Posted by: Opey | June 12, 2007

Cable Monopoly: On Its Deathbed?

Now, there is plenty of blog fodder out there about a certain talentless and, quite frankly, useless person out there and their jailhouse “revelations,” but, due to my self imposed ban on all things that person (I’m not allowing myself to even say her name), I will have to turn my fervor in a different direction. Luckily something materialized. I admit it, I am a television addict. If there were seedy characters out on a street corner selling television programming, I would be first in line. I need my fix. In that light, I have had several run ins with Charter Communications, the cable company with a monopoly in my locality. I utterly despise Charter for their poor performance both on their actual cable, as well as their horrendous customer service. With something that is relatively local, such as cable, customer support/service should be local as well, not located in a call center in Bangalore. But, I digress. Anyways, the last few weeks and months have seen some developments that have brought into question the future power of cable monopolies. For one, recent Federal legislation has acted as a push towards competition for cable companies. Between the FCC regulations that digital television become standard and the recent legislation regarding the uniformity and regulation of set-top boxes that decode and display that digital content (Link). There has also been a move by AT&T into several new markets, with bundled packages offering various television programming options at reasonable prices that can compete with cable companies. There has also been a rise in the use of over-the-air HD use for those with HDTVs. All of this is well and good and appears to be a force towards a competitive market, but I’m not fooled. In Microeconomics 101, when discussing what is a natural monopoly, often times the example of cable companies will be used. This is still the idea in many legislator’s and economist’s heads. They believe that the cable infrastructure is such that having only one dominant cable company in any locality actually provides the greatest benefit in terms of cost. This has allowed for cable’s power to grow. They have slowed down the progress of the afore mentioned legislation, lobbied for tight oversight and licensing to bar AT&T’s movement into the market, and has used its size and power to bargain to gain a foothold in the HDTV race. But, this is not the 60’s. Technology has advanced to the point where cable doesn’t need to be a natural monopoly any longer. If municipalities were smart, they would take over the cable infrastructure and then lease out its use to different cable companies, allowing for greater access. The maintenance of the lines could be contracted out as well, so that the municipality would act more as investor than owner. Further, I think more regulation and legislation needs to be levied towards the cable sector, breaking it down and restricting it from participating in anti-competitive activities. Satellite service is a nice alternative, but for those in apartments or in a city with high rises or obstructed views, cable is the only answer. The time has come to make that answer a much less painful one for the consumer.

On a side note today, I have come across a great blog. This great tome of knowledge is The Frugal Law Student. I am a “cheap” person by nature and now that I will be entering law school and signing away more of my soul to the University of Wisconsin, my frugal nature will have to continue to peak.  This blog has some great information for all people, not only law students, on how to get a hold of personal finance, all presented in an easily approachable and humorous way

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