Wisconsin consumers could potentially save between $121.30 and $149.01
annually on their cable bills if more competition is allowed, according to a
new report, The Benefits of Cable Competition in Wisconsin, released today
by the Wisconsin Policy Research Institute.
The report describes the benefits of competition on cable rates, and how new
phone companies are set to compete with cable companies for video service.
New technologies have allowed phone companies to provide television video
service over phone lines, which threatens to render the old cable
franchising framework obsolete.
Under current state law, cable companies are allowed the exclusive rights to
provide wire-based video service within a municipality’s borders. In
exchange, that municipality charges the cable company a fee, which they then
can use for general purposes. “Since 1985, Wisconsin law has been designed
to limit competition,” said Christian Schneider, the report’s author. “It’s
a lucrative endeavor to be able to buy government protection this
effective,” said Schneider, noting that cable companies pay $45 million per
year in Wisconsin to municipal governments.
In states where phone companies have been allowed to enter markets and
compete with cable companies for customers, there have been dramatic
reductions in cable bills. A United States General Accounting Office study
showed cable bills dropped an average of 23 percent in markets where phone
companies provided effective competition.
If that 23 percent were applied to basic cable rates in markets around
Wisconsin, consumers could see annual savings of between $121.30 and $149.01
(see chart). The report describes situations that could cause these savings
to be higher or lower, depending on the extent to which competition is
allowed and encouraged.
City Carrier Yearly Savings
Milwaukee Time Warner $149.01
Madison Charter $137.97
Stevens Point/Wausau Charter $137.97
La Crosse Charter $121.30
Eau Claire Charter $137.97
“Providing consumers with a choice in video services could ensure that
Packer fans aren’t stuck not being able to watch their team again,” said
WPRI President James H. Miller. A franchise law change will make new
programming and technology available to customers who previously could not
access cable or high-speed internet services, and could provide
municipalities with extra revenue, depending on how the framework is
structured, according to the report.
The full report can be accessed online at http://www.wpri.org/.
