Regulation of Cable Is Foolish

In Frank Pasquale's article ("An Infested Information Age," Opinion, Sept. 18), he argues that the only way to maintain fierce competition in the electronic communication realm is to regulate the activities of communications providers. He also seems to be under the belief that an expanded Washington bureaucracy is better equipped to handle the complexities of communications management than the businesses who profit from the creation of new markets, amongst other misguided notions. I would like to make a few comments to the contrary.

Pasquale rightfully cites the MaBell breakup of the 80's as a significant moment in the history of telecommunications, sparking the creation of new telephone companies. But what he fails to mention is that the reason Ma Bell was broken up was that this long-distance provider was just too good for its own good. Service was excellent, rates were competitively low. Ma Bell could easily attract new customers by this attractive mix of low rates and outstanding service. The anti-trust laws couldn't allow a company to use its great profit margin to keep up this excellent service, so they broke up Ma Bell. As a result of this regulatory interference, the "Baby Bells" had to raise rates and decrease service because they lacked the financial strength that gave Ma Bell the serious advantage that it enjoyed. Government regulation had not performed the great public service that it had hoped. Instead of increasing the competition, it caused the American consumer to spend more for less.

Pasquale proceeds to say that he had hoped that Congress would step in and help set up "the structure of these vital services." Why? Congressmen know nothing about the intricacies of the communications market, and I trust the business judgement of Big Business over that of Congress. Who knows better than Big Business about the creation of communication lines? Congress?

I doubt it. Big Business stands to make a large profit from a successful undertaking in the communications field when they are allowed to use the convergence of modes technology. Congress stands to gain nothing, except more money from special interests and the power over the lives of the millions of people who rely on communications services. I would prefer to have the service planned by those motivated by profit because they must compete for my subscription to their service. They will set up an efficient and easy-to-use system that will enhance the lives of consumers. Congress would just confuse us all. If they can't make an IRS form easy to understand, how do we expect them to regulate such a complex industry without bogging everyone down in countless layers of red tape? Pasquale's concern for the life of the 1992 Cable Television Act seems to be questionable. He is scared that if cable and telephone companies (whose only motivation is profit) are given the goahead and begin to blend their services, rates will skyrocket, and the consumer will be caught in a flood of childish, "profit-driven" television programs created by "corporate interests."

If these two industries are allowed to enter the competitive ring and fight it out for the loyalty of the consumers, wouldn't that instead lead to lower rates? If true competition is allowed (i.e., cable companies can no longer maintain government sponsored monopoly in certain regions of the U.S., and they actually have to deal with other companies), how could a company that raises rates and provides inane programming survive? It would lose its customers to better cable services, thereby destroying its profits and, eventually, the entire company.

As for the sudden rise in bad television programs, the answer is simple: boycott the station and its advertisers. The reason the shows exist is because they know people watch, and because the advertisers believe that the time slots they have purchased will be seen by the individuals who are most likely to buy their products. If the advertisers were presented with a petition that called for a total boycott of their products if they continued to sponsor a given show, and if the petition was big enough to cause problems, the advertiser will more than likely cancel the commercials, and, consequently, should other advertisers be approached in a similar manner, the offending program will most likely be cancelled (no sponsors means no show, right?). Also, if I am not mistaken, A&E, the History Channel, the Discovery Channel, etc., are all for profit cable channels, yet they seem to maintain a list of outstanding educational shows and culturally enlightening programs. Can we expect them to move into the realm of "frivolity" and "inanity" that Mr. Pasquale spoke of? I doubt it.

Why should this mix of cable and telephone service be "economically inefficient?" Mr. Pasquale does not provide an adequate explanation. Is the creation of thousands of new jobs as the market expands economically inefficient? Is the convenience of having to pay one bill to one provider of many services, instead of many bills to many providers of single services, economically inefficient? Is the creation of a second Ma Bell, who could once again give us the rates and service the consumers want, economically inefficient? No! Mr. Pasquale seems to equate efficiency with fairness. He finds the advantage that the large corporations have with respect to adapting to new technology unfair. His concern for the disadvantaged, smaller provider is unfounded. In the world of business, the larger, richer companies have an advantage, but is this unfair? The multi-billion dollar companies like AT&T and Microsoft achieved their corporate success through innovation, determination, and by providing a better product, whether it be long-distance calls or computer operating systems. Why should we punish them for being good? Isn't this detrimental to competition? What's the point of trying if you know that once you get to a certain point you'll have to start all over again because the government has ripped apart the corporation that you so painstakingly put together? How can this be considered fair?

Pasquale is concerned for the future of democracy. Why? I can't tell. His article doesn't really delve into the matter much, but if he is truly concerned, there is an easy solution: the democracy of the dollar (the basic rule that says that if you don't like the business deals of a particular corporation, or if you don't like their products, you don't have to buy what they sell). If the expected move by cable and telephone giants concerns him enough, he can start activist organizations to counter the problem that he believes to exist (there are already dozens of such programs fighting Wal-Mart and Microsoft). If Mr. Pasquale can motivate enough people to join and boycott offending corporations, they will have to comply with his wishes or risk closing down. He will, in effect, accomplish the preservation of his democratic ideal, whatever that is, without involving complex bureaucracies, Congress, or cumbersome regulations. True democracy in action. Isn't it grand? Joseph Anderson '99