Competition Provides Best Protection for Consumers' Interests

Competition Provides Best Protection for Consumers' Interests

HARRISBURG, Pa., Sept. 28 /PRNewswire/ -- Although municipal leaders are committed to serving their constituents, the antiquated system of cable franchising has apparently left them powerless to halt the skyrocketing increases in cable rates. Otherwise consumers would not be burdened with the 86% increase during the past decade -- compared to wireless phone rates that have decreased 5.6% or long-distance phone rates that have decreased 50%. In fact, the present cable monopoly is so costly to consumers that economists have projected that consumers pay $1 million every day that cable choice is delayed.

"As a state legislator, I understood the need to be sensitive to the concerns of my constituents. So I believe most municipal officials want to serve the best interests of their residents. Unfortunately, the present system of local franchise agreements gives them one shot to represent their constituents. After that, they have no meaningful control over the actions of the cable company. If a consumer has a complaint, the municipality can only refer it to the cable company," noted David R. Wright, retired communications professor and founder of CONSUMERS FIRST! "If municipal officials have power over the cable company in my town, they conceal it well. They have virtually no power over the cable company until the 10-year or more agreement is renegotiated," he added.

Wright said he found it interesting that some groups alleging to represent consumers challenge statewide franchising on the grounds that it would limit access to cable service. In addition to the error of that claim, it fails to take into account that incumbent cable companies place in their local agreements language that relieves them of the responsibility of universal service. Here is one of hundreds of examples:

"In my home town of Clarion, the cable agreement includes the following language: 'Adelphia shall extend the Cable System into all areas within the Borough where there is a minimum of twenty-five (25) residential dwelling units per linear plant mile of aerial cable, and fifty (50) residential dwelling units per underground mile of cable, calculated from the end of the nearest trunk line.'"

While that is a legal description, in plain language it means, "The cable company does not have to build out cable service to the entire borough." The point? Why should cable competitors be held to higher standard than Adelphia, Comcast, or Time Warner?

"When I hear about groups opposing the concept of statewide franchising, I wonder whether they've actually talked to consumers about how pleased they are with their cable company," Wright continued. "Perhaps they need to know that consumer surveys have shown that consumers prefer the IRS to their cable company by a 3% margin. So surely it wouldn't be the end of the world if consumers had another choice."

"Opponents of cable choice and competition claim ad nauseum that the local franchise agreements pose no barrier to competition. When the question is 'Why,' the answer is often 'money,'" Wright concluded. "It's fully understandable why they make this claim, but it directly contradicts a finding of the Federal Communications Commission that said, 'The local franchise process is, perhaps, the most important policy-relevant barrier to competitive entry in local cable markets.'"

For more information, visit http://www.paconsumersfirst.com/.

Source: CONSUMERS FIRST!

CONTACT: Bonnie McCarthy, CONSUMERS FIRST!, +1-717-319-7721

Web site: http://www.paconsumersfirst.com/

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