Is Deregulation of the Cable Industry good for the consumer?

The Cable industry has argued that government regulation will hold them back from giving the customer better services. Deregulation has been very good for the cable companies. It has let to much, MUCH higher prices. Up until 1984, local governments kept cable prices in check. But their deregulation has led to price hike after price hike (excluding 1993-1996 when the rates were briefly regulated).

The Telecommunications Act of 1996 opened the doors to deregulation and yet more price hikes. Since the Act was passed, cable rates have increased by 59% which is nearly three times the rate of inflation. So we have the problem of high prices, low competition and horrid customer service. While smaller operators actually improved their scores, larger companies continued to lose ground according to the American Customer Satisfaction Index. In the words of Dr. Claes Fornell who heads the study, Comcast set "an all-time low for the largest cable provider in the country." She also said, "there seems to be an element of monopoly-like pricing in the cable industry."

After Congress' deregulation of the cable industry worked so well, is it not fair of them to call for the government to stay completely away from network management and any net neutrality issues? But to cable's credit, it at least provided a real alternative to DSL and also put pressure on telco companies with VoIP service.

Cable has built a broadband infrastructure that, while not cheap or particularly fast when compared to other leading countries, reaches many Americans and in most cases are capable of faster speeds than DSL (DOCSIS 3.0 upgrades which are beginning should see more significant speed gains over DSL in the next few years). All of this without government regulation.

But looking at some recent FCC oversight hearings on network management which focused on practices at Comcast. Its easy to see how important it is to have some sort of public-interest regulator looking over the shoulders of these companies. The internet has become a key resource quick to rival water, heat and electricity as a utility. So such issues are a bit more than some puny private sector dispute.

While new laws and increased regulation may not prove a necessity to keep the internet healthy in the US, it would still be a shame if Congress and regulators like the FCC were so company minded that oversight was a mere formality and enforcement was toothless. This is not a desire by some to involve government in every private sector dispute, but more of a recognition that internet access in a low-competition marketplace is a bit too important than to have total self-regulation.

Like I read, if you think of it as wolves and chicken coops. When the chickens in the chicken coop are the most innovative chickens in the world, where it is a place of near magical scope and a wide variety of egg shapes and colors are laid by the chickens. Any good farmer would at least pay someone to watch the coop with a shotgun to keep the wolves at bay.