The New York Times is reporting the FCC is aiming to strike down thousands of cable contracts. Previously, apartment land lords decided who would provide cable and Internet to it’s residents resulting in residents with only one option. With this new plan from the FCC, apartment dwellers would be in control of deciding their service provider. This is good news for Verizon which has previously been locked out of many deals and bad news for the largest cable provider, Comcast.
Lack of competition results in higher prices and less innovation. I’ve seen this myself as my monthly Comcast bill is just under $150 for TV, Internet, and phone (which my roommates and I never use, but it makes the bill cheaper) service. Recently, Verizon started offering it’s fiber optic, blazingly fast Internet and TV service, Fios, to neighboring residence and when our Comcast contract is up in January we hope to switch. It’s not that the service is terrible, it’s that we got in on a special 3 for $33 deal and after January we expect those rates to go up.
Speaking of rate increases, FCC Chairman Kevin Martin noted cable rates have risen 93 percent over the past 10 years. Breaking the multi dwelling unit contracts will help spur competition in the space. Companies offering fiber service face a large cost in building out the infrastructure. Targeting areas with a greater density of customers makes more economic sense and a more lucrative opportunity.
This is good news for people like me, but it still doesn’t address the lack of choice to the big telelcos.