At the turn of the 20th Century, the federal government took steps to break up major monopolies that dominated the business world. The theory behind busting monopolies is to create competition, which in turn lowers prices and increases quality. Now, 100 years later, we face a monopoly in an industry that is integral to our lives as college students. I am of course referring to cable television, and Charter Communication's monopoly over the Madison metropolitan area.
Particular circumstances give Charter the opportunity to dominate the cable television market. Normally satellite television provides a competent adversary to cable television, but most students who live off campus cannot install satellite dishes due to their lease agreements. Students have no other options. The current process of franchising for cable television in Wisconsin is very difficult and unappealing for companies outside of Charter. Each company has to negotiate individual franchise agreements with each town, which brings the towns more revenue since the money does not go through the state. You won't hear a city official complain, but then again, they can get a satellite.
In an effort to create competition, state Rep. Phil Montgomery, R-Green Bay, introduced a bill in the state Assembly to simplify the franchising process. His proposal allows cable companies to establish franchise agreements with the state instead of the towns.
Towns would still be able to maintain service fees, so rates would decrease while revenue would remain relatively unchanged. This proposal gives more companies access to Wisconsin markets, which consequently leads to competition that benefits the consumer.
One emerging option is an Internet-based service that provides cable television programming online. Through a broadband connection, users can receive the same programming as Charter. AT&T introduced this Internet-based cable television in the Milwaukee area but faced a lawsuit due to the lack of local franchising fees, although AT&T said it was willing to comply.
The recently proposed bill needs to override local municipalities to assist the competition in creating a better market for cable. Cities would not lose revenue, and the revised franchising process would allow companies to easily provide cable access. The only loser under the proposal is Charter, whose monopoly over the Madison market would disintegrate.
Charter can currently afford to make mistakes and raise rates without fear of losing customers. Since cable deregulation in 1996, cable rates nationally have increased at three times the rate of inflation. Right now, the city can impose its own fees and Charter can charge whatever exorbitant price it wants, which leads to high rates. We fill Charter's pockets as it sits back without fear of change in the status quo.
A less expensive option should be available for college students in this unfortunate situation. How can we avoid rate abuse while still reaping the benefits of cable television? Life without ESPN and Animal Planet is unfathomable—that is why we are willing to endure mediocre cable service. In order to receive cable programming, we have no option other than to pay what Charter demands.
In the end, threatening to change services holds no value because there is no other service available. Until this bill passes, we must continue to barter with Charter and their deplorable customer service and high rates.
