One of the great misfires of the Reagan deregulation effort was unleashing the might of the cable television industry on unsuspecting and unprotected consumers. Rates for basic service have soared since the passage of the Cable Television Act of 1984, which stripped local governments of the power to control cable rates.
In Montgomery County, rates have skyrocketed 1,394 percent for a similar channel offering since the law took effect in 1986. In Baltimore County, rates have risen as much as 105 percent; in Howard rates have jumped 86 percent; rates in Annapolis have increased more than 70 percent. The consumer price index, by comparison, rose about 25 percent.
Welcome to market forces at work. The problem is two-fold. First, cable TV is an enormously capital-intensive business. This severely limits who can compete and for how long. Second, few areas can support more than one operator serving the same households. Even in places where two systems exist, prices are driven down for a while, but then one operator buys out the other or a third comes in and gobbles up the two. Bingo, prices shoot up.