In an article on Ars Technica, a lobbyist for the cable industry is quoted as saying that deregulation allows vendors to innovate faster and is a pro-consumer move. The article’s author, however, cries that past evidence shows that deregulation has always brought higher prices to customers. In addition, the absolutely abysmal customer service record of every major cable provider is pointed to as a need for government interference.
I can personally provide a number of anecdotes to speak to the utterly shameful service and support I get from my own cable provider, but as is almost always the case when deregulation (free markets) is blamed for a supposedly undesirable effect, the ostensible deregulation is incomplete or tainted and therefore does not accomplish its aim.
In the case of cable, consider the history. Buried wire cable TV and Internet providers have had to deal with censorship and invasive oversight from the FCC and have been granted exclusive contracts by local and state governments. These contracts usually take the form of the provider promising to build out the service to a high percentage of homes even if running wire there is not profitable and kick backs to the municipality in question in exchange for a guarantee that no competitors will be allowed to offer a comparable service in the same geographic area. When Kyle McSlarrow says he wants deregulation, it would seem he wants to be free from any oversight, but of course keep the government’s barrier to any competition.
Removing any threat of competition, as well as allowing the cable provider to set their own prices, provides no incentive to offer good services at good rates and no incentive to help customers who are having trouble. Right now, if I want better cable service, my only option is to move to someplace where a better provider is operating with their government-blessed monopoly. Despite intense marketing spin to the contrary, Satellite is not an equivalent option in terms of bitrates, latency, and weather resiliency. Services such as Verizon’s FIOS and AT&T UVerse face an uphill regulatory battle at the State, Local, and Federal level as they seek permission to run fiber-optic wires into cities to compete with cable.
As usual the proponents of a Paternalistic State are quick to decry free markets as the cause of the issues that were in fact created with regulations. If any company who wished to provide content was free to go out and negotiate with landowners to bury a transmission medium all the way up to individual homes, then we would see real deregulation. Companies like Time Warner, Charter, AT&T, and Verizon would have to compete for the business of discerning consumers instead of competing for the favor of a small number of bureaucrats. Complete deregulation is the only sure way to drive innovation, bring down prices, and improve customer service.
Only complete and unconditional deregulation will set consumers free from high cable prices and bad service.
