From: cole@concert.net (Derrick C. Cole)
Subject: Re: We need COMPETITION, not Re-regulation
Organization: MCNC Data Operations
Distribution: usa
Date: Mon, 14 Sep 1992 20:11:56 GMT

In article <3712@faatcrl.UUCP> jprad@faatcrl.UUCP (Jack Radigan) writes:
>jfc@salmon.sea.macsch.com (Jack Castro) writes:
>
>>I strongly believe the solution is to allow competition amongst the various
>>Cable TV companies over the same cables or over fiber optic networks. This
>>should improve service and product quality just as it has done in the long-
>>distance telephone industry. 
>
>  Cable TV and telephones are not the same thing.  One is a distributive system
>where the source propagates out to the receivers in a unidirectional fashion
>while the other is a discrete network of point-to-point connections allowing
>two-way communication.  The technologies involved are entirely dissimilar.
>
>  The *only* solution to the competition problem in the cable TV industry is
>to remove the cable.  Wireless systems would provide the competition that would
>obviate the need for regulation.
>
>>I do not believe the solution is to regulate the Cable TV industry. Regulation
>>will cost all taxpayers money and increase the size of the current government
>>bureaucracy. Furthermore, Cable TV companies will try as hard as they can to
>>stick us with additional fees within the regulations in order to recoup lost 
>>profits.  Also, if the Cable TV companies have to pay royalties to the network
>>for broadcasting privilages, it is only natural for the Cable TV industry to
>>pass these added expenses onto the consumer. 
>
>  It's quite true that regulation will not lower prices, it might even raise
>them a few dollars in the short run.

It WILL raise prices.  You can bet your TV on it (and the house, car, etc.)

>  The point you're missing, and the reason why regulation is necessary, is to
>*stabilize* prices so that we don't see the exhorborant rate increases that
>we've seen over the past decade.

You started out well, but then missed the boat.  Regulation is NOT the answer
to the apparent problems with the cable industry.  Competition is the ONLY
answer to meet the demands of consumers (better service, cheaper prices,
programming diversity and accessibility) in such a widespread, visible, and
controversial industry.

With competition, the cable industry will have to take a hard look at itself
and ultimately it's audience in order to stay profitable.  Instead of having
an "We gotta, You gotta" attitude produced by regulation, a "We'd better"
attitude will result.  Companies that don't/can't/won't adapt to a competitive
market will not survive.

A perfect example of the effect of changing from a monopolistic to a
competitive market is what's been going on in the long distance industry since
1984.  Granted, cable service is not the same as phone service - I'm merely
pointing out changes in market practices and strategies.

Until 1984, AT&T was Ma Bell.  Period.  Then Judge Harold Greene ruled that 
AT&T held an unfair advantage in monopolizing the long distance industry, and
that other companies should be allowed to compete.  However, AT&T had to abide
by the existing rules of regulation (they still do), while the competing
companies could do whatever.

Since 1984, AT&T's market share has gone from 95+% down to ~60%.  Why?
Competition.  How?  Other carriers such as MCI and USSprint have introduced
competitive services at competitive prices to consumers.  The end result?
Better service, lower, stabilized rates, more responsive customer service, and
IMHO most importantly R&D into better ways of doing business.  AT&T has
maintained the 60% share by innovative marketing defined within the limits of
the post-divestiture contraints and has lowered it's rates by over 40%.  MCI
has improved it's service, reliability and billing.  All carriers are offering
new services with cut-rate pricing schemes that wouldn't have come about in a
monopoly (why should they?)

Basically, there are now three major long distance carriers that are all
within a few percentage points of each other with regard to the aforementioned
areas.  The "We'd better" attitude at work for the consumer.

Comments/Further pondering welcome, flames to /dev/null.

Derrick (an ex-AT&T Marketing employee)

-- 
"I've seen better plots (and better dialog) in a Bazooka Joe comic."
                       -- rec.arts.movies comment on "Batman Returns"
======
Derrick Cole                                  MCNC Center for Communications