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Set-top Competition is the Medicine Cable Needs

The very FCC plan that the cable industry resists is exactly what it needs.

The FCC has been trying, after last decades attempts fell flat, to open the set-top box market to competition. Cable companies make a lot of money off of forcing subscribers to rent boxes, which are often underperforming and ill-equipped to serve the modern video consumption habit.

Cable is in a bad position as streaming continues to expand, with advertising and subscriber revenues expected to continue falling. The one thing that could help the market transition smoothly, the advent of the all-comer hardware device, is being actively resisted by the industry that needs it the most.

The proposal was already corrupted in a switch from an API-based model where access comes to the companies to an App-based model where the companies go to the devices. Now it is stalled completely.

The cable company is protecting its box rental revenue and its subscriber revenue at a time when it has enough of both to take a hit and resettle its place in the content delivery field. Instead, as entrenched industries are wont to do, it is fighting against the inevitable. It will see its revenues dwindle anyway, and its corpses (or at least the cable-related appendages; the ISP parts may survive) will then be swallowed by the new generation of media companies.

It is the same sort of short-sighted behavior that threatens our planet when major energy conglomerates don’t buy into the next generation of renewable energy. We may not see the pattern repeated with the auto industry, but that will likely depend on how fast they can merge as fleets of autotaxis become the norm.

What is clear is that the Republican seats on the FCC are actively blocking competition, which is antithetical to the Republican charge that free markets rule. The anti-regulation strain of so-called conservativism is stronger than the free market strain, when the two principles find themselves in opposition.

The lack of easy, integrated media devices will continue to drive consumers away from cable, as most streaming services are available through a single device. Media consumption is largely a social behavior, with people watching content those around them also watch. A generation is growing up without caring about traditional content delivery, and cable is basically ignoring that and fighting against a shift that’s already happening.

The best choice for cable would be to embrace the FCC’s original plan, lobby for the door to be two-way (allowing them to support streaming content on their own hardware offerings), and fight to make the best interface they can at the best price they can. They could even try to strike some subscription deals with streaming services, offering their subscribers the ability to add streaming packages in exchange for a finder’s fee.

Unfortunately, the bigwigs in the cable companies think that this is a very different year, where they can afford to weather the storm. They are betting that the unfathomable will come to pass and their ship will magically right itself. They are foolish for thinking this.

Deeming Finalized

Some brief thoughts on the release of the final FDA deeming regulation.

The FDA has finalized their rule for pulling e-cigarettes into their regulatory grasp. Litigation has already been filed in response. How will it all turn out?

Nobody knows. It’s that simple. The rule itself has a lot of things that make it look like the FDA is twisting the knob to 11, if they can. But how it will end up remains to be seen.

For example, they may be trying to close over the nicotine-free liquid market with the vague phrase intended or reasonably expected. A court may push back on that.

For example, they may be trying to force a de facto prohibition on open systems, through a burdensome regulatory process that would require open systems to mix-and-match matrix-style until every new product would require every other product to be tested with it.

But what will happen? A black market? A return to smoking? We will see.

How does this magic phrase, “intended or reasonably expected,” work? You have a nicotine-containing liquid. It’s, under the rule, a tobacco product. You put it in a tank. Now that tank is a tobacco product. You attach a drip-tip to the tank. Now the drip-tip is a tobacco product. You screw on a mod to the tank. Now the mod is a tobacco product. You put a battery in the mod. Now the battery is a tobacco product.

But under the rule, if you change one and only one thing, you can strike the word tobacco out from the paragraph above. That one thing: the fact that the liquid contains nicotine.

Now, assuming that the liquid is not bathtub-juice, that the nicotine is of high purity, the actual performance and harm of the same device is unchanged whether there’s nicotine or not. Whatever harmful constituents exist in the nicotine-free version will be identical to those in the nicotine version. But the regulatory difference is enough to bring an industry to its knees, call its lawyers, for black markets to open up.

Should these devices, which people use to inhale a flavored vapor, be regulated? Yes. It makes good sense that they be manufactured to a standard, that the public be protected against adulterated liquids (regardless of whether they contain nicotine), and so on. But the whole idea that it should all hinge upon something that constitutes, at most, six percent of the liquid (in the case of some cigalikes)? Dumb as all hell.

And the fact that the regulatory framework for these devices and products include so much testing that you’d think they were capable of far more than merely heating a liquid to point of vaporizing it so people could inhale it. I mean, your kitchen on an average night produces more harmful and potentially harmful constituents than a heavy e-cig user will in a week or a month. Your car produces more in a few minutes than an e-cig user will in a year. And so on.

The FDA probably couldn’t see any other way. Hopefully the courts and congress will.

The Meaning of Efficiency

Environmentalists shouldn’t be calling for an end to capitalism any more than they should be calling for an end to democracy.

Every year we as a species get more efficient. For some meaning of efficient. There is a view of dealing with climate change, that it is fundamentally opposed to capitalism, full stop. That is, that capitalism causes climate change, as efficiency of extracting and using carbon-based fuels increases every year.

But that’s only one type of efficiency. Similar in the software world to increasing the speed of the hardware and memory available. Oldtimers of computing often lament that modern computing is so wasteful, when they were able to get so much out of so little. That’s another type of efficiency.

The environmental movement has its Rs: reduce, reuse, recycle, and sometimes others, like refuse. But capitalism is focused on its paycheck. An oil company doesn’t care about reducing oil use, as it won’t make them more money. They might care about not wasting oil, but only insofar as they make their employees care. If the CEO’s bonus stays the same whether waste is 1% or 5%, it will stay under 6%, but won’t be minimized.

Capitalism is predicated on every year being bigger. It’s built on the idea that corporations should last forever. The bank is not made out of biodegradable materials, because it expects to long endure. But nature doesn’t work that way. There are highs and lows, natural cycles. Technology can improve, but volumes, they must reach some physical limits.

We’ve had a glut of resources. It’s been cheaper to use more than to figure out how to get by with less. More land to grow and farm, chop down some forests. More ocean to dump trash. Bigger nets to fish with and more boats. And so on. We have seen modest gains in real efficiency, but mostly we have seen gains through more resource use.

Critics of capitalism claim the problem is capitalism itself. That it cannot be but a resource-hungry ever-growing beast. Proponents of carbon taxes or cap-and-trade believe, as do I, that the issue is realigning the monetary costs to reflect environmental reality. To think otherwise, those calling out capitalism might as well call out democracy, which I haven’t heard them do.

We have done it before. With chlorofluorocarbons, with lead, with the food additives that caused cancer, with meat packing, with child labor, and on. Capitalism, while rigid, can be made to care. The notion that this time is different, when we have successfully redressed our past problems without upending capitalism, does not follow.

We cannot have endless growth. We cannot pull all the carbon out of the ground. It will kill us. Indeed, we will need to shrink our population over time. But we can become more efficient, we can continue technological progress. We can do so responsibly. We can pick the right meaning of efficiency.

There may be other reasons to see more serious overhauls to capitalism (or democracy as we know it, for that matter) than simply making it care about carbon pollution. Some of the coming efficiencies via robotics may disrupt labor markets to a grave extent. If we do need to move on from capitalism, or retool it at a deeper level, so be it. In the mean time we need to work on facing the political realities that keep the status quo’s harms alive.