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12/13/2009

Cable Critics Ignore Bundle of Evidence

By: Scott Milfred, Wisconsin State Journal

A new state audit suggesting cable television prices are soaring deserves a collective yawn across Wisconsin.

The audit studied prices most people don't pay for services most companies don't aggressively compete over.

In reality, most consumers are saving money by bundling video, telephone and Internet services - thanks in part to greater competition.

The Legislative Audit Bureau just released its report tracking prices in 17 Wisconsin communities from July 2007 to July 2009.

Lawmakers asked for the audit to try to gauge the impact of a cable competition bill that took effect in early 2008. The bill streamlined the process for land-based video providers to enter local markets. Instead of negotiating with individual municipalities for the right to expand and reach new customers, providers can now apply for a single franchise from the state.

The legislation is making it easier for competitors to enter markets dominated by traditional cable television providers. For example, AT&T is now aggressively challenging Charter Communications for your business in the Madison area.

The audit found that since the cable competition bill kicked in, monthly charges for basic video services jumped 21 percent over two years. Expanded basic service, which features more channels, jumped 11.5 percent during the same time.

Critics of the cable competition bill pounced. Competition isn't doing any good, they claimed, and consumers now lack protection from being gouged.

Nonsense.

Only about 8 percent of cable subscribers in Wisconsin pay for basic service alone. And barely a quarter of customers subscribe strictly to expanded basic.

That means the state audit studied prices that two-thirds of video customers don't pay. On top of that, the number of channels offered to basic and expanded basic customers has increased faster than their cost. And the price hikes in Madison were much lower than statewide.

The audit is clear about its "limited scope," acknowledging a more thorough analysis "remains difficult to ascertain."

That's because more and more customers are bundling services to save money. And the variety of discounted packages you can choose from is vast.

For example, Charter just offered new customers in the Madison area basic cable, high-speed Internet and unlimited long distance phone calls for just $70 a month for a year. AT&T is offering 200 channels, high-speed Internet and endless phone calls for about $100 a month for a year.

Don't like those guys? No problem. DirectTV is advertising 150 channels for $25 a month for a year.

After your deal runs out, you might have to switch companies - or threaten to switch - to keep saving money. But that's far better than having only one provider to choose from. Competition is the best consumer protection.

Now I am hardly a fan of video providers. I haven't subscribed to any of them in more than a decade. An old-fashioned antenna gets me a handful of decent channels for free. I have better things to do than glue to the tube.

So if you still think you're paying too much for all those channels that blur together over time, do what I do.

Go without. You'll save money and something far more valuable - time.

Source: http://host.madison.com/wsj/news/opinion/column/scott_milfred/article_772e6cf4-e808-11de-8a9f-001cc4c03286.html


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