Cable Television

This was written on August 28, 2003. It was in response to an article, obviously published by Ralph Nader, that declared the current high prices for cable television on deregulation. It was written to a Green Party e-mail list:

I disagree with this article, even though it may have been written by Ralph Nader. To understand the reasons one must keep in mind that 1984 was almost twenty years ago.

Prior to Reagan's first attempt to "deregulate" the cable industry in the early 1980's, there were very few laws regarding cable TV. How one can deregulate that system is beyond me, but Reagan said he did. Look at what he actually did. Before every small town had their own little cable company, each with a charter which granted them a monopoly within that town. In exchange for the monopoly, they agreed to supply certain cable services at a given price to the residence.

Reagan "deregulated" that by having a law passed saying this arrangement was no longer legal. That is, he passed a regulation. Since cable companies still had either real monopolies, or defacto monopolies, there was no longer any reason to hold down the price - prices double in about a year as I recall. This brought public protest, so there was an attempt to "reregulate" the industry. But rather than removing regulations, more were added, requiring price caps, etc. But they were set at twice what the real deregulated rate had been. This made the market ripe for big business to get into the area, and over time we ended up with the current system, only a few very large cable companies, and people thinking this is the only way it can be.

Personally, I call for true deregulation. Let's go back to the days before Reagan when the cable was just one more utility, just like water and electricity. This is, indeed, more compatible with the Green pillar which calls for decentralization.

Where I am at there is more than one cable company available - that is, Time-Warner cable is the "national" brand, and Everest. Everest undercuts the cable and telephone bill by about $50 per month. Actually less than that because there was an article in the paper a while back that noted Time-Warner dropped their rates by a lot where ever Everest exists. The article was about one reader complaining that he lived across the street from where Everest was available, and his neighbor on the other side of the street was paying $20 per month less for the same service from Time-Warner. This monopolistic practice by Time-Warner may cause Everest to go out of business eventually, but not with my help.

The point I want to make is that there is a lot of room for a decrease in cable rates, but more than likely the current monopolies that deliver the service will need local regulation, not federal regulation. Therefore, the local communities need to be freed from the federal regulations that prevent them from regulating the rates.

P.S. I remember the arguments given for treating cable different than other utilities, for example water. That is, the argument was made that water and electricity are necessary utilities. Yet I grew up without running water. Worse (for this argument) I recall watching as the water pipes were buried in front of our house. They did not go in because my father opted out. He didn't think running water was at all important.