WASHINGTON (CNS) — There’s more evidence that TV watchers are souring on the soaring cost of cable TV.
In some instances, the local cable operator is bucking demands from high-rated cable channels to pay more money up front to carry them, leaving the operator to pass along the cost to the consumer.
And the Federal Communications Commission is considering the possibility that cable TV monopolies actually have competition.
Already companies are offering services with less variety — and cost — than cable, with the promise of more services to come, provided you’re willing to look at shows on your computer, rig up the computer to your TV monitor, or get a new TV with Wi-Fi connectivity. Those services include Hulu Plus, Sling, HBO Now, Netflix, Amazon Prime and, most recently announced, Apple.
First, let’s take a look at some cable companies’ rejection by of “free” cable channels that are getting ever more expensive.
One case in point: Over Christmas, at the hotel where my family stayed, I flipped through the channel offerings from the local cable system. On the channel reserved for the Fox News Channel, there was a message from Fox telling viewers to call their cable company and ask them to restore Fox News.
That went on for a few days. Then, instead of Fox News, the channel was showing Blaze, a news and commentary channel launched by former Fox News host Glenn Beck. The cable company hopes viewers find the content is similar enough to quell any complaints about Fox News’ disappearance. The price it would have to pay for Blaze, though, is surely a fraction of what Fox charges for Fox News.
Nor is this an isolated incident. In early March, The New York Times reported that Suddenlink, which holds the cable franchise in Lenoir County, North Carolina, has blacked out each and every channel from Viacom in its cable menu for more than a half-year, with no apparent end in sight.
Suddenlink chafed at Viacom’s demands for more money, saying its channels’ ratings were dropping and didn’t justify the cost. Those channels include MTV, Comedy Central and Nickelodeon.
In the first quarter since Suddenlink imposed the blackout, it lost four times as many cable customers as it usually does in that period. But net income — that’s profit, folks — was up 65 percent for that same quarter. Since the start of the year, the national ratings for Viacom’s channels are off 20 percent
Part of the gamble for Suddenlink is that its customers will still want to buy its other services, including Internet service. So far, Suddenlink’s been proven right. Only 0.3 percent of its pre-blackout customer base has opted to toss out Suddenlink entirely.
Don’t think Suddenlink is just some “hick” cable operator. It’s the nation’s seventh biggest cable company, with 1.4 million customers in 16 states.
But, at 1.4 million customers, Suddenlink is a bit player when it comes to Comcast and Time Warner Cable, the two biggest cable firms in America. Comcast’s bid to buy Time Warner is still on hold at the FCC. Charter Communications, the third biggest, which lost out in the Time Warner acquisition stakes, has made a bid to buy Bright House Networks, the sixth-biggest cable provider.
One of Comcast’s arguments in its acquisition bid is that it’s not really a monopoly because it doesn’t have a majority of all U.S. cable homes. But Comcast conveniently forgets that cable franchises are routinely awarded on a monopoly basis by municipal or county governments. Firms bidding for the cable contract promised to build studios and commit to carrying public access, educational and government channels to win this monopoly.
As the number of cable operators shrank, cable companies consolidated, renegotiated or simply disregarded its community obligations.
There were calls in the early 1980s to let cable compete, in much the same way that telephone, electric and gas utilities, which likewise had a hammerlock on the local or regional market and now face competition. Thirty years later, that competition for cable hasn’t come in the form of other cable companies but by satellite and Internet TV providers.
The FCC March 16 voted 5 to 0 to study whether there is effective competition in the cable industry. The FCC’s “notice of proposed rulemaking” noted that since 2013, the FCC’s Media Bureau has received 228 petitions asking for a finding of effective competition, with only eight challenged. The Media Bureau granted 224 petitions in full, and four more in part. No challenges were denied.
If the study determines that competition exists, then price controls on cable offerings could go the way of the dodo. But if the competition is truly present, then cable firms will find ways to offer its services at lower prices to compete more effectively.
Pattison is media editor for Catholic News Service.