Cutting the cord on cable service

Readers should pay close attention to this story this morning. TCLV thinks there’s something to this Justice Department line of inquiry.

According to the WSJ: "The Justice Department is conducting a wide-ranging antitrust investigation into whether cable companies are acting improperly to quash nascent competition from online video."

To which the people said: "You think?"

The Internet is a disruptive force in many industries — telephone, newspapers, television and cable, to name a few big ones. It has produced competitors in spaces where previously there were none. It has torn down barriers of entry.

And on the other hand, it’s produced a wild array of opportunities for people with ideas and vision even for those already in a legacy industry. The big beneficiary should be the public. Suddenly we don’t have to watch programs when the networks want us to watch them. We don’t have to watch commercials if we don’t want to. We don’t even have to subscribe to cable packages to get a wide selection of viewing opportunities. This spring, I watched MLB on my computer while in Paris. How about that!

But cable and networks still have an advantage in some ways and they most certainly want to protect their franchises.

According to the WSJ, "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."

Watch this one. It will have many ramifications and more than a few unintended consequences.

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