December 7, 2013
Comcast case: a valid comparison?
Clarín uses it as an argument, but there are differences between US and Argentina
One of Clarín Group’s flagship arguments at the beginning of the public audience over the Broadcast Media Law was the Comcast case. This ill-fated attempt to regulate the US media giant was used by supporters of the conglomerate’s interests to prove that the idea of imposing limits on cable-television ownership is also doomed to failure.
But are these comparable cases?
Let’s take it from the beginning.
A section of Article 45 — one of the four questioned articles of the Media Law — aims to prevent any cable TV company from surpassing 35 percent of the market share.
Last April, the Civil and Commercial Appeals Court modified the ruling in the first instance (when the law passed the constitutionality test) and favoured Clarín’s position by deciding that its cable restrictions were unconstitutional.
Judges cited the Comcast ruling, which limited the Federal Communications Commission’s abilities to regulate the United States market.
Comcast is part of the so-called “Big Six” — a category it shares with News Corp, The Walt Disney Company, Time Warner, Viacom and CBS Corporation. Its dominant position was consolidated after acquiring media conglomerate NBC-Universal from General Electric.
Because of this, they ended up being at odds with a FCC rule dating from 1993 that set a 30 percent threshold meant to ensure “that no cable operator or group of cable operators can unfairly impede... the flow of video programming from the video programmer to the consumer.”
However, in 2009, the US Court of Appeals for the DC Circuit threw out the rule, deeming it “arbitrary and capricious.”
Yesterday, the Clarín Group repeated those arguments and tried to extend their conclusion to Argentina.
Clarín is comparatively
But the magic is in the details, which Clarín conveniently chose to ignore.
Why did the US Court of Appeals deem the market-share limit to be an “arbitrary” restriction?
In a nutshell, because the FCC was not able to prove why allowing companies to bring cable services to more than 30 percent of all subscribers would affect competition and programming diversity.
And why was that? Because ever since the 1993 regulation was passed, there had been in fact growing competition among video providers, as satellite and telecommunications companies had entered the US market and raised their stake in the segment.
That meant cable operators no longer had the power they once possessed — in the US, that is.
Moreover, North America has other anti-trust laws that prevent media cross-ownership, depending on the sizes of the cities and the number of companies that compete in each market.
But as lawyer Damián Loreti — one of the experts who took part in the drafting of the law — has pointed out, Argentina presents a completely different background.
Here, telecommunication companies are forbidden by law to hold broadcasting licences. And there is only one satellite television provider — DirecTV.
“The Clarín Group has in the Argentine market a much bigger presence than the one Comcast has in the United States,” media expert Martín Becerra explained.
And then there’s the ultimate characteristic of the Argentine market: four out of five homes in Argentina are subscribed to cable television. Tradition places it as culturally essential service.
This means that if the Supreme Court allows cable TV to remain so concentrated (Cablevisión alone makes up 58 percent of the market, according to the AFSCA media watchdog) the damage caused by the one company that has such a clearly dominant position — abuse of subscription fees, content discrimination, rapacious policies toward the competition — is likely to be much more severe down here.