An Inconvenient Mess
In the early days of cable, long before anyone dreamed of a 24-hour food channel, Real World Season 22, or Glenn Beck, a startup network showing nothing but music videos struggled to get carried by cable systems—that is, the companies that own the wires leading into people's homes. Frustrated, the owners of this new channel created a now-classic advertising campaign urging teenagers to call their cable operators and declare: I Want My MTV!
Ever since—this was the early 1980s—the media companies that own networks (Viacom, Disney, CBS) have fought with the companies that own cable systems (Comcast, Time Warner, Cox Communications) over distribution. Even today, when the average cable system offers about 120 channels—and many carry 500 or more—programmers complain that they can't get their fare onto the cable menu.
Now, though, instead of seeking to arouse the masses with "I Want My MTV"-style campaigns, disgruntled programmers hire lawyers to take their complaints to Washington—most recently, to a windowless conference room at the Federal Communications Commission, where dozens of high-priced attorneys have been arguing about which channels should be carried by what cable systems and at what prices. The complaints have been pending for years, the hearings before an administrative law judge have droned on for six weeks, and rulings won't come for months, after which they could be appealed to the federal courts.
Here it must be noted that the questions before the FCC are less than vital to the national interest: Must Comcast make the 24-hour NFL Network available to its digital subscribers, or can it charge them extra to see it? Can a startup channel known as Wealth TV force its way onto Comcast, Cox, and Time Warner cable systems? And should MASN, a Baltimore-Washington regional sports network, be carried by cable systems in Harrisburg, Pa., and Hampton, Va.?
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What gives the legal wrangling an Alice in Wonderland quality is the fact that the cable industry is now struggling to hold onto subscribers in the face of spirited competition from satellite and telephone companies that offer pay-TV packages of their own. In other words, cable faces market pressures to give subscribers the networks they want—or the subscribers can turn elsewhere for programming, as millions already have.
So why does the federal government remain in the business of telling cable systems what networks to carry? No regulator, after all, can order the Washington Post to carry a comic strip or demand that Wal-Mart provide shelf space to a new brand of cereal or toilet tissue.
There's no simple answer to that question, although the cable guys have, arguably, brought the heavy hand of regulation onto themselves. They used to be monopolists, and they acted that way, raising rates, providing lousy service, and becoming easy targets for politicians. Two politicians made it their business to fix cable: One is Al Gore, and the other is a Bush II appointee named Kevin J. Martin, who chaired the FCC from 2005 until early this year.
Gore, as a U.S. senator and presidential candidate, helped shape a sweeping piece of legislation known as the Cable Television Consumer Protection and Competition Act of 1992. A provision of the act, known as the anti-discrimination rule, prohibits cable operators from favoring networks they own at the expense of independent channels. The rule was intended to discourage vertical integration and promote a multiplicity of voices on cable.
Although there's something a little icky about the government telling media companies what programming to show, this may have been a good idea at the time. Without the ban on discrimination, a cable operator like Time Warner, which owns CNN, might have refused to carry rivals like MSNBC or Fox News. Or Cox Communications, which used to own a big stake in the Discovery networks, could have tried to throttle National Geographic TV.
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Today, though, independent programmers can and do get distribution elsewhere. Satellite services DirecTV and Dish Network cover nearly all of America and have 18 million and 14 million subscribers, respectively. Verizon has 2.2 million subscribers for its FIOS TV service, up 84 percent from a year ago, while AT&T's U-Verse TV service added a record 284,000 subscribers in the first quarter to give the telecom giant 1.3 million pay-TV customers. In Bethesda, Md., where I live, I can buy television from Comcast, Verizon, DirecTV, Dish, and a competing cable operator, RCN. The cable monopoly is history.
With such robust competition, you might expect the FCC to ease up on cable oversight, but no. This is where Kevin Martin comes into play. A former legal adviser to an FCC commissioner and a former Bush White House aide, Martin clashed frequently with the cable guys, accusing them of overcharging customers, refusing to sell programming a la carte, permitting indecency, and the like. So when the anti-discrimination rule came up for renewal in 2007—15 years after it was adopted—Martin and his allies on the commission argued that it should be retained. Michael Copps, a Democratic FCC member, explained it this way: "Independent programmers provide the diversity of voices that is so central to the proper functioning of our media and, ultimately, to our democracy itself."
Well, sure, but it's hard see how the NFL Network, Wealth TV, and MASN, which shows Baltimore Orioles and Washington Nationals baseball, are in any way "central to the proper functioning" of media, let alone democracy. Wealth TV, in case you missed it, is just what it sounds like—a lifestyle and entertainment channel offering such programs as The Luxury Travel Show, Let's Shop-Toronto, and The Roman Empire. Escapism for the recession-ravaged, no doubt.
NFL and American democracy
Of all the complainants, The NFL Network has the least to complain about. The 24-hour network, which charges high rates to cable operators, offers exactly eight live regular-season NFL games along with 357 days of repeats, analysis, and commentary. It's very difficult to make the case that the NFL has difficulty getting its voice heard in the media, and, in fact, its network can be seen on more than 300 cable and telecom providers nationwide, including DirecTV, Dish Network, Verizon FiOS, AT&T U-Verse, and Cox Communications, according to the I Want NFL Web site. Comcast evidently incurred the league's displeasure by offering NFL Network on a digital sports tier, where subscribers would have to pay extra to see it. Unaccustomed to not getting its way, the NFL brought out its lawyers. Comcast and the NFL settled their dispute earlier this month, with the cable operator agreeing to carry the NFL Network after the league cut its fees.
Litigating these disputes isn't cheap. Dozens of lawyers, charging $400 an hour or more by my estimate, have trooped through the FCC hearing room in the last few weeks, while the government has produced thousands of pages of analysis of the cable industry in general and the anti-discrimination rule in particular. Next time your cable bill rises, this will be one reason why, for which you can thank Mr. Gore and Mr. Martin.