It wants to protect the existing pay TV "ecosystem," in which consumers pay $150 a month and more for bundles of channels they do not watch, in order to see those few channels they do watch. As Powell told a Senate subcommittee during the show, according to Advanced Television, the largest subscription video service in the country isn't Comcast ( CMCSA), Time Warner Cable or DirecTv ( DTV). It's Netflix. The reason is simple. Netflix charges $8 a month, a tiny fraction of what cable charges. The same is true for the other Internet-based services, some of which, like Amazon.Com ( AMZN), actually charge a la carte for individual shows.
Powell wants the government to look the other way while cable uses its power in Hollywood against this Internet threat. Even as he spoke, major studios were refusing to renew their Netflix contracts, in an effort to dry up its flow of content. Cable paid for that content, Powell warned -- you wouldn't want anything bad to happen to Mad Men, would you?
But when the studios were broken up, did that end entertainment? Didn't we all just turn on TV, even when shows were controlled by commercial sponsors? Didn't the market work? Didn't Hollywood actually get richer than ever, with a programming outlet now in every home, however poor the quality compared to what you might see in a movie theater? I think it did. Cable showed the weakness of its market case this week, and that's the story investors need to take home with them. At the time of publication, the author had no investments in companies mentioned here. Follow @DanaBlankenhorn This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.