Telecom Analyst Advises Senate Antitrust Panel

Telecom Analyst Advises Senate Antitrust Panel

Open Letter Addresses GAO Report on Broadband
March 08, 2004

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<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Washington, D.C., March 9, 2004—Competitive Enterprise Institute Senior Policy Analyst Solveig Singleton is urging members of a Senate antitrust panel not to mistake a recent General Accounting Office report as a call for greater telecom regulation.  In an open letter released today, Singleton advises the members of the Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights to recognize the limited scope of the GAO study and the long term benefits of an unrestricted market.


The GAO’s January 2004  study on competition in broadband cable television networks, “Wire-Based Competition Benefits Consumers in Selected Markets,” found generally lower prices in the six markets it studied with broadband overbuilds.  It further noted that broadband over-builders reported several obstacles in entering the market, including local franchise and construction permit requirements and problems getting access to programming. Those inclined to support re-regulation of cable might argue that this supports a) some form of price regulation of cable in general or b) further program access requirements.  This, however, would be an error.


“While an interesting case study (as it was intended), the GAO report is too limited in scale and scope to offer a standard of what cable competition ought to look like or what cable prices ‘ought’ to be,” wrote Singleton.  “Competition is a long-run process, not a static state of affairs. … Likewise, the GAO report’s focus on trees might lead lawmakers to miss the forest.  As the FCC has found, there’s good news in video competition lately.”