IPcentral Weblog
  The DACA Blog

Wednesday, November 30, 2005

 
Competition Dividend?
(previous | next)
 

A new policy bulletin published by the Phoenix Center tackles some of the issues around franchise regulation. The study addresses revenue problems faced by local government that may result from proposed changes to the current franchise fee system. George S. Ford and Thomas M. Koutsky authored the paper. (Several years ago Ford collaborated with Tom Hazlett on an excellent paper that showed empirically why "level playing field laws" had anti-consumer effects.)

Ford and Koutsky assume that franchise fees will continue to apply to gross revenues. They assume that franchise regulation will be maintained. And they conclude that new franchise revenues will result from wireline telecom firms entering the video marketplace. Time will bear out their first assumption. The second assumption may be well founded: Franchise regulation is likely here to stay but is by no means necessary. Their conclusions are worth noting. First, they find that successful wireline entry into the video market will increase revenue collections by as much as 30 percent. There is a little math involved but basically new entry drives prices down and with lower prices, more consumers are willing to buy video services. As a result, total gross revenues increase. To maintain the same level of revenues, the cap on franchise fees could be dropped from 5 percent of gross revenues to 3.7 percent, according to Ford and Koutsky.

I'm not convinced that the political attractions of a revenue neutral policy should outweigh the virtues of reduced regulation and taxation for all market participants - elimination of the franchising regime - but I can certainly agree with the final conclusion of Ford and Koutsky, namely, for consumers to see any "competition dividend" the current franchising process must be reformed.

posted by @ 6:32 AM | Cable , State Policy , Think Tanks , Wireline

Share |

Link to this Entry | Printer-Friendly

Post a Comment:





 
Blog Main
RSS Feed  
Recent Posts
  EFF-PFF Amicus Brief in Schwarzenegger v. EMA Supreme Court Videogame Violence Case
New OECD Study Finds That Improved IPR Protections Benefit Developing Countries
Hubris, Cowardice, File-sharing, and TechDirt
iPhones, DRM, and Doom-Mongers
"Rogue Archivist" Carl Malamud On How to Fix Gov2.0
Coping with Information Overload: Thoughts on Hamlet's BlackBerry by William Powers
How Many Times Has Michael "Dr. Doom" Copps Forecast an Internet Apocalypse?
Google / Verizon Proposal May Be Important Compromise, But Regulatory Trajectory Concerns Many
Two Schools of Internet Pessimism
GAO: Wireless Prices Plummeting; Public Knowledge: We Must Regulate!
Archives by Month
  September 2010
August 2010
July 2010
June 2010
  - (see all)
Archives by Topic
  - A La Carte
- Add category
- Advertising & Marketing
- Antitrust & Competition Policy
- Appleplectics
- Books & Book Reviews
- Broadband
- Cable
- Campaign Finance Law
- Capitalism
- Capitol Hill
- China
- Commons
- Communications
- Copyright
- Cutting the Video Cord
- Cyber-Security
- DACA
- Digital Americas
- Digital Europe
- Digital Europe 2006
- Digital TV
- E-commerce
- e-Government & Transparency
- Economics
- Education
- Electricity
- Energy
- Events
- Exaflood
- Free Speech
- Gambling
- General
- Generic Rant
- Global Innovation
- Googlephobia
- Googlephobia
- Human Capital
- Innovation
- Intermediary Deputization & Section 230
- Internet
- Internet Governance
- Internet TV
- Interoperability
- IP
- Local Franchising
- Mass Media
- Media Regulation
- Monetary Policy
- Municipal Ownership
- Net Neutrality
- Neutrality
- Non-PFF Podcasts
- Ongoing Series
- Online Safety & Parental Controls
- Open Source
- PFF
- PFF Podcasts
- Philosophy / Cyber-Libertarianism
- Privacy
- Privacy Solutions
- Regulation
- Search
- Security
- Software
- Space
- Spectrum
- Sports
- State Policy
- Supreme Court
- Taxes
- The FCC
- The FTC
- The News Frontier
- Think Tanks
- Trade
- Trademark
- Universal Service
- Video Games & Virtual Worlds
- VoIP
- What We're Reading
- Wireless
- Wireline
Archives by Author
PFF Blogosphere Archives
We welcome comments by email - look for a link to the author's email address in the byline of each post. Please let us know if we may publish your remarks.
 










The Progress & Freedom Foundation