11/15/2007

Take that cable guy!

This article here talks about how the FCC is moving to ban contracts that landlords have with cable companies. Before the ban, landlords determined the television entertainment choices you had in your building and how much you were going to pay for it base on their contract with the cable provider. This created a monopoly on cable service in these buildings. When the ban goes into effect, tenants will have the opportunity to select their own provider and be able to shop around for the best price.

3 comments:

Sophie said...

This is a great thing, because it is ridiculous to be forced to pay for things that you do not want or use. The removal of these landlord cable contracts will allow those tenants that want cable to have exactly what package deals they want, and for those tenants that do not want cable to not have to pay the additional money for this unused service. Therefore, as is usually the case, with less regulation more people benefit.

Hailey said...

Plus without the monopolistic cable company, the tenants will most likely pay less for their cable. Cable companies will have to compete and will likely want to get as many people in the complex to sign up for their service. This means they will have to drop their prices in order to have some advantage to the customer.

Dr. Tufte said...

I believe the FCC backed down on this one.

Anyway, I think the commenters need to think more about the benefits of natural monopoly. In this case, the idea was to avoid the huge cost of wiring big apartment buildings in Manhattan (which, for the most part, didn't get cable until the late 90s).

Also, there is an extensive form game being played here that is nasty for the cable companies. They had to put the cables in first. Now that they are there, their property right to them is being infringed upon. If they'd known this was going to happen they wouldn't have put them in at all.