March 3, 2001

9:54 AM

Just call us Peoples' Telephone & Telegraph.[NYTimes, reg req] A federal appeals court claims that by restricting AT&T and AOLTW from expanding their cable service areas, First Amendment rights have been violated. Thus: these two companies will continue to be the only games in town.
posted by hijinx (4 comments total)

Okay, stuff like this drives me nuts. I would argue that AT&T and AOLTW have no right to expand beyond their service areas as established because, at least in my neck of the woods, you have absolutely no choice when it comes to cable. It's AT&T, or no cable. And if you're in an apartment building that doesn't allow satellite dishes, you don't have much of a choice if you want to pay for more channels than what the rabbit ears allow.

I would call that a monopoly of sorts, wouldn't you? I can't see how anyone wouldn't see it as such - so if you don't, please, share your thoughts.
posted by hijinx at 9:57 AM on March 3, 2001

Yes you are right, but pseudo monopolies are part of our lives on a constant basis. Take the movies for example, were many people pay tons of money to have popcorn that you could get otherwise for a few bucks. However the movie theaters have a captive audience, that have no choice, but to purchase there popcorn right than and there.

However AT&T will ultimately fail if its strategy will only be based on its temporary monopoly-type advantages. Other companies will come and force those markets open. It reminds me of when Sears had a monopoly-like dominance in the credit card market in the 60s (when departments stores started to give out their store 'credit cards', and people went to Sears, for instance not because of better prices or selection, but because they could purchase it on credit). But then Visa and MC came along and boom Sear's competitive advantage was gone.

What I find disheartening is the court's argument decision is based on the 'First Amendment'. What has a business level decision, such as this one have to do with free speech? It appears every other court decision is based on the first amendment.
posted by noom at 10:14 AM on March 3, 2001

This is going to be appealed and overturned. The FCC has the same right to place limits on the cable industry as it does the telecommunications industry. After all, that's why it's there and that's why the government granted it the power to make such decisions, no matter how arbitrary. So yeah, the FCC can place limits on how many cable systems a company can own, or in the case of the 1984 Telecommunications Act, break AT&T into smaller parts. As a government regulator it should have that sort of power, no matter what a federal appeals court may rule.
posted by rklawler at 11:58 AM on March 3, 2001

Except Michael Powell, the new head of the FCC, has made noises about not being too concerned by the consolidation of media power. Look for the law against companies owning newspapers and t.v. stations in the same market to get overturned as well. (A number of companies already do, the Tribune Co.'s WGN being a prime example, but they were grandfathered in.)
posted by snarkout at 1:20 PM on March 3, 2001