From: otto@systems.cc.fsu.edu (John G. Otto)
Newsgroups: uiuc.consumers,alt.cable-tv.re-regulate
Subject: competition
Date: 11 Sep 92 21:51:16 GMT
Organization: Florida State University

> In article <Sep.9.10.28.28.1992.11632@gandalf.rutgers.edu>
shagan@gandalf.rutgers.edu (Susan Hagan) writes:
>> grad@sparky.drad.umn.edu (Jonathan Grad) writes:
>>> In article <Bu08EC.1AD@news.cso.uiuc.edu> tmkk@uiuc.edu (Khan) writes:
>>> (stuff deleted)...
>>>> In article <1992Sep3.040116.15218@news2.cis.umn.edu>
grad@sparky.drad.umn.edu (Jonathan Grad) writes:
>>>>> In article <BtyytA.DLs@news.cso.uiuc.edu> tmkk@uiuc.edu (Khan) writes:
>>>> Better yet, how about encouraging like minded subscribers to petition
>>>> your local government to allow competition in the cable tv marketplace.
>>>> Maybe then. you will actually see cable companies that must take
>>>> customer preferences into account in their programming and rates.

>>> As I said, no real alternative.  ESPECIALLY in the short term.

>> If you don't encourage competition in the short run, you'll never
>> see competition in the long run.  You can't complain that you are
>> feeling the effects of a lack of competition (high prices) if you
>> don't allow competition in the first place.

> On the local level, competition on a home by home basis has nothing
> to do with getting the government to allow it.  It just isn't 
> technically possible or economically feasible right now.

BS.  There are zero technical bars to competition.  The barriers that exist are
all political and economical.

> A cable company invests a lot of money to lay cable in a particular
> area.  They make that investment because they know that approximately
> 60% of the area will buy their service.  Why should a second cable
> company invest the same money, for only a portion of that market
> when they can just get their own exlusive franchise?  It's only 
> worth it, if at all, in highly populated areas.

But, the "exclusive franchise" is a political, not a technical creation.
Here, where the franchise is not legally exclusive, the screwy deal the
government makes makes it one, through requirements & bargains for 
"public service programming", free connections to offices in city hall, 
county court-house and state capitol, and coverage of local government.
(Can you say "in kind campaign contributions to incumbents"?)  These
plus agreement that service only need reach areas with generous minimum
population density, and that any service cover at least a certain % of the
area's population combine to make the franchise a defacto monopoly.
They raise a barrier which a new company would have difficulty over-
coming.

As to cost... The last time I looked, one could get thick wire ethernet
(cable TV cable) for under a dollar a foot, even in tiny quantities.  People 
in population sparse areas have purchased and laid their own cable.  
A few months ago, I read in a business magazine that most of the costs of 
cable companies were wrapped up in marketing, not in the technical end 
of the operation.  (Does anyone have any numbers?)

> It isn't that the local municipalities want to protect the cable
> companies and not allow competition.  What they are not allowing is
> the running of multiple sets of wires.  If all the cable services
> could *share* a wire, like the long distance telephone companies
> do, then that would be a different story.

There's nothing wrong with multiple sets of wires.  Lubbock, TX (pop >100K),
Hamilton, OH, and over a dozen other cities have multiple sets of electricity
wires and the people there apparently like it that way or they wouldn't have 
voted in favor of it half a dozen times.
> -- 
> Susan R. Hagan (shagan@gandalf.rutgers.edu) 
> Publications Coordinator - User Services
> Rutgers University Computing Services

See Reader's Digest "Cable Can Compete" (a couple years ago) by John Brooks,
_Telephone: The First Hundred Years_ by John Brooks, "Hornswoggled: How
Ma Bell and Chicago Ed Cheated our Grand-parents and Stuck Us with the
Bill_ from Reason (1986), and _Unnatural Monopolies_ ed. by Robert Poole.

jgo   John G. Otto   otto@systems.cc.fsu.edu
Newsgroups: alt.cable-tv.re-regulate