Wednesday, October 26th, 2016

Why regulate television, phones and ISPs?


Why do we have cable monopolies? Why can’t different cable companies compete within the same community? Why can’t Waukesha have Time Warner and Comcast? What is the benefit to any community to have the aldermen choose one cable company over another?

As long as the different companies that use the telephone poles in the right of ways pay their “fair” share merely to maintain the poles, does it really matter if there is one line or twenty?

Under ideal conditions, a municipality would contract with a private company to maintain the poles. That company would then charge the different services an appropriate fee for the use of the poles. The use of the poles would then be unlimited except to the extent that the content provider could pay the fee. If the maintenance company charged too much, obviously they would have less content providers using their poles. The market would create an acceptable level of cost to use the poles, add in satellite competition, and television content costs would be truly market driven. Places like Milwaukee and Madison and even Waukesha would have a plethora of services.

Let’s take a look at another facet of television content provision. Right now cable television customers do not have access to the Big Ten channel and the NFL channel. Those of use who use an alternative source of television content happily can watch the Wisconsin Badgers and the Green Bay Packers regardless of which channel has the “broadcast” rights because our television content providers have chosen to reach an agreement with those channels. As a result, Time Warner is losing customers to the alternative sources, so there is some pressure on Time Warner to come to an agreement with the two channels. If we were to allow direct competition by allowing all cable companies to compete within the geographic area, there would be even more pressure on cable companies to provide that content.

However, free competition would also allow for television content providers to specialize in the content they provide. Imagine a Christian cable company, for example, that would specialize in only providing Christian-oriented channels and programming. The choices for the subscriber would obviously be limited, but we could also expect that the subscriber’s costs would also be less as they would not have to pay for content they do not wish to watch. Instead of trying to force à la carte programming, we could achieve it through the free market, even having niche content providers. We could even have Air America left-wing cable if we wanted: Al Gore’s channel, Michael Moore movie channel, HBO documentaries, etc.

Now let’s really expand our imaginations. Why should television content be provided to a point rather than an individual or a family regardless of location? If I travel, why shouldn’t my content preferences travel with me since I’m paying for the service? This was the idea satellite radio touched without being able to exploit it directly. What difference does it make to my cable, satellite or fiber optic television provider where I am at the moment I access my service? Right now geography plays a huge role, unfortunately. But as internet video advances, even if we do not de-regulate television content provision we will surely reach the point where all television content is on demand wherever we demand it. It’s just a matter of our ISP being able to follow us.

The only losers under such a scheme would be those local government units who have taken advantage of offering the monopolies to their profit to subsidize other government operations.

(Okay, bring it on. Let me see what objections to market television provision I have missed.)

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