Can the Internet really compete with cable TV?
Whether broadband can provide serious competition to cable TV has suddenly transformed from a theoretical question to the heart of a political debate in Washington.
The debate is expected to come to a head on Tuesday morning, when the Federal Communications Commission is scheduled to meet to decide whether to impose extensive new regulations on the cable industry.
FCC Chairman Kevin Martin, a Republican who's acting more like a Democrat, wants the regulations. The cable industry, already reeling from a hefty decline in share prices, definitely doesn't.
Also taking the free-market view are Republican senators, who said in a letter to Martin on Monday that the emphasis on "broadband deployment" has created a "competitive environment" that is providing cable with fierce competition.
"It is clear to us that it was Congress' intent that the marketplace, and not regulatory fiats, should govern wherever possible," said the letter from Sens. Jim DeMint of South Carolina, Kay Bailey Hutchison of Texas, Gordon Smith of Oregon, and John Sununu of New Hampshire. "If there is to be a fundamental shift or adoption of new regulatory policies, it is up to Congress, not the commission, to implement it."
House Democrats sent a similar letter, also on Monday, predicting increased regulation "would threaten program diversity and undermine a smooth and seamless" transition to digital TV.
It's a little unclear exactly what Martin is contemplating, not least because reports so far have been based on selective leaks and no polished proposal is available for public review.
The most likely explanation is that Martin is continuing what amounts to a populist campaign against the cable industry that involved him, in April, calling for laws forcing cable operators to let consumers select individual channels instead of purchasing them in packages with dozens of others.
In FCC-ese, the concept is called "a la carte" programming, and Martin claims it will help parents protect children from inappropriate TV shows. The argument has failed, and the 2000 Bush-Cheney campaign aide turned FCC chairman has been smarting ever since.
This has led some Washingtonians to view the rift as a matter of personal pique. One top Republican questioned the "manner in which" Martin treats "all industries before the commission," an unsubtle suggestion that Martin is not exactly objective when it comes to putting the screws to cable providers. The Wall Street Journal speculated that it might be "personal animus against cable."
What Martin is trying to do this week, according to published reports, is force a vote on a so-called 70/70 rule, which gives the FCC more authority once 70 percent of Americans subscribe to cable services. He'd like to, by regulatory edict, force these companies to lower prices they charge independent programmers. He'd also like to force cable operators to settle disputes such as one involving the NFL Network, through an FCC arbitration process.
It's not that easy an argument to make. A fundamental principle of U.S. regulation is, at least in theory, that government intervention is necessary only when market failure occurs. Market failure is more difficult to establish when there's vigorous competition. So actual and expected competition from iTunes, NBC Universal and News Corp.'s Hulu.com, and telephone companies is highly relevant to this question of whether FCC intervention is justified.
In a letter to Martin on Monday, House Republican Leader John Boehner stressed the rivalry of online offerings. Boehner wrote: "Wireline and wireless phone companies are now also offering video programming. The explosion in Internet video and Web sites such as YouTube not only provide Americans with an unlimited source of content, but also allow each American to distribute his or her own content to the world."
This is no longer the land of the ABC, NBC, and CBS oligopoly. Apple's iTunes alone offers dozens of current TV shows, including Desperate Housewives, NCIS, and Prison Break (although the current episodes of some NBC shows are conspicuously absent). Hulu, which launched a test version last month, features high-quality video from the rich archives of News Corp. and NBC (which explains the iTunes absence). Verizon's Fios fiber service offers hundreds of channels--probably more than many cable companies. Satellite TV companies are Comcast's most deadly rivals. And while video-sharing sites like YouTube and its many smaller brethren may not be replacing traditional TV, they deserve to be counted in any official survey of the landscape.
Another potential objection to FCC action is a big quibble about some small numbers. Martin's staff has reportedly concluded that the number of Americans with access to cable has climbed to 71.4 percent--a hair over the 70 percent threshold required for regulation. But other FCC surveys have put the number at closer to 60 percent, and the cable companies are emphatic that the key threshold has not been crossed.
But even in a non-election year, Washington remains an intensely political town, and intense political pressure may prove decisive. With top Democrats and Republicans hotly proclaiming what a bad idea cable regulations are, and wavering support from the FCC's two Democratic commissioners jeopardizing a 3-2 majority vote, it would hardly be surprising if the FCC chairman decided to find an excuse to postpone Tuesday's meeting until the heat dies down.
Declan McCullagh, CNET News' chief political correspondent, chronicles the intersection of politics and technology. He has covered politics, technology, and Washington, D.C., for more than a decade, which has turned him into an iconoclast and a skeptic of anyone who says, "We oughta have a new federal law against this." E-mail Declan. 
As far as live TV yes the internet WILL replace cable TV period, its just a matter of time, main issue right now is bandwith for serving it all up. Where as what I do is p2p for everything, the TV industry has yet to implement p2p so can handle the bandwith. I would also expect some version of a live p2p so that you can watch sports and other events live, and normal tv shows of course also. If they ever adopt the p2p way of doing things that is, it seems to be the only way to serve up that many copies of the shows.
But the ISPs will have to back off p2p in some aspects or maybe work with the TV industry, do some caching on their end, who knows. Right now though on the net is more or less every tv show within 30 minutes to 2 hours of the show airing.. that might not be what the want people to be doing, but its here to stay. What I get that way looks great on my 50" plasma and I havent seen a commercial in quite some time.. The few alternatives they have offered on their sites to watch the shows legally, have never been near that quality, much less in an open source codec, etc.
To those who pay their ISP for broadband cable, the same pipe that brings us cable TV brings us the internet - that same pipe from TWC, Comcast, Orange, FIOS, et al, brings us both of the two media.
The core issue therefore isn't really the internet "competing" with cable TV because factually they both are already provided to us by one and the same company(s.
The core issue remains the policitization of a redundant American agency, the FCC. Since the phone monopoly break-up of 1983, the FCC has done little for Americans except to drive us backwards in terms the technology, not to mention 1st Amendment Rights.
It's been quite effective at ensuring we're forced to pay outrageously overpriced high-speed broadband rates for service as well, thus effectively ensuring "monopoly" pricing by the ISP's.
Perhaps that's because the FCC's mainly staffed by lawyers who have been very gainfully employed by the telecommunications industry. Wouldn't it be nice to see the FCC mainly staffed by electronics engineers and programmers as it was in the old days pre-politicization?
I doubt this could happen at least in the foreseeable future; therefore, the FCC remains a flunky for the telecomms industry and a puppet of our government's Administrations.
Without some government oversight (and millions in subsidies of taxpayer dollars) there would be no telephone service to North Dakota or Wyoming, because it just isn't profitable for commercial companies to offer service in those states. I haven't decided if that is good or bad.
I've got to agree with you about staffing at the FCC. Why can't the FCC be staffed with engineers and people who cared more about what is good for Americans than they do about what's best for Rupert Murdoch?
free market that brings the real freedom of choice. Whenever the
government gets involved, it always ends in more problems and
higher costs.
http://ronpaul2008.com
- Stop the FCC!
- by chash360 November 28, 2007 4:17 PM PST
- The FCC may be doing the right thing for folks in the Dakotas but most of the time they don't. First off, our country could not operate without communication. So why is all of our comminication networks owned and controlled in the private sector? This model certainly would not work if applied to our highway system. Imagine if GM owned all the major freeways? How much would you get charged to drive a non-GM vehicle on them, or would you even be allowed to? When the Bill of Rights was written, there were 2 forms of communication, speech and print. Both were afforded specific undeniable rights, as would have any other form of communication had it existed at the time. But in our modern day, when wired and wireless communication became a reality, why were they not given the same free rights? Why is it that we have a large chunk of the 700MHz spectrum coming available, that belongs to all the people as a resource, is being sold to the highest bidder? This will again be turned around and the public will be gouged for the right to use this band by 'service providers'. The truth is that the devices themselves can provide the service, you do not need a company or greedy corperation to charge a service fee to handle your traffic, when the device you pay for can do it all on its own. If the network infrastructure was managed like we manage our highway system, we could forever eliminate telecommunication charges for everyone. The Internet will completely outshine the old 'one-way' propoganda machine that is the current media structure in the Broadcast industries, provided the politicians don't mess with it (absence of net nuetrality and Internet taxes are still very real threats to the first truly free form of collective communication we have ever experienced.) We desrve free (read as unlimited) communication, not this one-way crap that the FCC has forced us into. I don't mind commercials as long as the service is free, but if paying for a service, I don't want to pay for something I don't want. Everyone desrves their say, everyone could have their own ability to have their own broadcast if only the FCC would handle the spectrum responsibly by setting device and protocol standards for using them. As long as the device is compliant to FCC rules, there would not be any need to license or regulate users of the EM spectrum, the devices would enforce compliance by design.
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- The general Public
- by MR. Book Worm December 2, 2007 7:23 AM PST
- The general public has no clue its all ways the big money that does the power plays while most are un aware. Why this would be real news but your not going to hear about repeatedly on the five o clock news.
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(9 Comments)Write your congressman, and the FCC do not sell our precious resources to greedy corperations, give them back to the people!!!!
Free Communication=Free Knowledge=Free People.
OR
Pay for Communication=Biased Knowledge=enslaved and oppressed people.
No the choice is not yours, its the FCC's, until we stop them!