Is cable TV a right?

Like the editorial team and Pete Callaghan at The News Tribune, I too am very, very curious about what KOMO charged CLICK! for carriage. Cable TV

KOMO and CLICK! were locked in a re-transmission fee battle recently and the paper, wisely, is fighting in court to use the public records laws to find out what KOMO charges CLICK! since CLICK! is a public utility.

Makes perfect sense to me. Give it a shot.

There is a little problem though, and that is that at KOMO is a private company, and that the information about what they charge cable companies falls into the category of a trade secret according to their lawyers, and at least one judge’s opinion.

Do you know what Samsung charges Best Buy for a TV set? Do you know what WalMart pays for the DVD player you just bought? Are their margins unreasonable? Is there business model an affront to American freedoms? Who is supposed to decide that?

I vote for the marketplace.

So then what’s the deal with TV? When people scream for TV, why do newspapers and politicians and bloviating bloggers get involved? Well, the problem is that people think it’s a basic need.

It is not.

TV is a discretionary – a highly discretionary – consumer product.

Looking Back a Little

Way back when, TV operators were “given” valuable electromagnetic spectrum – or the “airwaves” as those of us locked in 1955 persist in calling it. Broadcasters paid for those “airwaves” by building a massive over-the-air infrastructure and providing the public free, advertiser-supported television. There was a public service mandate for news and children’s programs, but that was it. Easy.

Then, cable operators had a big new idea: more channels and more content because after all, more is better – right?

Cablecos were “given” exclusive franchises to serve a captive audience in their local areas, and THEIR business model was a real doozy: they could charge for both cable-created advertising inventory, AND charge for ALL the other TV channels too!

The cablecos “paid” for their exlusive rights to lay cable by building out the infrastructure (kind of – but that’s another debate) and by providing the dubious value associated with PEG channels.

At the time cities and counties thought the PEG channels were going to be awesome, then they figured out that creating programming is actually difficult and expensive – thus the proliferation of the outlandish public access shows, hours of mind-numbing council meetings and channels devoted to text-driven slide shows you never, ever, ever, watch. Yes, there is some good stuff being done on local PEG channels, but only with tremendous (on a percentage basis) subsidies.

Both sides needed each other: the new cable industry needed broadcaster’s content, and broadcaster’s needed access to the new avenues of distribution promised by cable.

The over the air stations got “must carry” enacted. The cable operators got to charge for the over the air stations content.

Today though, the fact is that both industries, cable and broadcast, are “mature” – and don’t need artificial marketplace manipulations to keep them, or what will be left of them, going.

These Here Modern Times

Even in Pierce County, we have the Internet, mobile, and satellite etc. These other channels are disintermediating (blowing up) each industry’s cushy business model with the scramble now “on” to remain relevant. Over the air broadcasters are going mobile and increasing hours of local programming, cable companies are going the opposite direction – working only on the expense side of the balance sheet from what I can tell.

So at this juncture, this snapshot in time, the tables are turning – leverage is going back to the content creators – yes, the people who actually create things that are worth watching on your otherwise mostly useless 500 channel cable package.

And that is as it should be IMHO because let’s face it, distributing a signal through a wire isn’t very special. It’s an old technology where the stranded costs have long since been recovered. There is just no justification for a cable TV operator to be guaranteed any particular margin on re-selling another guy’s over-the-air signal.

IS -vs- OUGHT … The Ongoing, Epic Battle of Our Lives

Here’s how things IS: The laws and regulations governing the relationship between video creators and distributors – be they OTA or cable or whatever – are a mess.

Now for the OUGHT.

Cable TV operators OUGHT be able to pay for signal from anywhere, and broadcasters OUGHT be able to charge as much as they think they can.

Consumers OUGHT likewise be able to access programming over the air, off the Internet or by paying for the cable channels they want ala-carte. Cable TV operators OUGHT not be forced to “must carry” local commercial TV stations.

And notice: Indeed, this is where we are heading. But as you can also see, getting there will be ugly.


Ultimately, content creators, entities like KOMO who employ 100 people in news alone, are well within their rights to TRY to reclaim some of the margin captured by operators like CLICK! if they feel they are in a position to do so. This is the nature of every other wholesale/retail relationship in the world.

Listen, if CLICK! (customers, the city, whoever) doesn’t want to pay for it – well, then don’t! Save yourself some money (about $1-ish per sub) and see if people will still pay for cable. It might actually increase income to the city to dump a local station. You won’t know until you try.

But to somehow reach beyond this basic promotion of free enterprise and posit that the loss of a channel on cable TV somehow deprives the public of a basic right is just faulty.

The fact is that cable TV may go the way of Windows95, and that’s okay. Likewise, if CLICK! wants to pull ABC in from Spokane, that should be okay too. It should also be okay for CLICK! to sell to Comcast, and for Comcast to tell KOMO that it may lose all of western Washington if it doesn’t get prices in line.

I know this is a little “wild west” for many tastes, but the fact is TV is not heating your house, providing you drinking water or flushing your potty. It is a discretionary product that has to undergo unfettered price discovery like any other product or service.

Listen people, you don’t have a RIGHT to cable TV. You don’t have a RIGHT to KOMO programming on cable TV. If cable operators can’t live with shrinking margins, they need to go out of business or consolidate, or create something of their own (!), to try to regain bargaining power.

Any argument that co-mingles “public airwaves” with a notion of a God-given right to cable is deeply misplaced, especially when the product is still absolutely free with a set of rabbit ears.