Cable TV Competition…Its Time Has Come!

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 to also reap the benefits of competition. 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. On November 14th the Portland City Council agreed, and voted unanimously to allow Qwest to offer cable TV service.

Unfortunately, just one week after recognizing the benefits of telecommunication competition, the city council fell back on its “government knows best” approach and voted to move forward on a $500 million government broadband fiber-optic system. The two private cable operators that the council has authorized to provide video services in the city both blasted this new move toward government involvement in telecommunications.

Perhaps the Portland City Council should take a look at last week’s Catalyst post, Broadband Blunders in the Beaver State, to learn how such efforts have failed elsewhere and why they’re likely to fail in Portland.

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

Steve Buckstein is Senior Policy Analyst and founder of Cascade Policy Institute, a Portland-based think tank.

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Posted by at 06:00 | Posted in Measure 37 | 10 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Jerry

    At least we know one thing with absolute certainty. The government broadband fiber-optic system will be a failure.


    The phone companies still have a monopoly! If I want a residential line in my house I can only get it through QWest, because I’m in their section of town……………that is a monopoly.

    These companies will putt the fiber optics in themselves without need of public tax money, it’s crazy to do it for them. This will fail, we’ll be out 1/2 a billion and they’ll pay these companies to “manage” our fiber optic system.

    Don’t vote for anymore tax increases, it’s obvious they have enough money if they are will to waste this amount!

    • Richard Brown

      It the Phone is an monopoly, I guess you have not heard of Voice over IP or dropping land lines for cell phones.

      • CRAWDUDE

        Actually I had ACN ( kinda a wholesaler) residential and then went to just a cell. When I was rearching the phone companies I found out that the Oregon Utilities Commision ( I think that’s the name, they control the state phone regs) sectionalized regions of towns, cities and the state for particular major companies to supply residential and business phone service. That action stifles competition, creates monopoly zones. Had the state not done that these companies would have already started running fiber optics in this city for future competition.

        In Clackamas county Verizon has committed 3 billion dollars to run fiber optics to be used in the future. My point above was that companies will invest their own money into the future if the goverment allows free and open trade. In the case of Portland it doesn’t happen in many cases because those same companies can manuever a gullible city council into building these innovations for them.

        Much like the condos. downtown would’ve been built with out tax abatements and tax payer funded enticements. The market for them has cooled and many builders are turning the complexes into apartments……………but they still get to keep the abatements meant for condo owners………….city council got taken again.

  • devietro

    Does anybody else see the ever encroaching government into the TV world. Its one step closer to that Orwellian land of TV watching you. Not at all saying that thats where we are headed but its an interesting thought.

    Yet again its interesting to see that private industry will win out again.

  • Gullyborg

    cable is not a monopoly. DISH, DirectTV, and rabbit ears are all viable alternatives. I don’t think cable even has a majority of market share.


      I don’t use cable but if only one company is allowed to run, access and set rates for the cable in a city or area and other companies are shut out be government than yes it is a monopoly.

      Market share for TV signal access is not the question, it’s the fact that only COMCAST can run cables on taxpayer owned phone lines. Other companies cannot, so COMCAST has a monopoly on the cable signals in the city. If mutiple cable companies were allowed to compete the prices would go down and quality up.

      If the city only gave permits to Direct TV dish installers and the DISH Network was shut out it would be the same thing.

  • Jerry

    The bottom line here is government is sticking its ugly nose into business, where it does not belong.
    It really is that simple.
    No regulation is necessary of any of this.
    The marketplace will decide…it always does.

  • rural resident

    The negative effects of the cable monopoly can be easily seen outside of the Portland/Willamette Valley by looking at the Comcast SportsNet Northwest situation. Comcast Cable customers have the channel on their expanded basis systems (Channel 37) from SW Washington to Eugene. However, those of us who live outside of this corridor have other systems or are on DBS. We cannot get CSN Northwest, despite the fact that Comcast is supposedly marketing it to other providers. (I’m not sure how hard they’re trying, but that’s another issue.)

    If there were actual cable competition, how long do you think it would take for Charter, Bend Broadband, or any of the other cable monopolies to put such a desirable channel on their expanded basic tiers in order to maintain their customer base? The way it is, these cable companies can ignore their customers.

    Yes, cable is a monopoly (unless you’re in a rare place with two or more cable systems competing). Rabbit ears are not an alternative, since you don’t get the same programming. Dish/DirecTV are not in exactly the same category because of the complexity of the equipment, service problems, etc.

    • Broadcast Guy

      Actually, Direct TV or Dish Network are far more reliable than moct cable providers. I won’t even discuss the second rate signal that mosr cable operators send to the chumps on their systems.
      In my last home in Tualatin, we constantly had ghosting on the bottom three or four channels on Comcasst’s allegedly “fiber optic” system. Only after repeated complaints – including a formal written letter to the county cable commission – did those clowns do anything to address their substandard signal.
      For whatever it’s worth, I don’t know a single person working in broadcasting in Oregon who knowingly will admit to having cable in their homes. It sucks that bad.

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