On a subject related to regulation of services, MO asked this:

Why does Cox basically have a monopoly on cable/internet service in San Diego?

While I can’t say whether MO‘s assessment is accurate, one major explanation for why there are restrictions on consumer choices is that that cable companies need to (or, used to need to) get local government permission to use the public right-of-way to bring the cable hookups to your house. (Of course, you could also get satellite service.)

In September, City Attorney Mike Aguirre went after Cox for trying to provide cable services to the San Diego’s StoneBridge Estates, a move he said violated its franchise agreement with the city.

In reality, as we saw recently in the negotiations between the city of Carlsbad and Time Warner, getting a local franchise used to be essentially a quid pro quo: The cable company gets the right to bring you cable, and the city gets part of the profits, public-access channels and some other goodies.

From the San Diego Union-Tribune report on the Carlsbad talks:

“The city said we’ll let you have an extension,” said Paul Edmonson, a deputy city attorney. “In exchange, we’d like to increase the PEG (public, education and government) fee from 1 percent on the basic tier to 2 percent on the basic tier.”

… Edmonson said the city wants to increase the rate because under the new law, cable companies will not be required to provide services they currently do.

For example, Edmonson said, Time Warner provides equipment and a technical crew to cablecast City Council meetings, and that will become a city expense. The city also gets free Internet service in its libraries. It will lose that too, he said.

So, what about that new law?

Well, the internet has changed things. As this cover from The Economist last year suggested, phone companies are seeing their profits on traditional land-line services plunge, and many are now turning to bundling a “triple play” of services — phone, Internet, cable — to make up for it. In California, phone companies have argued that local franchising essentially creates a monopoly for cable companies, as most customers can only choose from one cable provider; in response to its pleas, the state Legislature passed a new law in the fall, which took effect this month, that basically strips local municipalities of their franchising powers. (Here’s one take on the law.)

Now, all cable franchises will be handled by the state.

California cities say this is another example of lawmakers muscling in on their territory and riding roughshod over local concerns, and cable companies say that their brethren in the phone industry will only market their services to wealthy residents, leaving the poor and rural folks underserved. Local franchising, cable companies say, ensures that all neighborhoods will have access.

A local councilwoman in Santa Barbara, where I used to cover City Hall, once told me that the cable franchise bill was a demon second only to the state’s bonus-density law, which allows developers to bypass local zoning laws by building below-market affordable housing.

This may not be the end of it, as the Federal Communications Commission has also gotten involved.

Later today, I hope to find out how the new law is affecting the city’s cable franchises.

An interesting personal anecdote, to give you a sampling of how the telecommunications world is changing: My first interview for a job with voiceofsandiego.org was done from Berlin, Germany, through a voice-over-Internet service.


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