Thursday, August 17, 2006

Anyone for Monopoly

Most people in the world have probably played monopoly, spent many an evening in cut-throat negotiation, setting up payment arrangements, and trying to amass the most money possible, at the expense of everyone else. Great idea for a game, but its lousy in real life.

In the US, and indeed the UK, there is at least one industry, where monopoly is not just a game, or a practice, its a legally recognised business method. That industry, is the cable companies. In the UK, there is Telewest/blueyonder, or NTL, you can only have one, not the other. In the US, its Charter, Comcast, Time-Warner, and one or two others. No two of these companies competes directly against another, at the local level. Nationally, they bite at each other with packages, and deals, but the flat out truth is, to the consumer, there is no competition. If you live in a Charter area, you can't get Comcast, If you're in a NTL area, no Blueyonder for you. The end result is that consumers lose out, especially in the US.

If, in the US, you live in an urban area, but not near a large city (say a small town of 10,000-30,000 people) or if the town is in a hilly region, standard broadcast TV is out. Your choice then is between either satellite, or cable. Many places however won't allow dishes, or find them impractical (if you have nowhere to mount a dish to face the correct way, you've got no chance of picking up the signal). In those situations, cable is your only choice. In that case, doesn't matter if they lie, deceive, or follow illegal business practices, you have to deal with them, and they can charge what they want. I spent some time recently, with a friend of mine who was ill. He lived in a small town, and used Charter for his TV and internet. He wasn't a long time user, having only had it installed around Easter, but already the complaints and problems are astronomical.

Problems range from mis-selling goods and services, workmen arriving late, and telling stupid lies as to why, repeatedly inaccurate bills, customer services that don't reply to communications, often tell you you're not even in their 'service area' (exclusive/monopolistic sales area) you get someone with all the brains of an aspidistra.

In any other industry, even one of those would often cause customers to switch to a rival, but cable companies know that can't happen. You're in their service area, so you're in no-one else's. The only alternative is to pay a large sum of money, and go to satellite. If you can't, or are unwilling to, they have you over a barrel.

Currently, the EU is fining Microsoft extensively for its anti-trust practices, several similar investigations into them were carried out in the US. Other companies have been investigated similarly, and yet, all too often, the focus is backwards. A monopoly is where one business have over-reaching dominance in the market, and all too often that's interpreted as nationally. Two companies competing across the country is very different from two companies exclusively serving half the country each. The point of antitrust laws is to help the consumer by allowing them the choice to decide between competing products. If anti-trust accusations are levelled, its usually at the dominant company, by its competition.

If, however, you want something done about this, to whom do you complain? In the US, it could come under the FTC, the FCC, the DOJ, the state prosecutors office, and a number of others. In the UK, your best bet is probably OFCOM. Will they return your calls, and take you sensibly, however, that is another matter all together. The windows media player hullabaloo might seem important and 'protecting customers' for other media player companies, but does it really affect the consumer? I use windows, and I use Media player Classic, or, for DVDs, PowerDVD. In no way has my copy of windows with the media player attached, substantially affected my freedom to choose other competing products.

Of course, if anyone can point me to somewhere, in either the US or UK, where someone has the choice between two cable companies, then by all means drop me an email – address, as always, is at the top right –

Ben jones

1 comment:

  1. One small correction: if you're considering the cable company "monopoly" on a national level, it would actually be an oligopoly. But you got your point across either way.

    Being an inhabitant of the Bay Area, I'm one of the fortunate few who has at least a little choice in my cable service (Comcast or new AT&T). The catch? They both still charge an arm and a leg for cable services (we're paying close to $45/month for nondigital extended cable, digital costs another $10/month).

    I believe cable will become dated in the coming years, though. With companies like Verizon rolling out FIOS networks nationwide, it's only a matter of time before we can stream digital-, and later even HD-, quality programming from the Internet. If some companies offer an option to stream TV programming for a set monthly charge (or even charge a very low rate on a per-show or similar basis), cable television becomes entirely obsolete.