TCS Daily


Liberals and Conservatives Catch the Regulatory Bug

By Derek Hunter - April 9, 2007 12:00 AM

Over the last 30 years advances in media and communications such as cell phones, 500 channels of television, thousands of new talk radio programs, and the Internet have expanded personal freedom and increased access to information. But these expansions make some people nervous and many of them want to limit or control what comes next with the help of government regulation.

The various fights for the "right" type of regulation are already happening under guises as diverse as "protecting children" to "protecting freedom" and "ensuring innovation."

Consider the debate over so-called Net Neutrality. Those who support regulation want to control how those who build and maintain the physical structure of the Internet conduct their business. They believe those companies will still bring about innovation, and competition will follow. But Internet speeds and access have increased largely without heavy-handed government regulation. And competition has grown and is growing. So how would mandating how those companies conduct their business inspire them to continue the innovation that has made the Internet the supreme communications tool it is today?

If a company is not allowed to charge the market value for its services, not only has it no incentive, it will also have limited ability (through loss of investment dollars) to research and deploy newer, faster, and more reliable technologies.

The regulation bug isn't limited to liberals, as some conservative groups would like to control what children, and by extension everyone else, are able to see on television.

There is no doubt television of today is not The Cosby Show of days gone by. Racier shows dealing with sex, sexuality, and violence often bring in bigger ratings than most other shows, which is why there are more of them than "family friendly" programming. That is the market at work.

But those same market forces have spawned several family friendly cable networks and the broadcast networks relegate more adult themes to non-family shows or other channels altogether. Choices are out there for parents concerned about what their children watch.

Also, there is the V-Chip, a device installed in every television now sold that can, upon a parent's wish, block shows they deem inappropriate. All shows on network television are now subject to a ratings system, which aids the V-Chip in knowing which shows to block based upon content.

But that's not enough for some; they want the government to regulate show content so there isn't the possibility of something they disapprove of being seen by their children.

One solution proposed to this "problem" is called "a-la-Carte" pricing, which would force cable providers to offer all their channels individually, allowing consumers to pick the channels they want and pay for them individually, rather than be offered a provider's entire package. This approach could well worsen the problem it is supposed to fix.

Smaller religious and family cable stations do not subsidize MTV, VH1, and other channels some people may find objectionable. Rather, the opposite is true, MTV, VH1, et. al, subsidize the small religious and family stations. By bundling them all together, it exposes the smaller channels to people who otherwise wouldn't choose them, netting them more potential customers.

If providers were forced to offer channels individually, the small networks with few subscribers would fizzle out due to lack of exposure. Given the choice between channels, the majority of people would not pick those small channels, their potential audience would shrink dramatically, and less audience means smaller revenues. So that "solution" would actually make the problem worse.

The fact that someone else, someone over whom you have no control, could be watching something with which you disapprove is the price you pay for the same courtesy being returned to you. Government regulators should not make value judgments on what legal material is suitable for television - individuals should. And in the case of children, that is the job of parents.

Calling for regulation of an industry is like asking the devil to dance. He'll hit the floor with you, but he'll lead -- and won't necessarily stop just because you've had enough.

Derek Hunter is Executive Director of the Media Freedom Project at Americans for Tax Reform.


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44 Comments

already infected
It's to be expected to see so many busy-bodies with this bug around. In fact governments just love it, and encourage it. The more busy-bodies you have demanding less freedom, the more governments can justify taking them away. Thus it keeps growing till they try to regulate pretty much everything and we're off to totalitarianism. This movement we see in the States reminds me of the old nazzii notion of 'Gleichschaltung'. Too bad you guys are longing for it too.

Fairness Doctrine
Don't forget about those who want to return the "Fairness" doctrine to quiet those anti-socialist talk shows.

Derek Hunter: Ever hear of the internet?
Hunter: "If providers were forced to offer channels individually, the small networks with few subscribers would fizzle out due to lack of exposure. Given the choice between channels, the majority of people would not pick those small channels, their potential audience would shrink dramatically, and less audience means smaller revenues. So that "solution" would actually make the problem worse."

We subcribe to a foreign TV station we cannot obtain via cable or satellite. It is much less expensive than when we used to receive it from the satellite.

I like to watch rugby. No sports network in the USA carries world rugby, but I can subscribe and watch online.

And just this week, if one wanted to watch every minute of the Master's Golf Tournament, one had to watch onling.

I believe the argument made above is specious and you are lobbying for the cable companies.

If the gist of your piece is to be believed, the future for any programming will be via the internet and by subscription, not bundled programming no one wants to watch.

The most zealous religious station is
MSNBC.

Derek Hunter is quite right though. All of those bundled stations that folks don't watch for one reason or another aren't subsidized. They're more like insurance stations, you pay for them and hope to never have to watch them.

I nominate Derek Hunter for the Clueless Doctrine. Do I have a second?

A la carte pricing
The whole problem would correct itself if the market were ever allowed to actually operate. But since its inception, cable has been a game of monopolies.

There is competion now, in the form of satellite television. But historically every viewing area has had access to only one cable provider. So the viewer has to be content with whatever his provider decides to give him. And pay through the nose for it.

Turn on cable late at night and you'll find no more than a dozen channels actually providing content. The rest all switch over to night-long infomercials and shopping channels. And during daytime and prime time, viewer choices are heavily weighted toward mass-cult entertainment. Programming of interest to cultural minorities, like actual literature, actual art or actual news, is all but nonexistent.

The reason is that viewer preferences are extraneous-- the provider offers you no choice but to either buy the service as is, or not to buy at all. So you watch what he has decided is easy to give you.

Force open access, and allow more than one cable provider to compete, and a la carte purchasing will quickly become accepted and normal practise. And we will have more choices as well.

Internet programming
IMO internet programming will always have a marginal niche in the overall market.

It's very good for single people who enjoy sitting at their desk in front of a screen. But it's not great for family viewing, with everyone on the sofa or the floor. Nor is it great for half a dozen guys sitting around watching the game.

I can't quite picture a nation of couples, quietly sitting together in office chairs watching their computer screen. And they don't even have a remote!

Censorship And T1 Internet
Anyone who recommends censoring media is usually criticized heavily. A large amount of profanity exists in chat rooms. When everyone in the United States has T1 internet- like it already is in Japan, text chat will become second to video chat. Video e-mail will replace text e-mail in many instances on T1. By that time, the crys for censoring the internet will dramatically increase in my opinion.

I'm sure all of us have seen how insulting some individuals are using text chat. When the same individuals start using video e-mail as a medium, the obscenity emanating from the United States will get pretty darn bad.

Think Digital
If you have a digital TV then you can easily port the internet feed to your TV, bigscreen or otherwise. You can, of course, also send the signal to your analog set but you need a converter card and the output isn't as good.

Microsoft's X-Box is intended as the next step in turning your PC into a home entertainment center. At some point you'll see internet cable replacing local cable (if it weren't for the cable monopolies in would happen faster).

Think out of the box.
New HD TVs are big computer monitors.

Soon your computer will be networked to your HD TV.

A La Carte Pricing Will Reduce CURRENT Censorship
"a-la-Carte" pricing...could well worsen the problem it is supposed to fix"

Cable operations are local government protected monopolies. Current regulations enable and encourage broadcast censorship, in that they force consumers to buy what they don't want in order to get what they do want.

State-wide cable franchising and IPTV will likely stimulate competition in the mass media market in the next five years. I would like to have as many options as possible...including packages, single channels or custom combinations of channels from multiple providers (cable, internet, satellite, etc...). That would be a real market.

"A-la-carte" pricing is primarily a method to reduce monopoly power and expand consumer choice. By expanding consumer choice, centraled censorship is in fact reduced. And as for those who scheme to censor content available to citizens...they need to refer to the First Amendment.

I get a little nervous when I start agreeing with roy...
but he is right on the question of cable monopolies, and he stated the problem and the solution very well.

The key question is: How do we deal with the infrastructure that cable delivery requires? There is a very real reason that cable companies get monopolies, and that is because they have to make massive investments in infrastructure to deliver their product. Furthermore, building this infrastructure requires tearing-up large chunks of the city, and so constantly building new networks is a non-viable option, unless technology solves this problem.

The government could just seize and run the cable delivery system, but we all know where that would end up: stagnation.

How do we solve this problem? I have no idea. If anybody else has a suggestion, I would love to hear it. The recent battle in the Midwest between Clear Channel and Mediacom has convinced me something has to be done, but I'll be tarred and feathered if I have any idea what that something is...

Absolutely right.
Government mandates and busybodies are the two main reasons that we have censorship.

When government-protected monopolies form, consumer choice will inevitably decline.

When consumers feel like they do not have control over some large aspect of their lives or the lives of their children, like television, busybodies emerge.

Consider the books that have been banned from public schools. Include in this list textbooks banned because they contain information about the theory of evolution, or information about safe sex. Why are these books banned? Because people who sent their kids to public schools did not want their kids exposed to them, and they did not have a practical alternative for educating their kids. Privatizing schools would mean that parents have a choice, and this controversy over book banning would end with people voting with their feet, rather than getting the government to ban something for everybody.

If in doubt, privatize it.

TV Commercials
I have to admit, I get pretty irratated when I watch American Movie Classics late at night with my young daughter on a weekend and they start advertising male erection cures and Girls Gone Wild videos. Honestly, it is utterly inappropriate advertising and while I despise regulations it is more than blocking a channel. Now I have to know when to block it?

I have completely had it with ads with sex and erection meds. They are useless and tasteless. In fact, do drug companies really need to advertise on TV? I saw a ad for a drug recently that did not even say what it was for. Just ask your doctor...

I am all for market solutions but the market seems to not be contolling the lack of taste these days. I am so sick of sexually oriented programming it makes me want to hurl the TV.

Imagine being able to watch a show with young kids and not sexualize them?

Same outcome, different method.
Hi+ler centralized pretty-much everything under either the N@zi party or the government. He destroyed or subsumed independent organizations that might oppose the government.

What we have in America are different groups freely uniting together to form a political party so that they can get handouts from the government, not the government uniting everything under one roof.

The Unions and the environmental movement have very little in commmon. In fact, if there were ever two groups that should be opposed to each other, these two are those groups. However, the unions spout environmentalist rhetoric on a regular basis, alongside pro-abortion rhetoric, anti-war rhetoric, feminist rhetoric, race-baiting rhetoric, and all the rest of the liberal line for a simple reason: Their dirty little coalition needs to old together if they want power.

The Democratic Party is essentially a giant coalition of vastly different groups who have coalesced around a shared goal: Government handouts and special priveleges.

The unfortunate fact is that the Republicans have picked up a few of these "special privelege" groups, too. Big Business asks for trade protection, and far too many Republicans cave. Republicans routinely cave to Big Farm as well.

The total failure of either party to control illegal immigration is an excellent ecample of this problem. Republicans need the votes of businesspeople and farmers, and Democrats need new illegals to vote for them.

N@zi Germany and the USA have been travelling down different roads that lead to the same place: Socialism.

This from a guy...
who has proclaimed that he possesses naught but rabbit-ears for the top of his TV. Not to mention being a devotee of PBS.

So please, tell us how you came to this conclusion. Did you read about or did PBS have a special on it?

Late night cable has tons to offer depending on your tastes. As does the History, Military, Discovery, National Geographic, NASA, Weather, Independant Film, etc. channels.

Not that your ignorance of media needs to be pointed out. It is pretty much on display for all to see. I was just wondering why you believe yourself to be an accurate judge of something you have no knowledge of.

Yep...
...mine already is.

-Bob

solutions
One solution would be to seperate the owning of cable hardware from the providing of cable programming.

Already solved...
...new "pipes" have bandwidths that were only dreamed about a few decades ago. Now, fiber can be instaleld and used to carry competing cable companies programming. No need to re-install for each company, they can share the same fiber. But the problem now is regulation, which enforces the monopolies. Cities don't want to give up their franchise fees.

Let the free market reign!

-Bob

But wait there's more.
How about a computer that records your TV programs from analog cable, digital cable, HD signals, and more. Gives you all the functionality of a TIVO (pause, rewind, fast forward, record). Will remove commercials from your recorded shows. Allows you to save DVD's for easy playback. Plus you can stream or download shows of the web for viewing on any TV. Also allowing you to store this on one computer and view it anywhere in the house (or from out of the house over the net).

This is already available, but it's not generally consumer friendly yet (in large part because the entertainment industry is fighting it tooth and nail). Get up to speed on what is technically possible and you just might be amazed, before you get frustrated at the legal hurdles that have been put in place.

Saying NO to Irresponsible Advertising
"Imagine being able to watch a show with young kids and not sexualize them?"

I am with you on this.

My approach is to watch as litte TV as possible. Instead, I rent movies and TV show of my choosing (Netflix and Blockbuster) for myself and my teenagers...no commercials to worry about.

Regulation is not the best solution to tasteless and/or stupid advertising decisions. The consumers best choice to is seek out alternatives. If enough consumers stop watching, eventually the offensive advertising and/or the programing will be gone.

Don't any of you ever eat at restaurants?
Ordering a la Carte is far and away the most expensive way to dine unless you don't want to eat very much. Why do you thing it would be any different with cable TV? The cost in new hardware alone would be staggering. I think this idea only sounds good to people who don't actually watch much television. So get a new tv and watch over-the-air digital if you don't like cable. Don't screw it up for the rest of us.

No ads?? Horrors!
"This is already available, but it's not generally consumer friendly yet (in large part because the entertainment industry is fighting it tooth and nail)."

Allowing the consumer to possess technology that lets them remove commercials eliminates their incentive to produce entertainment programming. Tivo ran into just this problem before being allowed onto the market. When you can just clip and view anything you want to, they'll just stop producing programs.

Same deal with the recording industry and downloads. Why buy the cow when the milk is all free?

One thing, it would have a beneficial effect on our politics. The cash that now poisons our political dialog would no longer be routed into the networks; people would be able to avoid political ads altogether.

No Subject
"Allowing the consumer to possess technology that lets them remove commercials eliminates their incentive to produce entertainment programming. Tivo ran into just this problem before being allowed onto the market. When you can just clip and view anything you want to, they'll just stop producing programs.

Same deal with the recording industry and downloads. Why buy the cow when the milk is all free?"

I'm sure roy doesn't mean to sound like a shill for the entertainment industry, but that's how it comes off.

Your assumption is that the only way to monetize video or audio entertainment is through direct sales and paid advertising in the form of commercials. The market is changing and you have to find other ways to monetize your product. Some might stop producing programs, but that's their loss. The dollars available for entertainment are only growing, it's up to the producers to find ways to tap into that by creating a product that people want, and finding ways to make money off it.

Enterprise
Star Trek Enterprise that is.

An effort was made by the fans to obtain subscriptions to fund the show for another season.

It won't be long before CG will be good enough to eliminate the actors.

And next will be four walls of TV and then the firemen will come to burn your books and....

Breaking up the monopolies
Let the record reflect that there are occasions when enforced monopolies do the consumer a disservice, and that men of keen intellect can discern which of those are egregious. :)

I understand the concept of high initial cost to lay cable-- it's similar to the argument for public utilities, so you don't have reduplicated electric lines running everywhere from Joe's Electric Co., and Sam's Electric Co., etc. But it has given rise to a bad situation. One way to describe it is that electricity is fungible-- everyone seels exactly the same product. Cable TV isn't.

Here's an anecdote. Washington, DC was the very last place in the country to get cable. And two vendors were permitted to install trial service in a number of apartment buildings, of which I managed several. After a year's trial the city would choose which one to go with.

I think you know where this is going. One was responsive to the wishes of the customers. Billing was great. Feedback was listened to conscientiously. Their business model included the customer being satisfied.

The other one you couldn't even get on the phone. Billing was arbitrary, the signal spotty, complaints ignored, channel selection limited. Everything was wrong with their business model except one thing: SOMEHOW they were able to get the commission to choose them as our permanent vendor.

I think a deal should be cut where competitors are allowed to purchase access to the existing cables-- and that for a price deemed reasonable by a governing board, the right to purchase shall not be unreasonably withheld. That way any taking would be compensated as fairly as could be managed.

They broke up Ma Bell, didn't they? I'm not saying everything has gone smoothly since, but it did solve the old problem.

Wait. Scratch all that. The telephone breakup only created new problems. And all the cable access in the country would get bought up by the operator with the deepest pockets, very likely Cox. So there is no good solution-- other than to create your own entertainment, the way we did back in 1940.

Cribbage, anyone? Or maybe we could sing by the piano.

Beside himself with ire
I'm frequently in motels around the country, so I do have regular, periodic access to cable. And what I observe is that in most markets, there comes a point around one or two AM where Discovery goes off, PBS goes off, History goes off, National Geographic, etc-- all the good channels-- and their spot is given over to infomercials. From then until five AM all you can see is people selling Swarovski crystals, Girls Gone Wild and endless videos of people using exercise equipment.

A hundred years ago, if you told people there would be a medium where you could decide every evening between a hundred different concerts or plays you could attend, at any given time, at the touch of a button, I don't think they'd be saying "Fabulous! That means we can watch the Home Shopping Channel all night long!" I think they'd be imagining listening to Mozart or watching Ibsen, or some contemporary artist of similar quality.

Boy, would they be surprised.

So you see, I do not speak of things I do not know. I haven't just watched cable, I've watched it in thirty or more different venues. Discovery in one area is not like Discovery in another area. The local provider sets the schedule. And most often they switch to commercials as opposed to real programming as much as they can get away with-- namely during the late night.

What people will pay for.
Ever notice how many items are in a supermarket that YOU do not purchase?

Why do they have so many products that YOU don't buy?

Someone else buys them.

YOU many not like info mercials, don't watch. But someone must be making enough money selling the products on the shows to buy the time.

What a country!

PS: A hundred years ago, most people would read a book or talk to people to entertain themsleves late a night in a hotel or at home.

What new hardware?
Ever hear of "On Demand" programming?

What's new?

With all digital signals it would not be difficult or expensive.

But why bother? Soon you can buy the shows you want on-line.

How can a monopoly exist without government sanction?
If the government had not dissolved ATT monopoly, how likely would you have cordless telephones or practically free long distance, or cell phones or WiFi or.....?

Competition may not be as ordered as you like, but it does the job government cannot perform, satisfy the customer.

I agree
I agree. I despise the sexual ads.... However, nobody seems to care. They must be profitable enough to air them.

Monetizing the product
Television, including network, local and cable ads, brings in unimaginably huge sums of money for the producers. And it is well known that the only reason we even have programming is to attract viewers for the ads.

With viewers having an easy way to avoid the ads, do you see any rationale for the purveyors of advertising to continue developing programs? By what mechanism would they continue making money?

Let's use newspapers as another example. They decided to publish their content on the web, with mostly free access. Even with web ads, they're now losing money compared to what they used to make. Can anyone be surprised?

Breaking up Bell
I think we're in agreement, that monopolies can give us a better range of products and more affordable prices. That was the theme of my several comments.

The breakup of Ma Bell also brought a few undesirable consequences. Remember all those years of unnecessary thought devoted to which carrier we would choose? We paid dearly for the right to own our own phones. And we paid for umpteen billion dollars of ad campaigns designed to gain our business. Getting rid of that heavy black thing with the dial on it didn't come cheaply.

can you say iTunes
Been around a bit longer. Plus you need a fast computer and a high bandwidth connection. Those are 500 MB files. That's several days for a dialup connection. And at $2.00 a pop, it's not exactly cheap. That's $44 to $48 per season for just one show. You're actually better off waiting for the DVD collection. You make my point for me. It makes perfect sense if you average only one hour of prime time tv/week and don't watch any sports or news. But then you wouldn't exactly be the average viewer.

and the picture and sound quality leave a lot to be desired
No surround sound and far below DVD or even broadcast quality resolution, or at least that's been my experience.

Monopolies give us a better range of products?
I don't agree with that.

Why not offer customers a choice?
If they want to pay more for less, that is their choice.

People don't want to subsidize MTV, then they won't have to.

Ire?
Amusement my good man! You rarely get me angry anymore and I actually enjoy reading your posts.

Amused by your knee-jerk dislike of commericalism and capitalism. Ah yes, where are the Mozart channels? Where are the Opera channels? (Actually I can get 24-hour classical music through my TV as well as Opera but don't let that stop you. The fact that you don't know this is further evidence of your disconnect from that which you pontificate upon.) I am sure your rant ends with you waving your cane at those damn kids and their rock and roll.

Instead we have people trying to make that stinkin' money stuff! Ugh! I am sure the fact that people are making money by advertising on the internet keeps you up at night.

As technology progresses (satellite, digital, fusion with the internet, TIVO, etc.) viewers can tune out the commericals and fine exactly what the wish to find and this will be provided by even more diverse companies.

I went to satellite after a argument with my cable company and now pay less for more channels. Last night at 3am, when my sick daughter needed to be rocked, I watched a classic Vincent Price movie. Sure, I could have enjoyed the advertisments for Girls Gone Wild but I was able to gather up the energy to press the button and change the channel.

Pity that you believe others to be uncapable of performing such a daunting maneuver.

Scratch that thought
I should have proofread my comment before posting it. See how you like this version, which should have gone out:

>I think we're in agreement, that BREAKING UP monopolies can give us a better range of products and more affordable prices. That was the theme of my several comments.

The breakup of Ma Bell also brought a few undesirable consequences. Remember all those years of unnecessary thought devoted to which carrier we would choose? We paid dearly for the right to own our own phones. And we paid for umpteen billion dollars of ad campaigns designed to gain our business. Getting rid of that heavy black thing with the dial on it didn't come cheaply.

(Compare and contrast the ugly black thing with the various lines of cell phones today by Nokia, Motorola, etc.)

Popular tastes
You're right to mention that satellite does multiply one's choices tremendously. I'm not so far into my television set that I require it-- ordinary old rabbit ears TV is enough to give me quality programs, like the occasional Masterpiece Theater or Hallmark Hall of Fame.

What I was saying was that audiences of a century ago would have greatly preferred such programs to the kinds of trash that have become currently popular. But you've made me see the error in that assumption.

In 18th century France the Grand Guignol was popular-- street theater of people gouging out one anothers' eyeballs, pulling intestines from the hapless victim's gut, etc. This was considered great stuff by the hoi polloi. As it is today. Look at the number of times each week we are immersed in people burying folks alive, serially killing young children, holding torture victims in dungeons, etc in shows like Crime Scene CSI.

Almost the only barrier still unbroken is coprophagy, and I expect it's only a matter of time until that wall crumbles. We're not supposed to notice that the plot lines in the weekly crime programs are mirrored in the deeds described in real life crimes, on the front page. These programs are avidly watched by a certain number of impressionable people with limited IQs, along with what appears to be a majority of the ordinary viewing public.

I just find it odd that there seems to be so little demand for anything better. Worse? Definitely-- television is always plumbing fresh depths. But you rarely hear anyone say they could use better entertainment.

Satellite does multiply your options, and it's probably worth the money to you if the Turner Classic channel is still running at 3 AM. In a majority of venues I've visited over the past few years, it's not included in the basic package of sixty or so channels available on motel cable. I share your taste for old B&W movies. We would seem to be in a minority.

Shakespeare
English theatre in the 1500s was pretty low-brow.

read the article again. MTV subsidizes third tier channels, not the other way around.
Particularly this part:

"But that's not enough for some; they want the government to regulate show content so there isn't the possibility of something they disapprove of being seen by their children.

One solution proposed to this "problem" is called "a-la-Carte" pricing, which would force cable providers to offer all their channels individually, allowing consumers to pick the channels they want and pay for them individually, rather than be offered a provider's entire package. This approach could well worsen the problem it is supposed to fix.

Smaller religious and family cable stations do not subsidize MTV, VH1, and other channels some people may find objectionable. Rather, the opposite is true, MTV, VH1, et. al, subsidize the small religious and family stations. By bundling them all together, it exposes the smaller channels to people who otherwise wouldn't choose them, netting them more potential customers."

You are exactly the person this article was designed to reach, but either you didn't actually read the whole thing or somehow you missed the point.

I'm assuming from your reply that you do concede my original point that a la carte cable pricing is more expensive than bundled for the average viewer.

Raw and bloody
Jacobean theater was positively uncivilized. With Shakespeare the form took a great leap forward.

Subsidies
"The truth is that channel owners force cable and IPTV companies to carry channels they don't want, in the hope of reaching a wider audience and justifying higher advertising revenues on unpopular channels. The public has to pay for lots of channels it doesn't want because popular channels are deliberately bundled with weaker channels, which are often only watched by viewers flipping through channels."

http://www.theregister.com/2006/05/25/us_tv_unbundling_push/

If those who watch family or religious channels knew MTV was subsidizing them, I would bet they would prefer they go off the air or would pay for it themselves ala carte.

Until the market is truly free, the government needs to let people have the option to pay more per channel and get what they want.

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