Voting vs. messing with the market

Thu, 11/30/2000 - 7:00pm
Walter S. Ciciora, Ph.D., Recognized Industry Expert on Cable and Consumer Electronics Issues
By Walter S. Ciciora, Ph.D., Recognized Industry Expert on Cable and Consumer Electronics Issues

I am writing this just a few days before going to the polls to vote in the Presidential election. Voting is considered a sacred duty in the United States. Those who don't vote are criticized as being not worthy of democracy.

Even those who fail to vote agree that losing the right to vote would be a great tragedy. We'd be up in arms if our government attempted to take away our right to vote.

Few citizens realize that they get to vote every day. Even fewer realize that their right to vote in very important matters is being frustrated by their own government.

We vote when we make purchase decisions. Having just bought a new car, I voted for a particular brand and a particular set of features and capabilities. I voted against other brands and other ways of packaging features. This time, I voted for a sedan rather than a convertible or an SUV or a small truck. I didn't get everything I wanted in the new car and I got some things I didn't particularly want. Overall, I weighed the choices and picked the best compromise. I placed my vote.

My vote told the manufacturer of the car that I approve of the choices made in designing the car. When I drove the car off the lot, I left an empty space that encouraged the manufacturer to make another car to fill. Indirectly, I told the other manufacturers not to make any more cars for me. I didn't approve of their designs.

My purchase is an important communications event. It tells producers to make more of a certain type of product and other producers to make fewer of their best guess of what I like. Together with all of the other purchasers of cars this season, we will exercise some degree of control of the production for the next quarter. The manufacturers will see what sold and shift their production accordingly as best they can.

Consumers vote when they choose video and communications services and products. They choose cable versus DBS, cable modems versus DSL, high-speed versus dial-up, wireless versus wired telephony. An important part of all of these choices is the price. Price is the way in which manufacturing resources are allocated. The manufacturer who can command a higher price will allocate resources for the part of the product line that wins more consumer votes (dollars). As consumers have limited dollars, they can't choose everything. They select what is most important to them.

Keeping all of this in mind, I get upset when I see my government messing with my ability to vote for economic choices. When my choices in the marketplace are limited by either discriminating taxes or subsidies or artificial rules, my vote is marginalized or even taken away. Yet we see this happening all of the time.

Getting closer to home, we see massive interference in the marketplace for television services. There are many examples. The concept of "must-carry" is a major case in point. It becomes even more egregious when must carry is extended to "digital must-carry." Analog must-carry is at least justified by some as an attempt to preserve a service for the less well off who might not be able to afford video services for pay. But digital must-carry loses even this tarnished halo. It is an attempt to force on consumers something they have shown no interest in. They have certainly not voted for digital television with their dollars. The fact that consumers continue to buy 25 million color television receivers each year in the United States is a pretty solid voting track record for the incumbent. It clearly says they are quite satisfied with NTSC television. The vote for the opponent is minuscule. The opponent is seen as a fringe element, something for the fanatics and kooks. Yet there is plenty of federal support for digital television.

There is a very creative new way under consideration for messing with the market and the consumers' ability to vote. A new proposal has come forth to take away the vote from consumers. The new proposal is to require all television receivers of 13-inch screen size and higher to be capable of receiving both analog and digital broadcast television signals. Consumers could no longer vote between analog television or digital television. Their vote would come down to a choice between a new television receiver or keeping the old one. If the old one is broken, it may have to be repaired or the consumer may have to go without any television at all. Interestingly, this would breathe new life into the television repair business. It might again be cheaper to repair a television set than buy a new hybrid unit with forced digital capability.

I am personally very enthusiastic about digital television. I have it now in my DBS receiver. I hope to also have it soon from my cable company. And I love my TiVo. I think we will soon have "his-and-her TiVos" in our home. I may some day vote to have over-the-air digital television as well. But I hope that I get to vote and not have it forced on me.

I hope I won't have to go to Boston and throw digital televisions in the bay to protest "taxation without representation."



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