🚀 go-pugleaf

kadie@herodotus.cs.uiuc.edu (Carl M. Kadie) writes:

)hougen@uirvlh.csl.uiuc.edu (Darrell Roy Hougen) writes:

))  As it is now, most cable companies have an exclusive franchise (even
))though it is sometimes called a nonexclusive franchise) to serve a
))particular area and the only thing that is keeping them from raising
))their rates sky high is the fear of rate regulation.
)[...]

)Mr. Bill Rutly (sp?) of Cablevision of CU volunteered that they don't
)have an exclusive franchise. But on reflection, I thought, so what:

)  - you have a monopoly in all but a few markets
)  - your industry is working hard to abort any future competition from
)       fiber and satellite
)  - a few big companies (TCI, Time-Warner) own most franchises.

I talked to Mr. Rutly before, and he admitted that even though they
don't have an exclusive franchise, another company that wants to
compete in our area must have its application approved by some local
board.  The board is supposed to assess the need for another cable
company in our area.  If the new company cannot prove a need exists,
they can`t get a franchise and bang! they are excluded from the local
market.  I don't know who sits on the board, but I wouldn't be
surprised if it was someone that had a vested interest in reducing
competition in our area along with some people that don't really
understand the issues involved.  I also don't know how the law is
written and how hard it is to prove need.  However, the fact that 97%
of the local cable affiliates in this country have no competition
tells me that something is fishy.

The local city council certainly has no reason to promote competition.
Afterall, they collect a hefty franchising fee from the cable company,
allowing them "enhance their revenue".  You should have read the
remarks of one local city council member gloating over how the city of
Urbana was going to milk the cable company the next time their
franchise renewal came around.  He was quoted in the DI last spring
but I don't know if I still have the article.  If many companies were
allowed to operate in the area, it would probably be much harder to
collect large franchising fees because the companies would have
smaller profit margins in the short run.  However, competition would
bring efficiency and eventually larger profits.  Unfortunately, I'm
afraid that most city council members are not that far sighted.

Darrell