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from: Small Business Times

Competition does reduce cable prices

Posted on July 03, 2007 4:35 AM
By Stephen Pociask

Wisconsin lawmakers are considering legislation to encourage cable TV competition, lower prices and increase consumer choice, investment and jobs. However, local governments want to protect the monopoly at your expense.

Recently, the National Association of Telecommunications Officers and Advisors (NATOA), a municipal government-sponsored organization, incorrectly concluded that competition raised prices in Texas. What their analysis did, however, was to track "list prices" for legacy services - old services that large numbers of consumers have abandoned.

Their analysis did not track lower-priced services that consumers have flocked to, nor did the analysis compare differences in competitor and incumbent prices.

The NATOA results are flawed and contrary to 20 years of hard evidence showing lower rates from competition, including studies from the General Accounting Office (GAO), think tanks and academia. The Federal Communications Commission (FCC) found that competition lowered cable rates by 25 percent per channel.

Based on our survey, Texas consumers reported saving 30 percent off their cable bills, thanks to competition.

Local governments fear falling cable prices because they tax 5 percent of all revenue. As a result, local governments want to stop you from saving $15 dollars off your bill, so they can keep 75 cents of it. This too is misguided, since lower prices mean more cable TV consumers and higher cable revenues, which benefits both consumers and municipalities.

Stephen Pociask is president American Consumer Institute. For additional information, visit www.theamericanconsumer.org.

1 Comment

1.
Rich Eggleston writes:

Whenever I see a name like the Apple Pie and Motherhood Institute -- or the American Consumer Institute -- I wonder, "Who are those guys, anyway?"

Twenty-five years in journalism in Wisconsin taught me to be skeptical, and its a habit I've retained since I became a recovering journalist.

So, what is Mr. Pociask's American Consumer Institute? Does it have any
credibility to predict a future in which the Legislature will lead us out of the digital wilderness to a Video Valhalla? Or does it have a hidden agenda?

Here is what Broadband.com says about the American Consumer Institute:

"The American Consumer Institute isn't actually a consumer group. It's an amalgamation of think tank reps pushing a free market ideological agenda under the guise of consumer advocacy. A quick WhoIS notes that the ACI website is registered to Stephen Pociask, a telecom consultant and former chief economist for Bell Atlantic, who via groups like the Competitive Enterprise Institute, works to shape data that argues against government regulation of industry.

"...The closest thing to grass roots support in the incumbent corner are employees & investors.

"Since these often anti-consumer positions .. frequently don't sell well to consumers, new realities are spun via 'independent research' by industry think-tanks with absurdly misleading names.

"These reports are ultimately gobbled up by lazy journalists for injection into the broader discourse as objective fact."

I'm sure the folks at Small Business Times don't fall into the category of lazy journalists and will tell us who groups like TV4Us and the American Consumer Institute really represent.

I want to know not only as a shareholder in AT&T and Time Warner, but as a member of the Broadband Telecommunications Commission in the Madison suburb where I live.

Rich Eggleston