NATOA Survey: Impact of State Video Services Legislation
Early Results Do Not Evidence Sufficient Competitive Benefits
The
results of the survey indicate that incumbent cable providers are taking
advantage of the change in law, with one third of respondents indicating that
the incumbent had abandoned its local franchise for one issued by the
state. New entrants are seeking only
state franchises. In franchise areas
affected by state legislation, 27% of participants report one new entrant, and
6% report more than one new entrant in operation. Thirty-five percent (35%) of LFAs report the
new entrant has not built anything; 48% report the new entrant has built out to
part of the community; while only 18% report that the new entrant is in the
process of or has built out to the entire community.
As a
result of these changes, NATOA was disappointed to learn that under state
legislation thus far:
- Rates
have not decreased according to 98% of those surveyed.
-
Incumbent
basic rates have increased $1.12 for analog and $1.51 for digital
-
Most
new entrants do not market a Basic Service Tier nor report rates, which makes
consumer comparison shopping difficult at best.
-
Consumer
complaints remain high with 74% of respondents reporting the same level of
complaints, except as they relate to the availability of choice of provider
-
The
majority of LFAs reported that on incumbent systems, the number of PEG (Public,
Educational and Governmental) access channels has remained constant (97%) and
that the technical quality has remained the consistent (89%). PEG channel positions on new entrant systems
were reported as different from the incumbents by 39% with worse or poor
technical quality reported by 36% on new entrant systems. PEG funding was the same for 44% of the LFAs,
whereas funding increased for 12% and actually decreased for 22% of respondents.
-
Overall,
82% of LFAs do not believe that state video legislation is having a positive
impact on their community; 90% believe that PEG programming is not being
treated in an equitable manner by new entrants; and 97% believe that customer
service has not improved under state supervision.
“We were anxious to get this first snap shot and to set the bar against which future data can be collected and judged,” said NATOA Executive Director Libby Beaty. “Clearly, this legislation is very new in many places, and only time will tell whether, once implementation is complete, it will prove to have benefited consumers more than the corporations that sought the legislative changes. We are hopeful that it is the consumer who will win, but clearly it’s too soon to see those benefits yet. State legislation just out of the gate is not resulting in price reduction, the primary reason used to justify state over local regulation.”
Read the Executive Summary of the Survey Here.
Contact: Libby Beaty, Executive
Director, 703-519-8035