Can someone explain to me how cable TV service is not a monopoly?

Discussion in 'After Hours Lounge (Off Topic)' started by Carlo Medina, Jan 11, 2006.

  1. Carlo Medina

    Carlo Medina Executive Producer

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    And no, I do not count satellite services as a true competitor because it requires a whole different way to connect (satellite over the air & dishes vs. cable that is already pre-wired into most houses).

    Last I checked, Adelphia (my local carrier) did not lay down the cable wires that go to each house/apartment in my area, so I don't think they can claim ownership over those wires. Yet they have sole control of service and prices over that said area.

    Living in L.A. I have friends all over the place who have different providers. So at face value one could say "there's plenty of cable providers to choose from". Except that all of their territories conveniently stop at the border of the other's. So really the consumer has no choice. When the live in ___ area, they must buy ___ cable.

    My parents live in a medium sized (200,000 pop) NorCal town and they have only one choice for the whole city, so there is not even the pretense of competition there. I suspect in most small cities this is the case.

    So why am I griping? Quite frankly, I'm sick of being a slave to the services and rates of my one company. Just over the hill is another cable company that offers more channels in their base package for substantially less than what I'm paying for my service. About 30 miles south (remember L.A. is one contiguous city) in my best friend's house he has digital cable + HDTV and twice the channels I have for about $10 more a month (to even come close I'd have to subscribe to multiple packages on Adelphia and pay $30-40 more than he does).

    Someone who is smarter than me, please explain how this isn't a monopoly in practice (if not in theory). I'm sure there are legal eagles employed by the cable company convincing the courts how this isn't a monopoly in theory, but in practice it sure seems like it is.
     
  2. Carlo Medina

    Carlo Medina Executive Producer

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  3. SethH

    SethH Cinematographer

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    Well, I don't have the legal answers to your questions. However, if you knew what they did to college kids you'd probably feel better about your situation.

    In Blacksburg there's a company called NTC (formerly ConnectMe). They contract with most of the large apartment complexes in town to offer exclusive phone, cable, and internet service. They charge more than the other providers (Adelphia and Verizon) and have lower quality service in general. They also do not allow routers. Each person must pay ~$28 per month for internet (so if you've got 4 people in an apartment you're paying $112/month just for internet. The cable service is reasonably priced.

    If you only have one person in a 2 bedroom apartment you still have to pay for internet access to the second bedroom which is absurd.

    Anyway, sorry to take this off in a different direction.

    I think part of the reason it's not considered a monopoly is that satellites, despite your personal opinion, is a competitor because it offers the same service no matter what the transmission method is.

    Also, the phone companies, who already have lines run, are allowed to offer television service. If they choose not to, then that's a different issue.
     
  4. Joe D

    Joe D Supporting Actor

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    I totally agree with you and I loathe the fact that I can't make any choice on the matter.

    My local phone company and utility company are the same way, 1 Choice.
     
  5. Carlo Medina

    Carlo Medina Executive Producer

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    Seth, remember that widespread digital satellite services is a relatively new thing, and that before then, only sports bars and such had access (using those big-a$$ dishes we were used to seeing in the 70s, 80s and early 90s).

    Also, since they are a different form of transmission, and the cable companies did not lay down the wire that goes to your house, that does not address the monopoly over the wire scenario. It doesn't matter how much is available via satellite because they still have monopolistic control over the wires in your house.

    It's like saying that if we only had one gas [car-fuel, not natural] company (which would be a monopoly), that they weren't a monopoly because you could get an electric car. This would be analogous to the "have to buy other equipment" scenario that is satellite vs. cable.
     
  6. Carlo Medina

    Carlo Medina Executive Producer

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    An easy way to see the monopoly is this:

    I want cellular phone service: many choices.
    I want satellite TV: a few choices (directv, dish, voom)
    I want gas for my car: many choices
    I want long-distance phone service: many choices
    I want an ISP: many choices

    I want cable: 1 choice
    I want local phone service: 1 choice (good catch, Joe, I didn't want to open this can of worms yet but I had also thought about it)
     
  7. Chu Gai

    Chu Gai Lead Actor

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    I want less stupid ass channels that I never watch and still pay for.
     
  8. Jason Seaver

    Jason Seaver Lead Actor

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    Actually, I'm pretty sure there's multiple choices for local phone service now - I certainly get enough calls from AT&T and MCI trying to sell it to me.

    As to cable service, I would guess that (a) calling it and satellite service different things is splitting hairs, as they are delivering the same product, and more importantly (b) allowing for multiple providers would require adding more infrastructure. Who owns the wires on the street? I always figured it was New England Telephone/NYNEX/Bell Atlantic/Verizon/whatever name they have this week, since their name was on the telephone poles. If they want to lease some percentage of their bandwidth to one company, that's their business, and they can't be compelled to add more capacity (and whether it's in their interest or not is an open question).
     
  9. SethH

    SethH Cinematographer

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    Well, you'll probably need to address this with your city council or other similar body. Municipalities (who usually own the lines) make the decision to allow one or more operators in a given area. If they decide to only allow one, then you will have to take it up with them. If they allow more than one then it cannot be considered a monopoly just because no other franchise has come in to offer a service. Also, as I mentioned, the phone companies can offer television services over landlines to your house.
     
  10. Shane Martin

    Shane Martin Producer

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    Seth is correct. Municipalities govern the rules that these cable companies live by. They allow xyz amount of cable companies in the area and set the rates. They can't raise their rates w/o talking with thei local municipality.
    Cable companies and smaller stations like Golf Channel do not want this either. Many say well then let it die but they subsidize the cost of the other channels by packaging them together to the cable company thus if you drop one of those then you end up paying more for the channels you do watch.
     
  11. Colton

    Colton Supporting Actor

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    In Oklahoma, you get COX (I call 'em CoxSuckers) for all your cable needs ... which includes package deals with telephone and internet.

    - Colton
     
  12. Shane Martin

    Shane Martin Producer

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    And I consider it a great deal too.

    $100 a month for Digital cable + 4mb down High speed internet + local phone service with all the bells and whistles. I pay a little extra for DVR and HD but it's worth it. Directv and Dish couldn't touch it.
     
  13. Carlo Medina

    Carlo Medina Executive Producer

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  14. Shane Martin

    Shane Martin Producer

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    The Ala Carte debate will go on forever but it's not up to the consumer or the government to force the cable companies to make a choice. Since I deal with cable companies for a living, I've found that most of them that have answered my inquiry about ala carte don't like the idea.

    I wouldn't hold your breath on it.
     
  15. John Alvarez

    John Alvarez Screenwriter

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    Actually in Miami I have a choice of 2 cable companies.
     
  16. MarkHastings

    MarkHastings Executive Producer

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    I hear ya! Besides my issues with Comcast, my brother recently caught them (even a manager) lying to him TWICE!

    But since there are no other choices, if my brother wants cable, he has to bend over and deal with it. Comcast knows this and they don't give a rat's ass. They have this "Either deal with our shit or go without cable" attitude. [​IMG]

    If there were other choices for cable, I'm sure Comcast would change their tune rather quickly, but unfortunately that's not the case [​IMG]
     
  17. Joseph DeMartino

    Joseph DeMartino Lead Actor

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    1) In many municipalities cable, like local telephone, electrical and natural gas service, is a regulated monopoly. In all these cases the cost of infrastructure is/was so high and the efficiancies of a single provider so great that it simply made sense - at least when these services were new - to allow such arrangements. (And Carlo there is a good chance that Adelphia - or its predecessor - did lay down the wires that go to the houses or apartments in your area, or paid the developer to do it for them - just as the electric and telephone companies did.)

    2) Contrary to many misconceptions, it is not illegal to be a monopoly in this country. Anti-competative practices that unfairly disadvantage competitors are illegal, but if you simply build the best damned mousetrap in the world drive all the other mousetrap builders out of existence because nobody buys there crap any more, you have broken no laws.

    Technology is, of course, changing things. That infrastructure has mostly been amortized by now, and the government can force infrastructure owners to share their wires, even while making sure that they're compensated. (That's why we have lots of long distance companies competing with each other. Former monopoly AT&T was forced to lease space on its lines and switches to upstarts like MCI. I worked for both companies during that era - it was interesting.) There has been some move towards forcing cable companies and phone companies to allow competitors to buy bandwidth on their systems, and we may someday see true competition in more areas. But for the time being lots of us are stuck. I live in a north-facing condo with no access to the common areas of the exterior of the building - so I can't have satellite, I'm in a lousy area for off-the-air TV anyway, and my only choice for TV is Adelphia. But, hey, at least with Adelphia I get a bunch of channels, pay per view and a couple of HD DVRs. Life could be worse.

    Regards,

    Joe
     
  18. John Alvarez

    John Alvarez Screenwriter

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    The problem I have with it is that for my new neighborhood the cable provider had to go to the county and pay to give service in this area and that they would be the sole provider for the area.
     
  19. Carlo Medina

    Carlo Medina Executive Producer

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    Some good points Joe, but as John says, most often the company that takes over has paid the county/city to become the sole provider. I would guess the actual number of cable providers who actually created the infrastructure (i.e. laid down the wire) to be small, percentagewise...though of course I have no proof [​IMG]

    But it's clear when you read online that they are not regulated monopolies like power, water and natural gas. In fact, cable was deregulated in 1996 - here's an interesting read on the failure of cable deregulation .

    And I fully agree that it isn't a crime to be one. But heck, look at Windows. You don't have to use it. There are alternative OSs. But the government slapped Microsoft anyway with some lawsuits and won. To my mind, the cable company structure (where only one company controls one area with very few exceptions) is no different (and in fact IMO worse) than what Microsoft has done.
     
  20. Carlo Medina

    Carlo Medina Executive Producer

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    Just found this ConsumerReports.org article on deregulation [dated 2002]. Great subtitle: Deregulation was supposed to cut prices, expand choice, enhance service -- improve your life. So how come you're not smiling?

    Click on the Cable TV link at the left side of the page for further information on the industry...

    And Joseph brings up a great point as to why satellite is not a direct competitor with Cable TV--I just realized that I too do not have a southwest facing apartment (and in fact only one side of my building does, but no one has balconies). In many places like Los Angeles, apartments are not the oddity, but the norm, and many are not able to have satellite by virtue of facing the wrong way or not having balconies, or landlords not allowing them. But nearly all of these domiciles are "cable ready". For the one choice that we have... [​IMG]
     

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