Cable companies play monopoly; you lose

Congress deregulated the telecommunications industry in 1996. Deregulation, free market purists assert, automatically increases competition, thereby improving quality and lowering prices.

What it does, at least on this side of the observable universe, is create monopolies. It’s happened time and again after massive deregulation — the airlines, health care, you name it. A year ago, the L.A. Times’ David Lazarus, with no little frustrated incredulity on his part, pointed out the obvious:

Here’s a question for you: Is there a single example of consumer prices going down and market competition increasing after deregulation of a U.S. industry?

I’m serious. The phone industry? The cable industry? Regulatory oversight for both was eased — and in some cases eliminated — and look where that’s gotten us …

The telecommunications market was deregulated in 1996 in hopes of promoting more competition.

Where are we now? A wave of mergers has resulted in just two companies, AT&T and Verizon, controlling almost the entire U.S. landline market. AT&T, Verizon and Sprint account for about 75% of the wireless market.

On the cable side of things, four companies — Comcast, Time Warner Cable, Charter Communications and Cox Communications — now account for about two-thirds of all U.S. subscribers.

Needless to say, phone and cable rates have risen steadily since the telecom market was deregulated.

I trust most of you in the Charlotte area are home, and that many of you are watching — or attempting to watch — cable. Is it working? If it is, you happy with the selection, price, service? No?

Well, don’t loosen your grip on that remote, ‘cause it’s all about to get even crummier!

Already the dominant player in providing pay television services to American consumers, Comcast announced on Thursday a deal for Time Warner Cable’s boards, which will create a behemoth that will dominate the media industry.

It is the second transformative deal for Comcast in recent years, coming just months after it completed an acquisition of NBC Universal, the TV and movie studio. And the deal, if completed, could have impacts on consumers across the country, though it is unlikely to reduce competition in many markets.

“The financial benefits of this are attractive and will create sustainable benefits for years to come,” Comcast’s chief executive, Brian Roberts, said on a conference call on Thursday.

Yeah. For him. I ditched cable a couple of years back for, er, an unnamed alternative that uses a different technology. You might want to do the same. Competition’s a good thing. Hoist the cable companies by their own boxes!

Categories: Poking the Hornet’s Nest