TAILIEUCHUNG - TV Competition Nowhere: How the Cable Industry Is Colluding to Kill Online TV

I would like to thank Prof. Min Wu and Prof. Rama Chellappa for not only serving on my thesis committes and reviewing my thesis but also serving as references for my faculty application. I am also grateful to Prof. Shuvra S. Bhattacharyya and Prof. Lawrence C. Washington for their time and e®ort serving on my committees and reviewing my thesis. I would also like to thank Prof. Oscar Au, Prof. Andre L. Tits, and Prof. Peter Cramton for serving as references for my faculty application. Thanks should also go to all members in our Signals and Information Group for their friendship, encouragement, and help. I have learned. | TV Competition Nowhere How the Cable Industry Is Colluding to Kill Online TV Marvin Ammori Free Press January 2010 1 Executive Summary We stand at a defining moment for the future of television and film. Existing and evolving Internet technologies may finally inject much needed competition and choice into the TV market by enabling Americans to watch high-definition programs on the Internet from anywhere or on the family living room screen. But the big cable satellite and phone companies which benefit from the status quo are trying to put down this revolution in online video. The dominant distributors and studios have a long history of scrambling to kill online TV and trying to preserve the current market structure and prevent disruptive competition. Over the past decade they have locked down and controlled TV set-top boxes to limit competing programming sources they have considered imposing fees for high-capacity Internet use in ways that would discourage online TV viewing and they have pressured programmers to keep their best content off the Internet. In addition these companies which already dominate the Internet access market have threatened to discriminate against certain online applications or have already been caught violating Network Neutrality. Indeed the FCC issued an order in 2008 against Comcast for blocking technologies used to deliver online TV noting the anti-competitive effect of this blocking. While it may be economically rational for cable phone and satellite companies to squash online competitors the use of anti-competitive tactics is bad for American consumers and the future of a competitive media industry. The latest method of attack aimed at online TV however may be the most threatening and is also likely illegal. Competition laws aim to ensure that incumbent companies fight to prevail by providing better services and changing with the times not by using their existing dominant position and agreements to prevent new competitors from emerging. .

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