The Consumers Union wrote a letter to all five FCC commissioners expressing its surprise at the presumption of competition the FCC seems ready to install, since there is in fact no particular evidence of any competition.
CU is particularly surprised that the FCC would effectively break up the Comcast/TWC merger and then turn around immediately with this gift to large cable companies.
CU said, “In our experience – and in the experience of consumers – there is little evidence to suggest that today’s cable marketplace is a competitive one. By the Commission’s own figures, the annual cost of monthly pay-TV continues to outpace the rate of inflation. Despite rising prices, consumers continue to express dissatisfaction with many of the largest cable providers. In Consumer Reports’ most recent annual telecom service satisfaction survey, for example, many of the largest cable companies ranked at the bottom of our annual ratings.”
CU added, “Furthermore, as we have noted in previous Commission filings, consumers continue to tell us that they have no competitive alternatives and find themselves without meaningful options due to how the cable market is carved up into geographical clusters.”
Telco options have broadband but aren’t available everywhere, and satellite services do not offer broadband at all, making them unsuitable options for many consumers, said CU.
CU cited the obvious: “In a truly competitive market, competing providers would work to keep customers happy or risk losing them to competitors. The fact that customers of the largest pay-tv services are highly dissatisfied with the services they receive, yet remain customers, is a strong indication that the market lacks competition, and is certainly relevant to the FCC’s consideration of whether changing the presumption would be in the public interest.”
Cable companies are consolidating, especially along regional lines, further eliminating consumer choice. OTT options are not yet competitive, and entrenched MVPDs are undertaking strategies to minimalize them. They also tend, said CU, to favor their own programming over that created by other companies.
For all these reasons there is no reason to grant a presumption of competition, it said.
