Cable companies that have affiliated themselves with large apartment complexes have definitely reaped rewards over the years. For years apartment complexes have signed on with a single provider which was quite lucrative for the cable company, but rather limiting for the residents of the apartments. The apartments were supposed to negotiate bulk rates with the provider, but this was not always the case. Now, the FCC might do away with cable monopolies, at least in regard to apartment complexes.
The Value of Competition
There is no doubt that a freely competing market offers a great deal of savings to consumers. When all residents of a particular apartment complex are forced to purchase services from a single provider, the value of a free market is completely missing. The FCC views this as a monopoly and has held hearings to nullify any contracts between apartment complexes and cable companies.
This is a blow to the cable company in question, but is a boon to the many other companies offering services who have previously been excluded.
Struggling Cable Companies
Cable companies are already struggling as they are now competing with telecom companies. These telecom companies offer high speed internet, phone and mobile services along with cable programming. The bundled packages are attractive to consumers who are often leaving their old cable providers behind in lieu of the less expensive and simplified billing of the bundled packages.
For years, cable companies have relied on millions of apartments to maintain a significant portion of their revenues. Now, the FCC might do away with this reserve and let apartment dwellers choose their own provider, effectively putting them in the same class of customer as home and business owners.
Competition
Should the measure pass, cable companies and telecom giants will begin competing for customers. This will almost surely force prices down for most apartment dwellers as the companies rush to get the initial wave of sign-ups. The cable companies who have been operating in the complex up to this point will most likely retain a great deal of customers who simply prefer not to switch, but many other customers will begin searching for the best deal – and that deal may not be with their old company.
Video on Demand
One factor that many hope will be affected by any new ruling is video on demand. In December the FCC voted in favor of a ruling that would speed up video services. Many cable companies felt no need to rush and followed old rules. This meant licensing took months. If companies were competing for customers, especially video-on-demand which should be growing rapidly over the next five years, the changes would have been much faster – to the advantage of customers.
Video on demand and bundled or ala carte services are primary considerations in any new FCC rulings. Industry analysts expect the change to take place which is great for consumers, but might be very bad news for cable companies.
