Sunday, August 02, 2009
Editorial: Invite cable TV competition
Radford and Blacksburg should stop awarding monopolies to cable companies.
From the RoundTable blog
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Radford City Council has had it with JetBroadband, the cable television provider in the city. It owes the city $50,000 and does not want to pay, so the council will consider revoking its exclusive license to provide cable. If it comes to that, and it probably should, the city would need a new cable provider.
Meanwhile, Blacksburg is renegotiating its license agreement with Comcast.
As the two towns negotiate licenses, they should reject government-enforced monopolies. Non-exclusive license agreements would serve citizens better.
Exclusive cable franchise agreements are common in America. The companies agree to certain terms -- such as paying taxes and providing public access channels -- and in return, the town, county or city gives them the right to be the sole provider. It works well for the companies, but horribly for consumers.
Without competition, or at least the threat of it, cable companies dictate prices and what services they provide with little fear that another company will offer something better and win customers.
The trend is toward opening communities to such competition.
Cable companies will talk about "natural monopolies" and compare themselves to other utilities, like electric companies, that make sense as sole providers. The difference is that there is only one real electricity product, whereas there are many levels of cable service.
Indeed, Virginia law encourages cable competition. As long as localities treat cable companies equally, they may award as many licenses as they like.
In Fairfax County, competition has succeeded. There, three cable companies all offer services.
In Charlottesville, only Comcast provides service, but it has a non-exclusive agreement and must remain mindful that competition is only one ridiculous rate increase away.
New River Valley residents deserve the same. Cable providers should woo them with their offerings and prices, not impose whatever they want because the government protects an unnecessary monopoly.
Correction (Aug. 10, 2009): The town of Blacksburg has a nonexclusive contract with Comcast cable. Because of incorrect information provided to The Roanoke Times, this editorial originally mischaracterized the relationship.
