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Monday, March 6, 2006

There Are No Cable "Monopolies"
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I've already spoofed Consumers Union for its usual quick predictable statement that the proposed AT&T/BellSouth merger will leave consumers "paying inflated charges." That's Control PIC on CU's word processor. Due to the technological changes that have enabled facilities-based competition among wireline, cable, and wireless platforms, I expect--subject to the usual antitrust and FCC reviews--that the merger will be approved on the basis that consumers will ultimately benefit. (And the FCC should not allow its "public interest" review to turn into a rent-seeking bazaar in which a grab bag of conditions are proposed which have nothing at all to do with the specific competitive effects of the merger.)

But, even taking into account, the quite natural press release hyperbole announcing a momentous merger, I do find the ATT/BS press release's reference to "cable monopolies" off-putting, aside from being mistaken. The press release states: "Consumers seeking a real alternative to cable monopolies should see faster and more economical deployment of next-generation IP television networks and similar services as a result of AT&T’s groundbreaking entry into IPTV and the unparalleled research and development work at AT&T Labs, coupled with BellSouth’s extensive deployment of fiber networks for DSL and other broadband services."

The merger might well put AT&T and BellSouth in a position to be a more vigorous competitor to the cable companies sooner than they otherwise would be for the reasons stated. This is a good thing. But AT&T and BellSouth know that cable does not have a monopoly in the video market any more than they have a monopoly any longer in the fiercely competitive voice market. Cable's market share in the multichannel video market is around 60%, and falling. Cable faces stiff competition from the satellite providers, and now the telcos are entering as well, as the AT&T/BS press statement says. This too is good.

Whether it is advocating the conusumer benefits that it believes will flow from its proposed merger, or from reform of the cable franchise process, rather than referring to cable as a "monopoly"--which it is not--I'd rather see AT&T say something like this: "Consumers will benefit from even more competition if this merger is approved..."

posted by Randolph May @ 10:40 AM |

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