11/29/2007

FCC Regulating Cable

I have a hard time with this article here because the government seems way out of line on this one. The article talks about how the Federal Communications Commission is considering regulating the cable television industry by capping cable company coverage to no more than 30% of all U.S. subscribers and reduce prices that cable TV companies charge customers.

Since when did 'We The People' also include 'We The Cable Subscribers?' Cable television is a private good just like anything else in the world, but the government would like to treat it more like a public good. It is not our responsibility to make sure that every American home gets cheap cable TV.

I am also struggling with the implications that some cable providers have too large of a market share. If there was only one way to get TV and there were few providers, I could see a monopolistic accusation having some teeth, but there are so many other options than cable easily available to the public that the TV market is acting more like a perfectly competitive market than a monopolistic one.

7 comments:

Dominic said...

I have to agree. I felt the same way when I read this article. There are so many options for cable. I don't see why the government feels the need to control it. They should focus their efforts somewhere with less competition or an unfair advantage.

Dr. Tufte said...

Government feels the need to control this because the people who get involved in government do so because they have control issues.

Now, I'm painting with a broad and cynical brush here, but I think this needs to be in our toolkit of handy explanations for government behavior.

To this we could add bad incentives. Regulators are not paid to provide better service, but to regulate. When they are feeling like they need more to do, their job description is to go find something new to regulate.

William said...

Dr. Tufte,
I agree with you and Travis and believe that in this instance the government should not get involved and regulate. I think so many times the government only hears the complaints of the minority. And it seems that they only take into account their needs and forget the needs of the majority. I feel that in this instance with the cable some minority groups in small areas may be affected, but I don't think that the government should make all cable companies follow the same regulation.

Trinity said...

Dr. Tufte- While I agree a touch of skepticism is necessary to navigate the actions of government, there are many reasons the government regulates markets. These reasons may not be very sound but they are reasons that make sense to them and apparently many others. I doubt that all regulation can be blamed on the controlling personalities of politicians.

Grace said...

Extra Credit--Dr. Tufte

In response to Dr. Tufte and Trinity, I agree there is more behind why the government tries to regulate anything and everything. It goes beyond "control issues" to what William recognized as heeding the call of the minority.

Travis made a good point: it is not our responsibility to ensure that every American has access to cheap cable t.v. It is not a necessity, therefore it should not be under government regulation. It should be left in the hands of the market; let the "invisible hand" influence the prices and leave the government out of it.

An interesting side note: government won't regulate the content on cable t.v. so why should they regulate the price?

Reagan said...

Dr. Tufte-Extra Credit

The FCC needs to take their hands off the situation and let the market dictate what happens. I agree that regulators will move from one thing to another finding a way or making a need for them to get involved and try exercise their control. If people are willing to pay too much for cable then good for the cable company. If they feel like they are paying too much they can get a satellite system or maybe even watch TV for free with over the air broadcast. Nobody is forcing them to use the cable company's services. The FCC should back off and let the market do its thing.

Dr. Tufte said...

Trinity: I hit a nerve. Good.

Grace: the government does regulate the content of cable TV, just not as severely as that of broadcast.

I did say that my cynical explanation needs to be in your toolkit. I'm not excluding other reasons for regulation at all.

But, we have no problem generalizing personality traits of individuals into their group membership: people who like money go into business, people who are creative go into art, and so on. I just don't think most of you are going to recognize that people with control issues go into government, unless I point out that it makes sense using the transposition technique we already use.