Cable CompetitionWritten By: CHRISTIAN KLEIN
Article Date: 06-01-2006
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
Growing equipment markets and promoting free market values
AED has a reputation in Washington as a leading champion for infrastructure investment. One of AED's top public policy priorities has long been to ensure strong federal highway, airport, and water construction programs. Contractors working in those areas are key customers for AED member products and services. But just as importantly, physical infrastructure is critical to our nation's economic growth, national security, and public health and safety.
We also recognize that when it comes to infrastructure, the federal government can't, and frankly shouldn't, do it all. States and localities have a responsibility to invest in roads, airports, and sewers. (With recent federal cutbacks in water construction funding, states should be doing even more in this area!)
Businesses also clearly have a role to play in creating the infrastructure necessary to help America thrive. Now, a bill working its way through Congress could spark one of the largest privately funded infrastructure build-ups in American history.
The legislation in question is the Communications Opportunity, Promotion, and Enhancement Act (COPE), H.R. 5252, a bill introduced by House Energy and Commerce Committee Chairman Joe Barton (R-TX) in May that would bring a new era of competition to the cable television industry.
For years, cable companies have had what are effectively states sanctioned monopolies throughout the country. One of several companies would get exclusive access to a geographic market area in exchange for guaranteeing universal service and paying a franchise fee to the locality. Sometimes service was good, sometimes it wasn't, but the fact that there was no competition meant there was little incentive to improve, innovate, or find ways to reduce prices.
The COPE Act would bring the cable industry into the 21st century by transitioning it from a regulated monopoly to supervised competition. That process is already under way in several states where cable competition laws have been adopted. (Texas and Virginia are two of many).
Barton's legislation would harmonize the laws and make competition the national norm more rapidly.
The bill is getting bipartisan support on the Hill. Republicans are embracing it because it promotes free market principles. Many Democrats representing economically underdeveloped urban areas believe their constituents will benefit from more choice and lower access fees for cable and Internet service. A wide cross section of the business community is on board because the bill promises to reduce communication costs.
As might be expected, the only real opposition is coming from cable companies balking at the prospect of having to compete on a level playing field.
AED was one of the first construction industry trade associations to recognize the benefits of cable competition for its members. First and foremost, it would expand markets for AED member products and services. Telecom companies have said their companies plan to invest more than $15 billion in physical infrastructure (i.e., putting new fiber optic lines into the ground) over the next few years if the bill is enacted into law. That will almost certainly mean a lot of new demand for equipment and a lot of new jobs.
Cable competition will mean faster and cheaper Internet service for equipment distributors, not an insignificant issue for an industry that's becoming increasingly wired.
But there's more to the cable competition issue than the bottom line - important principles are at stake. AED may be a leading advocate for infrastructure, but just as importantly, your association is also known as a zealous champion for the free market and entrepreneurship.
AED is committed to the idea that free and fair competition will ultimately yield the best prices, service, and products for customers. Everything we've seen suggests the COPE Act would do all that and more.
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