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Government

Introducing A Law to Eliminate Monopolized Cable Packages, Allowing Consumers to Have More Choice.

The cable companies that are currently providing television to the masses in America are allowed to negotiate exclusive contracts with the networks to monopolize the content so the consumer has less spending power. Currently TV provider options are few and this will not change until we stop the anti-competitive practices.

by Zachary Adam Zell on May 26th, 2014, 8:28 pm PDT. This Ivia has been viewed 2,122 times. Last improved on November 13th, 2014, 4:48 pm PST.

The Cable Monopolies are only Getting Stronger

The available offerings for television are getting worse everyday, and the competition in the market is at a all time low with the recent developments of Comcast buying Time Warner for $45 Billion and AT&T buying DirecTV for $48.5 Billion.

The current status-quo of cable television entails; negotiated contracts for exclusive broadcasting rights, eliminate the competition by being a bigger entity who can take advantage of the high barriers to entry that exist in the cable and internet services market, caused by high fixed infrastructure costs. This serves well only to companies who can afford to write the enormous checks for these contracts such as Comcast, Time Warner, Direct TV, and so on. An example of how this doesn't allow for competitive business practices would be like playing monopoly and everyone starts out with 5 pieces of property and $10,000 in cash, and you start out with no property and $1,000 in cash, it would be almost impossible to win because you would be at a severe competitive disadvantage. Now imagine that Boardwalk is up for auction, and you need it to earn you an income stream. Unfortunately, you can't even enter the market (create a space that people would land on and pay you) because Comcast can bid $1,001 for Boardwalk (the infrastructure) and there is no other Boardwalk to buy, so you have no business.

How to Disrupt The Monopolies

We introduce a Stand-Alone Service Application Law

What it is- A law that will compel any television content providers to always allow the option of a selling their channels to consumers as a stand-alone product offered over the internet, at a price deemed fit by the content providers. Much like a Netflix, Hulu, or NFL Sunday Ticket subscription.

How it will work- We need to prevent the cable television industry from having the ability to establish exclusive rights to sell content commercially. If we can compel networks to provide a subscription price, allowing their content to be accessible by any means via the internet and with no allowances for negotiating exclusivity rights with companies, then channels with worthwhile content can grow and consumers can prioritize their diet of "channels" to be watched. This option would allow for cable companies to offer a bundled package, but have to compete with the network subscription prices.

Example- If one would like to purchase ESPN network at a hypothetical price of $12.50 a month, then they could do so. This would bypass the cable/satellite companies bundled subscriptions/contracts.

One Form of A LA Carte Might Happen Soon

As addressed from an article from Quartz:

Jay Rockefeller is working on the bill "Consumer Choice in Online Video Act" which as he states:

“My legislation aims to enable the ultimate a la carte—to give consumers the ability to watch the programming they want to watch, when they want to watch it, how they want to watch it, and pay only for what they actually watch,”

In the article "This politician wants to blow up the cable industry’s stranglehold on what you can watch"

By John McDuling @jmcduling November 13, 2013

The bill would:

"Bar cable, satellite, broadcast, and large media companies from engaging in anti-competitive practices against online video distributors: Earlier this year, it was reported that Time Warner had signed contracts with networks, preventing them from selling their content to online competitors. Rockefeller says his legislation would put “reasonable limits” on this practice. It would also explore ways for online video distributors—which includes streaming services like Netflix, Apple and Amazon—to negotiate to carry broadcast television content.

Limit the ability of broadband providers to degrade competitive online video services: Netflix (and other online video services) is delivered into homes over pipes that are owned by its direct competitors—cable companies and telecom carriers. “Net neutrality” principles should, in theory, force internet service providers to provide access to all content on equal terms. Despite this, there have been reports about a degradation of Netflix streaming for Verizon, Comcast, and Time Warner Cable customers. The bill seeks to address this, but specifics as to how are light at this stage.

Empower consumers with new truth-in-billing protections for broadband Internet service: The bill calls for “clear and understandable” terms and conditions on cable bills, so consumers can make better decisions about their preferred packages and speeds. It would also give the Federal Communications Commission the ability to monitor broadband billing, to ensure billing practices aren’t anti-competitive."

Image Sources

Main Image - http://i.imgur.com/Hp8FCJe.png

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About the Author

Zachary Adam Zell
Petaluma, California, United States
Founder and CEO at ImproveVia
Sonoma State University

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Reed W. Solomon 2 years ago

From 2 weeks ago, an update:
http://www.washingtonpost.com/blogs/the-switch/wp/2014/08/11/what-if-you-could-pick-and-choose-which-broadcast-tv-channels-you-get/
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VAN Truong 3 years ago

Much needed!!!! I had Comcast cable and cut it after realizing how much I was paying for channels I never watched.
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Zachary Adam Zell 3 years ago

Clearly there is a need for more competitors. Just today I read in the news that AT&T is trying to purchase DirectTV for about 50 billion dollars.

Source- http://mobile.reuters.com/article/idUSBREA4B0W220140513?irpc=932

If this happens who is left? Comcast will own Time Warner, AT&T will own DirectTV and then there is Dish Network and that's about it.