Your Way, Right Away

As the theory goes, utilities, as sanctioned monopolies, are not subject to anti-trust regulation. Alternately, the legacy of legislative bodies have created a legal structure that purports to re-balance the broken market systems in monopolistic utilities with heavy legislation. What really results from a heavily regulated monopoly akin to a socialistic system rife with inefficiencies and high prices.

Our first step, however, should *NOT* be to force cable systems to allow cafeteria style service selection through legislation. This actually reenforces the idea that legislating a monopoly to provide innovative services is better than simply creating a market system where innovation must continue or those who fail will perish by nature.

Alternately, we should all be proponents of separating service from infrastructure. That is to say, let the wires and equipment that connects our televisions in our homes to a central communication center or headworks (the infrastructure) be separate from those who sell us the programming over the network (the cable television service provider). Once this separation is completed, force the infrastructure provider, as a utility, to provide an equal pricing structure to all those who wish to provide service over its network.

This will result in the choice of multiple service providers to each home. These providers will be forced to provide innovative and valuable products to consumers. If they do not, some one else will provide what consumers desire, and will push the non-performers out of the market.

Once this happens, there will be a real incentive for service providers to provide the type of entertainment desired by consumers. To the extent that content providers (the major networks) force the bundling of products together, there will also be an incentive for the newly competitive service providers to bring suit (anti-trust) against those content providers for illegally bundling content together.

Why, you ask, would the service providers do such a thing? Because this creates real value for the consumer. As such, “Economics 101” tells us that those who do a better job at creating value will be able to command better profits, typically through lower prices to the consumer due to a lower cost structure.

To see just how a little bit of competition in service to the home drives prices down, take a look at Kutztown, PA. Here, the local government installed a “fiber-to-the-home” network where at least two cable providers compete for customers. The result: “Service Electric of Allentown” (a cable providers) customers in Kutztown who have more than one choice pay 30% less for cable TV than their counterparts three blocks away that have only a single choice.

As long as we allow the infrastructure providers to bundle service with the infrastructure, there will never be an incentive for the providers to give fair-use rates to other providers (this is the problem with UNI-P, a system that