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In Perspective - Sprinkles and a cherry

Thu, 08/16/2012 - 2:18am
Brian Santo

Consumers are not getting all of the benefits of free market competition.

CED's Brian SantoI’ve got an idea on how to improve the regulatory environment for video and other communications services that no one else seems to be suggesting, though I’m sure it will work. I am equally sure it isn’t being suggested because it’s unthinkable. It’s the free market.

Congress has signaled its intent to revisit the 1992 Cable Television Consumer Protection and Competition Act and the 1996 Telecommunications Act, both of which are long due for overhauls.

The impetus behind both acts was to encourage competition – in the cable television business in ’92, and then in ’96 in cable, telephony and the new service of Internet access. Twenty years later, service providers can justly say that there is competition.

There just isn’t enough. Consumers are not getting all of the benefits of free market competition.

To get a truly free market, the following are necessary: 1) All competitors must be able to offer all four major services (fixed voice, wireless voice, video, data) – with comparable quality; 2) There must be more than two competitors offering all four services, of comparable quality, in all major geographic markets; and 3) Delivery methods are irrelevant except when determining competitiveness with respect to 1) and 2).

I can’t think of any markets where both 1) and 2) pertain. If there are, they’ll be exceptions that prove the rule.

That’s a big picture sort of thing. Much of what needs fixing is in the details, things like retransmission consent and program bundling. The power imbalance among the parties involved has become pretty severe.

The results of these imbalances often end up costing end customers. And end customers can’t even find out what their costs are, or why those costs are going up, because those costs are hidden behind nondisclosure agreements. So here’s another free market idea: no more NDAs in contracts between programmers and distributors.

With a truly free market, the consumer wins. We all want that, right?

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