Keep cable from abusing its power

This column was published on Nov. 28, 2005.

Maybe you were perfectly happy last week even if you couldn't watch Supernews 9: The Story of Thanksgiving on your cable-television system.

Chances are, the animated short on the Current channel was a satire aimed at an audience of a particular persuasion. I'm just guessing, based on the synopsis: "Michael Moore travels back in time to the first Thanksgiving to warn of the horrible evils of the white man. Dick Cheney follows Moore back to foil his plan."

I can only guess because I couldn't take a look myself. Comcast, the only cable company that serves my neighborhood, doesn't carry the fledgling Current on its Philadelphia systems.

Personally, I'm curious to see what Current amounts to, with its plan to devote a quarter of its airtime to video submitted by its youthful target audience. I also want to see whether Current's cofounders - former Vice President Al Gore and lawyer-entrepreneur Joel Hyatt - keep their promise to have only a backseat role.

For that matter, I'd like to check out the America Channel, whose creator hopes to use "real people" and "real stories" to solidify national bonds that wove us together after the 9/11 attacks.

But it looks as if I won't see it here, either. Last I heard, Comcast wasn't biting.

Right now, cable companies such as Comcast and Time Warner own the primary pipeline through which a majority of American households get their television programming.

That same pipeline is often a consumer's best or only high-speed, or "broadband," route to the Internet.

The effects of cable's dominance are made clear in a recent report by Jonathan Rintels of the Center for Creative Voices in Media.

As Rintels documents, Comcast and its counterparts act as gatekeepers who choose whether a new channel gets carried on cable's primary "tier," the one that includes such mainstays as ESPN, CNN and MTV. Increasingly, Comcast says yes only to channels in which it has a financial stake. That's probably why the America Channel and Current don't make the cut.

Meanwhile, cable companies aggressively seek to control "must-have" local content - the strategy that gives Comcast a lock on Philadelphia sports fans. Comcast SportsNet carries most Phillies, Sixers and Flyers games. Relying on a loophole in federal law, Comcast refuses to sell the channel to its satellite competitors.

Does that leave many of us angry and frustrated? You bet.

And it doesn't help that nearly 10 years after cable companies lost their right to exclusive local franchises and prices were deregulated, most cable companies still enjoy monopolylike status, and the cost of ordinary service has more than doubled. Not exactly a startling coincidence, is it?

The Telecommunications Act of 1996 was going to change all this by ushering in a new era of competition. It hasn't worked.

From the start, lawmakers didn't reckon with Big Cable's control of its markets and political muscle.

Those assets helped scare off potential competitors.

Compounding the problem were decisions by the Federal Communications Commission and the courts.

The most harmful was last summer's Brand X decision by the Supreme Court, which ruled that cable companies didn't have to lease their networks to competing Internet service providers.

The Brand X decision had a predictable result: Telephone companies, which had been required since 1996 to lease their lines to competitors, demanded similar protection for their high-tech services.

In August, the FCC agreed. Under the new rules, companies such as Verizon, which is building fiber-optic networks to offer a cablelike bundle of video, Internet and phone services, can keep their new systems entirely to themselves.

There's a surface logic to this approach. As New Jersey consumers are learning through competing statewide ad campaigns, Verizon is going head-to-head with Big Cable. Soon, people who had one choice may have two.

But Rintels knows there may be a fallacy, too. Two choices are better than one. But unfettered duopoly will hardly be much of an improvement over unfettered monopoly.

What to do? Rintels' top priority is a rule called "network neutrality" that would bar any Internet provider from blocking or slowing down data streams from any source to give a competitive advantage to content in which it has a financial stake.

Neutrality is crucial to keep the Internet as free and open as we trust it is today. It's also crucial if the cable-television business model - selling consumers a large bundle of content, most of it unwanted, at a high price - is ever to give way to an Internet model of unlimited choices for consumers.

Cable companies like Comcast don't like this concept, for obvious reasons: If you can buy an individual TV show or movie from, say, "movies.com" and watch it on your TV same as you would a movie or TV show on traditional cable, the whole cable-TV business model is at risk.

In Rintels' wish list, and mine, Congress and the FCC could simply require broadband providers to rent an open pipeline. Short of that, though, he has ideas about how smaller changes can nudge the marketplace in the right direction:

Net-neutrality rules that guarantee us access to content and applications - not just movies, but inexpensive phone service and other new Internet technologies - while barring broadband providers from discriminating in favor of affiliated sites.

Rules that protect and encourage new broadband alternatives, including municipal wireless ventures such as Philadelphia's and technologies such as transmitting broadband Internet via electrical lines.

A genuine "level playing field" for traditional cable TV, so that companies such as Comcast can't use control over delivery systems to favor channels they own.

An end to the loophole that allows Comcast to keep SportsNet to itself, and program-access rules that require system operators to sell content they own to competitors.

Greater choice in how consumers may subscribe to cable, with more packages, tiers, and an a-la-carte option.

Rintels supports the push by phone companies to streamline the process of getting permission to build their systems.

His main worry: that some in Congress are trying to water down rules that protect consumers in their effort to speed competition.

As the last nine years have proved, you can't wave a wand and create vibrant markets out of whole cloth.

Competition is the best answer. But the devil is always in the details.