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Tuesday, February 10, 2004

GAO's Most Recent Cable Study
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In a report released by GAO today, entitled, "Wire-Based Competition Benefited Consumers in Selected Markets," the agency concludes "there are measurable consumer benefits in markets with BSPs [Broadband Service Providers] compared with markets without such competition." GAO itself rightly emphasizes that there are doubts about "the degree to which the BSP model is replicable throughout a broader set of markets."

Putting aside particular questions relating to the GAO study's methodology, such as the very small sample of markets, I wonder about the value of GAO's focus only on "wire-based competition" for multi-channel video services. Sure, more competition is welcome from any quarter, although GAO does question the soundness of BSP [aka "cable overbuilders"] business, financial, and marketing plans. Most importantly, however, as the FCC's just released annual Video Competition Report makes clear, the cable industry faces plenty of competition in the digital multi-channel marketplace from a variety of facilities-based providers using multiple technologies, not least of which are the still-growing direct-to-home satellite service providers. Presumably, that's why GAO is not recommending saddling cable operators with any new regulatory requirements.

Wouldn't it be nice, though, if GAO--rather than embarking on its own costly study--had just waited for the FCC to release its most recent congressionally-mandated annual Video Competition Report (now in the tenth year!) and simply issued a one-liner affirming what should be obvious to all: Due primarily to technological advances, the multi-channel video market, indeed the broader digital broadband marketplace of which "video" is just one (increasingly inseparable) segment, is effectively competitive and offering consumers a broader array of choices than ever before in history.

posted by Randolph May @ 5:35 PM | General

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