NEED FOR COMPETITION

Benefits of Competition

Before the Ohio Video Competition Act, consumers had no choice but to accept inferior technologies, poor service and uncontrollable rates.

The Ohio Video Competition Act will now allow many cable companies to bring their services to consumers throughout Ohio. This new competition forces cable providers to compete for our business. When cable companies compete, Ohio consumers receive better cable service, lower rates and new and innovative technologies.

How Competition Works

In the past, local municipalities had the authority to negotiate independent video franchise agreements. In the last 30 years this process has generally resulted in one company offering cable service in each community. This cumbersome and expensive process has blocked market competition and allowed the consumer to be taken advantage of.

Ohio is one of the 17 states that have done away with these agreements, giving their residents a choice among providers.

Under statewide franchise laws, municipalities continue to collect the same dues and fees from the new cable providers as they did under the local franchise agreement system, so revenue streams are protected. In fact, because towns no longer spend money administering franchises, they have more money for municipal services. And, with increased competition in the market, many consumers who currently do not have cable may consider signing up, which means municipalities could potentially see an increase in franchise fees.

About the New Technology

One new entrant into Ohio’s cable market offers Internet Protocol Television (IPTV) as an alternative to traditional cable service. Other potential entrants into the cable competition market in Ohio utilize other technologies.

These changing technologies allow customers to personalize their viewing experience, like choosing from multiple camera angles and getting statistics during a football game, or viewing news about the stars of a show while it is on, all with the touch of a finger. Viewers may also be able to teleconference with friends around the country while watching a show together.

The new TV technologies come along with much faster Internet service because the technology uses a high-quality, high-speed fiber optic cable that delivers content to both the consumer's TV and computer.

Competition Lowers Prices

A recent study by the General Accountability Office (GAO) shows expanded basic cable rates are 15 to 41 percent lower in markets with competition. Another study by the Phoenix Center found that cable competition should save Ohio consumers more than $306 million per year.

Competition Helps the Economy

Investments by new competitors will help the local economy by creating new jobs for Ohio consumers. In addition, competition is expected to plug hundreds of millions of dollars in new investment into the state.

Individual consumers are projected to save hundreds of dollars a year, which will be re-injected into the local economy, instead of going out of state to a large cable corporation.

At the same time, the number of overall cable customers is expected to grow, meaning that municipalities will collect more in cable fees from the various competitors. According to the Brookings Institution, Ohio towns and cities would get a combined $10 to $14 million in additional fee revenues a year.