Cable Competition Creates Jobs

By Erik Linask

Associate Editor

 

Some consumers have a choice of cable providers.  Others have but one option.  Soon, however, everyone will have the availability of IPTV (News - Alert) to replace or supplement their cable service.  Given that, it would be sensible for cable companies to be more agreeable to direct competition — while it would force them to offer a competitive service at a more competitive price, it would ensure them a place in the competitive landscape rather than alienating more consumers than they already have.

 

From the consumer perspective, most people understand that direct competition between telecos and cable TV companies would lower cable prices, but a new study estimates that video competition would also create a minimum of 101,000 new jobs — a third of them in the IT sector, where wage levels are 77 percent above the national average.

 

“This is one more piece of compelling evidence in favor of legislative efforts in Congress and individual states to open up the cable TV market to competition,” commented Larry Irving, former assistant secretary of commerce under President Bill Clinton and co-chairman of the Internet Innovation Alliance (IIA), which commissioned the study.

 

The study, conducted by Stephen B. Pociask, president of TeleNomic Research, documented research by public agencies and private groups that indicated full competition would lower cable rates by an average of 23 percent.  The TeleNomic study projects that lower prices driven by competition would attract new cable customers, expanding the market and the need for new employees.

 

According to the new research, competition would create 33,700 new jobs directly in the cable and video industry and another 67,400 jobs elsewhere in the economy.  Some of these jobs would involve building and operating the high-speed local broadband networks that companies are installing to add video to their lineup of broadband services.

 

Current regulations, however, prevent competitors from entering the cable market and compete with the traditional cable TV monopolies (and duopolies) to provide video programming, including Internet-based video services, which is why many groups are petitioning Congress to enact legislation that would enable higher degrees of competition.

 

It is certainly in the best interest of the consumer to have providers competing for their business, as it is sure to bring more quality services to market more quickly.  At the same time, competition between cable companies and telcos will help limit the further penetration of satellite television — satellite’s success helps neither cable providers nor telcos.