Cable Company Bastards....Well they are!

Factual Questions
1

OK, the cable descramblers thread stirred me to ask a question that I’ve often wondered about.

How do these cable companies get away with the way that the monopolies are set up. Recently the gummint deregulated the cable companies to make things even less comprehensible to me. In my area we have three choices. Plain ole’ antenna broadcast signals, not much of a choice in my book. Cable TV, with various degrees of bells and whistles. Finally, the true variety (AFAIK) of DSS, Digital Satilite sytems. The Satilitte systems are provided by a number of services and therefore a customer can pick and choose his favorite one, based on price, service, selection etc. Essentially, the model of capitalism, and competition controlling price. Network TV is an enigma, no one seems to actually use it, the people who watch TV all have cable, the creepy people who never watch TV have antenna service, but never watch it. Its free so i don’t really consider it a product that competes with cable.

Now to cable companies. There is only one company in my area that i am capable of choosing. (A very suburban area that isn’t lacking in demand or resources. Luckily my company has been excellent in service, and has the cutting edge of technology -broadband, digital cable, etc.- , but was recently bought out, and I fear the quality will suffer) How does this fit into any defintion of accptable fair trade practices? They have no competition within their product. (Calling network broadcasts and satillite TV the same product is like making people choose to drink warm drain water, Coke and only coke, or a variety of fine wines) So what motivation makes deregulation acceptable? Yeah, lobbyists, but they had to raise some kind of facade of legitamacy.

These assholes can raise my rates, offer shitty service, have frequent blackouts, have a meager selection, and generally blow goats, and my only recourse is a strongly worded letter to some PR slob. I can’t honestly threaten to change my service.

Is it the mere presence of some other type of option even if impractical or virtually unpracticable, and not very similar except on the loosest definition that makes this monopoly legal? Whats a comsumer to do, besides steal cable? I consider myself a moral person (neglect all purity score comments, and any of Satans threads), but this apparent injustice makes it hard for me to frown on stealing from the evil king. It makes me envision Robin Hood, maybe if everyone steals cable, the cable companies may need to stay in line, and keep the prices affordable. I don’t suppose this type of anarchy will gain any real approval, but its frustrating as shit.

Question two: Same as above, but substitute deregulated local phone service, and electricity.

Question three: Are there areas with multiple cable companies competing for customers? Does the cable company own the actual cables? And would a second competitor need to run brand new cables to every home?

The facts expressed here belong to everybody, the opinions to me. The distinction is
yours to draw…
Omniscient; BAG

2

Somerset, MA just had a fight with their cable company. The cable commission (town governmental body) flipped out on the cable company due to frequent blackouts and the lack of service from the cable company. That was Cox Cable, now they have MediaOne. I guess the local cable regulating body could kick out the old cable company if they felt like it and have a new one contract for the service, but then again, I don’t know all that much about how “cable law” works.

Jeremy…

I can think of no more stirring symbol of man’s humanity to man than a fire engine - Kurt Vonnegut

3

I’ve got MediaOne too, but in the last 2 months it was bought out by AT&T. I’m not sure if all of MediaOne was bought out or just the Chicago area, several other Companies in different burbs, and the city were bought by AT&T too, I think this sounds bad.

MediaOne was a excellent service I must say, expensive though.

4

Yeah, cable bites. Big time.

It’s not really a monopoly because, even in areas with one cable company, you DO have other options (even if you don’t really think they’re comparable) and the cable companies don’t really engage in anti-competitive practices.

The telecommunications industry is getting muddied with Giants buying smaller cable companies and ISPs. Where I live, I had one option when it came to cable: TCI Inc. They wanted me to pay $30/month for basic extended cable. That’s $360 for the approximatly 20 hours of good programming I’ll get out of a given year. I don’t like Connections THAT much!!

And to top it off, they were just bought by AT&T.

It’s been over a year since I last paid a dime for cable. I agree with your sentiment regarding pirating, but I can’t be bothered - I just don’t even want to watch the damn TV anymore. The hell with it. Every time I watch I feel myself becoming one with the Great Numb Cosmic God of Mediocracy and Mind-Decay.

I still can’t believe people waste their time with the radio. How stupid do you have to be to sit in front of THAT thing for hours?

Jury’s still out on the internet.

5

Damn SS, not real big on entertainment eh? I suppose we could stay in bed all day when its cold out, but damn it I like my cable TV. I just want to pay a reasonable price for it. Where would I be without 24 news and sports? Well mighty uninformed thats for sure. The news print is a diversion at best, and is always viewed through more partisan eyes. Newspapers are worse than TV when it comes to shock journalism. Not to mention that live updates are becoming critical, especially if business is important to you. Sorry, in my world TV is a necessity, sounds sad, but times have changed.

Back to the point. It can’t just be that there are the other two choices. Digital Satilitte TV is new, and it was regulated when there were still 3 choices. I can’t think of a better scam than cable, with the obvious exception of insurance companies.

6

cable tv companies do not have a monopoly as stated earlier, but it rarely happens that there’s more than one company in a given area. many times, if another company comes in, the existing cable company (who laid the cable lines) won’t let the other company use their pre-existing lines, and the new company is forced to lay new lines, which is very expensive, especially when few subscribers would switch, just for the hell of it.

“Question two: Same as above, but substitute deregulated local phone service, and electricity.”

local phone service is becoming less regulated. i believe in nyc, bell atlantic is trying to get into local service, as opposed to only long distance (or is it the other way around?) and cable companies (like at&t/cox) are looking (and are able) to throw their hat in the ring.
and electricity and power and gas in general are becoming so. i believe there are places in iowa that are like this, and in illinois, business customers are able to choose where their local provider buys their power from (perchance to lower their rates) and individuals will be able to choose in 2002. again there is an option. you can use a windmill (or mills) and the neat thing, if you make more than you use, the power company (or electrical company) is required by LAW to buy it from you. so if you have enough windmills, and you live in a windy area, you can make money from yer utility company…

7

It sure does seem like a scam, doesn’t it? The only thing they have going for them is the HUGE cost of laying the cable. After that’s done even an ape could run the company.

I have nothing against large corporate pseudomonopolies - hey, I wish I was smart enough to start one! More power to Ted Turner and Bill Gates!

8

Question 1: You have to remember that the pay-TV industry as we currently understand it is only a couple of decades old. When cable TV providers decided that HBO and ESPN (featuring a lot of rodeo and motocross, at the time) were a sufficient reason to wire up places that already had perfectly good over-the-air reception, a lot of people thought they were nuts.

At any rate, they came along to municipalities and said, “Hey, I’ll wire up your town and cut you guys in for 5% of the gross, if you guarantee that no one else will be allowed to do it for a while.” To which municipalities responded, “Yeah, whatever.”

And thus the cable monopoly was born. Technically, it no longer exists, because any idiot with a couple of billion to burn can “overbuild” an area now. There are not a lot of such idiots, for the reasons ubermensch mentioned. It’s too financially risky. (An aside, some telcom companies have done it anyway, and startups that combine cable with telcom and internet are doing it in urbanized areas. It turns out not to be so idiotic if you do it right.)

So the fact that direct wired competition is legal, combined with the fact that competition does exist in the form of the Direct-to-home businesses you mentioned, further combined with the fact that you already have free over-the-air TV is why it is not a “monopoly” on a local basis.

On a national basis, the gummit is quite concerned with ownership concentration issues. I’ll go further into this if anybody cares.

Question 2: Deregulated phone service is coming, but very slowly, to consumers. It already exists for businesses in what they call “Tier 1” and some “Tier 2” and “Tier 3” cities (basically, down to about 200k people). The Telecommunications Act of 1996 provides for local competition, including by means of leasing the incumbent’s wires, but there’s no money in that. The money is in building one’s own facilities. It’s pretty easy to imagine that the economics of that business work better in Chicago than in its distant suburbs. You might try a company called McLeodUSA. They are building facilities in your area, and in some cases offer residential service.

Electric deregulation is more complicated, because it is still in its early stages in your state. Even states that have electric competition (NJ comes to mind) have only been doing it for a little while. But basically, you still buy the local transmission from your existing power company (i.e., no new wires down your block). You have the option of purchasing the actual power from a list of companies approved by your state’s Public Utility Commission. The savings so far are small and the hassles large, but again, the process is new. In the long run, this could be pretty exciting stuff.

Question 3: Yes, there are companies “overbuilding” cable systems. As I mentioned, they overcome the lousy economics by bundling TV service with high-speed internet and with telephony. Two companies that come to mind that are focusing on residential service are 21st Century Telecom and RCN.

Yes, the cable companies own the cable up to where it enters your premises. And yes, a second competitor would have to build right up to your house. In most instances, though, they could use whatever interior wiring is there.

IMPORTANT P.S. Please tell me who your cable provider is. I may be able to offer some specific insight into the new owners.

Livin’ on Tums, Vitamin E and Rogaine

9

Doh!

The missing links are McLeodUSA[/url"] for the company you “might try” and [url=http://www.21stcentury.com/index.htm]21st Century Telecom as the first of the “two companies that come to mind.” Nickrz, if you could fix that up and delete this, I’d be grateful. I think I’m just missing a bracket at the end of the first URL.

10

How come no one mentioned that the satellite systems are not allowed to give you any nearby broadcast channels? It seems to me that this gives the cable companies an unfair advantage.

11

Funny you should mention that, Keeves. That issue is before the Congress right now. As it happens, the current law allows DTH providers to provide your local signals to you. What they can’t do is provide someone else’s local signals to you (exception to follow). That is to say, they can’t send the New York channel set to a viewer in St. Louis. The reason is that this is a direct threat to the economics of hundreds of local TV stations around the country and to the local news and community affairs broadcasts that are part of their mandate.

The exception is if you can’t get local signals at all (and there’s a pretty contorted definition of that). If you can’t receive local signals (usually by virtue of being too far away from a town with its own TV stations), the DTH provider may sell you what they call “distant signals.” L.A. stations to Wyoming, that sort of thing.

And yes, it’s a disadvantage to DTH providers. But they just don’t have the bandwidth up there to provide the local signals of every town in the country. One of the providers is sending out the major (6 or so) stations of the top 25 (or so) markets to try to overcome this. Later today I’ll find a link to an impartial discussion regarding “local-to-local” rules for DTH providers and post it. The short story is that the little broadcasters in big towns want DTH providers either to send all channels to a market or none (must carry), whereas the DTH companies want to provide only those channels that people actually watch.

Livin’ on Tums, Vitamin E and Rogaine

12

manhattan, is there any chance you might want to let un know what “DTH” stands for. From context, I think it means “the satellite guys”, but I’d like to be sure.

If the law is as you say, then how come a satellite dish in NYC can’t pick up the NYC local stations? My guess (following what you suggested) is that if the satellite would broadcast it, then people in Boston and Philly would also get the NYC stations, and that’s what is illegal. Am I close?

13

Omniscient, your city makes a deal with the cable comp for your cable services. It gets renewed. Notice usually comes up in the paper about the deal the city wants & what they can get.

Keeves, some satellite comp’s do offer local broadcast channels to a point. But then you only have one box per tv with that kind of thing.

14

Keeves: Sorry. I thought I put that in my first post, but I didn’t. DTH is “Direct to Home” and yes, it’s “the satellite guys.”

While I’m on the subject, I ought to clear up some other definitions, too. “Local-to-local” is sending one’s normal TV signals (some or all of the ones a customer would get from rabbit ears) as part of a satellite package. “Must-Carry” is the policy requirement that pay-TV providers have to carry all local signals to customers. This is the current law for cable companies, and is before the Congress regarding DTH providers, who claim they just don’t have the bandwidth. “Distant Signal” is selling NY and LA signals to a customer who can get no off-air reception (or, more commonly, lies and says that to get better reception).

Some NYC DTH customers can in fact get local-to-local. Echostar (Dish Network) customers can get the big four networks and a PBS national feed for $4.99/month. Primestar, to my knowledge, offers no local to NYC residents (doesn’t matter, they’re going away anyway). I don’t know where DirectTV stands.

Echostar can do local-to-local because it can disable the signal in boxes outside NYC, just as it can enable and disable HBO or any other channel, so the company doesn’t have to worry about Bostonians and Philadelphians getting access. Boston, Pittsburgh, and D.C. are the other cities in the Northeast that they offer local-to-local.

This may change. If Congress forces must-carry rules on DTH providers, they may abandon the local retransmission business altogether, making them a much weaker competitor to cable.

Livin’ on Tums, Vitamin E and Rogaine