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10/27/2009

Cable Competition Paying Off

By: Editorial Board, Wisconsin State Journal

Does a $3 price increase for Charter's expanded basic cable television service in Madison mean state efforts to encourage more competition have failed?

Of course not.

That $3 increase, to $54.99 per month, involves only one product offered by one company that most people don't buy. Most Charter customers bundle services or take advantage of special offers to get much better deals. For example, Charter is now offering cable television, high-speed Internet and unlimited telephone calls for about $100 a month.

And if those customers affected by Charter's $3 increase don't like it, they can now switch to AT&T U-verse. That option didn't exist until a year ago when AT&T entered the Madison market thanks to state legislation making it much easier for competitors to take on Charter.

If anything, that $3 boost for expanded basic cable would likely be higher if AT&T wasn't around. DirectTV also has ramped up its game, advertising more than 150 television channels for around $30 a month in the Madison area.

The competition for your business is fierce, and the Wisconsin Video Choice Act has contributed to that positive trend.

A Minnesota study suggesting cable television prices increased by 27.6 percent from December 2006 to February of this year in Wisconsin is hardly relevant. That's because the figure includes price hikes from before the state legislation took effect and well before competitors such as AT&T emerged. It also ignores the popularity of bundling services to save money.

Critics suggest the Video Choice Act, approved by Democratic Gov. Jim Doyle and a bipartisan Legislature less than two years ago, is a failure because prices for cable television haven't dramatically fallen since then.

But that was never the goal. The goal was to stop prices from continuing to soar while expanding consumer options and creating more deals and savings through competition. All of that does seem to be happening in the early implementation of the law.

Source: http://host.madison.com/wsj/news/opinion/editorial/article_be5343b2-c287-11de-a3c4-001cc4c03286.html


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