from the Constitutional-right-to-predatory-pricing dept
For the better part of two decades, the cable industry has fought tooth and nail to prevent having to sell cable channels individually (a la carte). Historically, the cable industry’s defense of this opposition is that letting consumers buy individual channels would do two things: kill off niche channels, and raise rates on consumers. Granted you’re supposed to ignore that both things have been happening anyway. Despite streaming competition, cable rates continue to skyrocket, and cable operators themselves have been dumping less watched channels from their lineups anyway in a bid to shore up tightened margins.
The streaming sector’s impact on these issues remains a work in progress. And state or federal efforts to force cable providers to sell channels individually haven’t gone particularly well.
Case in point: back in September, Comcast sued the state of Maine for trying to force the company to sell users individual cable channels (LD 832). Comcast lawyers insisted that the new law violated the company’s First Amendment rights, and told news outlets the law would “suppress competition and result in higher consumer prices and less program diversity.” Historically, “this violates our company’s First Amendment rights” is an argument telecom lawyers throw against the wall in every case in a bid to try and see if it sticks.
In this case, it appears to be working. Comcast’s argument was twofold: the law violated Comcast’s editorial decision making right to require consumers to take bundles of programming, and violates the First Amendment’s prohibition on speaker-based regulations — since the law applies to incumbent cable providers but not other pay TV providers. It’s that latter argument that appears to have swayed U.S. District Court Judge Nancy Torresen’s decision to impose a preliminary injunction preventing the bill from taking effect. She appeared to be less swayed by Comcast’s phony concern that such laws would raise cable TV prices:
“At this initial stage, I cannot conclude that the State has carried its burden of showing that [the law] will, in fact, be likely to reduce prices and increase affordable access to cable,” she said. But she also said: “The evidentiary record is weak at this point, but the record does contain evidence that cable pricing has greatly exceeded the pace of inflation over many years. This may provide a separate special characteristic that would support differential treatment of cable operators. Because I ultimately conclude that the State has not met its burden of showing that it is likely to succeed under intermediate scrutiny, I do not need to decide this issue at this time.”
At this point it’s probably not worth trying to force cable’s hand on this subject. In large part because growing competition in the pay TV space should ultimately do the heavy lifting here. Streaming competition is completely restructuring the pay TV landscape, resulting in traditional cable operators (especially those who refuse to compete on bundle flexibility or price) losing millions of pay TV subscribers each year. Even if this law fails, competition should ultimately pressure even Comcast to begin actually listening to consumers if the company wants to remain in the pay TV business.
The real problem remains in broadband, where giants like Comcast have secured a growing monopoly thanks to US telcos that have lost interest in the fixed residential broadband market and refuse to upgrade their networks. As pay TV margins tighten from competition, giants like Comcast and Spectrum will simply raise the price of broadband, most prominently via bullshit usage caps and overage fees. And since we’ve effectively neutered most federal oversight of the barely competitive US broadband sector, it’s a problem that’s going to stick around for a while (no, 5G isn’t a panacea).