Competition does reduce cable prices

    Last updated on May 13th, 2019 at 02:46 pm

    Wisconsin lawmakers are considering legislation to encourage cable TV competition, lower prices and increase consumer choice, investment and jobs. However, local governments want to protect the monopoly at your expense.

    Recently, the National Association of Telecommunications Officers and Advisors (NATOA), a municipal government-sponsored organization, incorrectly concluded that competition raised prices in Texas. What their analysis did, however, was to track "list prices" for legacy services – old services that large numbers of consumers have abandoned.

    Their analysis did not track lower-priced services that consumers have flocked to, nor did the analysis compare differences in competitor and incumbent prices.

    The NATOA results are flawed and contrary to 20 years of hard evidence showing lower rates from competition, including studies from the General Accounting Office (GAO), think tanks and academia. The Federal Communications Commission (FCC) found that competition lowered cable rates by 25 percent per channel.

    Based on our survey, Texas consumers reported saving 30 percent off their cable bills, thanks to competition.

    Local governments fear falling cable prices because they tax 5 percent of all revenue. As a result, local governments want to stop you from saving $15 dollars off your bill, so they can keep 75 cents of it. This too is misguided, since lower prices mean more cable TV consumers and higher cable revenues, which benefits both consumers and municipalities.

    Stephen Pociask is president American Consumer Institute. For additional information, visit www.theamericanconsumer.org.

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