Wednesday, June 13, 2012

Cable Companies Accused of Antitrust

Are cable companies practicing monopolistic behavior, driving pricing up while limiting smaller programmers and new video platforms from growing?  Today's Wall Street Journal article has the Justice Department looking deeper into these practices.  From talk of lack of net neutrality to pricing, it is reasonable to suspect that such behavior is in fact necessary to maintain the dominance over the customer in an industry that is rapidly seeking new means for distributing content and managing bandwidth.

The cable companies built these digital highways initially for a proprietary video platform; technological changes have enabled content to be consumed on this same highway.  The cable companies want these highways to be a toll road; consumers want free travel.  Cable companies want to control what you view and from whom, consumers like the a la carte choice and free to view model.  And so you have conflict.

Today, that means the Justice Department digging deeper into cable practices including contract requirements that may limit where a programmer can exhibit or how much, and pricing requirements that guarantee they get the same deal as other big distributors.  As the largest distributor, Comcast has the largest target on its back.  Along with this current probe, Comcast is facing additional lawsuits.  "The suit accuses Comcast of violating sections 1 and 2 of the Sherman Act by gobbling up competitors, then overbilling consumers for services."  Now this particular lawsuit appears to have been in the courts since 2003.  The wheels of justice may move so slow that technological change may find a solution before the courts do.

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