Savings wars: Cable, telco lobbyists tout consumer benefits
Feeling any richer? According to cable and telco lobbyists, we should all soon reap billions of dollars in benefits from their competition.
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Days after cable’s top lobbyist touted his industry’s ability to save consumers billions on phone service, a telco-backed organization is claiming major savings for consumers from competition in the video market.
Kyle McSlarrow, president of the National Cable & Telecommunications Association, said this week that his analysis of J.D. Power & Associates data showed consumers could save $60 billion over five years, or $11.19 less per household per month, if they buy VoIP service from a cable company rather than traditional voice service from a telco. The pricing data came from J.D. Power’s most recent survey of phone service. McSlarrow’s analysis assumes cable VoIP service continues to be less expensive and is able to attract 85% of the voice market.
Today, Consumers for Cable Choice (C4CC), a lobbying group backing national video franchise efforts, said that consumers could save $7 billion a year if competition is allowed to drive down prices. That assumption is based on cable price reductions seen in areas such as Texas, where there is a statewide video franchise law and fledgling video competition from both AT&T and Verizon. Texas consumers are projected to save $600 million this year on cable rates.
Those savings include price reductions by incumbent cable companies to compete with AT&T’s U-Verse IPTV service, currently available in San Antonio, and Verizon’s FiOS TV, currently available in 17 Texas cities, including several suburbs in the Dallas-Fort Worth area.
Using the Texas rates as a basis, the Phoenix Center for Advanced Legal and Economic Public Policy Studies projected savings under nationwide cable competition of $7 billion a year.
According to C4CC, “dozens” of companies have filed for video franchise rights in Texas, including at least one rural company.
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