The FCC Runs Amok

The FCC is considering banning agreements between cable companies and owners of condominiums and apartment buildings, according to USA Today. This looks like another attempt by the commission to “manage” competition, rather than let the free market play out. Leaving aside the question as to whether cable service agreements even fall within the FCC’s regulatory purview, the FCC needs to decide on what set of principles its going regulate the business. The 700 MHz auction rules notwithstanding (more on that later), from what we know, Chairman Kevin Martin is part of a majority of the commissioners who agree with the what free-marketers have said about network neutralityââ?¬â??that the government should use caution because network neutrality would prohibit business agreements that have as much a chance as benefiting consumers as harming them. Point being that consumer “harm” is purely speculative and we have yet to see a concrete example of blatant abuse of market power grow out of the not-quite-neutral nature of the current Internet access business. Yet the FCC is disregarding this principle when it seeks to dictate the way how a property owners, associations and representatives of large groups of cable consumers can purchase services. Contrary to what the U.S. Telecom Association is telling the commission, the fact that owners of multi-dwelling housing (read apartments and condos) can enter into a multi-year exclusive arrangement with one service provider is not anti-competitive. It’s just the opposite. A condo or rental building, because they deliver so many customers, is an attractive target for all service providers. As such, owners have enormous leverage. This is exactly the environment competition and deregulation is supposed to create!