Effective at the start of this month the FCC’s control over cable TV pricing expired, and the word from the cable industry is “not to worry, we won’t be seeking new, exorbitant price increases.” And for good reason. CATV pricing, under regulation, has about doubled over the past five years.
Also, the NCTA, the industry trade group, is cautioning cable operators to hold price hikes down to the 5%-6% range to avoid attacks from consumer groups as well as complaints from consumers.
We can say good riddance to cable price regulation for two reasons. One, we really would prefer to let the marketplace, rather than government, set appropriate pricing levels, and two, it is obvious that the FCC’s regulation did little to control pricing.
But now that deregulation has arrived, isn’t it time the FCC bit the bullet and really opened the TV signal market to full-fledged competition?
Yes, we have direct-to-home satellite, but at the end of last year the actual overall industry growth was almost nil as disconnects nearly equaled new subs. And while that situation has eased greatly this year, the estimated total DBS subscriber base of about 10 million is a far cry from the nearly 70 million hooked to an antenna.
As for a prescription to cure the lack of competition against CATV, we suggest the government:
- Give DBS operators the right to beam in local TV stations.
- Let TV stations, or at least all the PBS stations and those commercial locals not affiliated with networks, use their digital channels for multi-casting to sharply increase the amount of free over-air programming.
- Give telephone companies the unrestricted right, subject to local franchising, to provide cable TV service.
- Encourage paging and cellular operators to enter the wireless cable market.
- And support, through tax credits, research on Internet delivery of full-motion TV programming.
In short, competition will work to keep the cost of TV program delivery in line with value, but only if it is truly free. — R.E.G.