Originally posted by BeKnighted:
4. The linked document is a cable franchise agreement. The reference to common carriers in the definition of "cable system" is from the federal Communications Act and refers to situations in which separate common carrier services are offered, with the intention of removing those services from the franchise. For what it's worth, that definition was created in 1984, before any cable operator had any intention of offering phone service.
"For what it's worth, that definition was created in 1984, before any cable operator had any intention of offering phone service".
if someone wonders why their wired internet price is so disproportionately high, perhaps it's not just because they are stuck in an un price regulated monopoly or duopoly provider situation, but also because they are probably subsidizing the pay tv side of their provider thru an inflated internet price, regardless of which provider they pick. (assuming they have a choice at all).
let me explain,
fact is, in 1984, cable companies were quite aware of the ability of their plant to be used for phone service, as well as home security.
as to not having any intentions of offering phone service, that was because in 1984, they couldn't by law offer both phone and cable.
that was significant to them, not because offering phone service was a priority in 1984, but because that law protected them from the phone companies entering into the cable business.
the reason the govt barred the phone companies from entering into cable/video at the time, was because it was argued that the phone companies would use their phone service, which they basically had a monopoly on, to subsidize their video/cable service.
i bring this up not as a fun fact in reference to your comment on the matter in 1984, but rather to the underlying philosophy behind that thinking at the time, in respect to today.
several times in this thread i have made reference to the fact that duopolies tend to behave much more like monopolies than do even oligopolies, let alone industries with many players in a market..
currently, most of the country has access to 3 or 4 multichannel providers. (cable or satellite pay tv).
the 4 being, the local cable provider, AT&T or Verizon, Directv, and Dish Net.
yet most have access to only 1 or 2 wired internet providers, the cable company and maybe the phone company.
2 of the multichannel competitors, Directv and Dish Net, deal only in pay tv, and not the internet. (other than satellite internet, which is not competitive with wired internet).
so, Joe Consumer generally has access to 3 or 4 pay tv competitors, (2 of which can't offer wired internet), and 1 or 2 wired internet providers
with there being 3 or 4 competitors for pay tv, and there only being 1 or 2 competitors for wired internet and phone, obviously one could reason that the pay tv side faces more competition than does the wired internet side.
point being, unlike in 1984 when the govt didn't allow the phone companies to use their monopoly position in phone to subsidize a pay tv business, and give them a huge advantage over an emerging cable industry, there is no protection today from the cable and phone company using their internet and phone services to subsidize the pay tv side of their business.
if so, and i certainly think it is going on on the internet side, not only does it put Directv and Dish Net at a competitive disadvantage from cross subsidization by their competitors, but it somewhat screws anyone who takes just internet from say Comcast or AT&T, but not their pay tv side, because not only does said internet customer have to deal with an un price regulated monopoly or duopoly provider, but on top of that, good chance he is also subsidizing the pay tv side of that provider through an inflated internet price.
probably why one's wired internet price is most likely disproportionately high relative to the price of pay tv, considering the actual cost of delivering each of those different services to the consumer by the provider.
as over the top competitors like Netflix etc expand and progress, why would we not think the subsidization of the pay tv side of the cable and phone companies, by the internet customer of those companies, would not continue and even expand, thus perpetuating and increasing the competitive advantage of the pay tv side of the cable and phone companies over satellite and over the top services like Netfix, Hulu, Amazon Prime, thru forced cross subsidization by the internet customer of said companies, who is stuck in either an un price regulated monopoly or duopoly wired internet provider situation.
and even if he has a duopoly situation, he's still forced into subsidizing the pay tv side through inflated internet prices, regardless of which wired internet provider he goes with.
as cable and internet evolve from being complimentary services, to more and more direct competitors, regulation, and even price regulation broken down by service, become more and more important.
if not, the cable and phone companies will be more and more incentivized to use and inflate their wired internet pricing to both subsidize their pay tv side, and to cover any revenue losses from cord cutters and downgraders who quit or downgrade their pay tv side, in favor of on line delivered services.
This post was edited on 3/4 6:54 PM by i'vegotwinners
