Consumer Issues

The cable industry spends millions of dollars annually on government relationships. Regularly this industry employs the spouses, sons and daughters of influential mayors, councilmen, commissioners, and other officials to assure its continued local monopoly and preferred market allocations, many of which have been questioned as unethical.

The monopoly on cable television has historically been enforced by local governments. Cable maintains thousands of such de facto monopolies. In order to provide service to individual homes, a cable provider must place its cable wiring along and across local streets or other rights-of-way. To do so, the provider must get permission from the local government(s) that own those streets via rights-of-way permits.

Operational permission comes in the form of a document called a local franchise agreement. Most of local government(s) chose to grant permission to only one company, however, recently states have developed broader franchising laws to drive more investment and competition. Changes in the federal law in 1992 had forced local governments to grant permission to other companies to provide service, however the U.S. Government found in 2006 that only 2% of U.S. households had a competitive choice. In some cases Comcast, with municipal government approval, had entered into market allocation schemes. By agreeing to not compete head to head, consumers thus are perpetually locked into a single monopoly cable provider with annual price escalations reaching 93% in the past decade