Skip to main content

Slow Progress for Open Cable TV Competition

U.S. regulators have denied a request by the cable television industry to delay new rules designed to open up the market for cable TV set-top boxes -- and in the process have started to unravel the longtime duopoly of Motorola (owner of General Instrument) and Cisco (owner of Scientific Atlanta).

According to a Reuters report, the Federal Communications Commission (FCC) said it would not postpone an order that requires cable companies to separate the security functions from set-top boxes and put them into a CableCard that can be easily used in TVs and set-top boxes made by other manufacturers (not owned by the duopoly).

"In a new era with a competitive set-top box market, consumers will enjoy greater choice and reap the benefits of exciting and innovative features -- such as the ability to watch Internet videos or view slideshows of family vacations on their TV sets," FCC Chairman Kevin Martin said in a prepared statement.

I believe that Chairman Martin should have gone farther, and mandated unbundling so that cable TV subscribers could purchase individual channels from an a-la-carte menu and create a customized tier -- as consumers in leading pay-TV markets, such as Hong Kong, can already do freely. He, and the FCC commissioners, talk about the obvious benefits -- but it's all talk and no action.

Current restrictions in the U.S. market force consumers to purchase channel-tiers that often contain many "filler" channels they never watch. It's one of the primary reasons that the pay-TV sector is so lucrative. Furthermore, cable companies closely track the usage of channels that are trending upwards, and then remove these channels from the "Standard" tier.

Such was the case with Time Warner Cable in Austin, Texas, as an example. When the Independent Film Channel (IFC) and the Sundance Channel gained in popularity, they pulled these channels from the Standard channel tier, essentially forcing non-digital subscribers to upgrade. Moreover, all consumers now had to subscribe to a "Movie Pak" tier that included eleven channels -- even if they were only intending to watch the IFC or Sundance.

To date, the FCC did nothing to intervene after they deregulated cable TV services and rates began to skyrocket -- meanwhile municipal governments continue to grant a monopoly to just one cable TV company in most markets. Meaning, Chairman Martin's "new era" has actually proven to be a disaster for most American consumers.

The "channel shuffling" game was merely an incremental byproduct of the apparent lack of federal regulatory oversight. Clearly, local municipalities have no incentive to contain rising cable TV rates, since their own tax windfall is based upon a percentage of pay-TV revenues.

This scenario is the real reason that U.S. Telcos have been so keen to enter the pay-TV market. It's considered yet another government-protected marketplace that has tolerated blatant restraint of trade, while at the same time ensuring that consumer choice is restricted. Add to this the consolidation of the radio and television broadcast sector, and it's apparent that the FCC has forgotten a key part of its charter.

Therefore Chairman Martin's announcement is hardly grounds for consumers to believe that substantive progress in being made to make the pay-TV market progressively more open and competitive. It's more like a token gesture effort to deflect ongoing criticism that Americans must endure a system of government that clearly hasn't protected the consumer's interest.

Popular posts from this blog

GenAI: A New Era in Business Transformation

The advent of artificial intelligence (AI) has ushered in a new frontier of innovation, with Generative AI (GenAI) at the forefront. At the brink of this revolution, it's crucial to understand the current GenAI adoption and its implications for commerce worldwide. A recent poll conducted by Gartner provides valuable insights into this emerging trend and the potential upside opportunities. Generative AI Market Development The poll, which included 1,419 executive leaders, indicates a significant shift in the corporate world's perception and adoption of GenAI. The data reveals that 45 percent of respondents are currently piloting GenAI, while another 10 percent have put it into production. This is a substantial increase from a similar poll conducted in March and April 2023, where only 15 percent were piloting and 4 percent were in production. GenAI is no longer a mere buzzword; it has become a strategic focus for organizations worldwide. As Frances Karamouzis, VP Analyst at Gartne

GenAI Revolution: The Future of B2B Sales Apps

When B2B buyers consider a purchase they spend just 17 percent of that time meeting with vendors. When they are comparing multiple suppliers‚ time spent with any one salesperson is 5 or 6 percent. Self-directed B2B buyer online research has already changed procurement. IT vendors are less likely to be involved in solution assessment. Now, more disruptive changes are on the horizon. By 2028, 60 percent of B2B seller work will be executed through conversational user interfaces via Generative Artificial Intelligence sales technologies -- that's up from less than 5 percent in 2023, according to Gartner. Generative AI Market Development "Sales operations leaders and their technology teams must prepare for the convergence of new forms of artificial intelligence, dynamic process automation, and reinvented deal-planning activities that will transform the sales function," said Adnan Zijadic, director analyst at Gartner . According to the Gartner assessment, Generative AI (GenAI) s

Industrial and Manufacturing Technology Growth

In an evolving era of rapid advancement, market demand for innovative technology in the industrial and manufacturing sectors is skyrocketing. Leaders are recognizing the immense potential of digital transformation and are driving initiatives to integrate technologies into their business operations.  These initiatives aim to enhance efficiency, reduce costs, and ultimately drive growth and competitiveness in an increasingly digital business upward trajectory. The industrial and manufacturing sectors have been the backbone of the Global Networked Economy, contributing $16 trillion in value in 2021. Industrial and Manufacturing Tech Market Development   This growth represents a 20 percent increase from 2020, highlighting the resilience and adaptability of these sectors in the face of unprecedented challenges, according to the latest worldwide market study by ABI Research . The five largest manufacturing verticals -- automotive, computer and electronic, primary metal, food, and machinery -