Three million cable customers in the New York area missed 13 minutes of the Academy Awards. Equipment failure? Power outage? Breaking news?
No. The Walt Disney Company and Cablevision couldn’t agree on the fee that Cablevision should pay Disney to carry its ABC Channel 7 programs in the New York City area. After pulling ABC from Cablevision at midnight Saturday, Disney restored the programming at 8:43 p.m. Sunday once an agreement had been reached.
At least one cable customer was satisfied. “I’m happy I got to see the pretty dresses after all,” said Hamilton, New Jersey resident Ellen Lovejoy.
The same thing could soon happen here. Disney’s distribution deal with Time Warner Cable-which has more than 2 million subscribers in Texas-is set to expire at the end of August. Foreshadowing challenges ahead, Time Warner said in an email to its New York-area subscribers that their access to ABC is “not at risk… yet.”
This wouldn’t be the first time Texans have been caught in the crossfire of such a dispute. In 2007, the NFL and Time Warner couldn’t agree whether Time Warner would carry-and pay for-the NFL Network on its basic tier of programming. Things got so bad-some Texans were in jeopardy of missing a game between the Dallas Cowboys and the Green Bay Packers-that a committee of the Texas House of Representatives actually held a hearing on the issue.
Similarly, having voters suffer without the Oscars was too much for some politicians, who urged the FCC to get involved in the dispute to “fix the system.”
Fortunately, at least one politician was able to put this dispute in its proper perspective. Texas Congressman Joe Barton wrote to the Federal Communications Commission that “the deal is best left between the respective companies and their viewers, free from government interference or cajoling.” He correctly pointed out, “The alternative is to ask the government to weigh the relative value of carriage and of particular programming.”
Of course, that is what the government does every time it steps in to “fix the system.” Government regulations are, by their very nature, designed to overrule the decisions and valuations freely made by consumers in the marketplace because a few government officials-and special interest groups-don’t like the outcome that consumers prefer. New regulations then impose the preferences of regulators on consumers-usually in the name of consumer protection. This is exactly what is going on with the FCC’s current push to regulate the Internet in the name of “net neutrality.”
As it turns out, though, consumers aren’t quite as helpless as some would try to portray them. In the NFL dispute, Time Warner did not carry the Cowboys-Packers game. But the people who actually cared either switched cable providers, got satellite service, watched the game on the Internet, parked themselves at a sports bar, or went over to a friend’s house. Or even just read about the game in the newspaper the next morning. Nobody seemed much the worse off.
We should keep these lessons in mind before we ask our government to fix something for us. As Congressman Barton said in his letter, doing so “is a risky proposition.”
Bill Peacock is the Director for the Center for Economic Freedom with the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.