CUT-THE-CABLE.COM

As this website continues to grow along with its following, I feel that it is time to expand and offer our own editorials.  Our readership has hit a threshold for us to begin to make a difference if we band together.  So if I may, let me start the ball rolling with my utopian vision of what the cable industry SHOULD look like if the consumers best interest were of the primary concern.

Break the Business Units into Different Companies

Comcast and Time Warner both started as Cable TV companies.  Verizon and AT&T both began as essentially telephone companies.  Over time as the technology playing field evolved and these technologies converged, these companies are now all offering the same core services: CATV, Internet, and Telephone.  The one thing that all of these services have in common from the consumers standpoint is that little piece of coaxial cable that runs into their home.  If you look at that cable coming off of the telephone pole running in parallel with your power line, the common person has to ask the question: ”Why is it that the way I am treated as a POWER consumer is so different than the way I’m treated as a CABLE consumer?”  Believe it or not, the answer in my mind is a matter of mere politics.

Did you ever wonder how companies like AIG, GM, and other got so big that they were deemed “too big to be allowed to fail” by our own federal government?  It’s because these machines co-exist in a symbiotic relationship.  As long as the COMCASTs, AIGs, and GMs keep funneling huge sums of money in the forms of lobbying and political contributions (to both parties), there is no political incentive to break them down into manageable businesses.  And the only way that the cable industry can continue to afford to do this is if they continue to make obsene profits. 

If you recall during the Clinton years, Bill Gates and MICROSOFT did not pay the Clintons the “hommage” that they felt was due from such a wealthy company, and a 16-month epic anti-trust battle began with results being that Microsoft had deep enough pockets to outlast the Clinton reign.  The moral of that story is that the bigger a conglomerate gets, the harder it is for even the federal government to reign them in.  The fact of the matter is that these companies are setting policy, not your elected leaders.

My recommendation is that the federal governement update the FCC regulations to disallow CATV, Internet, and phone services to be offered by the same company.  The first thing that people will say is that you will then loose the economies of scale that come from packaging these services.  NONSENCE!  It wasn’t too long ago that through your local telephone provider you could select from any numbe of different long distance providers and still have that transparently incorporated into a single billing statement.  Therefore, there is absoluely no reason that the same consolidated services could not be offered to the consumers through a unified billing statment, for completely seperate companies.  The benefit to the consumer in doing this is that you will have choices for each component through your coax cable and not locked into a vertual monopoly, which then also contributes to the self-perpetuating machine.

Treat Cable Services as a Public Utility

The next step in my utopian vision is that cable services be treated in the same manner as any other public utility.  Let’s have a meter installed on the outside of the house.  It can be a SMART meter that doesn’t require someone to come out and read it once a month.  The technology is there for the information to be sent back to the cable company without having to send someone out.  Now, envision the option of paying for your CATV, Internet, and phone based on actual usage rather than a flat monthly fee!  That would completely change the landscape of how television content providers are compensated also.  If for example, HBO feels that their product is so superior to your local NBC affiliate, then let them get compensated based on actual viewership.  I guarentee that a lot of the old assumptions about the relative popularity of one station over another will be proven wrong.  I’m not saying that you have to do away completely with subscription pricing, but having a regulatory requirement in place that gives the consumers the option of metered usage can only benefit cable consumers as a whole.

Change the Revenue Stream

In the CATV world, the business model as it currently exists has the consumers paying the cable company for services, and the cable company paying the networks for content.  This model allows the various networks to raise their rates at will based on dubious ratings data, and the cost is then passed down to the consumers in the form of increased CATV rates.  I propose that this is OK for premium channels (ones that rely on content only without suplemental advertisements) which the consumer can select on an  “a la carte” basis, but that all other channels that carry ADVERTISEMENTS be carried by the cable companies on a purely speculative basis with 100% of their revenues coming from their advertisements.  These commercial station should pay the cable companies for the bandwidth capacity to deliver their signal to the consumers and not vice-versa

So there you have it folks, my ‘pie in the sky’ utopian vision.  Please pick it apart or add to it, and by all means send in your ideas.  Once we have enough of them we can put our heads together and start the petitioning process.  If you want to share without it being posted, just email me and we’ll discuss things off-line.