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How A Justice Department Investigation Could Shake Up The Cable Television Model

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"How A Justice Department Investigation Could Shake Up The Cable Television Model"

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There are a lot of people who want a lot of things about the way we watch television to change: to be able to buy channels on a stand-alone basis rather than in bundles, to be able to buy streaming access to premium networks like HBO without having to purchase a cable subscription first, to be able to stream shows that are available through services like Hulu as quickly and smoothly as if they were airing on a network. As much as I would also like to see some of those things come to pass, and as much as some networks would like to be able to offer some, if not all, of those options it’s been hard to get through to folks that there is a complex system governing cable television and internet that makes those changes difficult to make without current successful business models take a major hit that could disrupt the delivery and quality of the programming we currently find so desirable.

But major changes to that system might be closer than we think.

The Wall Street Journal reports today that the Justice Department is probing many of the elements of the cable and internet delivery system that throw up barriers to alternate means of distributing content. The story’s pegged as an investigation of whether Comcast, in violation of its anti-trust agreement that let it merge with NBCUniversal, is giving preferential treatment to content that streams through its own outlets so it streams faster and cleaner than content that comes over the internet from companies like Netflix. That’s critically important, as is net neutrality generally, but apparently, that’s not the only thing Justice is looking into:

Another issue that investigators have asked about is whether cable companies are acting anticompetitively by making viewers have a cable subscription before being able to access certain online programming. Comcast and some other companies have verification systems requiring viewers to enter their cable subscription details before being able to watch, say, ESPN’s programming on an iPad tablet…

The Justice Department also is investigating the contracts that programmers sign in order to be distributed on cable systems. Some contracts include so-called most-favored nation clauses, which make programmers give the biggest cable companies the best price they are offering anywhere, among other conditions. The Justice Department is questioning whether there are legitimate business reasons for such terms or whether they are intended to stop programmers from experimenting with other forms of online distribution, a person familiar with the matter said.

Whatever the ultimate outcome of the investigation, I’m glad it’s taking place. So much of the conversation around what people find frustrating in the current cable regime is erroneously aimed at networks, rather than the regime they operate within. This investigation should recenter that conversation, and hopefully give us more insight into the fulcrums we need to push on to give us an environment where networks can have more opportunities to monetize their content and to pursue new subscribers without risking the ones they currently have.

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