Monopoly Pricing and Monopolistic Malfeasance in a Recession
Lo and behold a couple of weeks ago, some of the channels on my TV stopped working. I realized it when I tried to watch MSNBC’s Morning Joe, a simply must have for me first thing in the morning – great guests, good politics and economics and lots of humor. Clicking around, I realized that I had also lost a lot of other channels and none of them did I think of as premium rate channels. They included A&E, Lifetime, Bravo, the History Channel, C-Span and some silly paid programming channels. I couldn’t make rhyme or reason of the selection, but one thing was certain – I am sure that those channels come with the basic coverage. The odd thing was that a couple of other televisions I have did not have any missing channels. But I’m not a big TV watcher, so I didn’t pay much attention to this difference in reception.
I called my local cable company – the only cable company that services my area – and explained the problem, thinking they would simply fix it all remotely. Instead, they told me that they were eliminating analog channels and in order to get those channels back, I needed to have a cable company card inserted into the television. The two televisions that were unaffected by this ‘outage’ had cable boxes, they explained when I queried as to why some televisions were working just fine.
“And how much do the cards cost?”, I asked. $2 per month rental. Well it seemed a small enough price and I really wanted Morning Joe, so I arranged for them to come to the house and install the cards. When they arrived, they informed me that the TV’s were too old and there was no place for a card, but they could solve that problem if I just rented a cable box for $6.50/month Or they said I could buy new TVs with card slots and I could just pay $2/month.
So regardless of what I did, they had me. The difference was $50 per TV per year, which I did not want to give to them, so I went out to Costco and bought new TV’s. At the rate of $50/year, the payback would be about 4 years, and the new TVs were lightweight and full of all the new bells and whistles.
Back came the cable company serviceman to install the cards, only to inform me that these new TVs did not have a card slot. In fact, calling around to Wal-Mart, Best Buy and P.C. Richards, I came to find out that no retailer carries those TV’s any more. I returned the TV’s to Costco and faced the fact that the cable company had me – if I wanted Morning Joe I would have to pay $6.50 for the privilege each month, a total of $75 per year. Pure profit for the cable company and no place for me to turn to find a more economic solution because my cable company has a monopoly in southwestern Connecticut. Dishes simply don’t work well where I live.
Where is the Government in all this? Consumers in need were supposed to be helped in the switch from analog to digital with Government assistance to buy a new TV, but did the Government know that part of the analog to digital plan was to allow the cable companies to raise their incomes by $75 per year for every television out there not already with a cable box? In the midst of a recession, the sudden increase in expense for so many people is an insult and for many I am sure unaffordable. I am sending this blog to Richard Blumenthal, the Attorney General in Connecticut.
May 26th, 2009 at 12:03 pm
“Where is the Government in all this? Consumers in need were supposed to be helped in the switch from analog to digital with Government assistance to buy a new TV, but did the Government know that part of the analog to digital plan was to allow the cable companies to raise their incomes by $75 per year for every television out there not already with a cable box?”
I’m sorry…what country did you say you were living in? Gov’t assistance to buy a new TV? SAY WHAT? At least you can afford cable TV, and I assume by this web address that you aren’t connecting to the Internet via modem, as I do. If you think you’re going to get your “Morning Joe” over an antenna, you are in for a rude awakening! Because THAT is all the Gov’t is offering anyone. If you have an old analog TV, they will give you a $40 coupon (or two) you can use towards purchasing a digital to analog conversion box that will allow you to receice BROADCAST digital television signals. If you can afford CABLE or SATELLITE, then you are on your own, and considered to be digital compliant; You don’t NEED “Government assistance”.
Yeah, you may be “had”, but you obviously can afford to be.
My compliments to Mr. Blumenthal, but he has much more important things to muddle his mind.
May 27th, 2009 at 4:54 pm
Ah, this dark side of the invisible hand; it is around our collective throats slowly squeezing the oxygen from our very lives. As a result of the policies of the FCC over the past 20 years, our airwaves (nice tie-in to the strangulation, don’t you think?) have been handed over to the evil empire cable companies. In most jurisdictions, the same thing has happened. In Phoenix, Cox is the only game in town, too bad if I don’t like it. Some industries are by nature monopolistic, and therefore should be government controlled (and I don’t mean the auto industry). Communications is the perfect example. I remember the original AT&T. Largest shareholder owned company in the world. Run privately, but controlled by the Government. It worked great and we got Bell Labs as part of the deal. Someone decided that competition would work better and MCI was born. You know what our result has been.
This is a blessing in a way; no TV is good for me because I’m too cheep to pay for it. Call me old fashioned, but I am grateful for that!
Kind regards,
Joe O’Donnell