Delaying video competition costs US consumers $8.2 billion a year: Study

MUMBAI: American consumers stand to lose $8.2 billion in the next year if policymakers fail to remove barriers to entry, including local franchise requirements, in the video industry.

The Phoenix Center for Advanced Legal & Economic Public Policy Studies has put out a new Policy Bulletin. Total losses increase for each year of delay and would climb to a total of almost $30 billion if market entry is delayed for four years, the Policy Bulletin added.

The reports states that competition promises to benefit consumers through lower prices, enhanced services and expanded choices from both incumbents and new entrants. Actual market entry, however, faces a significant barrier in the form of local franchise requirements that are delaying entry and could postpone competition for a substantial period of time.

In calculating the costs that consumers will bear by any delay in reform, the Bulletin drew from a Government Accountability Office and other surveys finding that cable television prices drop significantly when cable providers face wireline video competition.

The actual cost to consumers may exceed $8.2 billion because recent surveys suggest that cable companies are slashing prices by more than 40 per cent in some markets in response to new competition from the traditional phone carriers.

Phoenix Center Chief Economist George S. Ford observed that the costs of delay may not be measured by dollars alone. "In some instances, needless delay may deter entry altogether by raising business costs and risk. When that happens consumers are permanently saddled with lower service levels and less innovation. Moreover, our estimate does not even consider the substantial adverse impact that any delay would have on the roll-out of new broadband services."

Phoenix Center Resident Scholar Thomas M. Koutsky expressed hope that policymakers will consider the consumer losses when considering franchise reforms designed to open the door to competition.

"Every month, American consumers pay more for cable service than they would if robust, wireline video competition was present. Claims that the franchising process protects consumers often forget the immediate and substantial harm that consumers must endure today, in an environment where the franchise process delays and stymies new entry.

"The costs to American consumers for the status quo are significant and substantial. Franchise reform should be an easy choice," said Phoenix Center President Lawrence J. Spiwak.

"Phone company plans for head-to-head competition with the cable industry should deliver substantial savings and new services, but those benefits are at risk because of outdated rules. For the sake of consumers, we need new public policies that speed competition, not delay it," added Spiwak.

Latest Reads
Star World to air 1-5 of 'Homeland'

Star World and Star World HD is all geared up to air the pulse-pounding action series 'Homeland.' The show tackles geopolitical moral conundrums of our current world. It has recently unveiled the teaser for the upcoming season 6 shows how Carrie Mathison will circumvent around another international...

Television TV Channels English Entertainment
Share all World Cup, T-20 feeds with Prasar Bharati, rights holder told

The telecast of all official one-day and Twenty-20 matches played by the Indian Men’s Cricket Team will henceforth have to be shared by the rights holder with the public broadcaster Prasar Bharati under the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act 2007.

Television TV Channels Terrestrial
Saregama returns to film music acquisition with Pen pact

Saregama India has inked a two-movie deal with Pen Movies. With this agreement, Saregama has acquired the music rights of upcoming Bollywood releases of Pen which includes Kahaani 2 -- Durga Rani Singh, featuring Vidya Balan and Arjun Rampal.Kahaani 2 is slated for a release on 2 December.

Television TV Channels Music and Youth
Q2-17: Zeel numbers, PAT up on higher Ad and Subscription revenue

The Subhash Chandra led content and broadcast player Zee Entertainment Enterprises Limited (Zeel) reported a 23 per cent hike in consolidated revenue for the quarter ended 30 September 2016 (Q2-17, current quarter) as compared to the corresponding quarter of the previous year.

Television TV Channels GECs
Best Deal TV appoints Hari Trivedi as COO

MUMBAI: Best Deal TV has appointed Hari Trivedi as the chief operating officer with immediate effect. Based in Mumbai, Trivedi will be responsible for overall sales and marketing. He would also be initializing lowest price offers and deals on Best Deal TV.

Television TV Channels People
Disney announces successor of MD Siddharth Roy-Kapur

MUMBAI: Walt Disney International has announced the successor to its former managing director Siddharth Roy-Kapur. As a second stint with the organization, Mahesh Samat has made a comeback and will lead The Walt Disney Company India as the managing director. He will pursue his new responsibility...

Television TV Channels People
Life is more imaginative than fiction in a story like POW, says writer-director Gideon Raff

MUMBAI: Sometimes, coming back home after 17 years is not always a happy ending. "Prisoners of War" is the story of three Israeli soldiers, who were held captive for that many years following their kidnapping while on a secret mission with their unit.

Television TV Shows Thriller
IPL media rights bidding postponed sine die

MUMBAI: The BCCI has made it clear that the media rights auction cannot take place till the time it gets a concrete go-ahead and a formal approval from the Justice RM Lodha committee. Till the evening of 24 October (Monday), BCCI did not receive the okay from the committee which said, "it is in...

Television TV Channels Sports
Q3-16: DIRECTV mitigates AT&T U-Verse TV subscriber numbers fall

BENGALURU: AT&T acquired DIRECTV added 323,000 net subscribers and hence helped mitigate the company’s Entertainment and Internet Services Group (Entertainment) segment’s loss of 326,000 U-Verse subscribers for the quarter ended 30 September 2016 (Q3-16, current quarter). About 70 percent of...

Television TV Channels English Entertainment

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories