Congressional Black Caucus Cable Fight
Call to Action: Congressional Black Caucus
September 26, 2003
1. Cable television is the dominant system delivering television in the US.
Approximately 70 percent of all households subscribe to cable television service. Only 15 percent of Americans now receive TV solely from over-the-air ("free") broadcasting. The remaining 15 percent subscribe to direct broadcast satellite services.
2. The Cable TV industry has a long history of anti-competitive practices. Hence refusal by major cable companies to give capacity to African-American-backed entrepreneurs should be viewed from that perspective.
Cable giants have often forced competing programmers to cede them control or ownership stake in their ventures, as a condition of access. Or they have blocked a proposed channel from succeeding. Hence the recent disclosure that Comcast was insisting that both Russell Simmons and Tim Reid cede it "operational control" of their proposed channels should be viewed in that light. Another example was the refusal of the cable industry in 2001 to back a public affairs channel specifically for African-American concerns.
3. The cable TV industry is highly concentrated and is dominated by a handful of companies. New FCC Rules will allow even greater consolidation.
The cable industry has dramatically consolidated, with just a few companies controlling most of the industry. Comcast (which just purchased AT&T's cable holdings) and (AOL) Time Warner dominate. Comcast now controls at least 29% of all multichannel (cable and DBS) subscribers. The FCC is expected soon to issue rules that further weaken cable ownership safeguards, and will permit further control by even fewer companies. This will foster even greater media concentration beyond what the FCC just approved last June for the broadcast and newspaper markets.
4. The Cable industry has enough capacity to add many more programming channels and new digital services.
The industry has upgraded the majority of its cable systems so it can deliver scores of new digital TV channels, pay-per-view and video-on-demand services, and high-speed Internet access (broadband). Cable's business strategy is to leverage its monopoly control over its network to dominate any new programming ventures. Cable and broadcast giants can start new channels at will, however. For example, Comcast now has a new G4 game channel and its TV One service; News Corp/Fox has just created its "extreme sports" Fuel channel.
5. Cable is also the leading US provider of broadband to the home, which will allow it to expand its monopolistic practices to new digital media.
At stake is not just competition, diversity, and access to information/entertainment in the TV market. TV and the Internet are merging as a result of broadband technology. Cable controls an essential facility through which all sorts of digital communications will flow. The ability of African-American programmers and others marginalized in today's media business to distribute digital products will be greatly affected by cable TV industry practices. Cable companies can ensure that their websites and services receive preferential online treatment-while competitors are relegated to second-class service.
6. Greater overall media concentration threatens democratic expression and competition. New FCC rules will allow for cable to merge with broadcasters and major daily newspapers in many communities.
According to a recent report from the Writers Guild of America, west, just five companies control the majority of TV channels people view. Newly formed cable giants such as Comcast can now also make or break potential cable programmers. The broadcast networks and large station groups have been able to create channels, because they successfully lobbied Congress in 1992 to give them leverage over cable operators ("retransmission consent"). But everyone else-unaffiliated, start-up, minority programmers-is left out. The upcoming takeover of DirecTV-the country's largest DBS service-by Fox and GE/NBC's acquisition of Vivendi-Universal film and cable holdings will further narrow opportunity, competitiveness, diversity, and access.
7. What can be done?
The CBC should hold national and local field hearings on cable TV's potential to serve both national and community programming needs more effectively. Congress should enact policies to ensure that both local and national programmers have nondiscriminatory access to cable and other broadband networks. The cable industry must also embrace policies that ensure meaningful diversity and choice of programming services. Congress should also repeal "retransmission consent," so that big broadcasters no longer get a free multi-billion federal handout for their cable and satellite channels.