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Cable
Ownership Navigation
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| Why
is cable ownership an important issue? |
The word cable, for most
people, brings to mind cable television. We think of channels
like MTV, ESPN and HBO. But in actuality cable means a lot more
than our favorite TV shows and channels.
Cable is a highly consolidated industry that relies heavily
on government-granted monopolies. As the cable industry expands
its reach from TV to internet and phone services, the cable
monopolies are positioning themselves to become the ultimate
gatekeepers of the media you consume and create.
Cable companies rely on franchise agreements that give them
monopoly control over a single city's potential cable subscribers.
We can think of this as the "original sin" of cable
ownership. This monopoly control allowed cable companies to
continually raise rates and take advantage of consumers who
were left without a choice. Over the years, a handful of cable
companies built upon their locally-granted monopolies and successfully
lobbied the federal government to deregulate the cable industry
nationally. More and more cable providers were bought out, leaving
the industry where it stands now, where Comcast, the
nation's largest cable provider, controls over a third of all
cable homes and the top four cable companies control over 70%
of the national market.
The remaining cable giants are now using their leverage as government-granted
monopolies to expand into both high-speed internet access and
phone service. They are also expanding into the content side
of the media world as can be seen with Comcast's attempt to
buy Disney in 2004. At the same time they are lobbying the federal
government and the FCC to further deregulate cable ownership
so that they can grow even bigger.
These are not companies that rose to the top of an industry
by way of healthy competition, but instead built their empires
on government-granted monopolies, price-fixing and predatory
buy-out tactics. Since the cable industry was deregulated
in the late 1990s cable rates have risen at over five times
the rate of inflation. These companies have made profits
their priority while putting workers' rights and local needs
have been pushed to the backburner. Comcast in particular, with
over 21 million subscribers, is widely known for its dismal
customer service record, union-busting and other questionable
labor tactics, and ignoring local community needs.
What could be even worse is that if these cable monopolies are
allowed to continue their expansion, with little or no government
oversight, they will gain increasing control over not only television
programming and channels but also the content and structure
of the internet.
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| Grassroots
Cable Coalition |
Much of Media Tank's work and organizing
around cable issues is by way of a national network formed by
Media Tank and other groups concerned about cable called the
Grassroots
Cable Coalition. Media Tank is the Philadelphia affiliate
of the group, with other members in San Francisco, Seattle and
Chicago.
In 2004 the Coalition drafted a Code of Conduct for Comcast
and other cable companies to adopt which holds them to standards
in different areas like customer service, labor practices, fair
pricing, program diversity and local input. To read the Code
of Conduct and then add your endorsement click
here.
Media Tank has also done a lot of other work around cable ownership
for the Coalition including creating an easy
online form for filing comments with the FCC and an audio
PSA aired on radio stations accross the country urging them
to let the FCC know how they feel about cable ownership. For
more on this work look below in the National Cable Ownership
Limits section.
Click
here for the national Grassroots Cable Coalition website.
Click
here for the Philly Grassroots Cable site.
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| National
Cable Ownership Limits |
The Federal Communications Commission
(FCC) is currently reviewing the National Cable Ownership Rules.
These are the laws that determine how big cable companies are
allowed to be. Cable giants like Comcast and Time Warner
have spent vast ammounts of money and energy lobbying the federal
government and the FCC to loosen these rules.
In 1992 Congress passed the Cable Act which directed the FCC
to establish national limits on cable ownership. The FCC implemented
these rules the following year.
Then in October of 1999 the FCC loosened their cable ownership
limits in order to, as they described, "reflect a changing
MVPD marketplace." MVPD stands for Multichannel Video Program
Distributor, which is a fancy technical term for pay-TV companies
and includes cable and satellite TV companies. The introduction
of satellite TV providers induced the FCC to change the rules,
though since then the major satellite provider, DirecTV, has
been bought by another media giant, News Corp.
As they stand now the limits allow cable companies to reach
30% of U.S. households. Because of the way cable franchises
work that means that a single cable company can have a monopoly
over nearly a third of all pay-TV customers across the country,
which Comcast currently does.
The rules also limit cable ownership vertically. This means
that cable companies are not allowed to carry only channels
that they own. Under the current rules cable systems with
less than 75 channels are only required to have 60% of their
channels be unaffiliated with the cable company. There is
a ceiling set at 45 channels. This means that a cable system
with over 75 channels still only has to have 45 channels that
are independent from the cable company.
The nation's largest cable companies, in particular Comcast
and Time Warner, desperately want these regulations loosened.
They want to buy out more and more of their competitors and
the 30% limit is inhibiting this. Also, companies like Comcast
are increasingly looking at getting into the content side of
the industry. As these distributors get bigger and bigger they
run out of room to grow horizontally so they look to grow vertically.
The FCC's vertical ownership limits how many of the cable channels
they carry can be owned by them. If these limits were lifted
they would likely try to buy out many already-established channels.
With cable's current expansion into the internet and the
phone industry these ownership limits are more important than
ever. As they expand in every direction these are the only
legal limits left to keep them in check.
The FCC hears from these cable giants all of the time, now the
FCC needs to hear from you! Don't let the cable monopolies be
the only voices heard on this important issue.
Click
here to go to our easy online form that allows you to file comments
directly with the FCC.
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Comcast Buys AT&T Broadband
(2002)
This was one of the biggest mergers in media history as Philadelphia-based
Comcast Corporation bought AT&T Broadband, creating the
nation's largest cable company. For more than a year, Philadelphia-based
Comcast Corporation awaited final approval of its bid to buy
AT&T Broadband, which finally came from the FCC on November
13, 2002.
This merger made Comcast the largest cable operator in the
nation with 22 million subscribers and expanded their reach
to 17 of the nation's 20 biggest cities. Their sheer size
gives them unprecedented power to influence both the content
and delivery available to consumers for cable TV, as well
as the Internet and other media delivered via cable broadband
wires. The merger has had profound effects on cable subscribers,
Internet users, workers and citizens in this country and beyond.
Related articles:
U.S.
Clears Cable Merger of AT&T Unit With Comcast
By Barnaby J. Feder, New York Times, 11/14/2002
FCC
Rules Against Consumer Groups
By Roy Mark, InternetNews.com, 11/7/02
Related resources:
The
FCC's AT&T-Comcast merger page
Comcast-Disney: The Mega-Merger that Never Happened
(2004)
On February 11, 2004, Philadelphia-based Comcast Corp. announced
a surprise bid to purchase The Walt Disney Co. The initial
$54 billion offer was rejected by Disney, but Comcast is still
actively pursuing other deals that would make them a major
player on the content-side of the media industry. Another
bid for Disney is also not out of the question. Such a merger
would not only create the largest media conglomerate in the
world, it would put control over vast networks of media production
and information distribution together into one company's hands.
News of the potential merger was met with outrage by media
activists across the country. Media Tank was part of a large
demonstration against the Comcast-Disney merger that took
place outside a Disney shareholder meeting in Philadelphia.
The protest was very successful and received coverage from
national media outlets like the New York Times.
Related Articles:
Roy Disney derides Comcast bid
By Ron Orol, TheDeal.Com, 3/26/2004
Comcast
Awaits Disney Action
By Geraldine Fabrikant, New York Times, 3/23/2004
Comcast
chief remains interested in Disney
By Peter J. Howe, Boston Globe, 3/13/2004
Outside
the Meeting, the Sounds of Protest
By Jill P. Capuzzo, New York Times, 3/4/2004
Fewer
moguls, bigger empires
By Dan Fost, San Francisco Chronicle, 2/12/2004
AFL-CIO
demands changes to Comcast governance
Reuters, 2/26/2004
Related Resources:
The
Center for Digital Democracy's statement on the Comcast-Disney
merger
Media
Tank's old Comcast-Disney merger page
Comcast & Time Warner Carve Up Adelphia (2005)
The nation's two largest cable companies buy out one of their
few competitors...
More info soon.
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| National
Video Franchising |
More info soon.
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On
Wednesday April 6, 2005 Media Tank hosted Philadelphia Inquirer
reporter Joseph N. DiStefano to talk about his book, COMCASTed,
which explores the cable industry and its biggest player, Comcast.
By
the Numbers