Cable Competition in Michigan Moving Slowly, Study Says
Only One in 20 Households Receiving Benefit Of Cable Law
By Linda Haugsted -- Multichannel News, 1/29/2008 3:28:00 AM
One year after the passage of a law designed to ease the entry into the cable market of competitive providers in Michigan, only 110 of 2,000 communities in the state have a choice of cable providers, according to a study by the law firm Howard & Howard, which counsels municipal governments.
That translates to about one in 20 households receiving the benefit of Public Law 480, which replaced community-by-community cable regulation with a single state point-of-contact. The law was passed at the urging of AT&T Inc., which said the traditional franchising scheme was a barrier to quick entry to the market.
"AT&T has received video franchises in some of the larger communities in our state," said attorney Jon Kreucher commented, "but in many of those communities, the pace of AT&T's buildout appears to be moving rather slowly. That means that the vast majority of our state's residents will probably be waiting for cable competition for a very long time."
The report, released today, gave no love to incumbent operators, either, noting the state's major operators, Comcast and Charter, scored poorly on the annual American Consumer Satisfaction Index.
"Unfortunately, cable companies scored the triple-play last year: Very poor levels of new competition, exceptionally bad levels of customer service, and prices that often increased ten times faster than the national consumer price index for other forms of recreation," Kreucher said. In many parts of southeast Michigan, Comcast's prices for the lowest level of cable service rose between 25% -- 50%, while the CPI for recreation logged an increased of just .8% during the same period.
"Given the very low levels of wireline competition in the state, the decline in customer service, and rapidly increasing cable prices, we have to rate the current situation in cable service as 'very poor,'" Kreucher concluded.
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