Is cable a monopoly provider of video services?

Absolutely not.  Most consumers today can choose from at least three, and up to five, providers of multichannel video services including their local cable operator and two national Direct Broadcast Satellite companies.  In many markets, an additional cable-wireline provider and a telephone company service is also available.

While cable TV originally was granted exclusive local franchises in the 1970s, federal law was changed in 1984 to allow communities to grant competitive franchises for new providers. In addition, Direct Broadcast Satellite (DBS) companies were given approval in the mid-1990s to begin offering home video services. Now the large regional telephone companies are aggressively rolling out services.

How have consumers benefited from increased competition?

Increased competition has forced all providers to invest and innovate.  Cable operators alone have invested more than $130 billion since 1996 to build broadband networks that offer advanced TV services (digital cable, high-definition, video on demand, digital video recorders).

This investment has also enabled cable operators to offer the nation’s leading high-speed Internet service – with speeds of up to 50 megabits per second – and provide consumers a choice in local phone service with cable’s digital phone offerings.

If competition is so effective, why haven’t prices for the service been reduced?

The monthly service charge reflects the improved service that is being delivered, including the increased quantity and quality of programming, introduction of new interactive services, and improved technology for a better and more reliable experience. The monthly service charge also reflects investment in more customer care and technical personnel to explain and maintain the more sophisticated services that are now being offered.

Why is it important to treat like services alike?

Federal telecommunications policy should not pick winners and losers in the marketplace; rather it should establish a broad framework that encourages investment in new technology and competition in new services.  Policymakers should consider what rights and responsibilities ought to apply to all providers, and then stand aside so the free market can work to provide the best solutions to consumers.