What the Pennsylvania Liquor Control Board and Comcast Have in Common

             Pennsylvania ties with Utah for having the most restrictive access to wine and spirits.  Predictably the Pa. State Stores offer high prices and many employees manage to channel the attitude you might find at any Department of Motor Vehicles.  I particularly loath the “intruder alert” that announces entry by each individual customer.  Each store uses the same device leading me to suspect someone really connected got a sole source contract to supply all stores.

            So what does the Pa. State Stores have in common with Comcast: exclusivity and the ability to set price above market value.  Channeling the old Bell System, Comcast prevents subscriber access to a new and used (resale) market for set top boxes and even simple and inexpensive Digital Transport Adapters (“DTAs”) needed by analog television sets to display digital signals.  Subscribers must lease equipment from Comcast at unregulated rates.  Never mind the Carterfone policy that would support a competitive market.  Incumbents like Comcast have has cowed the FCC into thinking the set top box marketplace is competitive in light of the CableCard option that allows subscribers to use a Tivo box with a cable company supplied security card. And just how many digital video recorder options are out there in addition to the cable company’s set to box/DVR combo and Tivo?

            Recently I reported that Comcast now charges for DTAs, having previously offered them freely, presumably as a consumer interest bone to the FCC for agreeing to waive the requirement that consumers have access to the basic tier of content without a set top box or other device.  Comcast pulled the old bait and switch, but I tried self help: I acquired a DTA today at a church rummage sale.  Because the device has flash memory and addressability I assumed Comcast gladly would activate the DTA just like the company allowed me to use my own cable modem.

            What was I thinking?  The several Comcast representatives with whom I chatted made it clear the DTA would not get activated even if technologically the company could register the device just as it does for cable modems.  I must infer that management at Comcast did not think they could get away with forcing sole source leasing or sale of cable modems, but that is exactly what they now mandate for a far less complex and cheaper device.  There may be as many as 23 million DTAs in use, most now earning a nifty return for exclusive lessors like Comcast.

            I am sure Comcast could fine any number of scholars and experts to explain how the DTA market is either robustly competitive, or so complex that cable operators need to control their installation and monitoring.  Yeah right; just like the Bell System whose managers insisted that subscribers would harm the network and employee safety if they used their own phones.

            It took years for the FCC to reject the harm to the network gambit and the freedom to Bring Your Own Device to some wireless service results more from T-Mobile’s recent pricing strategy than the FCC’s Carterfone policy which should apply to wireless handsets no differently than wired sets.  Oh but of course there are sponsored researchers who would swear on a stack of bibles that the use of spectrum or some such reason prevents Carterfone from applying to wireless.

            Yet again consumers’ lack of digital literacy and a cowed FCC make it possible for cable operators to sole source DTAs.  At least the Pennsylvania Liquor Control Board  can invoke consumer protection and the demon in rum. 

            Anyone want a DTA cheap?

             

Regulatory Status of Wireless Information Appliances

News of a slimmed down Amazon Kindle electronic book has triggered this question: what regulatory status applies to devices that use wireless capacity purchased by the appliance vendor and bundled into the cost of both the appliance and downloads? In the United States the FCC has exempted bundlers of telecommunications capacity on grounds that they do not retail a telecommunications service.

But in light of the willingness of the FCC and other national regulatory agencies to oversee some times of information services, might network neutrality and other concepts of nondiscrimination apply? Bear in mind that Kindle buyers apparently do not receive a subsidy that reduces the cost of the information appliance in exchange for locking out competing content and applications. Still the FCC has shown no interest in forcing wireless carriers or manufacturers to comply with the so-called Carterfone nondiscrimination requirements applicable to wireline handsets and carriers. Carterfone requires carriers to interconnect with other carriers and to accept subscriber chosen and loaded applications.

Apple makes great self-congratulatory statements about the wide and open applications available for downloading, but note that the FCC does not require at&t to accept any non-Apple approved and marketed applications, nor does the Commission prohibit Apple from blocking and disabling applications that it unilaterally decides subscribers should not use. So if the FCC could not be bothered with wireless common carriers operating in a discriminatory manner then the Commission probably will have no concerns about a "locked down" Kindle. In light of the Supreme Court's deference to the FCC's "expertise" in the Brand X decision, it appears that the FCC could ignore information appliance discrimination entirely.