Wednesday, October 31, 2007

Time To End The Cable TV Rip-Off: This Is Just The First Step

By Manifesto Joe

Hey, channel surfers: Are you tired of 10 different versions of ESPN? Never watch Hallmark TV, or the Jewelry Channel? Hey, guys: Seen enough reruns of Gilligan's Island that even Ginger, or Mary Ann, can't get you interested in one more look?

This week, we in televisionland are getting a rare break from the Federal Communications Commission. This first move was mostly intended to break the back of the spiraling price increases of pay TV, largely heaped on the backs of the poor.

But much more needs to be done: What we need is menu subscription, and we should have had that long ago.

Here's what the FCC is doing. Thousands of contracts for exclusive service rights, provided to apartment buildings, are to be struck down. A blatantly monopolistic practice is being halted.

But much more needs to be done. This action wasn't the result of any strong official concern for the ratepayers. To quote The New York Times:

"It would be a huge victory for Verizon Communications and AT&T, which have challenged the cable industry by offering their own video services. The two phone companies have lobbied aggressively for the provision. They have been supported in their fight by consumer groups, satellite television companies and small rivals to the big cable providers."

This move will bring cable prices down for a lot of people, especially poor folks living in apartment complexes who were being victimized by monopolistic practices. It's an underreported scandal. Continuing to cite the NYT article, lower-income families have seen prices rise at three times the cost of inflation over the past decade. (I know, you can always go back to an antenna. But does that make the clip job OK?)

Back on subject, there's another step that is badly needed. I was astonished to hear that Kevin Martin, FCC chairman, has actually favored this. The NYT also reported:

"Martin has also pressed the cable companies to offer so-called a la carte plans that would permit subscribers to buy individual channels, or groups of channels, at lower rates than they now pay."

Better watch your ass, Kevin. If Cheney hears about the likes of you in the government, you may soon be toast.

I've been unable to see for many years why the "a la carte" concept couldn't have been part of all this very early -- other than, of course, simple greed. And even after the satellite services came on the scene, ostensibly offering some kind of competition, they behaved like monopolistic competitors (check out the British economist Joan Robinson) and offered essentially the same things as the cable providers, with only marginal improvements.

Here's yet one more take on this, excerpted from the Web site Gizmodo:

"Exclusive deals between landlords and cable companies that force tenants to use a specific cable provider are being terminated by the FCC, which hopes the move will spur competition and drive down cable prices. According to the NYT, the move will be a boon for low-income and minority families, who have "seen cable prices rise about three times the rate of inflation over the last decade," as "40 percent of households headed by Hispanics and African-Americans live in" buildings with 50 or more residents. The more cynical take on the FCC's agenda (as opposed to a snowy white heart filled with consumer advocacy) is that it's partially in response to telcos like Verizon and AT&T who've started to offer TV aren't feeling too shiny about being shut out. But if it really does push down prices, it's definitely not a bad thing, whatever inspired the FCC."

We've got at least one more large step to go. Not that this matters all that much in the vast scheme of things. But it's a shame to see legal theft go on for so long.

Manifesto Joe Is An Underground Writer Living In Texas.

17 comments:

Complaint Department Manager said...

For years I've felt ripped off by my cable provider(which has changed names 3 times since I've had them during a 3 yr period). I've seen my rate go up about $20 in the last few years and all I have is analog cable, I can't afford digital cable and all the satellite providers exclude the channels I watch til you get to higher priced packages.I hope this thing comes about fast with the HD deadline coming up.

dr sardonicus said...

I'm conflicted about this. I'm all for striking down the exclusive service contracts. A la carte subscription, I'm not so sure about. A la carte would basically require each cable channel to pay its own way, and from what I understand, most cable channels wouldn't be able to generate enough revenues to survive on their own. Cable packages, imperfect as they are, impose a sort of revenue sharing so that niche channels like the History Channel and Food Network can exist. That may well be just cable industry propaganda, but television broadcasting is an expensive proposition, and to me it seems like a reasonable argument.

Manifesto Joe said...

This has been the argument, but I think even some insiders thought years ago that they could offer something more targeted to the audience than what we're getting now. It would mostly be bundling in subgroups. You wouldn't be able to choose many channels individually, but there could be menus that emphasize specific interests: sports, music, arts and culture, movies, news and public affairs, history ("The Hitler Channel"), and so forth. And you could pick more than one. If I could get $10 or $20 less per month on my bill for all the stuff I never, ever watch, like MTV and ESPN, that would be the point. And for what I would save, they might even be able to sell me a premium channel that I'm not taking now. That sort of thing could have been done as long as 20 years ago, but for them it was neither convenient nor profitable to do so. Such is life when you operate a monopoly.

Brother Tim said...

I think that cable company rip-off is a serious matter, but I wonder if this will have any impact.

BTW -- Mary Ann still excites me.;)

Strannix said...

Just eliminating the sports programming from the average family's programming package would have a major financial impact.

Sports programming is ridiculously expensive, and such programming being bundled with networks such as History & FoodNetwork has helped to hide those costs, while raising package prices across the board; the prevailing wisdom being that sporties would not pay exorbitant prices just for ESPN, CSTV, yadda, yadda, yadda.

In that I think the prevailing wisdom is wrong. Sporties are crazy...often in a good way. Sporties are at least in part the reason that HDTV programming & equipment has been adopted at all in the US, with all the roadblocks that the government & industry players erected.

Cranky Daze said...

This topic is one of my hot buttons. I live in an area where, if you're going to have television reception, you have to subscribe to cable TV. Since there is only one cable company that provides service here, I don't have a choice.

I have basic cable and extended basic, no movie channels other than the ones that come with extended basic. I pay for five sports channels, and on weekends most of the basic cable channels I get are almost exclusively sports during the day. The other channels on extended basic are about 90% reruns. It's become almost impossible to find something that hasn't been broadcast dozens of times. I also have cable internet service from the same company. Several times every year, the price of their service is increased, and there is never advance warning about this; the increases just pop up on the bill.

Channels like TNT have started showing the same movie over and over on weekends, calling them "new classics." And to add insult to injury, commercial time is running as much as 40% on some channels.

And have you noticed how many commercials are trying to peddle pills these days? I swear, they're inventing illnesses. And the side effects they admit to are horrifying. For example, pills for people who suffer from depression often warn that they may increase suicidal tendencies. So if you're depressed to the point that you need medication, it seems bizarre to swallow pills that might make you want to kill yourself.

A while back I heard that one cable company was offering a plan that would allow customers to select only the channels they want instead of a package that is often heavy on channels that hold no interest for certain groups of people. I think that's a great idea. It would force television channels to improve their programming if they want to stay in business.

The FCC is not doing their job. I have mixed feelings about censorship. Ideally, television would censor itself, but they're pushing way past what is acceptable. I remember the days when movies on TV did not include the obligatory graphic sex scene and language that my mother would have washed my mouth out with soap if I'd dared use those words.

This is progress?

Manifesto Joe said...

All sounds familiar. I now live in an urban area, so it isn't quite as bad. There's a bit more choice. But I recall living in more rural areas in the '80s, and yes, those were the ultimate monopoly situations for the cable companies. And, over 20-25 years, they have learned so, so much more about how to exploit those situations. From what I know of people who still live in rural areas, or in classic Heartland towns of, say, 25,000 population, a fair distance from an urban center, the cable companies can flex their muscles all they want, as you describe. Nowadays there are lots of infomercials, an overload of ads, and lots of channels that interest very few viewers.

But -- yes, since you mention something like this, I noticed long ago that even in some boonies area like rural Oklahoma, you can get soft-core porn. And plenty of sports. What's harder to find is a good movie, public affairs, etc. Anything intelligent.

Newton Minnow's depiction of a "vast wasteland" has expanded not only beyond basic, but even beyond extended. There are 100 desolate channels to choose from.

Anonymous said...

I will be signing a lease in several months and my apartment complex is making having cable a requirement as an addendum to the leases. I do not choose to have cable at all, nor do I want any service to pay for, as "wi-fi" television or rabbit ears is just fine with me, and even better with HD signals. The internet provides better information and selective programming anyway!!

My question is if there is a specific law or ordinance I can use to show them it is illegal, or something just in the works? If they want to raise the rental rates and include cable as an amenity is one thing, but they are requiring an addendum and then adding it to your total rent due. Please contact me at ftlbear@yahoo.com if you can be of assistance. Thanks and be well.

Anonymous said...

In Oct 2007 I found out by accident what many are just now finding out... the cable industry (Comcast is my local provider) has designed a strategy that will create windfall profits only paralleled by the gas companies.

What I found out that October was that the lower channel (1-99) were going to trimmed to only a few channels.


The reason? to drive subscribers to their $5 to $8 /month converter box under the guise of "enhanced service".

My response was immediate. I wrote an email to all my friends and included my local Congressman and Senator. The silence was deafening EXCEPT for Comcast. I received a call from a very nice women from the corporate office and to make a long story short confirmed the plan. Not a single newspaper or consumer advocate cared.

So aside from a TERRIBLE remote, slow responding cable box, price increases (3x last year alone?) lets just do the simple math... maybe you'll begin to see (and do something about)just how you're about to see a BIG % increase in your cable bills :

Possible EXAMPLE:

$10 (estimated)cost to manufacture (non-hi def) cable box
$8 MONTHLY RENTAL FEE OF THAT BOX
3 AVERAGE NUMBER OF TELEVISION PER HOUSEHOLD
23,000,000 Comcast cable customers
multiplied by $24 PER MONTH - EVERY MONTH

$552,000,000 MONTHLY WINDFALL TO COMCAST.
$6.5 BILLION A YEAR

WOW.
If I could afford it I might buy their stock.
Oh well - already learned my lesson there - the little guy takes the risk and loses, the big guy gets rich and walks away.

Manifesto Joe said...

Thanks for stopping by, anon 2. Actually this is a subject I need to research for a new post, because the previous poster, anon 1, indicated to me later in an e-mail that the FCC has failed to enforce the breakup of these exclusive apartment complex contracts. And, I noticed before I ditched cable for satellite that they were doing everything they could to force those digital boxes on customers at higher prices. (Here, it's Charter Communications.) We're going to get a new FCC boss soon, I read, so February might be a perfect time for an update on this issue.

Anonymous said...

I fired Time Warner and now watch 13 on air digital channels locally for free. ABC, NBC, CBS, PBS, and FOX included. Screw pay TV.

Anonymous said...

I just stumbled across your site and was VERY pleased I did. For years I have been a ranter and raver at what cable companies do to us.

Yes, the a la carte thing MUST happen, and here in my home state of New Hampshire I have been pushing to see that become law. But there is something else I would like you to consider.

Lets suppose that this evening your phone rings and its your insurance agent. He says "Hey pal, I have a great new plan for you and your wife and I would like to come by and show it to you." You take the bait and say sure, I can give you a half hour. And then he (astonishingly) says "Oh great, and by the way, it will only cost you $50 to have me present that plan..."

Would you pay your money to have someone come into your home and market you on something? How about market you on something you are totally uninterested in?

THAT is exactly what you are doing with your cable company. You are PAYING them to sell you stuff you probably dont want and most likely dont need.

Every hour long show is now about 38-44 minutes long with the rest of the time being there for these witless commercials. When you have cable, YOU are paying to bring these commercials into your house! THIS HAS TO STOP TOO!!!!

Imagine going into a restaurant, ordering a great steak, and then when that meal arrives, you also get a fish dish, and four or five other main courses you didnt order.

You say to the waiter, 'Hey! I didnt order this!!!' and he says, sorry, those meals come with the steak dinner meal. THAT is what cable companies do to you RIGHT NOW!!!

Lets stop this maddness before it gets any worse. Write the FCC!!! Write your Cable Company, or even better......

Do what some of us are already doing - INVOICE your cable company for every commercial that comes into your home. Many people are now doing this and driving the cable companies banana's - but it is making the point - we didnt pay for commercials, and WONT!!!

Lets fight back before this gets any more stupid than it already is.

Manifesto Joe said...

The Obama administration has had plenty on their plate, but I hope they eventually get to the FCC and its benign neglect of the pay-TV oligopoly. And you have reminded me, anon3, that I'm overdue to do an update on this subject. I have been semi-vacationing this summer, and it looks like I need to get busy again with the blog.

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Shade said...

Bottom line they're dead right wrong for what they're doing. Cable is the most proficient scam of the modern era. I'm only 21 but back in other times over $100 for cable? That's crazy. Comcast lies their asses off and charge you for stuff you don't even use. Right now, a servicemen stated that Comcast charges for each TV usable. A cable BOX is $7 alone. Then, they start jacking up your rates after about one or two good months. There's almost no escape.

ATT Uverse isn't no different. I suggested them to my mom, and because she got their internet service, they implied that she had some type of BS back payment or something that was over $300. The only thing to happen is to get a dish (which I can remember the countless offensive dish commercial ads back in the 90s early 2000s.) Now getting a dish is the best bet, but the only thing is that if you live in a apartment complex and it faces the wrong way then you're stuck to Comcast. Do pay attention to the "only $39.99 a month" ads. Don't worry, you'll be returning your box in no time.

Anonymous said...

Why do they repeatly rip us off I'm canceling cable