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To: ahhaha who wrote (3417)	12/16/1998 1:34:00 PM
From: ERM	Read Replies (2) \| Respond to of 29970

<<I don't know where you live, but where I live there is one designated carrier. No one else is allowed to enter.>> Then your municipal authorities are breaking the law. <<The fear here has been that if another company was allowed in, prices would rise.>> Obviously that's ridiculous. The problem has been that building an overlapping cable system (or any system for that matter) is very capital intensive, and historically it has been very hard to make it profitable. I say historically, because operators were limited to 30 to 40 channels of video. Now of course there are many more services available, but for a new carrier these can be delivered cheaper via wireless. Also, historically there has been the problem of vertical integration making it difficult for new entrants. Before the 1993 Act, owners of systems also owned the programming, and they could choose not to sell it to anyone they didn't want to. <<After decades of this tradition the potential competitors don't even bother making the attempt because they know they can't operate profitably.>> Now you seem to agree with me, unless you mean they won't be profitable because of additional government imposed costs. If that's the case, then again, a franchising authority would be breaking the law which caps their "take" at 5% of revenues. <<You say that in areas where several providers operate, they operate as monopolies and they are unprofitable. That is the case because the FCC fixes the price at a rate where the companies can't break even.>> Actually they operate as duopolies. The point is that the FCC has only regulated cable rates since 1993, yet with entry of Ameritech, dual cable system communities have actually increased in the last five years, so that can't be the reason. <<So how could you claim that the market is dictating anything?>> Why, before 1993, weren't cable prices $50? or $75? The reason is because at those prices second systems could be profitable. As long as prices as stayed in the $20 to $30 range, it wasn't economically feasible for someone to spend the capital required to build a second system. That combined with programming access problems kept out overbuilders, not the government.