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Cable-company monopolies

Hello and good day to the person hired and appointed to read email sent to the mayor:

This email is also being sent to the San Diego Reader employee who seems to know where to go to get good information on some off-the-wall questions/concerns. My concern is: why is it that Cox Cable and Time Warner Cable have set areas throughout the county in which only one or the other — and not both companies — can provide service? If it is a California Public Utility issue, then I will probably be wasting my time with bringing this issue up with you (sorry, I mean, whomever is paid to read your email). My concern is probably falling on deaf ears, so I challenge the mayor to bring this “issue” to the attention of the general public via the media. This media attention would allow various customers to know they actually do have a choice, or, maybe they once did. I believe most are just afraid to bring the “cable company issue” to the attention of anyone important. Most people or persons within the jurisdiction of a city or a mayor do not like unwelcome attention due to fear of being ridiculed, embarrassed, deported, or simply being pointed out. Yet, I am not afraid of speaking my mind and actually do look forward to the actual city municipal code/rule/policy/law that states why it is “Cox” has a stranglehold on most properties south of the 52 freeway.

— Bryan Hendrix

Are you trying to say that the cable companies divvy up territory so that they can run exclusive monopolies on cable service to millions of people?

Yup. And it’s all perfectly legal.

But, wait a minute, Matt, doesn’t the government break up monopolies?

Yes, with a “but.” No, with an “if.” Cable television, according to lots of economists, is a “natural monopoly.” What that means is that the initial cost of doing business (i.e., setting up the cable infrastructure) is enormous and the cost of expanding the business (i.e., adding cable subscribers after the first one) is minimal. Because of that, it’s more cost effective for one company to provide cable service to a large area and for competition to stay out. At least, that’s what the government has maintained in the past. Because of this, cable companies operate as “franchises” that are overseen by local authorities. In our case, that’s the County of San Diego. There are two cable franchises in San Diego: Cox and Time Warner. Cox gets the territory south of the San Diego river, Time Warner gets everything to the north. They’re legally obliged to operate huge chunks of land because it’s strictly forbidden for them to “cherry pick” neighborhoods, by which I mean they can’t just wire up the rich neighborhoods and leave the poor ones without cable. In order to acquire those territories, the companies had to submit a proposal with a $2000 fee attached and a bond demonstrating they had about half a million dollars kicking around. Most of these territories are 25+ years old and the deals are long done. The natural monopoly is established and it’s unlikely to change.

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Hello and good day to the person hired and appointed to read email sent to the mayor:

This email is also being sent to the San Diego Reader employee who seems to know where to go to get good information on some off-the-wall questions/concerns. My concern is: why is it that Cox Cable and Time Warner Cable have set areas throughout the county in which only one or the other — and not both companies — can provide service? If it is a California Public Utility issue, then I will probably be wasting my time with bringing this issue up with you (sorry, I mean, whomever is paid to read your email). My concern is probably falling on deaf ears, so I challenge the mayor to bring this “issue” to the attention of the general public via the media. This media attention would allow various customers to know they actually do have a choice, or, maybe they once did. I believe most are just afraid to bring the “cable company issue” to the attention of anyone important. Most people or persons within the jurisdiction of a city or a mayor do not like unwelcome attention due to fear of being ridiculed, embarrassed, deported, or simply being pointed out. Yet, I am not afraid of speaking my mind and actually do look forward to the actual city municipal code/rule/policy/law that states why it is “Cox” has a stranglehold on most properties south of the 52 freeway.

— Bryan Hendrix

Are you trying to say that the cable companies divvy up territory so that they can run exclusive monopolies on cable service to millions of people?

Yup. And it’s all perfectly legal.

But, wait a minute, Matt, doesn’t the government break up monopolies?

Yes, with a “but.” No, with an “if.” Cable television, according to lots of economists, is a “natural monopoly.” What that means is that the initial cost of doing business (i.e., setting up the cable infrastructure) is enormous and the cost of expanding the business (i.e., adding cable subscribers after the first one) is minimal. Because of that, it’s more cost effective for one company to provide cable service to a large area and for competition to stay out. At least, that’s what the government has maintained in the past. Because of this, cable companies operate as “franchises” that are overseen by local authorities. In our case, that’s the County of San Diego. There are two cable franchises in San Diego: Cox and Time Warner. Cox gets the territory south of the San Diego river, Time Warner gets everything to the north. They’re legally obliged to operate huge chunks of land because it’s strictly forbidden for them to “cherry pick” neighborhoods, by which I mean they can’t just wire up the rich neighborhoods and leave the poor ones without cable. In order to acquire those territories, the companies had to submit a proposal with a $2000 fee attached and a bond demonstrating they had about half a million dollars kicking around. Most of these territories are 25+ years old and the deals are long done. The natural monopoly is established and it’s unlikely to change.

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RE: Cox Cable and Time Warner

Dear Matthew Alice,

I have noted your cogent, insightful and snappy responses for years, but you must be getting tired of putting meat on the bones of your responses. It is such a crock of poop for the cable companies to continue with their ‘natural monopolies’ that I was left wanting after your response to Bryan Hendricks. Whatever good rationale existed 25 years ago for these exclusive franchises does not hold water now. Were there even cell phones 25 years ago? It was 1988 in case the math is fuzzy.

My brother-in-law complained to me that since Fox and Time Warner can’t reach a Padres deal, local pro-baseball won’t be on his screen this season. He’d like to sign up with Cox, but...

Of course, when I think of those enormous start up costs that Cox and TW went through, my heart just aches, if you know what I mean. Curiously, the cell phone companies manage to share each others infrastructures, as do electricity, gas and water providers on occasion. But I guess the cable companies have borne such great burdens that protecting exclusive territories is just good public policy and a great consumer benefit. And it puts a special spin on the concept of ‘free enterprise’ and ‘market forces’.

So Matthew, if you have some spare moments and a little left over energy, I would appreciate it if you would investigate and maybe slam those self-serving free-loaders a bit. Hey, what about the wave of pure internet streaming services? Maybe we’ll be cutting the cable soon anyway.

March 15, 2013

Perfect timing for your question. This Thursday March 21, 2013, at 9 am the California Public Utilities Commissioners www.CPUC.ca.gov will have their annual San Diego County meeting at our beautiful new County of San Diego Conference Center Hearing Room, San Diego County Operations Center, 5520 Overland Ave., San Diego, CA 92123. If you work watch the 9 am meeting online from the CPUC website www.cpuc.ca.gov or by phone, dial 1-800-857-1917 and enter passcod 92105 to hear the discussion. Mayor Bob Filner will be at the meeting to give public testimony.

There is still time to organize a Padres to the People protest before the meeting. At public comment, Padre fans should ask this Time Warner and Fox Sports issue be put on the CPUC's agenda for a future meeting.

The first agenda item is Public Comment which starts promptly at 9 am. This is where San Diego Padre fans can make their wishes and complaints known to the actual decision makers.

https://ia.cpuc.ca.gov/agendadocs/3311.pdf

Note this correct webpage link is hard to find on purpose. Other online versions of this public meeting state the issues will be heard in San Francisco. Do not be fooled.

Mayor Bob Filner will be at the CPUC meeting to lead the charge on local Environmental issues including Item 41 San Diego Gas & Electric (SDG&E) Company's Local Capacity Requirement and Power Tolling Agreements. Which has to do with 2 new proposed gas power plants, the Quail Brush Power and Pio Pico Energy Center. See Item 41. The staff recommendation is to "Denies authority to enter into purchase power tolling agreements with Pio Pico Energey Center and Qual Brush Power." A fun fact is the estimated costs notes: "Costs will be confidential at this time. However these corporate monopolies are tricky. The CPUC Board can rule against the Staff Recommendation, and can approve the 2 new San Diego Gas Power Plant projects with just the Board's vote.

March 16, 2013

Even though the title of this is "cable company monopolies", let us not forget AMERICAN TELEPHONE AND TELEGRAPH (AT&T), who just happen to throw stones at ANDREW AURENHEIMER. As for myself, just by picking up the phone, ATT both spuriously billed me and harrassed and intimidated me using a collections agency, within two months of my application to CALIFORNIA LIFELINE PROGRAM. The scam used by the hugest of all COMMUNICATIONS MONOPOLIES in the poor sections of the city is to "forget" to send a technician, but remember to initiate billings based upon a "saved" or "reserved", TELEPHONE NUMBER. Does a telephone number for a location that has no wires or telephones exist, and, most important, why is this the program available to the poor?

March 16, 2013

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