THE BLOG
08/20/2013 07:00 pm ET | Updated Oct 20, 2013

Consumers Stand to Lose as CBS Battles Time Warner Cable

The Wall Street Journal posted a comically inaccurate editorial by Gordon Crovitz over the weekend on the "retransmission" fight between Time Warner Cable and CBS. These kinds of battles are increasingly common in the media world, and in the end, the consumer is the loser -- in blackouts, higher fees, and often both. This particular stand-off, though, goes beyond programming to the functionality of the Internet itself.

First, the basics: CBS wants Time Warner Cable to pay more for the right to carry its programming in several markets, including New York, Los Angeles, and Dallas. The network is demanding a $2 per customer fee increase in the markets under negotiation, which tallies to hundreds of millions of dollars in extra revenue. Time Warner balked, and now its customers are denied CBS programming even though they continue to pay for it through both cable TV and Internet subscriptions.

Crovitz' claim that broadcasting has been regulated as a natural monopoly fundamentally misreads history and current law. From the beginning, broadcast licensing was about managing the public airwaves for the public interest -- providing an exclusive license (not a "natural monopoly") in exchange for diverse and local programming. Broadcasters served an important role in their communities. Their newscasts informed the local electorate and held the powerful accountable. Entertainment programming provided a venue for the expression of local art and culture.

That was the promise, anyway. But the golden age of public interest programming was short-lived. The industry fell in love with monopolization. Its lobbyists pushed for deregulation of nearly all public interest requirements, and as stations combined, broadcasters became more responsive to shareholders than their communities. Quality local programming suffered. Worse yet, the Federal Communications Commission (FCC) -- explicitly charged with regulating the airwaves in the public interest -- blessed much of this deranged policy.

So Crovitz could hardly be more wrong. The problem we have today -- a few multibillion dollar companies calling the shots with nary a consideration for the consumer -- is a consequence of deregulation. That's hardly a cause for yet more corporate giveaways.

But here's the wrinkle in this most recent fight. CBS is blacking out access to CBS.com for Time Warner Cable broadband customers nationwide -- even those outside the affected markets and even those who are not cable television subscribers! Imagine how broadband customers who pay separately for satellite television feel being swept up into this spat. CBS is perpetrating an audacious violation of the FCC Open Internet ("net neutrality") rules. These rules guarantee consumer access to lawful content. They are designed to prevent just this sort of corporate censorship.

Someone here needs to stand up for consumers. There are encouraging signs that the FCC may act. Acting Chairwoman Mignon Clyburn has expressed her dismay at the situation. Senator Ed Markey, D-MA, wrote the Commission, urging them to act, while Congresswoman Anna Eshoo, D-CA, called on CBS and Time Warner to resolve their dispute or face congressional action.

These are solid first steps. The Commission should act to relieve blacked out consumers. Then, it should implement strong Open Internet rules of the road that protect broadband users from corporate censorship. The Internet should not be subject to corporate gate keeping and these kinds of shenanigans.