Sunday, November 09, 2008

Gullible, disingenuous pols enact state video franchise schemes unlikely to lower cable rates

Gullible and intellectually dishonest politicians enacted so-called video franchise schemes in about a dozen states over the past few years pushed by big telcos like AT&T. They were gullible at best and disingenuous at worst because they parroted the telcos' party line that such regulatory "reforms" would enhance competition for video services by allowing telcos to compete with cable companies, resulting in lower prices for consumers.

Well surprise, surprise, surprise. Cable rates are headed up -- and not down -- despite the entry of telco TV offerings such as AT&T's U-Verse, according to this weekend item from the Milwaukee, Wisconsin Journal Sentinel. This week, the Federal Communications Commission launched an inquiry into cable rate increases in advance of next February's mandated cutover to all digital television broadcasting.

"On balance, the law hasn't been good for consumers but has been very good for the companies that wanted it," Barry Orton, a telecommunications professor at the University of Wisconsin-Madison, told the newspaper. "Two years from now, I don't think you will be able to say that consumers saved a lot of money if any at all."

Telcos sugar coated their true agenda with the false patina of increased competition and lower rates for consumers. Their real goal was to get local governments that wanted them to build out their broadband infrastructures evenly to serve all and not just some of their residents off their backs. It's far easier to lobby a single state regulatory agency and influence the pols who appoint their members (and get them to put in place rules sanctioning broadband black holes) than to herd the political cats who sit on city and town councils and county boards of supervisors.

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