Cable TV Competition

Remember when the only telephone service you could get was from AT&T? From 1913 to 1984 the company had a government-sanctioned monopoly. The company argued that telephone service, by the nature of its technology, would operate most efficiently as a monopoly providing universal service.

Of course, we now know how expensive that lack of market competition turned out to be. After deregulation, phone services exploded while rates plunged.

Now it’s time for cable TV customers finally to reap the benefits of competition also. In the last twenty years cable TV rates have risen more than twice as fast as inflation, while technologies such as TV equipment, telephone services and Internet services have either dropped in price or risen far slower than inflation. The differences can be attributed in large part to whether the industry is competitive or not.

Lack of competition has hampered innovation in the cable market. Just look at the computer you own today, compared to the one you owned ten years ago. Compare the Internet access you have today to what you had then. The differences are like night and day. Cable TV service, in comparison, has changed very slowly. Again, the difference is all about competition.

The Mount Hood Cable Regulatory Commission voted recently to allow Qwest to compete with Comcast for cable customers in Multnomah County. The Portland City Council will vote on approving the Qwest franchise agreement next Wednesday.

Cable TV is where phone service was in 1984. It’s time to bring it into the 21st century and let consumers reap the benefits of competition.

Steve Buckstein is Senior Policy Analyst at Cascade Policy Institute, a Portland, Oregon-based think tank.

© 2007, Cascade Policy Institute. All rights reserved. Permission to reprint in whole or in part is hereby granted, provided the author and Cascade Policy Institute are cited. Contact Cascade at (503) 242-0900 to arrange print or broadcast interviews on this topic. For more topics visit the QuickPoint! archive.

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