Monopoly Cable Providers Opposed to IPTV Services

Cable companies, long known for their stranglehold on the American consumer due, in part, to their exclusive franchise rights in a city, are now fighting phone companies like AT&T, Bellsouth and Verizon.

So why are they fighting them?

It is because these companies want to enter the market for video service. They offer IPTV, internet protocol television, which streams video through an internet connection, then to the television screen. The monopoly cable companies see this as a source of competition, not only could these companies take potential cable customers away, but could drive down the cost of the monthly cable bill as a result!!!!!!

A bill, which is in the House, could potentially break up the "old system" of granting monopoly franchises to individual cable companies. This is, of course, backed by the phone companies who want to get a little piece of the pie, while it is opposed by the cable giants.

The grant for a franchise has, thus far, meant that a provider would pay a fee to the local government, provide those lovely community access channels (which politicians love to talk about, even though the cost of those channels is passed on to the individual consumer's monthly bill, seriously...look @ your bill, you will find a section marked "franchise fees", this is to pay for the local access channels, as well as the fees the cable provider "pays" to the local government. However, in essence all it is is another way for local governments to collect a tax from the citizens, without having to do the politically unpopular thing...raising taxes.)

Cable providers claim that the phone companies want to bypass these regulations by sending up a "smokescreen about the lengthy process of acquiring a franchise". The cable operators suggest that the phone companies would also not provide service in poorer areas of the community, which is a violation of the franchise agreement. This suggestion is spurred by the fact that IPTV uses a large bandwidth and that running fiber optic cables to each house averages $1,000/house. That means that in order to recoup the cost the IPTV providers will only lay cable in wealthier neighborhoods. Unfortunately, according to the Cable advocates, this would only drive down the cost of cable bills in the areas which are least affected by the steep price of service.

I have a simple solution. Release cable providers from their franchise contracts, and allow the marketplace to dictate itself. Competition always drives down cost, while increasing services. This will benefit everyone. There is no need for the Federal Government to regulate that IPTV must be at every curb of every house. Let the people, who "can afford it", absorb the startup cost, since adoption always spurs cheaper prices, and wealthy people are usually the ones who can afford to be "first adopters", they will, in turn cheapen the cost of laying the fiber to the communities which may choose to use cheaper service bundles.

Cable companies have begun the transition of providing telephone service over the internet, VOIP, now it is time for telephone companies to transition into providing video service.

Find the story about the House Bill at:
http://www.ajc.com/friday/content/epaper/editions/friday/business_44c23c2b564d216e0044.html