A Beautiful Mind Game

BY ALICIA MUNDY HBO should sign Russell Crowe for the starring role if it ever makes a movie about the battle over cable ownership caps at the Federal Communications Commission. That’s because the man he portrayed in A Beautiful Mind, eccentric mathematician John Nash, is playing a large role in how that cap decision will be made. It seems that evidence placed in the FCC record to date, both for and against raising the nationwide distribution cap from 30% to 40% for any one MSO, is very weak. Without empirical data, the FCC is largely relying on its own 2002 study using game theory and bargaining behavior for answers to this billion dollar question. Those arcane economic theories gave Nash his Nobel, Crowe his last great role and the players in this drama a huge headache. FCC Chairman Michael Powell lamented the “thin” record of evidence in the cable cap issue to reporters last week. Asked if the cable industry had dropped the ball here, however, sources familiar with cable corporate strategy said the matter was very complicated for MSOs and for their lobby, the National Cable and Telecommunications Association. One source said the cable companies had hobbled themselves because some of the larger cable MSOs would like the cap removed entirely. Therefore, the NCTA and various companies apparently don’t want to make a strong case for a new 40% cap, since that would imply they accept any cap at all. Meanwhile, consumer groups have apparently failed to produce useful data as well, largely because the cable cap issue doesn’t have analogous situations in the real-life media landscape they can cite as warnings and examples. There’s an “information vacuum” on where to draw the line here, one source added, leaving game theories and hypothetical bargaining as the FCC’s main guide. The decision may come down in late June, after the media ownership rule vote.