I don’t disagree that the cable package offered is not always attractive to the consumer. In that case, the consumer should signal his or her preference to the provider. But that is quite different than saying there is no choice (monopoly), a government protection racket for the preferred provider, or a Hobson’s Choice between cable/no cable or current cable franchise/new cable franchise.
Like so much in competition policy, these questions rely on one’s perspective and definition of the market. In the broadest sense, there is plenty of choice and competitive pressures to discipline the cable provider’s offerings. There are alternatives to entertainment, news and sports in the form of books, movies, radio, videos, music performances, visits with neighbors, magazines and even the Internet through the World Wide Web and the proliferation of blogs like this.
More narrowly, the multi-channel video market includes the direct satellite providers already mentioned below, satellite dishes which are set up in backyards across the country, the local cable provider, and broadcast television (multiple channels being the key point.) The mechanism for funding these choices — through subscription, private equipment purchase, or advertising — does not matter to the competitive analysis.
People in small towns should not go to the county commission to complain that there is only one Ford dealer in town. Invariably this leads to more restrictive regulation. It is especially the case if there is a Chevy, a Honda and a Dodge dealer right up the street. First off, it is inappropriate for the public sector to punish the Ford dealer because other auto suppliers don’t want to do business there. Secondly, even if there is only one seller of new cars — Mr. Ford — the abundance of transportation opportunities is nearly as big as choices in the video market. Likewise for cable.
One simple step toward improving the situation was alluded to below. County Commissions — or in some places franchise boards — not only “authorize” the cable provider to do business through a certificate of appropriateness or franchise agreement, they also regulate the rates. There may be some merit to a business certificate. If cable companies use public resources more than other companies, then it makes sense to keep track of them (roads). Similarly, it may improve public safety (gas and electric lines that don’t get cut through improved coordination.) But there is no justification for the price regulation other than to protect the incumbent.
