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John Wolfe: On cable: Beware the Bells

01:00 AM EDT on Friday, April 28, 2006

In his April 25 column, "Cable TV: A new economic divide," Clifford Montiero appears to have swallowed -- hook, line and sinker -- the Bell monopolies' national talking points on why they should be given sweetheart deals from regulators and Congress to provide cable-television service. However, his commentary misses the mark entirely when it comes to broadband competition in Rhode Island.

Mr. Montiero cites national pricing information and bemoans the lack of similar data for Rhode Island; his research apparently was confined to a cursory search of the Public Utility Commission's Web site. However, had he been a bit more diligent in his search for the facts, Mr. Montiero would have realized that while nationally, cable prices may have risen 25 percent over the past five years, in Rhode Island that increase has been a considerably more modest 13 percent. He also would have learned that over the past five years, Verizon has increased its price for the average residential telephone customer by as much as 15 percent -- even as the price of phone service nationally has declined over that same period.

Mr. Montiero implies that the Bell monopolies will ensure that cable will be "accessible" to African-Americans and other minorities. This is a dubious suggestion in Rhode Island, where nearly 100 percent of the residents enjoy access to cable television and other broadband services today.

Ironically, even as Mr. Montiero suggests the Bell monopolies are the answer to broadband access in minority communities, national minority advocacy groups are expressing concern that AT&T and Verizon are cream-skimming by bringing their broadband networks only to affluent suburban communities -- "high-value" customers, in the words of SBC (now AT&T).

These concerns appear to be valid. For example, 97 percent of the Massachusetts communities initially targeted by Verizon for its cable service have incomes higher than the state median income, and the African-American population in those communities is less than a fourth the average for the rest of the state.

In Verizon's initial target communities in Rhode Island, the African-American population is half the state average, and the Hispanic population is barely a third of the state average.

That's why groups such as the National Black Caucus of State Legislators, the Minority Media and Telecommunications Council, the Hispanic Federation, the National League of Cities and the National Black Church Initiative's Ministers Alliance are urging legislators and regulators to ensure that the Bell monopolies make the purported benefits of their cable service available to all consumers, and not ignore inner cities, urban centers and economically challenged areas.

Given Mr. Montiero's position, it is surprising that he would be unaware of these significant concerns.

It is beyond dispute that fair competition benefits consumers, competitors and Rhode Island as a whole. However, in their enthusiasm to foster competition, policymakers must avoid creating another digital divide by ensuring that the benefits of competition are realized by all consumers -- not just those considered "high-value" by the Bell monopolies.

John Wolfe is vice president for government and public affairs at Cox Communications' New England unit.

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