Competition to the rescue?

Baltimore County: Two cable companies want to break Comcast's cable television monopoly.

June 20, 2000

SOMETIME SOON, Baltimore County residents may get their first glimpse of what deregulation in the cable television industry really means. Two companies -- Starpower and American Broadband -- want to offer service and compete with Comcast, but the competition may not solve the ills affecting current cable service.

Ask the county's 210,000 cable consumers about cable service, and they'll likely grumble about escalating bills. What really bothers them, however, are the inexplicable service interruptions, the difficulty reaching service representatives and cable repairs that are not made when promised.

Competing cable operators may provide Baltimore County consumers with lower-priced service with more channels, but their service is likely to be no better than Comcast's.

Cable companies don't have much leverage to control their costs associated with programming, debt service and equipment purchases. Service is the only area where cable operators can substantially cut costs, which they do by keeping a skeleton staff of operators and using subcontractors for service calls.

It's hard to see how Starpower and American Broadband will run their service operations any differently, even though they're breaking up Comcast's monopoly. And since these two companies are building systems from scratch, skimping on service operations would be an easy way to make up for high start-up costs.

The County Council will hold hearings on whether to negotiate franchise agreements with the two new cable companies. Since federal law allows cable companies to bypass local governments, the council has a lot less control over these companies than it did when it granted the first cable franchise.

Even with this diminished power, council members should use what power they have to obtain some ironclad commitments about maintaining a high-level of customer satisfaction for the county's cable customers.

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