Cable competition not fast enough

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Sunday’s Washington Post featured a story entitled, “Cable War Fails to Offer Rate Relief in Montgomery.” The gist of the story is that Comcast, the incumbent cable provider in Montgomery County, Maryland, is raising rates by 4 percent and residents are distraught that the much vaunted competition from Verizon has done nothing to curb prices.

So much for the idea that “competition will bring down rates,” said Montgomery County Council President Marilyn Praisner (D-Eastern County), who has long clashed with the industry over regulation. “That clearly hasn’t happened.”

David Isenberg links to the story under the headline “Benefits of Competition my Ass” and asks, “Are you listening Kevin Martin?”

You would think Verizon has been providing service in the country for years and has settled into a cozy duopoly with Comcast. So when did Verizon get permission from the county to start competing with Comcast? November 28, 2006. That’s right folks, less than three months ago.

As the Post story notes, Comcast serves 200,000 households to Verizon’s 1,000. However, it will build out to most homes in four years. The story also notes–albeit in paragraph 14–competition on margins other than price: “Comcast, for instance, has improved its Internet speeds four times over the past three years without increasing its prices.”

Feb 19, 2007 | Comment | Tags: , , , ,

Martin pushes 90-day shot clock

The FCC website being what it is (or maybe politics being what they are), an agenda is not yet available for the December 20th meeting of the FCC. All eyes are on this meeting because commissioners (including recently de-recused Commissioner Rpbert McDowell) will vote on the AT&T-Bell South merger. However, it now looks like Chairman Martin is also going to take the opportunity to push through a resolution to the cable franchising proceeding that’s been open since January. According to Multichannel News, Martin has circulated a proposed rule that would require local franchising authorities to act on an application for a franchise within 90 days.

Martin, who waited for cable-franchising reform to fizzle on Capitol Hill before shopping his own plan, said FCC pressure on cities and towns to act promptly would produce several benefits, including spurring broadband deployment and lowering cable bills. The 90-day cap would apply to entities that had existing approval to occupy public rights of way presumably phone companies initiating service and cable incumbents seeking renewal. … Martin, who has circulated his plan among the other four FCC members, would like it voted on at the agency’s Dec. 20 open meeting.

There has been a flurry of activity in the docket for this proceeding, so it looks like it might happen. Not having seen the draft rule, I wonder what happens after the 90 days are up. In our recent law review article and comments to the FCC, Jerry Ellig and I proposed just such a regulatory shot clock. We proposed that if a locality doesn’t make a decision either way on an application, then the franchise would be deemed granted with a set of default terms, which could be set the same terms of the incumbent’s franchise, for example. Anybody seen the draft rule?

Cross-posted at TLF. You can leave and read comments there. →

Dec 13, 2006 | Comments Off | Tags: , , ,

On franchising, who needs Congress?

It looks as if now that national cable franchise reform is dead in Congress, the FCC is moving forward with its proceeding on the issue. According to USA Today, “Federal Communications Commission Chairman Kevin Martin has proposed rules to make it easier for phone companies and others to jump into the video business.” According to the newspaper’s sources, the new rule would require localities to rule within 90 days on competitive franchise applications by phone companies and others with existing access to public rights-of-way. In a new article in the Journal on Telecommunications & High Technology Law (and a public interest comment), Jerry Ellig and I tell the FCC not only that they should preempt unreasonable local franchise practices, but how they can do so. One of the points we make is that while requiring localities to act expeditiously in making franchise rulings, that’s just a start. The FCC also has the power to curb unreasonable denials of franchises.

In our paper we calculate the cost of franchising to consumers, and it looks like the FCC has such costs in mind. According to the USAT article, “Martin is using the FCC’s upcoming annual report on cable TV prices as ammunition. FCC officials say the report shows that satellite TV and cable TV operators have settled into a cozy duopoly, keeping prices in a steady, upward climb. It shows the average price of cable TV in 2005 was $43.33 a month. Where satellite TV also was available, the average was $43.34. But in markets with another “wired” video provider, the price was dramatically less: $35.94. The upshot: Absent credible land-based rivals, cable TV prices will keep going up.”

Cross-posted at TLF. You can leave and read comments there. →

Dec 4, 2006 | Comments Off | Tags: , ,

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