Thursday, December 13, 2007

Peace, Prosperity, and the NFL Network

In one sense it (almost, but not really) reassures me to know Sen. John Kerry is seeking to intervene in the dispute between the NFL Network, on the one hand, and Comcast and Time Warner, on the other, regarding the carriage of the NFL Network’s games on the cable operators’ systems. The NFL Network already is carried on the cable operators’ sports package tier for which subscribers pay an extra fee, but the league wants to have its package of a few selected football games carried on the lower-priced basic expanded tier.

According to a Broadcasting & Cable report, Sen. Kerry has called for a meeting between high-level Comcast, Time Warner, and NFL Network executives at which he proposes to mediate the carriage dispute. The sense in which Sen. Kerry’s efforts (almost, but not really) reassure me is that I could be lulled into supposing all the issues surrounding the Iraq war, climate change, health care, the subprime lending mess, and even the overall economy have been resolved. After all, these are the weighty issues that usually preoccupy Sen. Kerry. If he has time to worry about whether NFL Football games are carried on one cable tier or another, then perhaps the country is in much better shape than he usually portrays it to be.

The sense in which I am not reassured is wondering why Sen. Kerry thinks the government, in this instance in the person of a senior member of the Senate Commerce Committee, should intervene in this dispute between the football league and the cable operators. Doesn’t Sen. Kerry understand that, ultimately, someone has to pay for the NFL’s high-priced programming (unless the government decides to subsidize it, or, perhaps as a matter of the national interest, simply nationalize the National Football League)? Doesn’t Sen. Kerry understand that the NFL already enjoys a significant government benefit in the form of an exemption from the normal operation of the antitrust laws?

In this case, Comcast has made a business judgment that those football fans who desire to watch the extra NFL games should pay more so that the larger body of cable subscribers who don’t value watching these particular selected games as much won’t be burdened with paying the higher costs. This may or may not be a sound business judgment, or one that stays the same for all time. But Comcast’s decision surely is a business judgment about the use of its property that ought to be left to the marketplace. It is a decision that the private sector parties should be left free to negotiate without Sen. Kerry (or any other government official) intervening. Such government intervention, even if initially under the rubric of simple mediation, almost inevitably leads to coercion of one side or the other.

I understand that Sen. Kerry's interest here is that he may believe it is of paramount national interest that all Americans be able to watch -- as cheaply as possible -- the New England Patriots make their stretch run to a potentially undefeated season. If the NFL wishes, on its own accord it could resolve Sen. Kerry's Patriots' problem by moving the Patriots' game to broadcast TV and replacing it on the NFL Network with another game. But instead of doing this, what the NFL wants to do, if it can, is to enlist the government in putting pressure on Comcast and Time Warner so that the league can enrich itself as much as possible at the cable operators’ expense. In the league’s eyes, why be satisfied with an antitrust exemption?

What I don’t understand is why Sen. Kerry, or any other government official, would take time to intervene in a dispute the marketplace is perfectly capable of resolving in a way that maximizes consumer welfare -- at least until the weighty national issues of peace abroad and prosperity at home have all been resolved to everyone’s satisfaction.