The Pacific Research Institute just published a paper I coauthored on Municipal networks. The study, titled “Wi-Fi Waste: The Disaster of Municipal Communications Networks”Â reviewed 52 city-run telecom networks that compete in the cable, broadband, and telephone markets.Â The amount of deception and anti-competitive activity that we found in our sample was appalling and a solid reason why proposed new Muni WiFi systems should be opposed.
Below is the press release announcing a study I just co-authored on cable franchise issues. I’m reproducing the entire release below b/c it’s a good summary of the paper and why you should read it.
New Study says Consumers are Paying Too Much for Cable TV
Consumers are paying too much for cable services, a problem that can be fixed by Congress, according to a new study by the Pacific Research Institute, a free-market think tank based in California. â€œCutting the Cord: Streamlining the Video Franchising Processâ€ co-authored by Sonia Arrison, director of Technology Studies and Vince Vasquez, technology public policy fellow, explains the video franchising process, why itâ€™s broken, and how to fix it.
â€œThe regulations that currently govern the cable industry were created at a time when cable was the only realistic video provider in town,â€ said Ms. Arrison. â€œNow that the environment has changed and the Internet allows for more players, itâ€™s time for Congress to open up the marketplace so consumers can benefit from increased competition.â€
PRIâ€™s study is relevant to debates occurring in Congress on communications reform, including a recent bill introduced by Representatives Joe Barton (R-TX) and Bobby Rush (D-Ill).
â€œAs members of Congress examine this issue, they should keep in mind that delays in reform mean delays in economic growth and savings for Americans,â€ said Ms. Arrison. â€œFor instance, in our study we note that a one-year government-created delay for competitive service providers like AT&T and Verizon to enter the national video market could cost cable subscribers from $6 to $8 billion in unrecoverable consumer welfare losses.â€
While some states like Texas and Indiana have already enacted statewide reforms, PRIâ€™s study urges reform at the national level. â€œWe have seen huge discounts for consumers when the marketplace is opened to competition on the state level, but consumers will benefit most when a national structure is in place,â€ advised Ms. Arrison. â€œThatâ€™s because new video services travel over the Internet, an international medium that is best managed by national, not state entities.â€
â€œCutting the Cordâ€ offers policy recommendations that will help modernize the communications landscape including:
- Reducing the regulatory burden of video franchising for all service providers.
- The federal prohibition of â€œgoodie bagâ€ compensation that franchisees have traditionally forked out for the use of public rights of way. These add costs and rate hikes for local residents, most of whom will never benefit from the superficial government gifts.
- Contentious â€œbuild outâ€ requirements written within many franchise agreements should be discarded. Forcing video providers to pay for more equipment than is necessary to serve consumers is a wasteful and naÃ¯ve policy. Facilitating new market entrants is a more sustainable way to achieve local service ubiquity than are heavy-handed mandates that needlessly overrun business costs.