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Fox-Cablevision Spat Highlights a TV Biz in Transition

Last weekend, I brought my Cablevision set-top box back to the store and told them I was cancelling my service. The clerk accepted it without question and handed me a receipt. Never mind that Cablevision's current showdown with Fox Television meant I couldn't watch the Giants game, House, or the 10 O'clock news with Ernie Anastos. Why would the company watch a customer guaranteed to spend more than $100/month walk away without a single question? Because in Hoboken, like most towns, the cable company has a monopoly. It's a lot easier to offer your customers blacked-out channels when there's no competition for them to turn to.But this won't be the case forever, and both Fox and Cablevision need to get with the program if they want to stay in business.

Cancelling my Cablevision service actually had nothing to do with the Fox dispute. I moved one mile away to Jersey City, where the monopoly cable provider is Comcast. The technician came today in the traditional, productivity-destroying window—between 9am-11am—and installed a new cable box and modem. Now Comcast will get my $100-plus monthly fees. Stupidly, I asked the technician if he has seen any new business because of the Fox-Cablevision brouhaha. "Not really, we don't offer service in Hoboken," he said. Of course not, because there is no such thing as consumer choice in cable providers.

Dish Networks might see some pick up, he suggested. The satellite provider offers a valid alternative for a lot of residence. But you need to have a clear line to one of company's satellites, and not all buildings do. And not all renters can get permission to install the dishes, either. When it comes to Cable, Cablevision owns the town. That means Comcast, Time Warner, RCN or any other provider is locked out.

This isn't the first time Cablevision has gone head to head with a content provider over fees, or the first time that its customers got caught in the cross fire. Earlier this year, the FoodNetwork and HGTV were cut from the provider's lineup. As a fan of Good Eats, I was greatly distressed by this. The channel came back after a few weeks, but in the interim I had no options. On those channels, Cablevision ran a series of ads vilifying the FoodNetwork for raising fees. It is doing the same thing with Fox right now. I guess this is a luxury you can afford when you own the pipe.

Dust-ups like this are going to be a lot more common in the future. Indeed, Dish Networks is due to renegotiate with Fox in just a few weeks. This same story could well play out again, in the satellite arena. Keep in mind, the World Series will be broadcast on Fox exclusively. If the Yankees win the ALCS, there are millions of people who will want to watch it live. If Texas wins the ALCS, well, there is always preseason intermural curling. (Go Yankees!)

What happens then? Where will all those baseball fans go? They will head online for illegal streams and downloads of video content. Content providers will try to bypass the cable companies by licensing their content to YouTube and Apple TV. The new Google TV platform lets you search through online videos just as easily as those available in your official Programming Guide—and they don't get blacked out when News Corp wants more money. This is the future that both the cable companies and content providers fear most and yet spats like these are exactly what is bringing it on.

Don't mistake my annoyance with cable monopolies as me siding with Fox in this affair. Fox is reportedly asking for $150 annually, a steep leap from the $70 million Cablevision now pays to carry the channel. And it was, after all, Fox's decision to cut off viewers when its current contract expired. My problem is the fact that while Fox and Cablevision are playing this game—it is the consumer that loses. And there isn't anything we can do about it.

Except move to Jersey City and trade one monopolist for another.

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