Adelphia Transaction Advances

Lost in the hub-bub of yesterday, the Federal Trade Commission voted 3-2 along party lines to approve the proposed division of Adelphia between Comcast and Time Warner and accompanying system swaps. What surprises me is not so much the result (getting conditions in this administration, particularly on a cable merger, was always a long-shot) but the timing. The FCC is still chewing over the data request it made in December, and the Adelphia Bankruptcy proceeding has been rescheduled for mid-March. It smacks annoyingly of a political favor done for a stalwart Republican (did we mention Brian Roberts, CEO of Comcast, is a big Bush supporter and fundraiser?) than the careful reasoning of the anti-trust agency charged with protecting the public. But that’s probably just my imagination post-State of the Union grumpiness combined with discovering how many big companies are spying on us for the government.

My analysis below . . .

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Cable Market Power For Dummies

Most folks outside of Washington DC still find their cable company an obnoxious monopoly, despite the presence of competitors like DirecTV, Dish Network, and the occassional overbuilder like RCN. But, despite the fact that customers express far more satisfaction with satellite and overbuilder service, most folks remain subscribed to cable. What gives? And how does cable get away with raising prices and favoring affiliated programming in the face of this “vigorous competition.” Needless to say, the cable folks respond with a host of fancy economic papers that they file with the FCC and present to members of Congress.

My own impression, having spoken with a number of economists, is that the Cable Cos use economics the same way Creationists use intelligent design. The point isn’t to engage in real scientific inquiry. The point is to throw enough scientific sounding stuff out there to confuse the issue and make people believe there are two equally valid sides to the debate. My problem is that the FCC and Congress usually end up playing the the Dover School District Board rather than Judge Jones.

Anyway, in an attempt to cut through some of the nonesense, MAP released a white paper of my authorship yesterday: “The Switching Equation” and Its Impact on the Video Proramming Market and MVPD Pricing. As you can tell by the title, even an attempt to write a simple, plain language version of this ends up more complicated than I’d like. (Sad fact is, economics is hard.)

So here’s the short version — most people find it such a pain in the butt to switch from one service to another that they will put up with higher prices, worse programming, and worse customer service rather than kill two days futzing with unsubscribing to cable and resubscribing to someone else. As long as cable doesn’t stink too badly, they can keep enough market power to make it even harder for competitors by cutting exclusive deals for regional sports programming and jacking up the price of video on demand to competitors (Comcast and Time Warner own 78% of iN Demand, the leading supplier of VoD). If we want real competition, we need to have rules that actually address market power and make it easier for people to switch to competitors. Otherwise, we get a lot of empty rhetoric about “level playing field” and “free market” and blah blah, and we still pay ridiculously high prices for cable and broadband service that still suck.

You want proof? Go read the paper.

Stay tuned . . .

Senate Confirms Tate and Copps

Late last night the Senate confirmed Deborah Tate and Michael Copps for the FCC Commissioner slots. I’d like to think it was my eloquence shaming them into sanity, but I doubt it anyone on the Hill reads this blog (Wonkette this ain’t).

My congratulations to new Commissioner Deborah Tate and reconfirmed Commissioner Michael Copps. Sad for me, I will have to work for a living in January after all.

Stay tuned . . . .

Hallmark Channel to Show Documentary on Low Power FM

I’m posting an announcement for a documentary about low power FM (LPFM). As regular readers probably know, I represent United Church of Christ, which made the documentary, at the FCC on LPFM issues.

LPFM: The People’s Choice“ to air on the Hallmark Channel on Sunday, January 8th at 7 am EST and 7 am PST.

There’s a new sound on the air and it’s emanating from a source deep in the hearts and minds of Americans across the country. ”LPFM: The People’s Choice“ chronicles the extraordinary story of a low power, low cost radio service that withstood the rigors of Capitol Hill and special interest attacks. Today, LPFM is sending out a loud and clear signal — Freedom of Speech has a new ally, and it’s LPFM. ”LPFM: The People’s Choice” is more than a documentary- it is a rallying cry to build community around locally owned media. The film chronicles how low power FM radio is bringing diverse people closer together and giving new life to disadvantaged communities, new strength to neighborhoods and new voices in the marketplace of ideas. This program is not a debate about the merits of LPFM vs. the radio industry. Rather, it is meant to educate the audience about the possibilities for finding a new voice with LPFM. The film was produced by the Office of Commmunication of the United Church of Christ. For more information, please visit us at www.ucc.org/ocinc, or call 202-263-2576.

Farewell to Abernathy

Last Friday, December 9, marked the departure of Republican Commissioner Kathleen Abernathy. The FCC therefore briefly drops to a 2-1 Democratic majority. But the Senate should confirm Deborah Tate, a Republican Public Utilities Commissioner (and neighbor of Senate Majority Leader Bill Frist) before it adjorns, bringing the FCC back to 2-2.

A few reflections on Abernathy and some thoughts about the likely new Commission below.

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Is the Comcast/Time Warner/Adelphia Deal In Trouble?

Back some months ago, I wrote about fighting further consoldiation in cable. In particular, I talked about fighting the proposed division of the Adelphia cable systems by Comcast and Time Warner and system swaps between Comcast and Time Warner which would give Comcast and Time Warner dominance in many regions of the country. As usual, back when the parties filed their applications with the FCC in May, the parties predicted a cake walk and the industry analysts agreed.

The smart money is still betting on no major conditions, with the possible exception of requiring Comcast and Time Warner to provide access to their regional sports programming. But a number of recent developments have raised questions. Between that and the political situation, I suggest that, like that remaining piece of Christmas cake at New Year’s, things have gotten a little stiffer and a little stickier than expected. Warning: a lot longer and not nearly as fun as my last cable post, but worth it get a picture of events you won’t get from trade journalists and industry analysts…..

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Will CALEA kill CWNs? (Community Wireless Networks)

I hadn’t intended to do much in response to the FCC’s Order extending the Communications Assistance to Law Enforcement Act to broadband providers and VOIP providers. I was just gonna kibbitz my buddies at EFF and CDT. But then I reread the Order, got mad, and filed this Petition for Reconsideration. As it was due November 21, I ended up pulling a late night right before Thanksgiving.

What pissed me off? See below.

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We take on Chicago and Milwaukee Commercial TV

I had a little unintended hiatus for the last 8 weeks or so. Hopefully, I’ll be back to more regular posting.

To catch up on the news. Media Access Project, where I work, has filed challenges against the licenses of the commercial television stations in Chicago and Milwaukee. You can read the press release here. You can follow the links to the Chicago petition and the Milwaukee Petition. Or you can see my quick analysis about why you should care below.

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Tinfoil hats — who you calling “fringe”?

MIT puts science to good use:


Among a fringe community of paranoids, aluminum helmets serve as the protective measure of choice against invasive radio signals. We investigate the efficacy of three aluminum helmet designs on a sample group of four individuals. Using a $250,000 network analyser, we find that although on average all helmets attenuate invasive radio frequencies in either directions (either emanating from an outside source, or emanating from the cranium of the subject), certain frequencies are in fact greatly amplified. These amplified frequencies coincide with radio bands reserved for government use according to the Federal Communication Commission (FCC). Statistical evidence suggests the use of helmets may in fact enhance the government’s invasive abilities. We speculate that the government may in fact have started the helmet craze for this reason.

By the way, this is why I have a problem with scientists: always pointing out problems, never solutions. Nevertheless, it’s important to keep asking. Here is the proper form of address when formulating a question for scientists.