Newton’s Third Law states that for every action there is an equal and opposite reaction. He was talking about physics, not politics, but the law also holds true in the world of Washington.
Responding to preexisting competition, cable bundled its products, and the consequent effect on prices has been very much to the consumer’s benefit.
In this rarefied environment (some complain that it is truly a vacuum) it is also true that whenever someone articulates an argument or policy proposal, someone else will argue the opposite and both will come up with "facts and figures" that irrefutably support their position. It’s just wonderful what you can do with numbers!
In the various debates we are in over cable regulation, numbers have been thrown around for years to support the proposition that cable must be regulated, or reregulated, or now re-reregulated because the "numbers" show that cable’s prices are way out of line with something. Of course that "something" is a key ingredient in the argument, and it is usually the consumer price index or some other measure of static goods and services not subject to the vagaries of the programming marketplace. But never mind, it sounds good…cable has gone up X percent! Those monopolists are gouging the public! The government — that true, trustworthy and always diligent minder of the purse strings — should step in and make things right!
Well, it’s obviously getting a lot harder to make those arguments, but you can be sure we will hear them again this year. We already have. The FCC held off announcing the results of a study completed a year ago of numbers that are now 2 years old in order to have those now pretty useless and irrelevant numbers allegedly bolster the move to introduce more competition into the MVPD market. But the numbers were woefully bogus, and most folks realized that.
You see, between the time those numbers were accumulated and now, some of the companies that were offering deep discounts (which showed up as an alleged success of competitive price reductions) have either substantially raised their rates — because they were not able to sustain the loss-leader nature of their pricing — or they have simply gone out of business. Meanwhile, the cable companies, responding to preexisting competition, have started bundling their products, and the consequent effect on prices has been very much to the consumer’s benefit. In other words, prices have already gone down for the value package more and more folks are buying.
The numbers game simply is not going to work on Capitol Hill much longer. The "reaction" of the cable industry has been to generate numbers of its own, and they are pretty impressive. They need to be repeated to every member of Congress as many times as necessary to get the point across.
Steve Effros, a former FCC attorney and president of CATA, is a columnist and consultant in the cable television industry. He can be reached at email@example.com.