Frank Ahren’s “FCC Moves to Place Restrictions on Cable TV” was highly misleading in its description of a “largely unregulated cable television industry” that raises prices for consumers. Contrary to Mr. Ahren’s claim, cable television is highly regulated by local and state governments, which routinely grant geographic monopolies to influential cable companies.
Local government place heavy burdens on industry that can be more destructive than federal regulations. Despite the methodological problems of comparing the price for services across decades, where the basic cable service today is much better than the best service 20 years ago, there is no basis to conclude that market competition results in higher prices. Free and open competition results in savings to consumers and better services.
Even if Americans are paying more for cable (is the FCC’s measurement in real or nominal terms?), would anyone say that the cable service today is worse than it was 10, 20, or 30 years ago?
Also, many people are upset that cable television does not offer enough channel choices. However, they also demand a la carte cable services. Bundled cable is the only reason why we have such a wide diversity of channels. The channels that are in high demand, such as ESPN and Fox effectively “subsidize” those that aren’t in such high demand, like Spike TV (which I love, by the way). Because of this “subsidy,” we have great channel-surfing choices we wouldn’t otherwise have. Tonight, I can probably find at least three channels with a version of “Law and Order” playing and at least two with a version of “CSI.” What great diversity in the face of so much regulation! Imagine what wouldn’t exist without it.