Who wants to be a monopoly?

Posted: Thursday, May 04, 2000

The following editorial appeared in today's edition of the Chicago Tribune:

Whew, what a relief! For a minute there, it looked like that virtual monopoly was going to seriously disrupt a pastime Americans hold near and dear.

This has nothing to do with the impact of the Justice Department's threatened breakup of Microsoft. It has everything to do with Time Warner's interfering with the inalienable right of Americans to watch Disney/ABC's ``Who Wants to be a Millionaire?''

While Justice has trained its antitrust howitzers on big bad Microsoft because it fears consumers may be harmed sometime in the future, Time Warner and Disney have engaged in a high-stakes game of chicken that starkly illustrates this fact: Most Americans still have no choice when it comes to who provides their cable TV.

Satellite TV is a growing alternative - especially now that transmission of local broadcast channels will be included. But when it comes to cable TV service, most subscribers in the United States are still captive to government-sanctioned monopolies. And for 39 hours this week, 3.5 million of them suffered actual harm (however temporary).

After blacking-out ABC network programming on Time Warner cable systems, thus depriving TV viewers from New York to Los Angeles, Time Warner agreed to a temporary truce with Disney that defers - but doesn't resolve - this dispute. The FCC is already looking into whether its rules were violated.

Like many corporate negotiations, this one is all about money. How much money should Time Warner have to pay to offer a trio of Disney offerings - the Disney Channel, Toon Disney and the Soap Opera channel - to its subscribers?

But it is also about the future. America Online is in the process of buying Time Warner. Disney is loudly and properly worried about what that alliance will mean for Disney's access not only to Time Warner's 12 million cable subscribers but also to the new Holy Grail - the 23 million AOL Internet customers, a number that, not incidentally, is growing by the day.

This isn't the first such dispute between broadcasters and cable operators and it's a sure bet it won't be the last. A recent dust-up between Cox Communications cable systems and News Corp. resulted in no Fox broadcasting for Cox cable customers for six days.

The two industries have been sparring ever since Congress passed the 1992 Cable Act, which forced cable systems to carry broadcast signals basically for free. The level of acrimony is increasing as broadcasters comply with a government mandate to digitize their signals, making possible yet more broadcast channels.

If consumers had the option of switching to another cable TV system when corporate behemoths threaten to hold them hostage, this would be just another private business dispute. But consumers don't have that option yet. If this provides a boost to Satellite TV, so much the better. Competition is the answer.



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