Comcast Sues Maine For Demanding It Sell TV Channels À La Carte

from the the-Constitutional-right-to-be-an-ass dept

Over the last few years, telecom giants have increasingly been trying to claim that pretty much any effort to hold them accountable for their terrible service (or anything else) is a violation of their First Amendment rights. Historically that hasn’t gone so well. For example, courts generally laughed off ISP lawyer claims that net neutrality violated their free speech rights, quite correctly highlighting that ISPs are simply conduits to information, not acting as editors of available speech through their blocking or filtering of available information.

With the federal government effectively in the cable, telecom, and broadcast sector’s back pocket at the moment (aka regulatory capture), the lobbying focus has shifted toward the states, where the industry has similarly tried to claim that holding them accountable for decades of bad service violates their First Amendment rights. For example when it was found that Charter lied about meeting its recent merger conditions and New York tried to hold it accountable, Charter claimed doing so would violate its 1A rights.

The argument popped up again this week in a Comcast lawsuit against the state of Maine, filed because the state passed a law that would force companies like Comcast to sell cable TV channels ? la carte:

The companies claim the Maine law?titled “An Act To Expand Options for Consumers of Cable Television in Purchasing Individual Channels and Programs”?is preempted by the First Amendment and federal law. The Maine law is scheduled to take effect on September 19 and says that “a cable system operator shall offer subscribers the option of purchasing access to cable channels, or programs on cable channels, individually.” The lawsuit seeks an injunction to prevent the law from being enforced.

Granted, “You can’t do that because it violates our First Amendment rights,” is literally the first argument telecom lawyers try whenever anybody tries to hold them accountable for terrible service, unfair bundling, predatory behavior, or anything else. Just like the fifty times before this, the argument is nonsensical, and really just a knee jerk effort to fling some ideas at a wall and see what sticks in a bid to protect the shitty status quo.

Consumers have been begging for the ability to buy individual channels for decades now, and it used to be a pet project of former Senator John McCain. For the entirety of that duration, the cable industry has tried to claim that ? la carte television would do two things: raise rates for all consumers, and kill off niche channels, which the industry argued simply couldn’t survive outside of the bundle. You’re to ignore that these niche channels are being killed off anyway and cable TV prices continue to skyrocket despite the rise of streaming competition.

Undaunted, Comcast continues to claim that bringing flexibility to the cable bundle would raise TV rates (something Comcast is super, authentically worried about, to be sure):

In a statement provided to Ars, Comcast and the TV networks said that “Maine’s ? la carte mandate is prohibited under federal law and is unconstitutional… the law is not only unnecessary, but also likely to suppress competition and result in higher consumer prices and less program diversity.”

On the plus side it’s not like any of this is going to matter longer term, and both Comcast and state regulators really are just swimming upstream here. The rise of streaming competition will, sooner or later, force these companies to finally listen to consumers, stop mindlessly raising TV rates, and kill off traditional bundles. Cable TV providers that are tired of the increasingly tight margins in the pay TV sector will simply exit and focus on broadband instead. The rest, like AT&T and Comcast, will spend a few years swimming upstream by suing people, trying to tilt the regulatory playing field, and crying a lot until they realize the shift toward cheaper, more flexible TV bundles is a trend they can no longer ignore.

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Companies: comcast

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Comments on “Comcast Sues Maine For Demanding It Sell TV Channels À La Carte”

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Daydream says:

Hi, I was hoping to buy a couple of words? I’m looking for ‘Comcast’ and ‘Sucks’.

You have it? Great, how much?…Pardon? I can’t get them individually, I have to buy a sentence?

…Alright, what else is bundled in this sentence?…’Comcast Is Great, Sucks To Be Anyone Who Doesn’t Have It’.

But I don’t want all those words, I only want ‘Comcast Sucks’.

Look, the law says that you have to have the option of selling words and letters separately.

And now you’re suing? Because you don’t want to sell letters or words, just sentences?

(Disclaimer; I’m sleep deprived at the moment and I can’t accurately assess how witty this may or may not be.)

Anonymous Coward says:

Per channel? How about per show?

I’m looking forward to a future where it’s a la carte on a program basis. Why should I pay for all of NBC if the only thing I watch is Saturday Night Live?

Also the argument that niche channels can’t survive outside of the bundle is a strange one. Why should they survive if they don’t have an audience? Maine can probably get the GOP on board if they call it tv channel socialism.

Anonymous Coward says:

Re: Re: Re: Per channel? How about per show?

My pint exactly, a lot of specialist channels exist on youtube, powered by donations from their fans. From what I have seen, 100,000 subscribers is about the level where they will be enough fans willing to support the channel for the owner to go full time, and they have a world wide reach for finding those subscribers.

DannyB (profile) says:

Forced Bundling and Tying

It’s a time honored tactic of monopolists.

Bundling: add in a bunch of "junk" the customer doesn’t want, so you can increase the price because of how much "value" you added. (I would argue adding ESPN should force them to have to reduce the price.) Look at this new fancy television set! It may seem expensive, but it includes floor mats and an undercoating that won’t ever get any security updates!

Segment The Market: With Linux, you can do anything. But Windows comes in so many different editions. Windows Home Basic, Windows Pro, Windows Extra Whitening, Windows with Peroxide, Windows with Baking Soda, Windows Tartar Control, etc.

Predatory Pricing: If a competitor gets a foothold in one market segment, such as small business servers, you simply underprice them. Sell at a loss. You can easily afford unlimited losses because you can charge whatever you want in the other market segments you have monopolies on. For example, Remmington Rand introduces a new entry level computer. Introduce your own model at way less than the cost of manufacture, but with just barely enough memory. The memory for this model is incompatible with any other model, and is priced sky high — making up for the initial loss from the sale.

If you want to read the monopolists playbook, which I picked up in the early 1990s, read:

Big Blue: IBM’s Use and Abuse of Power

Microsoft behaved as if everything in this book was their bible. It was astonishing.

James Burkhardt (profile) says:

Re: galaxybrain.gif

Thanks to my roommate, I have live TV. Over the cost of internet alone, the TV service with 230+ channels costs me $30. So $0.13 per channel.

If I watched Live TV, I would watch like 5 of these channels. So in theory I am spending $30 to get $0.65 worth of content.

Streaming, to get the content of those 5 channels would run me something like $50. That’s an issue. Part of it is replacing ad revenue, I get that. But that is why Ala cart TV plans are different than streaming. People don’t often want to pay for commercial-supported content in streaming I’d figure. And figure the ad revenue is suffering the same issues as internet ads in general. But people expect commercials in Live TV, even cable, nowadays. You could significantly discount that service as a alacart live TV provider in ways you can’t as a pure streaming provider.

They are different services, and the expectation is the revenue factors are different and could discount the $10/mo per network we see for streaming.

Anonymous Coward says:

Re: surprisedpikachu.gif

I think your point is valid, but perhaps oversimplified.

Consumers don’t want everything a la carte, nor do they want everything bundled together. The truth is somewhere in between. Part of the issue as well is the perception of the impeding market segmentation.

A lot of people are used to being able to watch whatever they wanted to watch on Netflix. It’s convenient to have all the shows you like in one place, for one fee. As we see things drop off of Netflix and head over to new streaming channels like Disney+, the average consumer gets upset and says "But I liked having everything in one place and paying one fee!"

On the other hand, the bundles available to cable TV are dumb. I’ll never watch 110 channels. I’d rather be able to choose the 5 channels that I actually watch, and pay for just those. So the average consumer says, "I’m paying for stuff I never use! Give me a la carte!"

If you really think about it though, what they actually want in each case is the same thing, just approached from two different sides. "Let me choose the channels I want to watch, and pay a single fee for them."

If Cable TV could pivot to be that aggregator/payment processor for single-point access to multiple networks (like they already are for legacy channels), but for streaming instead, it might make everyone happy.

Anonymous Anonymous Coward (profile) says:

Re: Re: surprisedpikachu.gif

I wonder how in a show by show a la carte system the providers would introduce new programs? Free introductory offers, but only from their silo? If I was to subscribe to one brand, say NBC or DIsney, how would CBS or ABC or ESPN entice me with new programs? Put them on YouTube for free as introductions or hope that the buzz over the company water cooler will be sufficient?

Personally, I don’t like any of the silo’d options. Nor do I like the bundled option. Nor do I have any suggestions. As markets will do, this will get sorted out messily and over a long time. Since I don’t use either method, silo or bundle, I will miss the fight, except as a spectator, and probably as it is documented here.

urza9814 (profile) says:

Re: Re: surprisedpikachu.gif

"Consumers don’t want everything a la carte"

I certainly do. I don’t even subscribe to cable but I have that problem with online streaming. I pay five bucks a month for ten channels where I only watch one of them. Then I pay another five bucks a month for another hundred channels where I only watch three or four. Then I pay another ten bucks a month for another dozen channels where I only watch one. And then you’ve got services with partial overlap, so a couple of the channel I watch I can get two or three different places, but I still have to subscribe to all of those in order to get other channels that are exclusive to one or the other…

Of course, now one of my channels is talking about splitting into three or four different channels, and charging separately for each one…which sucks too. But in that case it’s the same genre of content, produced by the same company, with the same hosts and producers, so splitting that up seems rather silly.

The thing that annoys me the most though is when you pay extra for "exclusive access" only to find that this new pay site is just a collection of embedded private YouTube clips. If I wanted to watch you on YouTube, I’d just do it directly…The main reason I’d want to pay is to get away from Google.

The problem with this is that if they charge a flat fee no matter how much you watch, then the people who only care about one of those programs are subsidizing the costs of the people who watch many of them. Which is exactly what they want — to keep you inside their own platform. If you paid per program then they’d have to actually have a lot of good content, instead of one good show and enough mediocre to garbage ones that they can advertise "hundreds of channels!"

Anonymous Coward says:

Re: Re: Re: surprisedpikachu.gif

How granular do you want to get with your ala carte, though? Take CBS All Access, for example. $10/month for access to the show archive plus their exclusive content. But what if the only thing you care about is Discovery? Would you want to pay something like $2/month for access to only that show? And as you point out, would CBS even want to provide that as an option?

Then let’s say you also like a Netflix original. Same deal – $2/mo for the one show?

Repeat as needed, and you’re paying $2 to 12 different sites to cover the individual shows you like. A lot of people are going to find that annoying, even while they’re happy that they’re paying for only what they want.

I think Cable TV/legacy providers have an opportunity here (because they would never license to a startup for it) to offer the ability for a customer to pick those same 12 shows, but pay a single provider for them. Seems to me that would be a more satisfactory solution all around – People get more control over their choices, and Cable TV gets a new revenue stream to fill in for cord-cutters.

John85851 (profile) says:

What if your channel is cut?

Customers: We want everything a la carte!
Customers again: Why are you removing my favorite channel and claiming no one watches it?

This has been the issue since the beginning of this argument: what happens when the cable company thinks there’s not a large enough market for your favorite channel? Do we really need 3 EPSN and 2 Golf channels? No.
But supposed not enough people in your area watch the History Channel, but you love all those shows about bigfoot and aliens going to pawn shops. Well, sorry, that channel isn’t making enough money so the cable company drops it. And since there’s no competition, you can’t watch it.
Oh, sure, you could try the History Channel app, but it probably asks for your cable company before you can log in.

ECA (profile) says:

First amendment...

FINE…let them have them.
But to have them they MUST be able to tell EVERYONE what they wish to say.. Otherwise its Bias, only speaking to those that have access, or can afford access.

Under their Ideal, we would all have to goto friends home to watch Cable/sat, WHICH i dont think they like either..

And while you are at it…HIGH SPEED INSTALL INTERNET..

farooge (profile) says:

low latency satellite broadband

while I can say, without a doubt, that my ATT fiber is a MUCH better service than anything i ever experienced from Comcast it also doesn’t allow me to use my own router or change the default DNS. also, I’m compelled to do business with a company i loathe. i really hope the forthcoming satellite offerings live up to the hype. I could also, conceivably, dump Verizon. then they could buy all the laws they want (I live in TN .. sooo) and it wouldn’t matter .. that would be awesome.

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