FCC: High Cable Rates Due To Franchising System

Sounds like a good plan but like all things that start out good will probably not be good for consumers in the long run only time will tell.

Yup...Another back office sweetheart deal for selling out this country.....whats new! They will tell us after the deal..... PLEASE

Sod em all. Get a C-band dish and a-la-carte. :-D

Why do they need it to be secret until after the vote? No need to keep it secret unless there's something to hide.

Wow... for once they are right!

It is indisputably, irrefutably true that the biggest obstacle to next-generation broadband/TV service deployments are pesky local governments which put up inane build-out requirements for providers. Like any commodity, a lack of competition leads directly to high prices.

The only real solution here is for voters to get on the ball and vote out local government officials which continue to stand in way of progress. The last thing we need is more Federal bureaucracy in what really should remain a state/local issue.

I hope they put a stop to Munis asking for anything NOT having to do with BB/TV service. No Community Centers, no swimming pools, no more of the local politicians buying votes by saying "look what I got for you." And you shouldn't need more than about 10 Public access Channels either.

I agree with you. And even 10 is about 8 more public access channels than are needed. 99% of the people NEVER even watch 1 public access channel.

Very true, I was just being generous for a very large city, say over 5 million.

Few cities have more than 1 public access channel anyway.
If you are including government and educational channels, they have way high viewership than public access (nothing that would support a broadcast network, but still easily enough to justify their existence).

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Like any commodity, a lack of competition leads directly to high prices.

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Which is why FIOS, DirecTV, Dish, and Comcast are roughly (within $5/mo) the same price for each other... Also the reason FIOS also raised rates this year.

Competition almost never guarantees low prices. It just makes you feel better about the price you pay. A panacea if you will.

Cable would have gone out of business if not for satellite TV, however. Had satellite not initially provided some sort of competition for cable TV, cable providers would not have offered new services like On Demand, DVRs, real high definition programming and the like.Competition does allows you to play the providers against one another to get a better deal for yourself. Quite a few people have used with success the threat of moving from one provider to another as a means to get their current provider to continue a promotional rate where it would have otherwise expired.

Are you sure thats what you meant? If a company exists without any competition, they have a better chance of prospering, not the other way around. If there was no competition, there would have been no reason for them to expand their service offerings, they would just have to keep raising the prices of their existing products.

Yes. There was a brief period a few years back when satellite TV was killing cable. I remember when Comcast was offering satellite TV subscribers $400 in discounts to become cable subscribers.

However, cable now offers more of the types of services that satellite TV offers. If cable had not made these improvements, those providers would have continued to lose customers to satellite.

Of course, if there were no satellite TV providers, cable would still be making money hand over fist but their product offerings would be worse than what they currently offer.

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Cable would have gone out of business if not for satellite TV, however. Had satellite not initially provided some sort of competition for cable TV, cable providers would not have offered new services like On Demand, DVRs, real high definition programming and the like.

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I highly doubt that. HD programming followed the trend in big screen HD sets. I'd say that one was driven more by consumers and CE companies vs competition.

The rest is nice, but more like a natural evolution. DVR's were the result of Tivo coming on the scene and the CableCo's realizing that they could make $9.99 off Tivo-like functionality.

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Competition does allows you to play the providers against one another to get a better deal for yourself. Quite a few people have used with success the threat of moving from one provider to another as a means to get their current provider to continue a promotional rate where it would have otherwise expired.

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And many more are told "see you". And if you do switch, it's often for a short time before your rates go up. I have been with both sat providers and now comcast. After all the rate increases on sat, Comcast is roughly (within $5-10) what I was paying DirecTV.

"After all the rate increases on sat, Comcast is roughly (within $5-10) what I was paying DirecTV."

Which is the current marketing technique. This will also happen with fiber in a few years. They will just set the prices so close to each other that it will not matter who you get service from. Standard price fixing collusion.

"Competition does allows you to play the providers against one another to get a better deal for yourself. Quite a few people have used with success the threat of moving from one provider to another as a means to get their current provider to continue a promotional rate where it would have otherwise expired."

Not where I live they say ok sorry good luck,bye-bye.
Bruce

Im not sure where you live, but if I had chose cable instead of Dishnetwork and received the same programing I would be paying about $21 a month more with cable.

You are getting the shaft from your cableco. Here Comcast is about $5-10 more than Dish/Directv.

Comcast was _much_ more expensive to start than DirecTv

1 tuner Directv = $39.99

Analog service on Comcast was $50.40 (no standard basic available in my zip )

Digital was $60.10 for 1 tuner.

I have 3 tuners on DirecTv with the 'plus' package and pay $57/month after all taxes and fees.

Of course, you realize that if you had no standard basic then you were not protected by a municipal franchise agreement. That is another drawback of dropping franchise agreements... the telcos will not have to carry a basic package (which means to rate regulation).

Umm, a panacea is a cure-all. That is, a solution to all problems, cure for all diseases. I don't think that's what you meant, was it?

»dictionary.reference.com ··· /panacea

Not to mention I wouldn't call, in any way, the present oligopoly that exists in the communications delivery market, a competitive market at all. So it seems that OP has expressed several logical fallacies.

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Umm, a panacea is a cure-all.

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Yes. Everyone thinks competition is the cure all for high prices and innovation. What they fail to realize is that it is rarely the cure all. It's basically "who do you want to pay you $xxx to?"

They always think competition will result in massively lower rates.

Fact is, rates NEVER go down for regular service for ANY reason other than a limited promo, or, gov/court order.

I agree that competition needs to happen as quickly as possible. However, we should question national decisions as they are most likely a compromise that is good for some and bad for others.

Cable competition claims that local governments are impeding progress. But I naturally question that claim since there are always two sides to an argument. Principally, I believe competition only works when it's offered to all residents of a local community.

In 1998 SBC (now ATT) offered DSL to select residents of my area who were within a 3 mile radius of their central offices. Year after year they have promised those too far would be offered DSL "real soon now". It's nearly 2007 and they have NOT delivered on that promise. Should I believe that their television service deployment will be different?

What the government (not just the FCC) should do is ban utility taxes that are not directly tied to regulatory cost recovery. Given this, I seriously doubt local municipalities would be able to justify their current utility-based income schemes. Don't you agree that it's silly to pay a tax to your local municipality based on your electricity, gas or cable bill? I think it's insane.

I understand that local cities without significant retail development cannot operate on retail taxes. However, why not add an assessment to real estate taxes? This has to be more just than a utility consumption tax or do we believe that your ability to pay correlates with utility usage? While still not 100%, I think it's far more likely that someone owning more valuable property is able to pay more taxes.

In exchange for a national franchise the FCC should mandate reasonable deployment timelines to prevent the same thing that happened with DSL in my area.

I agree with you that certain taxes should be eliminated. However, it is the universal buildout requirement which has doomed many providers from wanting to do business in many localities.

In nearly every jurisdiction that has tried to mandate universal service, the end result was a success of sorts in that everyone got no service whatsoever.

Internet service is a for-profit industry. It should not be compelled to provide service to areas it does not deem profitable.

Property taxes have also been pushed to their limit. (at least in the Northeast and on the coasts) Not to mention they exclude constituents who may be large users of said utilities; namely renters.

Heh... keep dreaming

Government will always find ways to raise "high" property taxes. In MD they just raise it at the state level. In Philadelphia they simply re-assess your house at a ridiculously high price so that you pay more at the existing rate. One way or another, they will keep raising it.

As a landlord I can tell you with certainty that those renters are paying property taxes via monthly rent checks. You don't think we just eat those expenses, do you? Property taxes are one of if not the largest expenses of owning rental property.

And for that reason, America will always lag behind other nations technologically...

I agree. Internet access and television service are not rights. For that matter, phone, electricity, sewer and water should not be a rights but a privileges. However twisted their logic, I suspect some states probably have laws that make it a right. I'm not sure how the constitution enforces this but maybe they amended the constitution. Regardless, that's a whole different discussion.

I believe every business should have the privilege to pick its customers and provide whatever service it can based on profits. In my opinion, this is congruent with basic capitalism. However, whenever utilities are involved, both companies and the government are predisposed to involve legislative action to define, assist and govern fees. Generally this is caused by lack of true competition (oligopoly).

My bottom line belief: If some level of government is to provide an advantage to a particular company, then I believe that government has an obligation to ensure the advantage eventually provides the product or service to a majority of its constituents. And....eventually should be reasonable and not 10+ years.

Yes it's not fair. Those with more money can afford more energy efficient stuff, homes, and improvements while poorer people tend to have what they can afford which may be less energy efficient. This shifts some of the tax burden on those who really need a break nowdays.

Competition this, that, WHATEVER! I don't see how it could possibly help. Lets think here, big company, versus start-up/smaller company. Smaller company needs overhead, and can't get it without charging the same as the big guys...

How would you feel if there was no franchising agreement needed and both the telco and cable company decided not to service your area. Add to that, they would prevent anyone else from servicing your area under the "promise" to service you one day.

I think they would consider it doing what they were elected to do: look out for the welfare of their citizens. They represent all their citizens, not just those considered "desirable" by the telcos. Federal laws have largely removed the rights of munis to say anything about cable rates; just about the only thing left that they have a say in is build-out.

What Martin, et al, is saying is that it is better that only a few have service available to them, with a bit lower prices due to competition, than to have the service available to everyone, albeit at a bit higher price. In other words, there will be winners and losers, and those on the losing end will just have to deal with it. I think the closer you get to the local level, the tougher it is for that to seem like a good idea.

really, limit "build-out requirements." That, if anything, is the only benefit I find on franchise agreements. Well, I guess people leaving a feet away from what they provider feels is profitable know will have to stick a out a couple of thousands to get service/

FCC Chief Kevin Martin blames rising cable rates on local municipalities...

this is the same logic that blames the american people (or the press or the Iraqis) for the mess in Iraq.

It apparently hasn't occured to Martin that the reason we have no competition is the FCC keeps approving megamergers and deregulating monopolistic industries.

Cable rates have increased above the rate of inflation for as long as I can remember. I agree with his observations and goal, but I wonder about the timing of addressing this problem as the telcos want to enter the market.

you can look at it two ways, either a greedy municpality.. or a local cable company looking for job security, maybe a little of both. it's quite possible there may even be a truce between satellite and local cable companies to stop or slow down telco's entry into video. if telcos pass on these costs to the consumer, it's quite likely people will not buy video from them, backfiring on those franchise fees-- you can't GET what they don't COLLECT. a viscious circle whereby satellite and local cable monopolies win, which is to say despite the record number of 'settled' franchise agreements won by telcos, they aren't shy of passing on these costs to the end consumer. a reform must 'get at' a MAXIMUM determined value of concessions to a franchise without any possibilty of a waiver, with resonable adjustment for inflation. this is an up-hill holy grail because it's no secret that the telcos are flush with cash (fresh from mega merger) for their buildouts.

he wants to put a time limit on negotiations. If they don't finish a franchise with a local municipality in three months, they get to operate without an agreement. what will make the telco's just hold out until the time limit expires and then operate without a franchise anyway? This is a terrible proposal only benefiting at&t and not any consumers. don't believe their lies.

Did not the providers blame the higher rates on what they have to pay for certain mandatory channels like sports?

Historically and logically, nearly any instance of the Federal government looking to usurp the powers of the state (or local municipality) is for the benefit of the few and not the many. Anyone that believes otherwise is history's fool.

the implication that no franchising system will lead to lower cable rates is b.s.

the simplest way to voice your disapproval is to stop giving the providers your money.

Finally , but why won't they disclose all the info ?

Id like to see national franchises but with good restrictions. And this goes for satellite providers as well.

- All promotions must be nation wide.
- All prices must be nation wide.
- All upgrades must also be done nation wide in a reasonable time line based upon an experts opinion on how long they should take and hard numbers.
- A standard $2 each month to your local government. ( Your city and state share this ! )
- carry local access channels ( even if low quality just send at least 2 of these so people can see their snow emergency plans and such for their city. obviously satellite providers don't need to do this. but it would be nice. or cycle them in with locals for the area. One channel carries 12 cities. Something like that pack em in make them useful instead of just constantly scrolling content and crappy pictures of the city )
- Provide discounted rates for the "triple play" to local schools and educational institutes. ( even the big carrier class links )
- Cap on the % they can raise rates every year.

There are some other things I can't think of at the moment Id like added in there as well.

The FCC did nothing to lower broadband prices which can also be used for video.

After seeing a few Fountain Valley meetings where FV local gov't puts up roadblock after roadblock it's no wonder why Huntington Beach has FIOS on virtually every street while FV doesn't. The greed of local gov't can get excessive and does stand in the way of deployment.

That said the whores at the FCC are rarely the answer.

Which is why i have DirecTV

For the most part, satellite providers avoid local franchise fees as they are a national provider.. but were forced into local channel scheme kicking and screaming with "must carry" for distant networks. Now they changed the game and said "NO" to thousands of consumers by making the distant networks stricter. No franchise system makes cable rates cheaper.. in my opinion, it ADDS to the already sky-high rates.. and yearly increases are a fact of life. High cable-tv bills are the last thing people should be worried about in the BIG picture.. have you gone to the GAS STATION sometime this year?
If cable companies did that to customers, they really wouldn't have any to speak of.. or they'd pirate the crap out it(more than they do now), after all, it is "content" which is digital... Rriiight?

Besides, do you really need 12 news channels (24/7/365)? Or an internet broadcast blog 'pod cast every hour or so.. No, but your forced to buy it ALL or nothing primarily!