Station brakes: the government's campaign against cable television

Reason, Feb, 1995 by Thomas W. Hazlett

When you next settle into your cushy La-Z-Boy Recliner, hoisting a nice cool one after a trying day in the real world, try this: Aim your trusty remote and channel surf for some news, information, or public-affairs programming. Chances are that you will light upon Crossfire or Capital Gang on CNN, Equal Time or Pozner & Donahue on CNBC, a college course offering on ME/U, a history lesson on the Learning Channel, a biography on A&E, a sexual harassment trial on Court-TV, congressional hearings on C-SPAN, or a Noam Chomsky speech on C-SPAN2. Perhaps you will zero in on Politically Incorrect or Women Aloud on Comedy Central, or flick your way over to a "Rock the Vote" rally on MTV. Or you may just get briefed by Headline News.

Don't be alarmed, but you have just committed an incendiary political act of revolutionary import: Every one of those viewing choices was not so long ago a target of the U.S. government. If the regulatory policies crafted between 1959 and 1972 had continued, Americans wouldn't be able to indulge in such antisocial viewing choices. Cable programming was then officially judged a menace to society, and the Federal Communications Commission had launched a regulatory jihad against it. Like all holy wars, this offensive was undertaken in "the public interest."

And you thought you had First Amendment rights as an American patriot. You have been watching too much TV!

This episode is of more than historical significance. Because in today's world, hardly a millisecond lapses without yet another government or foundation report issued extolling the frightening challenges posed by the emergence of Information Superhighways. The theme of each policy analysis is strikingly symmetric: The explosion of competition threatens to divide America into information-rich and information-poor. Having divined a crisis, these policy entrepreneurs leap to the rescue. We will, they promise, enforce strict universal access rules and save society from this horror-strewn high-tech future. We will intercept the destructive market forces, and mold the emerging technologies into our regulatory model. We will shape the new communications network to serve the public interest.

The FCC has been there, done that. In 1966, the high holy days of anti-cable rulemaking in Washington, the commission boldly premised its suppression of wired TV (then called CATV, for community antenna television) thusly: "CATV systems cannot serve many persons reached by television signals. [Today, cable passes more than 96 percent of U.S. homes.] Persons unable to obtain CATV service, and those who cannot afford it or who are unwilling to pay, are entirely dependent upon local or nearby stations for their television service. The Commission's statutory obligation is to make television service available, so far as possible, to all people of the United States on a fair, efficient, and equitable basis.... This obligation is not met by primary reliance on a service which, technically, cannot be made available to many people and which, practically, will not be available to many others. Nor would it be compatible with our responsibilities to permit persons willing and able to pay for additional service to obtain it at the expense of those dependent on the growth of television facilities for an adequate choice of services."

Cable's indictable offense was that it threatened the revenue earned by UHF (ultrahigh frequency) television licensees. Cable operators were accused of "fragmenting" and "siphoning" the audiences needed by UHF. These stations, placed on the higher frequencies (then channels 14 to 83), had been given an almost impossible assignment by the FCC: to compete in local TV markets head-to-head with VHF (very high frequency) signals that can be far more easily received. An alternative licensing scheme, which would have made local TV markets either all-VHF or all-UHF (thereby making it easier for UHF to survive) was specifically rejected by the commission. But the FCC, having brutalized UHF on its own, certainly did not want cable competitors piling on. The success of UHF had been determined to be in the public interest.

To protect a universal service never actually provided by UHF, the FCC swatted down a cable industry which--when deregulated years later--would actually deliver the FCC's stated goals. In short, to save "universal service," the government elected to kill competition. It succeeded only in the latter, cheating the American public of the bountiful choices made possible by technology. Today, as new opportunities fly out of Silicon Valley at the pulse rate of light waves over fiber optics, they too must circle in public-policy holding patterns. Social planners, we are told once more, must carefully contemplate the ramifications of robust--and unsettling--competitive rivalry in advanced telecommunications networks. Today's Information Superhighway appears stymied by roadblocks remarkably similar to those used to thwart yesterday's television interstate.