Cox Cable sure picked some good timing to announce a rate increase, just days before the Louisiana Legislature opens its regular session with a couple of bills on tap to break the near-monopoly cable companies have on the provision of cable services.
HB 869 by state Rep. Jeff Arnold and SB 422 by Sen. Ann Duplessis would allow the granting of cable franchises through the state and bypass most obligations and obstinacy heaped upon competitors to cable companies by local governments. By reserving the power to grant franchises to local governments, it has discouraged competition because of the start-up costs a local government can impose including fees that simply transfer money from cable consumers into the accounts of local governments for no other reason that local governments can do that. Having the state franchise providers can prevent discriminatory costs that have the effect of allowing cable companies to monopolize the service.
A similar bill was attempted in 2006 and passed the Legislature. But among her most stupid moves, former Gov. Kathleen Blanco vetoed the bill. Election year 2007 seemed to stymie the bill’s chances, but it’s no surprise that New Orleans-area legislators Arnold and Duplessis are leading the charge in 2008 because New Orleans suffered a 43 percent increase in cable rates (courtesy of Cox Cable) over the past eight years, well past the rate of inflation.
Cable companies may respond that such rate increases have come as a result of expansion of service to individual household, i.e. more channels. But the most prominent point about these bills would be they would encourage other providers (as already are able to in many states) to come and provide on-demand service, where instead of being locked into a limited set of packages which is the cable company strategy, consumers can pick and choose which specific channels they want to have without having to pay for many they don’t want.
These bills can expect severe resistance from cable companies and local governments – both extreme hypocrites on this matter. Cable companies successfully fought for providing phone service at the state level, yet they want to prevent phone (and other companies) from doing the same with cable. Further, they are aided and abetted by local government who can refuse to grant franchises to any other competitors and do so unless huge concessions are involved, because they see allowing cable companies to be monopoly providers as a conduit to pass money from consumers to their own treasuries.
If not for Blanco’s stupidity, consumers already would have been enjoying lower prices and better quality. It’s imperative that one of these bills in pretty much the form they currently exist be passed and sent to a pro-competition Gov. Bobby Jindal finally to help out Louisiana telecommunications consumers.
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