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Boston Globe: If Cable Firms Act as Monopolies, Cities Should Be Able to Regulate

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If there isn't enough market pressure to keep basic cable rates from skyrocketing in Boston, the city should be able to step in and regulate them.

When the Federal Communications Commission took away Boston's power to regulate basic cable rates almost a decade ago, the assumption was that competition for pay-TV services would hold prices down for consumers. That assumption has not panned out. Comcast Corp., the successor to Boston's original cable franchisee, still dominates -- not least because its former monopoly status conveys lingering advantages that hamper competition even now. Those advantages help explain why Comcast's charges for basic cable -- now $15.80 a month for a package of 35 channels, according to a city report -- have risen by 75 percent since 2008.

So, Mayor Menino is right to ask the FCC to give the City Council oversight over basic cable rates, and US Senator John Kerry is justified in asking the commission to study whether cable operators have been taking advantage of deregulated markets to increase charges. It's telling that basic service in Boston costs twice as much as in Cambridge, where city authorities retain the power to regulate.

Comcast suggests that the more relevant comparison is to other pay-TV companies. Its basic rates are slightly lower than that of rival cable provider RCN, and around half as much as the entry-level offerings from DirectTV and Dish Network. Yet not all homes in Boston can easily accommodate satellite dishes, and RCN has failed to build out its network to the size the company once projected. Meanwhile, another potential rival, Verizon, has no plans to bring its FiOS service into Boston. No doubt that's partly because of the high logistical barriers of setting up a new network in a dense, congested, and often finicky city -- but also because Comcast's long head start in the marketplace limits the potential upside.

One might argue that, because basic cable is not a necessity, there's no urgent need for the city to try to hold prices down. And perhaps Menino should work that angle, too: The mayor could help educate cash-strapped constituents on using better antennas, which could improve their reception to the point that over-the-air channels would suffice.

Yet for many Bostonians, cable service, while not strictly essential, has become an important way to get entertainment and monitor public affairs. And if the FCC finds that Comcast enjoys a de facto monopoly, the city should be given the power to regulate it.


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