Why we’re screwed by cable monopolies

Talk show host Rick Smith on Meredith Attwell Baker, the NBC/Comcast merger, and FCC corruption.

This is from “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age”, a book by Susan Crawford, a former adviser to Obama on science, technology and innovation issues. In this excerpt, she homes in on the monopoly extended by the Comcast/NBC merger:

To those who argued that the merger would stick U.S. consumers with high-priced, homogenized entertainment and second-class Internet access, Comcast had only to respond that the situation for consumers would not be any worse than it already was. If opponents could not decisively prove “merger-specific harms,” the phrase Comcast employees repeated endlessly to staff members across Washington, the deal could not be blocked.

By February 2010, the accepted wisdom in Washington was that the deal would go through. And it showed Americans their Internet future. Even though there are several large cable companies nationwide, each dominates its own regions and can raise prices without fear of being undercut.

Wireless access, dominated by AT&T Inc. (T) and Verizon, is, for its part, too slow to compete with the cable industry’s offerings; mobile wireless services are, rather, complementary. Verizon Wireless’s joint marketing agreement with Comcast, announced in December 2011, made that clear: Competitors don’t offer to sell each other’s products.

It doesn’t have to be this way. Other developed countries have a watchdog to ensure that all their citizens are connected at cheap rates to fiber-optic networks. In South Korea, more than half of households are already connected to fiber lines, and those in Japan and Hong Kong are close behind. In the U.S., only about 7 percent of households have access to fiber, and it costs six times as much as in Hong Kong.

Rather than try to ensure that the U.S. will lead the world in the information age, American politicians have removed all regulation of high-speed Internet access and have allowed steep market consolidation. The cable industry has done its best to foil municipal efforts to provide publicly overseen fiber Internet access. Now, the U.S. has neither a competitive marketplace nor government oversight.

In the subcommittee hearing, Roberts never faltered, and his performance was judged a success. In the end, the Antitrust Division allowed the merger, and the FCC followed suit.

Compared with people in other countries, Americans are paying more for less and leaving many of their fellow citizens behind. Perhaps they will start to care when they see that the U.S. is unable to compete with nations whose industrial policy has been more forward-thinking.

3 Responses to Why we’re screwed by cable monopolies

  1. Izquierdo December 25, 2012 at 11:21 pm #

    She should have been put into a special 95% tax bracket.

  2. JJ December 25, 2012 at 11:55 pm #

    Americans are SUPPOSED to pay more for less. It’s what makes us exceptional…

  3. someofparts December 26, 2012 at 10:46 am #

    “Perhaps they will start to care when they see that the U.S. is unable to compete with nations whose industrial policy has been more forward-thinking.”

    When they see?

    When have they ever?

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