Consumers must demand choice in cable

Most of us probably only vaguely remember the days when the words, "I'll take my business elsewhere," actually had meaning and power when used against a business that was not meeting our expectations. Somewhere along the line, those words lost their power. Many reasons can account for this loss, but the reasons can still all be summed up by a single observation: that large portions of that great, nebulous 'market' you hear about in economics has shifted from being consumer-driven to being producer-driven.

Now this editorial is not meant to be some deep economic argument, nor is it meant to indict "big business" for being greedy and uncaring. However, it does raise the point that many consumers feel the systems for providing certain goods and services are broken. For example, anyone who has tried to get any kind of cable television service in the area around campus has probably realized that their options are quite limited. While there are many nationally recognized service providers potentially available, only one company provides service to the area around Tech campus.

This is not uncommon. Most regions are severely limited in their cable options. It would seem reasonable to hypothesize that limited options are due to technical and physical limitations of the infrastructure, but these limitations are only, at best, marginally the reason. Most cable companies hold legal geographic monopolies in which, either by law or agreement with their competitors, they divide up large regions into areas where only the controlling companies will provide service. The notion seems outrageous, and the situation created for consumers only becomes worse.

Anyone who has ever subscribed to a cable service in the United States has been faced with two options: purchase a programming package with about 10 wanted channels and about 50 unwanted channels, or do not pay for cable at all.

Cable companies assert that packaging channels for their customers gives the consumer a better deal. However in the last two years, the price of cable service has increased at twice the rate of inflation. Cable companies counter that with that price increase, they are providing the customer with even more channels. But did any of these providers ever ask the consumers if they wanted to pay for these extra channels?

Senator John McCain (R-AZ) believes that someone should ask. On June 7, he presented the Consumers Having Options In Cable Entertainment (CHOICE) Act on the floor of the U.S. Senate.

In an editorial published in the Los Angeles Times, Senator McCain and FCC Chairman Kevin Martin wrote, "the solution to high cable bills isn't price controls or additional government regulation. It is more competition and more choice... [The CHOICE Act] would allow cable companies to compete nationally for your business (rather than only at the local level) in exchange for agreeing to offer channels a la carte, either individually or in smaller bundles."

According to the Government Accounting Office, consumers living in areas where two or more cable companies compete for their business have cable bills which are an average of 15 percent lower than consumers living in an area with only one company. The FCC further found that consumers could save up to 13 percent on their monthly cable bills with an a la carte system.

An a la carte cable system has been available in various forms in other countries for years. McCain's and Martin's editorial provides the example of a system in Canada which offers either individual channel selection or a "pack" option where customers can enjoy significant savings by choosing their own bundle of five, 10 or 15 channels.

Unfortunately, McCain's bill has not yet garnered much support from his fellow lawmakers. However, the bill may be added to a much broader, sweeping telecommunications bill, to be considered later this month. Also McCain's bill has received praise from telecommunications firms such as AT&T and Verizon, companies that have been poised to compete with cable companies by providing either an a la carte cable programming or internet-based video systems.

But do not label these telecoms as wholly progressive just yet. It seems that telecoms only like competition when it favors them. AT&T and Verizon, among other telecoms, along with several cable companies that provide internet service, such as Comcast, are strong opponents of network neutrality: a concept that a network's only purpose is to move data - not to choose which data is privileged to get a higher priority of movement.

Simply put, the opponents of net neutrality own the networks through which all data passes, and they want to control what data moves faster based upon whether the originator network has paid them a "toll" to get priority service.

On the day after McCain introduced the CHOICE Act in the Senate, the U.S. House of Representatives passed the Communications Opportunity, Promotion and Enhancement (COPE) Act without its provisions to keep net neutrality.

It is reasonable to suspect that these provisions were left behind under pressure from the telecom giants who oppose it. The internet is the final frontier where consumer choice still reigns. With the destruction of net neutrality, these telecoms are no better than the cable companies.

It has become a dance of one step forward, two steps back for the reestablishment of the consumer's right to choose and the consumer's right to "take my business elsewhere." Hopefully consumers who are tired of their limited options will finally assert their freedom to choose.