Cable Monopolies Finally Meet Their Match?

[laketrout]

This is probably the cleariest article I have read about this Cable monopoly vs. telephone-based TV battle. The most interesting part of this article:

A Federal Communications Commission report shows that for the year ending Jan. 1, 2004, cable TV prices were 15.7 percent lower in markets that had wireline competitors than in those without such competition.

That's why Griesheimer believes the state must do something to spur competition.

"The consumer is going to win," he said, "because it will drive down cable rates."

http://www.newstribune.com/articles/2006/01/23/news_state/0123060004.txt

Is there any reason for these franchise agreements anymore if teclos are willing to lay down lines on its own like Verizon's fiber optics?

 

[Genx87]

I can see valid arguments on both sides of the aisle. The cable company picks up the costs of laying the line and in return is guranteed rights to those lines for x amount of years.

At the same time it destroys open market competition and can artificially raise prices for the users.

Satellite TV has put a dent into Cables numbers and once the contract runs up I believe the city is supposed to partially or fully own the lines and competition is allowed back in.

 

[laketrout]

But if other companies like verizon are willing to lay down lines on their own, and make that intiial investment, I don't see why they are being denied. The point for the cable franchises was to make an agreement to get them to initially develop. That mentality obviously is not the case anymore, now it is just flat out competition that cable is avoiding.

 

[RightIsWrong]

Dang Gen....I'm beginning to say this phrase in reference to your posts a little too much for comfort.....

I agree with you.

 

[charrison]

Well it is good that telco are getting into the cable tv business. MOre choices is a good thing. I am looking forward to being able to have IPTV services sometime early this year.

 

[3chordcharlie]

Originally posted by: laketrout
But if other companies like verizon are willing to lay down lines on their own, and make that intiial investment, I don't see why they are being denied. The point for the cable franchises was to make an agreement to get them to initially develop. That mentality obviously is not the case anymore, now it is just flat out competition that cable is avoiding.

The point of programs like that is usually to spread service quickly, and normally includes relatively strong regulation to prevent true 'monopoly' pricing from taking over. If there's no regulation, it's hard to justify protectionism stipping a competing company from laying their own wires.

 

[laketrout]

Originally posted by: charrison
Well it is good that telco are getting into the cable tv business. MOre choices is a good thing. I am looking forward to being able to have IPTV services sometime early this year.

I agree. I think in many areas the agreements that cable companies have which were once useful to encourage development are now hurting us by limiting competition and alternatives as evident in this article.

 

[3chordcharlie]

Originally posted by: laketrout

Originally posted by: charrison
Well it is good that telco are getting into the cable tv business. MOre choices is a good thing. I am looking forward to being able to have IPTV services sometime early this year.

I agree. I think in many areas the agreements that cable companies have which were once useful to encourage development are now hurting us by limiting competition and alternatives as evident in this article.

To some extent that was the point of those agreements... to allow companies to defray massive startup costs without the competitive pressures of a market operating at the margin (the difference between marginal and total cost is the reason deregualted airlines do not make money).

 

[laketrout]

I understand that it was initially a useful idea. But now it is becoming a problem for those who want a choice with their cable.