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June 28, 2005


Jim Conran

I agree that consumers should be given a choice in providers and content. The current system keeps cost high for consumers with poor programming.

Dan Krimm

The Brand X decision was certainly bad for choice (I am an Earthlink subscriber, and I'd like to be able to choose between Earthlink DSL provided by my local telco and Earthlink cable provided by my local cableco).

Now, there's is talk of legislation to remove the requirement for the telcos too! Equal treatment is fair, but it ought to be in the direction of open access to increase competition.

I'm a little perplexed by CCC's position on local frnachising: what about redlining? Seems there needs to be some guarantee that fringe areas are served, otherwise these corps will cream the market, leaving many people either unserved at all or served only at tremendous individual expense. That doesn't seem fair to me. How does CCC propose to ensdure that these people get service?

When we're talking about stuff like Internet access, this stuff is becoming a necessity like a publlic utility. Those without affordable broadband access are finding themselves on the wrong side of the digital divide.

Bob Johnson

C4CC wants choice in new video technology in the hands of consumers as quickly as possible. And we want that choice to be available to all consumers.

However, concerns about so-called redlining are misplaced and even counterproductive. The same concerns were raised about other services, such as local telephone service by new entrants in the 1990s, and proved to be incorrect. All market segments quickly had vibrant local competition. If regulators had anticipated a theoretical redlining concern and imposed artifical entry requirements, it would have slowed the pace of competiiton and consumer choice. The same will be true in the cable/video market. Competitive choice will quickly reach all segments. There is no basis to anticipate failure and over-regulate.

The free market works. Let's open the door and let it work.

Dan Krimm

In the case of RBOCs and CLECs, isn't it true that the RBOCs still had to agree to cover the full region? So telcos still operate under a regulated market, to the extent that there must exist at least one carrier that covers it all.

I wouldn't mind that for video service as well. So, if that can be devised without local franchising, that would be okay with me.

Of course, the original reason for local franchises was access to public rights of way, and the local municipality ought to still have control over those rights of way (a local company should still have to ask permission to disturb those rights of way, without causing havoc to roads and other public property on their own terms).

Let's improve the system without throwing the baby outy with the bathwater. In the context of natural monopolies such as these utilities (with high costs of market entry and economies of consolidation), there is ultimately no "free market" at the end of the day and we are entirely justified in retaining regulation that makes sense.

While fixing the problems, let's hang onto the underlying principles that are in all of our interests, and not just the companies' interests. The "free market" is a concept, not a reality. Markets systematically fail under cases of excessive market power, externalities, public goods and information asymmetry. Regulation is entirely justified in these cases, if it is properly responsive to public interests. The trick is not to throw out the idea of regulation but to monitor it in a fully transparent manner and make sure it is doing what it was designed to do, and fixing it (rather than discarding it) when it fails.

Bob Johnson

Dan, you make some good points that I’d like to highlight. Telephone companies already have franchises in communities where they serve. All players in the video market should play by the same set of rules so that consumers – not regulations – that determine who the winners are in the marketplace.

As to your point of market failures, that is precisely what C4CC is advocating to change. Cable has the market power and we want to break the monopoly in the video market by removing outmoded regulations to speed up the deployment of competing networks and give consumers a real choice, better service and lower prices.

Dan Krimm

Regulations and fluid markets are not at all incompatible - in fact, markets often rely upon regulation to remain fluid and competitive. I agree that standards should be the same for telcos and cablecos, but wild deregulation is not the way to get to the most competitive market, per se.

I want to ensure that in the course of breaking cable market power we don't just hand it over to the telcos (which are really no better) without keeping a strict eye on both moving forward.

Maintaining competition in a market where physical constraints lead to natural monopolies and a tendancy to consolidate because of the redundancies of duplication of infrastructure requires keeping a hand in the game, and not withdrawing entirely.

Bad regulation is not a good thing, but removing it outright could simply make things worse. The current situation is not by any means the worst it could get. Fix the regulation, don't throw it out.

Jordan 1

ah i loved reading that post! sounds gorgeous, can't wait until tomorrow!

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