A One Cable Company TownRural America's competitive black holes ( old news - 01:27PM Wednesday Apr 27 2005) tags: competition · coverage · cableThe town of Hudson, MA, hired a consultant for ten grand to prove Comcast had been over-charging customers in the town by around $2 a month. In response, Comcast lowered the price of basic cable, but raised prices for premium services, to keep customer bills the same. Town leaders are irritated, but like many American towns, they only have one cable provider to choose from. Last year, the GAO released a study ( pdf link) showing that when consumers have a choice of more than one cable provider, they'll typically pay from fifteen to forty percent less for cable, and between two and thirty-eight percent less for broadband. The GAO also found that when satellite competition is present, local cable companies on average wind up offering a 5 percent broader selection of networks than they would otherwise. More recent FCC data indicates that cable rates rose on average 3.6% in regions with competition, and 5.6% in regions without. Unfortunately, GAO data suggests that only around 2 percent of communities have access to more than one cable provider. To add salt to the wound, A Consumer's Union 2003 report ( pdf) claims that each $1 price hike on average results in an $800 million increase in revenues. The CU report argues the price-gouging isn't due to network upgrades, or ESPN, but monopoly control. Some suggest the way to lower rates is to force the cable providers to offer channels individually (a la carte), but proponents of such a shift, like John McCain, seem to have fallen asleep on the issue. Satellite brings some competition, but many regions served by The National Rural Telecommunications Cooperative (NRTC) pay more for equipment and programming. A solution for the price-impasse may be the bells' entry into the television business. However the town of Hudson was told by RCN their town wasn't worth the investment. Are towns like Hudson really going to see $1,200 per home fiber installs anytime soon? Integrate the fact that incumbents are attempting to ban towns like Hudson from wiring themselves with fiber, and what is the choice for rural America?
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cdru
Go Colts
Premium,MVM
join:2003-05-14
Fort Wayne, IN | [Insert witty subject here] You mean competition is good? There's a shocker. | |
|  | DonLibes
Premium,ExMod 2001
join:2003-01-19
| Re: [Insert witty subject here] The rate jiggling you speak of is handled that way *everywhere* in the US. The FCC permits cable companies to raise their regulated rates subject to appeal by the LFA. If the cable goes ahead despite the appeal and the appeal is successful, the cable must pay back the customers.
Bottom line is that LFA's almost always pay a consultant to analyze whether regulated rates are too high. The outcome should be no surprise. | |
| 
djrobx
join:2000-05-31
Valencia, CA
1 edit | NRTC Didn't Pegasus customers beccome DirecTV customers last year? Are customers in those regions still paying higher prices?
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\\ROB - a part of the SCB local network | |
| | crazyboykc
join:2003-01-30
Gardner, KS
| Re: NRTC I am having this problem now with Time Warner doing this EXACT thing to their customers in the small town where I live. I know others that live in larger cities around me that can get more features and pay less for their service through Time Warner. Just wait, there will be a time when I leave their ass for another provider because of what they are doing. | |
| Damon85
Premium
join:2004-12-25
Louisville, KY
| Isn't it obvious? Integrate the fact that incumbents are attempting to ban towns like Hudson from wiring themselves with fiber, and what is the choice for rural America? Stay in the dark -- or move into an urban area where they can take your money for cheap. They want your money, but you can't expect them to put forth too much effort to get it.
The bag of chips is just out of arms reach and they're too fat to get off the couch. The bag of chips, therefore, is commanded to move closer... | |
| | Gunslinger03
join:2004-07-09
Chesapeake, VA
| Re: Isn't it obvious? It should be obvious, but most of the people sheeple socialists on this board think government is the solution to every broadband problem. This is because there are not many good economics classes in our government-run schools. Coincidence? | |
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SpitefulCrow
Insert Witty Tag Here
Premium
join:2003-06-04
Berkeley, CA
| Re: Isn't it obvious? How clever of you. You've taken a macroeconomics 101 course at some college, I presume.
The private sector does not have the motivation to make their services universally available.
The government isn't efficient enough to maintain massive infrastructure like a nationwide network or even one for a large metropolitan area. However, small towns that have started municipal access networks have seen great success.
So here's how it should work:
Let the little towns that wouldn't be profitable to the huge telcos run munis. The telcos can then focus on providing better and faster service in major metropolitan areas to justify rate hikes and can also reinvest more in their core networks while maintaining a profit since they would then have substantially less last-mile to maintain out in the sticks. The federal government will never get involved, it'd be done entirely at the local level. Everybody wins. | |
| | | | Gunslinger03
join:2004-07-09
Chesapeake, VA
| Re: Isn't it obvious? said by SpitefulCrow  :How clever of you. You've taken a macroeconomics 101 course at some college, I presume. This is actually a microeconomic issue. You have never taken a microeconomics 101 course at some college, I presume.
said by SpitefulCrow :The private sector does not have the motivation to make their services universally available. It's not about "motivation." It's about profit and loss. If a company loses money they go under, if the muni loses money they fleece the taxpayer. To say that entrepreneurs do not have motivation is wholly ignorant.
said by SpitefulCrow :The government isn't efficient enough to maintain massive infrastructure like a nationwide network or even one for a large metropolitan area. However, small towns that have started municipal access networks have seen great success. How can they not see success? Afterall they have the taxpayer to bail them out. And if the muni was not successful do you think your local politicians would admit it when they can just raise taxes and fees?
said by SpitefulCrow :So here's how it should work: Let the little towns that wouldn't be profitable to the huge telcos run munis.
So if they are not profitable to the private sector they will not be profitable to the government either. But the government doesn't pay for its failures--the taxpayer does.
said by SpitefulCrow :The telcos can then focus on providing better and faster service in major metropolitan areas to justify rate hikes and can also reinvest more in their core networks while maintaining a profit since they would then have substantially less last-mile to maintain out in the sticks. The federal government will never get involved, it'd be done entirely at the local level. Everybody wins. I have been referring to municipal government. And when you get municipal government (just like any other level of government) involved everyone does not win. In fact, everyone loses equally. Again, if a private/public company sucks and no one purchases their products, or they roll out a billion dollar network to a community of 5000, they or their investors suffer a loss. If a government municipal network sucks and no one purchases their products, or they rolled out a billion dollar network to a community of 5000, the do not lose. They raise taxes.
If broadband is such a big deal to all you socialists in rural areas, and you do not take the initiative to move elsewhere to get it, you have no one to blame but yourselves. There are lots of people in your area that are happy without it, and they will be pissed when your muni forces them to pay for it too. | |
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Minister
join:2002-01-02
Fleeting | Re: Isn't it obvious? quote:
But the government doesn't pay for its failures--the taxpayer does.
A growing number of the munis are using non-tax based financing (private, etc) | |
| | | | | | | | | | | | | Gunslinger03
join:2004-07-09
Chesapeake, VA
| Re: Isn't it obvious? How is a muni going to cover costs by rolling out a billion dollar network in an unsuitable area? How is the muni going to adapt? And if the muni ever did make a profit, would you see a dime of it?
I am aware governments bail out private ventures, and that is yet another unfortunate example of how they abuse their power. We could go on for days about the wasteful bailouts politicians give whenever it is time to grandstand or buy votes. | |
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SpitefulCrow
Insert Witty Tag Here
Premium
join:2003-06-04
Berkeley, CA
| said by Gunslinger03 :How is a muni going to cover costs by rolling out a billion dollar network in an unsuitable area? How is the muni going to adapt? And if the muni ever did make a profit, would you see a dime of it? I am aware governments bail out private ventures, and that is yet another unfortunate example of how they abuse their power. We could go on for days about the wasteful bailouts politicians give whenever it is time to grandstand or buy votes. Define an "unsuitable area."
Then, would you have opposed government aid in rolling out POTS copper to these areas 100 years ago? | |
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lyls
@tele.dk
| Re: Isn't it obvious? of course he would.... with a name like gunslinger its not very likely that he would EVER be able to admit that he might have spoken too soon  i think muni broadband sounds fine and its kinda sad to see the big corporations have such big influence on politics that they can get them to actually ban muni broadband when they dont even want to serve them anyway | |
| | | | | | | | | | Gunslinger03
join:2004-07-09
Chesapeake, VA | Re: Isn't it obvious? So if the big corporations have such a big influence on government, why again would you want this corrupt government running your broadband network? | |
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Minister
join:2002-01-02
Fleeting | Re: Isn't it obvious? Smaller government is more manageable and more directly accountable.
Also, if they're competing with SBC, they'll be less influenced by their lobbyists because loyalties will lie elsewhere (like to the people) | |
| | | | | | | | | | Gunslinger03
join:2004-07-09
Chesapeake, VA
| Re: Isn't it obvious? said by Minister :Smaller government is more manageable and more directly accountable. I agree. So why make it larger by giving it the power over a broadband network?
said by Minister :Also, if they're competing with SBC, they'll be less influenced by their lobbyists because loyalties will lie elsewhere (like to the people) They problem is they cannot compete. This is because they are funded by the taxpayer who has little recourse--and because they have the money of the taxpayer they are not forced into being innovative. They can bury costs of rollout, upgrade, and maintenance in your taxes. Sure you can vote them out, but if a crooked politician has enough money they will get in office. | |
| | | | | | Gunslinger03
join:2004-07-09
Chesapeake, VA | Munis issue bonds, the taxpayers eventually pay the bonds. Like I have said before, give me one example where this was not the case. | |
| | | | | | | | | | | | | | | Gunslinger03
join:2004-07-09
Chesapeake, VA | Re: Isn't it obvious? Twist the words any way you want. The taxpayers pay the bonds. | |
| | | | | | | | | | | | | | | | | | | Gunslinger03
join:2004-07-09
Chesapeake, VA
| Re: Isn't it obvious? This is a really simply concept, and the last post I am going to waste my time making on this one: If the muni cannot cover its bills with enough income the taxpayer will fill the gap. The taxpayer also has no way to ensure some of their tax revenue, city fees, etc., are not somehow getting secretly funneled into it. But unlike a private enterprise held accountable only from revenues by people that want the service, everyone that pays taxes would be tied into a muni. | |
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Minister
join:2002-01-02
Fleeting
| Re: Isn't it obvious? If a community votes to wire itself, it's not socialism. It's Democracy. If they shoved it down your throat, it would be socialism.
Your entire position as yet another free-market talking head is based entirely on one premise: Greed. Less regulation, less taxation, less baracades to you getting more money in your pocket.
Boiled down, all your entire philosphy is based on is GREED. (sometimes fear)
Greed isn't a policy. | |
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SpitefulCrow
Insert Witty Tag Here
Premium
join:2003-06-04
Berkeley, CA
| said by Gunslinger03 :said by SpitefulCrow :If broadband is such a big deal to all you socialists in rural areas, and you do not take the initiative to move elsewhere to get it, you have no one to blame but yourselves. There are lots of people in your area that are happy without it, and they will be pissed when your muni forces them to pay for it too. I'm not a socialist and I'm not in a rural area (I live in the New York metro area, thank you very much). Calling anyone who supports municipal broadband a socialist, even if it's only in limited cases, does nothing but harm your argument. | |
| | | | | | Gunslinger03
join:2004-07-09
Chesapeake, VA | Re: Isn't it obvious? How does it harm the argument? | |
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lyls
@tele.dk
| Re: Isn't it obvious? like when i see your name and say everyone with gun in their name is a gunloving redneck..... i might be right in some cases but not all and its pretty stupid to start assuming like that | |
| | | | | | | | Gunslinger03
join:2004-07-09
Chesapeake, VA | Re: Isn't it obvious? This is about as ignorant as it gets folks. If you want to add your baseless generalizations to the discussion, atleast post with a registered name coward. | |
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lyls
@tele.dk | Re: Isn't it obvious? i always post with this name so i dont know how anonymous it is..... and i guess you didnt get my point or maybe you just dont like to admit that you might be doing the same thing albeit not as much as the one i gave an example of there | |
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Harry ball
@comcast.net | Re: Isn't it obvious? Your a commi so is the other guy for muni broadband. The guy lives in NY, liberal, clinton lover, gore tree hugger, should i go on. | |
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SpitefulCrow
Insert Witty Tag Here
Premium
join:2003-06-04
Berkeley, CA
| Re: Isn't it obvious? said by Harry ball:Your a commi so is the other guy for muni broadband. The guy lives in NY, liberal, clinton lover, gore tree hugger, should i go on. Get stuffed. Stupid rednecks. | |
| | | | | | | | | | Gunslinger03
join:2004-07-09
Chesapeake, VA | Re: Isn't it obvious? The truth hurts socialists. | |
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lyls
@tele.dk | yes the government cant run ANYTHING and obviously the corporations are doing a VERY good job...... | |
| 
TKJunkMail
Enjoy the sun
Premium
join:2002-03-03
Avalon, NJ
 ·Sprint Mobile Broa..
 ·Comcast
| Multiple reasons for no cable-cable competition There are multiple reason there is no cable to cable competition:
1. Political corruption - the city/municipality/township pols signed an agreement to only allow 1 cable franchise exclusive right to run cable in exchange for donation to their campaigns.
2. It isn't economically profitable for another cable company to wire a locality and try to get business thru lower prices or better offerings. And for many small/poor communities this is the major reason.
3. Semi-monopoly status of the cable industry where there are now very few players because of mergers. The incumbent players find it more profitable to just carve up the territories rather than to compete against each other.
The only competition cable TV will get in entrenched areas is either thru satellite(but prices aren't really that much lower) or thru telecomm providers. But telecom competition will take years before they make any real headway. And when they do, I'll bet prices won't be that much better. And cable will just lower prices in those areas where real competition exists. But 2010 will be the date before this really starts happening. So for now, cable users are stuck, unless they decide to go to the trouble of switching to satellite. But only the really outraged or really mistreated cable customers will go to that trouble.
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| | | chesney09
Premium
join:2004-07-26
Redford, MI
clubs:
| Southeast Michigan competition A descent portion of the Metro Detroit Area has 2 cable companies. WOW ((Wide Open West)Built by Americast/Ameritech) and typically ComCrap. It is amazing at the price difference when you look at areas that have access to choose and those that don't. It is a MAJOR amount of difference. The problem is that the new Cable company that builds out a whole new RF Trunking Network has a hard time getting the penetration it needs to sustain itself. WOW has RAVED about customer service, but fights to win customers over from ComCrap for whatever reasons. I remember when it was rolled out in a new city.. The response would be IMMENSE but Comcast would just offer them a boat load of free service to come back.
So, as competition is good for customers it is quite hard for a business case. | |
| | 
imrf
Premium
join:2002-06-06
Utica, MI
·Comcast
·WOW Internet and C..
| Re: Southeast Michigan competition said by chesney09 : It is a MAJOR amount of difference. I wouldn't say major. I pay roughly $10 maybe $12 less for WOW than Comcast for similar services. The one thing that WOW doesn't offer that Comcast does is VOD. Sure its not the end of the world and I am living without it, but as time goes on, these smaller companies like WOW start to lag behind the larger competitor and end up not making the pricing worth it. They simply do not have the capital that the larger company has. Sure WOW has an awesome network here and good customer support(sure there are a few rouge CSRs that are a pain) but in the long run I don't think it will last. This is one of the main reasons why there is usually only one cable or telco company around, which is something most do not understand nor do they care to hear it. | |
| | RadioDoc
58ef2c0
Premium,ExMod 2000-03
join:2000-05-11
 ·AT&T Midwest
| Show me where :urban: America has it different Except for a very few areas where overbuilding was the rage in the early 1990's, there aren't ANY places where there are two cable providers, rural, suburban or urban. They are almost ALL "One Cable Company Towns". I live in a very affluent Chicago suburb and Comcast is all we have, and that ain't changing.
Someone also tell me how living in a rural area keeps you from getting satellite TV. I guess all those dishes I see on hundreds of dwellings "out there" are for catching raindrops?
Rural America has the same choice the rest of the country has. This is a non-story. | |
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See 21 replies to this post | |
ib50MbSoon
Formerly TwoKDialup
Premium
join:2002-06-07
Coloma, MI
| Get the big fish first! quote:
a consultant for ten grand to prove Comcast had been over-charging customers in the town by around $2 a month.
Maybe Hudson, MA should have their "consultant" look into their telco's ~$10/mo CallerID service or $5/mo call forwarding. Might as well go after the big abusers first. | |
| | Kearnstd
Elf Wizard
Premium
join:2002-01-22
Mullica Hill, NJ
| Re: Get the big fish first! i can agree there, CallerID should be a free part of phone service. its not like its costing them anything more to throw a switch and send that extra lil bit of data. and the fact that all cells have CID by default.
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[65 Arcanist]Filan(High Elf) Zone: Broadband Reports | |
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Homer J
Mmmm, Free Goo
join:2000-10-05
Springfield
| Re: Hudson Really has it bad. I was thinking the same thing. Hudson is not exactly the boonies, it is not far from Boston. I grew up in Natick, and Hudson was not far from there at all. A lot of people tended to move to that area as a place where they could afford to buy a home.
I live in Knoxville TN now and we have a choice for cable, and telephone. A company called Knology is the competitor with Comcrap and Bell South. The prices are about the same from either, Knology is no bargain unless you bundle all the services together. Even then they were more expensive for broadband and offered a slower speed. I keep basic cable as a way of saving on my broadband. It was a no brainer, I spend 9.95 for basic cable to save $15.00 on my broadband.
D'oh
Homer J | |
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cookeys
Premium,MVM
join:2001-06-10
Orland Park, IL
clubs: | Re: Hudson Really has it bad. I grew up in Hudson. I wouldn't have considered it rural even back then. And it certainly hasn't become more rural since then. | |
| | 
EdibleTarget
Real Gamers Dont Use Consoles
join:2004-12-02
Lowell, MA
1 edit | Semi rural? theyre pretty much a small city!
I live in Sudbury and drive through Hudson all the time, theyre pretty far from rural. | |
| 
Titus Pullo
I came, I saw, I slept
join:2004-06-26
·Embarq
| What chance does the U.S. consumer have when the knuckle_dragging, dancing_w/Jesus, change the subject from the truth crowd jams all sensible circuits by ramping up the signal to noise ratio with BS when proof is put before their very eyes?
We get what we deserve -- and we're f*cked, folks. | |
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See 23 replies to this post | |
ArgMeMatey
join:2001-08-09
Milwaukee, WI
·AT&T Midwest
| In a perfect world How about the "deregulated" gas and electric model? It's a model, not a 1:1 plan, but how's this utopian idea:
Everyone has broadband media into their home and any interested provider puts their content in a slot. The provider contracts with each customer and authorizes a transceiver to use whatever the customer wants to pay for. In fact they could cut out the middleman altogether and everyone could pay channels directly a la carte or buy packages.
Not too many areas are technically ready for that yet, but the competitive alternative is a whole lot of cables being buried or strung up on poles to get competition. Aka a high barrier to entry.
The CATV outside plant should be spun off as a separate subsidiary which charges a distribution fee. Or, it could be a coop owned by two or more content providers. I know there are a lot of technical issues but somehow the Bells managed to separate LD from local, didn't they? Put up walls through the middle of COs? (The ILECs also say it would be too hard to separate switching from cable plant, but why would they express interest in giving up a monopoly?)
The question is whether the customer pays less in the end. Looking at my gas bill, the jury is still out on that. | |
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Al Cohol
@coxfiber.net
| Re: In a perfect world LD and local are seperate issues, mostly only a billing issue, not a physical plant type of issue.
One of the problems with deregulation is that they aren't truly deregulated. They were split up, but still regulated out the ying-yang. Check out all those extra fees on your bill. The majority are taxes and regulatory fees imposed by the government, not the company.
There are also taxes included in your bill that you won't see due to the law stating that it is illegal for the companies to tell you that you're paying it. BPOL taxes, for instance, are illegal to be placed on a customers bill. In typical fashion, the government believes that if few people complain, its ok. And since its hidden, few people will know about it to complain, so that must mean its ok.
If the government would get their sticky figners out of the pie and let us Americans do what we do best, it would be a HELL of a lot cheaper. | |
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plk
bo may sleep in loft
Premium
join:2002-04-20
Ogden, IA
| Worse..... one provider of both services I have one telephone provider who bought the cable company some time in the past. DSL is the only game in town at 69.00@256k a month plus another 40 for phone.
256k fastest speed offered.
They are suppose to roll out 512k@89.00 a month and 1 meg @ 129.00 a month.
If I look at other towns around Iowa, around the same size but with a cable provider offering HSI, I see prices $30.00 less for the same speed or faster. Note, I looked at other Coop's only serviced by Iowa Network services only.
If my taxes have to go up to get prices down, what's the difference? I'm lining the pockets of some investor, or pouring it in my community. At least its a local sink hole.
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Thermaltake 2000a/Asus P4C-e/p4 3.4/ocz3500 2x512/WD.2x200g/raptor2x74 raid 0/ATI 9600/APC sua 1500/Logitech z-680/ Samsung 213t LCD/MX 1000 | |
| | reninator
join:2004-08-08
Breaux Bridge, LA
| Re: Worse..... one provider of both services here in LA they have put on the ballot in my communnity a tax for fiber to home. Previous to the vote going on the ballot a resident at a city council meeting asked the chairman if they could view a budget for the project. Councilmans response its in the works. A month later another city council meeting same concerned resident same councilman same response. These politicians want us to write them a blank check to install a fiber opitc infrastructure with no absolutely 0 accountability on how the money is going to be spent. I truly want the muni but my point is a project of that size and magnitude takes great care and planning and most local politians will somehow abuse the funds or the project will most likely be due to failure by poor financial planning.So i am going to vote it down i agree with the fact in keeping goverment out of private enterprise as too much regulation kills free enterprise but without some regulation then u end of with a monoply. trick is to find the happy medium between the two and dont forget cable is reaching most of its max physical capacities in the areas they offerring and as business and consumers needs to move larger and larger amounts of data increase so will broabands appeal and fiber will take over just like broaband did to dial up. So in about ten years i figure everyone will be bitching about fiber prices and its availability | |
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plk
bo may sleep in loft
Premium
join:2002-04-20
Ogden, IA
| I understand your concern Reninator. If they can't answer these questions, they shouldn't be going forward until they can. So go back to the meeting and call them publicly on it. Tell them all, and write it in the paper, that you want FTTH, but not if they don't have a solid plan. Tell them you will have to vote no until they do.
Some Muni's are going to fail for many reasons. However, if the Bells and cables really felt this was the case, they would not be fighting it as hard as they can. A failed Muni especially a FTTH deployment would be a steal to buy from a city in a pinch.
I believe if the Bells etc would be laughing waiting to pick it up on the cheap. But, this to may not be the case. Yahoo, MSN, AOL and many others and investors could look to bypass the Bells and cables and pay top dollar for these FTTH networks in the future.
A poorly deployed FTTH network might not pay off all a cities debt, but a solid FTTH network sure the hell will not be worthless and some one will buy it. Very few will get stuck paying off a totally dead network.
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Thermaltake 2000a/Asus P4C-e/p4 3.4/ocz3500 2x512/WD.2x200g/raptor2x74 raid 0/ATI 9600/APC sua 1500/Logitech z-680/ Samsung 213t LCD/MX 1000 | |
| 
heels_fan
1.20.09 The start of Socialism
Premium
join:2003-02-07
Columbia, TN
| Been there and doing it I work for a small cable upstart that is overbuilding Charter. The town was so happy to see us come in and actually lower the cable prices. My little town was one of the "One Cable Company Towns"
In the two years we have been in operation, we have close to 6000 subscribers and close to 3000 broadband customers. We only offer cable in the city limits. Total homes pass is around 15,000-16,000.
We carry 37% share of the market, beating out Charter and both Dish companies.
Competition is very good, I would say
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If guns kill people, then I can blame my spelling mistakes on my keyboard | |
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(topic offline) I see the future