Commentary

Blanco blocks cable competition and (surprise!) Cox raises rates

The ink was barely dry on Gov. Kathleen Blanco’s veto of statewide video franchise reform when Cox Communications announced rate increases in Baton Rouge and Lafayette. The veto will slow BellSouth deployment of competitive cable TV services in Louisiana. In her veto, Blanco said she was more concerned with safeguarding the revenue flow local municipalities receive from the existing franchise fees. In other words, the demands of the tax man trump the documented consumer benefits of cable competition, at least in Louisiana. Cox said that prices for its expanded-basic cable TV will increase by $3.34 to $46.99 for its Baton Rouge. In Lafayette, rates for expand-basic will increase $5.94. The rate hikes take effect Aug. 15. While Cox will lower rates on its low-end basic cable tier, it removed popular channels such as The Weather Channel and ESPN, which will take over Monday Night Football broadcasts this year, from the basic line-up. Customers wanting either will have to upgrade to the more expensive expanded basic tier. In addition, Cox will raise prices $2 across the board for its high-speed Internet service. A spokeswoman attributed the increases to increased fuel costs and recovery from Hurricane Katrina. Tellingly, Cox is not increasing rates on its Internet-based telephone service, the one area where it competes head-to-head with BellSouth. Fortunately for Cox, apparently high fuel costs and Katrina clean-up had absolutely no impact on these operations. The franchise reform bill would have allowed BellSouth faster entry into Louisiana cable markets. Blanco’s veto turned back legislation that passed both houses of the Louisiana legislature by a nearly 3-to-1 and bucking a growing national trend in support of franchise rules that spark cable competition. Louisiana’s example now stands in stark contrast to states like Texas, where franchise reform was followed by competition and lower cable rates. So, one more time…Franchise reform means competition. Competition means lower rates and faster deployment of innovative technology, such as fiber to the home and Internet Protocol TV. Consumers win. Regulated monopolies and deliberate obstacles to market entry mean rate increases and delayed investment. Consumers lose.

Steven Titch served as a policy analyst at Reason Foundation from 2004 to 2013.

Titch's work primarily focused on telecommunications, the Internet and new media. He is a former managing editor of InfoTech & Telecom News (IT&T News) published by the Heartland Institute. His columns have appeared in Investor's Business Daily, Total Telecom, and America's Network, among others.

Prior to joining Reason in 2004, Titch covered the telecommunications industry as a journalist for more than two decades. Titch was director of editorial projects for Data Communications magazine where he directed content development for supplemental publications and special projects. He has also held the positions of editorial director of Telephony, editor of Global Telephony magazine, Midwest bureau chief of CommunicationsWeek, and associate editor-communications at Electronic News.

Outside of the telecom industry, Titch conducted rich media and content development for publishers and corporate marketing groups. He has also developed and launched his own web-based media, including SecuritySquared.com, an on-line resource for the security industry.

Titch graduated cum laude from Syracuse University with a dual degree in journalism and English.