Conquering the remote control

I had a phenomenal break through the other day. A regular lifetime moment. I conquered my remote control. For years I’ve had this box on my coffee table that held my remotes, all 6 of them. Long ago my kids told me that I could consolidate most of them into just the one from the cable company. Since technology and I just about coincide I didn’t have the guts to try it until a frustrating night last week when I couldn’t make anything work.

It was a nice illusion while it lasted. After conquering the remote I decided to get rid of about 250 of the 320 channels I pay for. After a confusing 15 minutes on the phone with a bored customer service representative I surrendered. For now the cable package is the cable package, love it or leave it.

Since cable TV wires were invented in northeastern Pennsylvania in 1948 the service has always enjoyed a monopoly. It took a lot of guts, risk and money to wire this state for cable. Detractors mocked the system as a fool’s errand. At the time the idea was considered silly that people with good reception from their roof antennas would ever pay to watch television.

Now the cable companies laugh – all the way to the bank. According to the National Cable and Telecommunications Association over 65 million American households subscribe to basic cable. The trade group estimates that annual cable revenue this year will top $69 billion. Business is so good at Pennsylvania’s giant Comcast that the company felt obligated to file with the Securities and Exchange Commission the fact that it will cap this year’s bonuses for top executives at $12 million. In Comcast terms, with 6 executives affected, $72 million is nothing. In my neighborhood the standard cable package sells for over $50 a month. Try that times 21 million subscribers then add people like me who can’t live without paying even more to get The History Channel. Paying a bonus to one person that is the equivalent of the combined annual earnings of about 250 Pennsylvania working families is easy.

Those are the kind of revenue numbers that only unregulated, utter monopolies can generate. The question is did cable companies earn or buy their monopoly status?  In the early days of cable the incredible costs of installing wires narrowed the competitive field quickly. A system of franchising agreements with local governments, that rewards them with handsome royalties every year, locked in the cable companies hold on communities. While satellite TV has made some inroads large segments of the population, people who live in townhouses, condominiums and apartments usually can’t construct receivers.

Comcast might be looking to cap bonuses because real competition might be coming. Telephonic giant Verizon is constructing something called FIOS which stands for fiber optic something or another but really means freedom in our state. Its development will mean direct competition for cable television and high speed Internet access.

Following cable precedents in Pennsylvania, Verizon must negotiate local franchise agreements. In some towns, councils, commissioners and supervisors are balking at allowing it in. Foolish rumors abound that towns with public access channels will lose them, while others are just trying to fatten their treasuries at the expense of competition.

There’s no turning back. Those governments that don’t foster cable competition will become victims of their own greed. As word spreads of the new cable environment residents will demand choice. The local governments that haven’t negotiated competitive agreements will lose any leverage they might have now. If they don’t respond responsibly the state or federal governments might cut them out of the action. Either way someday soon we will have at least a competitive choice to help us conquer our remote controls.

Albert Paschall
Senior Fellow
The Lincoln Institute of Public Opinion Research, Inc.