02 Nov Road to cable TV choice and faster Internet runs through Madison
Editor’s note: The Legislature’s Joint Finance Committee last week approved a cable TV deregulation bill that would replace franchises that have been issued by local municipalities with state-issued franchises. The measure, which now goes to the full Senate, has already been approved by the State Assembly.
Everyone knows that robust competition is what keeps prices low and quality high. Small wonder, then, that consumers are so unhappy with their current choices for video services – the rising prices, the lack of innovation. The choices are just not there.
There’s a reason for this. While current federal law is supposed to promote competition, the video franchising process in most states – including Wisconsin – enables cable television companies to carve out what are effectively exclusive deals with local governments which prevent competing providers from entering their markets.
The “opportunity” to compete exists, in theory. But, in reality, any new provider that shows up is required by the local government to sign the same or similar deal as the incumbent cable operator has – including a lot of services and fees that only someone getting a monopoly would agree to.
When you add that to the fact that you have to do this in each municipality and to the high cost of building a network and expensive prospect of having to take away significant market share away from the incumbent in order to succeed, it’s no wonder that few if any companies are willing to take that risk.
The result is that there’s little or no competition in the market to provide video services.
So what about satellite? True, it does offer some competition to cable. But satellite technology cannot support robust internet connections and telephone services – the so-called “triple play” – which any provider must be able to provide to really compete with the cable operators. It’s only when a second wireline competitor enters that prices truly fall.
What to do? The Wisconsin Assembly has already passed legislation that will accelerate video choice by removing barriers that keep new providers and new services from entering the market. But, the legislation has been hung-up in the State Senate because of the budget battle.
Fortunately, with the budget concluded, there’s still time for the Senate act. If it does so and the bill is signed by the Governor, consumers throughout Wisconsin will quickly see a broader range of video, Internet and telephone services at lower prices – more offerings, more choices, and newer technologies.
And there’s a bonus. Many of the companies that want to get into this business are offering ultra high-speed fiber optic connections directly to homes. When the path is cleared for these companies to start providing their services, consumers will have the opportunity to obtain internet connections at transmission speeds 30 to 40 times what they can get now from DSL and cable modem. They’re going to need those higher speeds as more and more video programs, movies, and other high bandwidth applications come to market.
Just as You Tube couldn’t and didn’t exist in the days of slow dial-up internet service, a whole new world of video, data, teleworking, and telemedicine applications – to name just a few – is awaiting the introduction of state-of-the-art communications services made possible by fiber connections.
Keeping up with the Midwest
The technology to make this happen is available today. Many of Wisconsin’s neighboring states – like Indiana, Michigan, and Ohio – have taken steps to streamline their video franchising laws, and they are already seeing tremendous growth in the construction of next-generation broadband networks that provide consumers with competitive choices.
It’s time for Wisconsin to join them and clear the way for our high-bandwidth future.
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