Cable Market Power For Dummies

[SOURCE: Tales from the Sausage Factory, AUTHOR: Harold Feld]
[Commentary] Most folks outside of Washington DC still find their cable company an obnoxious monopoly, despite the presence of competitors like DirecTV, Dish Network, and the occasional overbuilder like RCN. But, despite the fact that customers express far more satisfaction with satellite and overbuilder service, most folks remain subscribed to cable. What gives? And how does cable get away with raising prices and favoring affiliated programming in the face of this “vigorous competition.” Needless to say, the cable folks respond with a host of fancy economic papers that they file with the FCC and present to members of Congress. My own impression, having spoken with a number of economists, is that the cable companies use economics the same way Creationists use intelligent design. The point isn't to engage in real scientific inquiry. The point is to throw enough scientific sounding stuff out there to confuse the issue and make people believe there are two equally valid sides to the debate. My problem is that the FCC and Congress usually end up playing the Dover School District Board rather than Judge Jones.
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