Size Matters, But It Needn't Dictate
Hardly had the FCC pronounced Comcast and AT&T Broadband joined in fiscal matrimony last week when foes of the deal filed a suit to annul the marriage, calling it dangerous and de facto anticonsumer.
We disagree. Big companies sometimes abuse their power. When they do, the Justice Department ought to pursue them like a pack of bloodhounds. But that is not the same as not allowing a company to grow because there is a potential for it to abuse its size. Consolidation can enable companies to take advantage of economies of scale to provide more or better services more efficiently. And here is the kicker: If they don't, there are alternatives. Cable does not have a monopoly on multichannel services.
With the advent of satellite TV and particularly since the addition of local broadcast signals to their lineup, there is, or soon will be, an alternative to cable in the vast majority of American homes. We haven't even mentioned the third, free alternative in most markets: terrestrial over-the-air broadcasting. Consolidation foes keep raising the cable-rate issue, suggesting that cable rates will "continue" to soar under a merged company. The problem with that is, the hay politicians make with the issue notwithstanding, the price of cable has not soared but instead has beaten inflation on a per-channel basis. On a per-performance basis, the price is a bargain. (Here's a test: Take a family of five out to a movie.) We can thank over-the-air TV for conditioning us to expect free, plentiful entertainment but also, we think, for creating a sense of entertainment entitlement that is unrealistic.
There would have been an even stronger competitor to cable reaching even more U.S. homes if the FCC/Justice allowed the DirecTV/EchoStar combination, but that is another editorial.
Forgive us for blowing our own horn, but we are always impressed with the crowd that shows up for the BROADCASTING & CABLE Hall of Fame bash, both its star quality and that it is one of the few times that the broadcast, cable and satellite industries get together. DirecTV's Eddy Hartenstein captured the collegial spirit by contrasting it to cable's annual Kaitz Dinner, saying that, to get into that room, he would need a busboy's uniform. Said inductee Bob Schieffer afterward, "It was a much better crowd than I normally run with." Of course, it was a better crowd for having him there. The beneficiaries of the evening will be the International Radio and Television Society and the Broadcasters' Foundation, which receive a portion of the proceeds.
From Hugh Carey's loving tribute to the late Peter Barton to Oprah's rendition of "Amazing Grace," it was a night to savor.