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Wednesday, August 06, 2008

Broadband, Phone Companies May Soon Break Cable Monopoly

Congress has been tinkering with the idea of opening up the cable markets for the past decade or so. The main talk, though, has been about unbundling services (which allows you to pay only for channels you want) instead of locking you into a "tier" service.

Before any reasonable cable overhaul happens, though, other services may soon offer a local alternative to the cable issue.

Verizon (Can you hear me now?) has spent stacks of cash laying fiber optic networks around the country and has started offering cable programming through that network. Right now the company is simply testing the service in Massachusetts, but its goal is to roll out a nationwide cable alternative.

The downside is that customers are still forced to pay in bulk, tiered services; however, anyone who has wrestled with the cable company over service knows that having an alternative is nice.

That competition has been good for consumers in the mobile phone space, although it's certainly taken its toll on companies used to having its subscribers locked in. These days, consumers are slowly being given the option to change service providers without early termination fees or without being forced to buy new hardware.

That true competition has forced companies to compete with new services and reduced prices, which is the backbone of free-market competition.

The new cable services offered by Verizon and increasingly by online streaming services such as Hulu.com mean that cable companies will no longer have a stranglehold on its customers. And if things progress properly, like the mobile industry, they will be forced to compete on services and price.

By Brad at 11:51 AM | Comments (0)

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