Monopoly Money

by Brian L. Clark

Tuning Fork

In the event it hasn't come to a TV near you, readers should know there's a turf war shaping up between Telcos rolling out IPTV and cable companies protecting their God-given right to maintain a local monopoly. The bottom line: cable operators around the country want telephone companies to do what they had to—sign franchise agreements in each and every municipality where they want to do business, a process that would take years. Phone companies don't want to wait that long, so here in New Jersey Verizon is trying to reach a single agreement with the state. Not surprisingly, cable operators have gone on the offensive by airing a truly grating (and somewhat misleading) TV spot warning that Verizon wants to "triple your cable tax."

I love it when cable companies show they care.

To find out more about this little pissing match, I visited a website set up by NJ cable providers called KeepItLocalNJ and found the following: "Our ability to decide for ourselves how cable television service is provided in our own neighborhoods is being threatened."

Translation: Verizon wants to horn in on our turf, and we want to make it as difficult as possible.

I dug a little deeper and discovered "myths and facts" about the debate. For example, "Verizon claims cable companies have a monopoly." I nearly choked after reading cable's retort, "The claim is false and Verizon knows it." Actually, the claim is true and I know it. Otherwise, how is it I have only one choice of provider?

Ah, the smell of semi-free enterprise.

The legislation in Jersey does indeed call for an increase in consumers' fees, but more than three quarters of the 4 percent fee would be passed on to local communities to provide relief from the state's painfully high property taxes. The remainder would go to providing cable television services for little old ladies. Seriously.

Here's another little fact cable companies don't want you to know: According to a 2004 study by the General Accounting Office, cable subscribers in towns where two or more cable companies compete against one another pay an average of 15 percent less than residents in towns with only one provider...like mine.

I subscribe to digital cable, which costs about $67/month, so my current fee is about a buck. Under the proposed legislation, my monthly fee would rise to $2.68. But let's say the competition from IPTV lowers my bill by 15 percent, or about $10/month. Let's see, a "tax" of $2.68/month vs. a savings of $10/month. Clearly someone's hiding something here.

Look, I'm no fan of phone companies. I subscribed to DSL for a year and it was one of the worst online experiences I've ever had. But that was four years ago, and given the money I fork over to my cable provider every month, I've reached a point where any competition is better than the state I'm in right now, in spite of my cable company would have me believe. As I mentioned in an earlier column, two providers have lines running directly behind my house, but I can only "choose" to subscribe to one of them. I really hate that.

You should too.

Brian L. Clark is a reporter and consultant on all things digital, runs the The Tech Enthusiast's Network, and writes for Money, Men's Health, and Laptop. Read more Tuning Fork here.