April 21, 2008

A Question of Harm [2:55 pm]

This Friday I went to see Jonathan Zittrain give a talk at Harvard about his new book, which I have not yet finished reading. Jonathan was his usual incredibly diverting self and he gave gave good precis of the book (at least, consistent with what I have read to this point.

During the Q&A John Palfrey asked the closing question, a classic question to a presenter, which could be roughly phrased as “of all the questions you’ve gotten on this talk, which was the hardest to answer that hasn’t already been asked today.” Jonathan pointed to one of the key questions that have continued to come up in these talks, which is essentially, “why won’t the market just take care of this problem?” Jonathan admitted that, at this point, he really doesn’t have a compelling proof, just a strong conviction.

Which brings me to this little news item, elements of which have been percolating for some time. It seems to me that dealing with the market question ultimately brings us back to two classic policy questions - (1) where’s the harm and (2) is the harm (and thus its remedy) external to the market? So, keeping those two questions in mind while reading this (and pondering appropriate remedies) might be helpful — because showing the harm is not easy, IMHO, but it’s the necessary step before you even get to discussing remedies: HD enthusiasts crying foul over cable TV’s crunched signals (pdf)

As cable TV companies pack ever more HD channels into limited bandwidth, some owners of pricey plasma, projector and LCD TVs are complaining that they’re not getting the high-def quality they paid for. They blame the increased signal compression being used to squeeze three digital HD signals into the bandwidth of one analog station.

The problem is viewers want more HD channels at a time when many cable and satellite providers are at the limits of their capacity, said Jim Willcox, a technology editor for Consumer Reports magazine.

“They have to figure out a way to deliver more HD content through their distribution networks,” he said.

Compressing the signal is cheaper than costly infrastructure upgrades to increase capacity. Satellite TV providers — including DirecTV Group Inc. and Dish Network Corp. — also have the option of launching satellites to boost the number of HD channels on their systems.

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