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Wanted: More Choices for Consumers
July 1, 2005
By John Berthoud
It is sad but not surprising that cable companies across the country are marshaling all their political resources and lobbying might to halt the advance of cutting edge technology that would offer consumers an alternative way of receiving video and Internet service in their homes. IPTV (Internet Protocol Television) is the next generation of technology that can provide video and Internet service to consumers through upgraded fiber optic telephone lines. Verizon, SBC and other telephone companies -- big and small -- are now preparing to spend billions to make these necessary upgrades and improvements to their lines in an effort to bring their IPTV services to local residents in the coming months.
Verizon's "FiOS TV" service will offer its customers more channels, more choices and highly advanced digital TV capabilities through their upgraded lines. SBC is working to roll out their "Lightspeed" project which would enable millions of residential customers to access integrated digital TV, super-speed broadband, and voice services via a new fiber-rich network.
If this technology is allowed to progress, tens of millions of residents in communities across the country could benefit from the first phase rollout of these new high-speed, ultra high-tech video services.
Why is the introduction of new video service to towns across America so significant? It will add another level of choice for consumers. Cable TV rates have risen substantially recently, posting a 40 percent average increase over the last five years. Greater competition and choice means consumers win. More choices means that consumers will have a greater selection of choices to best meet their needs. Further, the competition will hold prices in check and cause service levels to improve.
Unfortunately, rather than welcoming more competition, cable companies have decided to throw up every roadblock imaginable to prevent the introduction of Internet Protocol Television service. They're trying to use political clout to stymie the rollout of IPTV.
With the sparring partners decided -- innovation in one corner versus entrenched interests in the other -- it's now up to local, state and national policy makers to make a choice on whether to erect the barriers to IPTV that cable companies are clamoring for. Hopefully, they will see the benefits of IPTV, not add on harmful regulation, and thereby open up local video markets to real competition. Milton Friedman, Nobel Laureate in Economics, once observed, "Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government." If state and federal regulators can resist the siren song of cable companies -- and not throw up regulatory roadblocks -- they will help facilitate a new, high quality video delivery package that will have a very beneficial impact upon consumers.
The cable companies have enjoyed a long and profitable ride for the past decade but new technology is arriving and times are changing. Our local and national communication policymakers need to do what's right for consumers and not inhibit greater consumer choice.