Infrequently Asked Questions About the Cable Industry

What is really going on here?

On December 1, 2004 the Albany Times Union reported that Time Warner will soon raise cable rates by another 5% or more, quoting the familiar company line that higher costs are responsible for the increase. Don't believe it!

The fact of the matter is that Time Warner Cable is an unregulated monopoly, and that like any unregulated monopoly they raise rates whenever their market research show they can get away with it. There is little, if any, relationship between their cost of providing cable service and the rates they charge customers.

There is plenty of readily available, credible research in support of the view that the cable industry is price gouging defenseless customers.
For example:

Cable Mergers, Monopoly Power, and Price Increases

The Continuing Abuse Of Market Power by the Cable Industry.

Furthermore, there's a lot more to this story that the local press can somehow not bring itself to report. There's not much municipalities can do about rates, thanks to the Telecommunications Act of 1996, but they certainly can help cable customers get more for their money. The entire subject of the public access requirements in cable franchising, which Time Warner has aggressively and successfully resisted locally for years, consistently falls off the radar screen--yet it is here that municipalities can realize millions of dollars of benefits and savings for their citizens in addition to the intangibles of media literacy training, multi-media education, and increased non-commercial programming choices.

And what of Time Warner's entry into high speed Internet access, local and long distance telephony, security systems and who knows what else to come--all based on cable franchises first negotiated in the late 1960s and early 1970s, long before most of these services were even contemplated! In the Capital Region, the "rent" paid by Time Warner for rights-of-way over, under and through public property comes nowhere near what the Federal government authorized TWENTY YEARS AGO in the Cable Act of 1984! The public's reward for its generosity is ever more expensive entertainment programming of relentlessly decreasing quality.

And while the public pays more and more to get less and less from Time Warner, Time Warner pays less to get more from the public. Perhaps the most outrageous boondoggle to date is the Metroplex Authority's gift of nearly two million dollars in tax money so Time Warner could move jobs from Albany to Rotterdam--new site of the regional headquarters from which Time Warner stymies state-mandated public access to the cable system!

Which brings us to the story of the Public Service Commission, long since captured by the industry it ostensibly regulates, whose public service is in name only. In fact, the PSC might more accurately be re-named the Public Dis-Service Commission--for its suspiciously tainted, chronically inept "free" consulting services to municipal governments that cost the public millions, if not billions, of dollars each year throughout New York State--to the benefit of the cable industry from which at least the most senior member of the Commission's cable staff hails and to which they all defer.

And then there is the tale of the telephone company's pending entry into the cable industry, an unprecedented opportunity of which local municipalities are woefully unprepared to take advantage simply because our politicians are almost completely ignorant of the subject--and dependent for advice from government entities ill-prepared to give it and disinclined to advocate on the public's behalf in any event.

The real scandal is that these issues have been lingering for more than thirty two years! In 1972, the Federal Commications Commission wrote: "Recently, governmental programs have been directed toward increasing citizen involvement in community affairs. Cable television has the potential to be a vehicle for much needed community expression ... We believe there is increasing need for channels for community expression, and the steps we are taking are designed to serve that need. The public access channel will offer a practical opportunity to participate in community dialogue through a mass medium." Cable Television Report and Order, 36 FCC 2d 143 (1972)

For a world in which information technology holds the key to our political and economic futures, in a region where the name "Tech Valley" has yet to be earned, decent cable franchises are the first step to realizing our potential!

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