Friday, April 25, 2014

Why Did The FCC Give A Gift To Cable Providers?

The FCC has come out in favor of allowing cable companies to charge higher fees to content providers.  Companies like Netflix would have to pay a higher fee to Comcast which has a service that competes with Netlix.  It is not surprising that FCC has changed its position on this issue.  All we have to do is look at the new members appointed to the FCC.  They have been lobbyists for the cable industry.

Business leaders love to complain about government regulation.   What they don't tell you is that they lover government regulation when it works to their advantage.  That's what lobbyists do.  They do what they can to obtain favorable regulations that increase the monopoly power of their clients.  The new FCC rule is great for the cable industry but it will reduce innovation by content providers by raising the cost for new entrants.  Large firms, like Netflix will survive but the new rule will increase the barrier to market entry.

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