Sharpening our wits on the grindstone of Life: Big Bidness wins again .comment-link {margin-left:.6em;}

Sharpening our wits on the grindstone of Life

Thursday, July 14, 2005

Big Bidness wins again

And I thought this issue was dead until the next legislative session in Texas. But apparently, Governor Rick Perry added it to his special session that he promised would only be about school funding until it was resolved. Of course, school funding is still unresolved, but the lawmakers have managed to raise their own pensions (although the legislation is officially about judges salaries), and now have handed Southwestern Bell the cherry they were seeking in the last legislative session. And, as usual, whenever big bidness wins, the poor folks lose.

The legislation, which was deadlocked in the regular session but passed 25-3 in the special session (kinda light turnout, doncha think?), allows phone companies to obtain a state franchise, and offer video services only where they want. Cable companies currently have to obtain municipal franchises, and as part that franchise, have to insure that every home in the franchise area has access to it's services.

So while the cable company has to build it's network to provide everyone service, phone companies can choose to only provide service to the wealthier neighborhoods, typically where higher end services are the norm. They make more money per household, and therefore can be more competitive in their pricing. Meanwhile, the cable company has to spread their network thinner, with less average revenue per household, and therefore has to charge higher rates to support the infrastructure.

So who has to carry the heaviest load here? Not the rich folks, 'cause they can switch to the phone company, and be blindly happy they live in a country where competition keeps prices low. It's the people who live in the lower economic areas, who don't have the choice, that have to pay the cost. Sure, they can switch to satellite, but will have to sign a long term contract. And with the economy the way it is, who in that group can really be sure they'll have steady income for the next two years?

The legislation also allows the phone company to set it's own rates (with some restrictions), even though it's still getting subsidies from the state. But in this area, competition will help keep costs low (hopefully) because of all the other options out there. At least I hope that's the case, and I'm not being blissfully ignorant because I have other options at my house, which I'm exercising. The only mail I get from Southwestern Bell is offers to please, please come back, and they promise they'll be better.

Yeah, right.

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