Opinion: Daily Journal

Phoning In More TV Competition

RALEIGH – If the emerging, competitive market for telecommunications were a football game, the line of scrimmage would run right down the middle of the Hood household in Southern Wake County. My boys and I represent the opportunities and challenges facing traditional providers, newcomers, and competitors currently locked out of the market.

I have both cable TV service and a satellite dish. I have basic cable to provide a feed to multiple TVs around the house. It really is the basics: broadcast channels, the biggest cable networks, Time-Warner’s News 14 Carolina channel, and, of course, Cartoon Network. The service also includes my indispensable cable modem, which powers my working from home, the boys’ Internet researches, and our favorite new hobby, online gaming.

My satellite service, on the other hand, provides me with a wide array of niche programming – history, classic movies, kid’s stuff, and pay-per-view – on one TV. The last time I checked, this was a better buy than expanding my cable service. However, it’s also the component of the Hood media portfolio most likely to be sold in the future, as I’m finding that we spend less and less time watching scheduled television and more time gaming or watching tapes and DVDs.

Now, this being a market, all decisions are subject to price. I’d welcome another option for pay-TV that would provide me more selectivity in the channels I buy and/or a lower monthly bill. Satellite is a fine competitor to traditional cable companies in some ways, but for both technical and marketing reasons it may not ever provide the alternative I and many other consumers would like to see. Who could? The company that already has a wire (little used at the moment) running into my home: BellSouth.

Sponsors of a bill introduced this year in the North Carolina House, the Video Service Competition Act, argue that it’s time for clear out the regulatory underbrush and allow telephone companies to enter the marketplace for pay-TV. The legislation would create a new system for approving providers. In the past, cable companies had to negotiate franchise agreements with each municipality and pay special taxes for the privilege of offering service. This bill would kick the decisions up to the state level, allowing the Utilities Commission to approve entrants into the market and replacing the local taxes with a seven-percent tax on all competitors’ service – be they cable, satellite, or telephone.

While working out the details of tax burdens and transitions is essential, it’s undeniable that consumers would benefit from broadening the array of options in video programming – and such broadening is far more likely to happen quickly and fairly in the absence of regulation by local governments, whose demands are often unreasonable and sense of urgency is entirely lacking. Phone companies, for their part, have a strong incentive to make use of existing infrastructure and right of way to sell a service people demand in addition to the traditional landline voice service that is in increasingly less demand. They seem ready to go as soon as that regulatory underbrush gets dragged off. In other states, allowing telephone companies to enter the pay-TV market has driven down monthly bills by 16 percent or more.

Most of the arguments against liberalization pose the wrong questions. Would an end to local franchising – meaning government-sheltered monopolies – result in less local tax revenue? Would it bring an end to public-access television?

Uh, pay-TV doesn’t exist to enrich the coffers of politicians or facilitate subsidized broadcasting by a few to a few. It exists because many paying consumers want to watch TV. I’m one of them (in-between Google searches and City of Heroes missions). I’ll take “Win-Win Public Policies” for $500, Alex.

Hood is president of the John Locke Foundation.