One is often reminded that consumer advocacy is not Bob McDonnell’s forte. Lowell’s piece on Cronkite brought to mind commentary in The Wall Street Journal about the cable industry. Apparently McDonnell believes it’s fine that monopolies are unregulated. Or he just doesn’t understand that monopolies do not respond to market forces (they obliterate them). This speaks to the broadcast industry's trend to infotainment and the quality of programming bemoaned by Lowell. It also speaks to McDonnell's concept of the marketplace and his responsibility to his constituency; or who really constitutes his constituency. Over the years, the cost of cable TV service has slowly and consistently crept up. The service provided has changed, but in most cases, not as a result of any choice consumers made. Beyond a very basic set of FCC regulations, the cable TV industry is free to provide you what it chooses and charge you for what others choose. Yes, you are paying for others' viewing habits. And you are provided not what the market dictates, but what a monopoly deems broadly attractive to potential customers (and its bottom line).
As Martin Peers explains in his piece, the average household views only 16 of the 118 channels available. It turns out I’m among the below average, but what he tells us means that average someones are paying for 112 channels we don’t watch. The number of channels is a marketing tool. But oddly enough, the most viewed channels, those affiliated with the broadcast networks, generally do not receive fees from the cable industry. What the cable industry (actually you and I) must underwrite are the channels that cannot make it in the “free market.” Those like Nickelodeon which have viewership to justify their revenues, would likely make it as broadcast channels or as ala carte competitors. Those like ESPN Classic or the NFL Network wouldn’t even come close. And surprise, surprise, many of these loser channels are owned by the cable operators themselves. They get their subsidies from us coming and going.
Based upon viewership, Nickelodeon receives $312 per viewing household while ESPN Classic is paid $3,781 and the NFL Network $6,642. So, if we had a real ala carte option, actual viewers who choose the service by selecting the channel would pay about $26 a month to watch Nickelodeon while ESPN Classic fans would pony up $315 a month. And only a very few would be able to afford the real cost of the NFL Network option; it would be more economical to attend the actual ballgames.
These "networks" are the most dramatic examples of monopolistic excess. However, every channel we don’t watch yet pay for by averaging the costs across all viewers while ensuring a profit for the monopoly is another abusive fee made possible by failure to enforce appropriate economic policy. Our former consumer advocate, Bob McDonnell of the unfinished term as Attorney General, was completely silent on this and apparently oblivious. But he has never distinguished himself through his economic acumen. This translates to a "business oriented" (or directed) potential governor to the detriment of the economy and the citizens of Virginia. And why would anyone think his teammate, the Cooch, would pursue any other policy? Virginia deserves a Governor and Attorney General who take their responsibilities for her citizens' welfare seriously and provide it priority. That would not be Bob or Ken.
