Thursday, July 16, 2009

Anything's got a price, even cable companies

Hearing today that one of the local cable companies here in Hamilton -- Mountain Cablevision -- is being taken over by Shaw brings back some memories.

A number of years back (1997 to be exact), when the big three cable companies in English Canada -- Rogers, Shaw and Cogeco -- got together to launch a dozen or so new cable networks at the same time at a cut rate price and called it "Me TV" -- it took many of the mom-and-pop cable companies by surprise. (And so began the negative option billing controversy that led to the explosion of satellite TV).
Here in Hamilton, there were at the time four cable companies; Cogeco and three smaller companies (Western, Mountain and Southmount). I was served by Western, however it did offer the package and I took it. But the other two did not, for months. It wasn't a negative option situation, instead they wouldn't offer them, period. Soon, a local deejay who lived in the footprint of one of those two called them the "loser cable companies," and the name stuck. And when they did offer the channels, the packages were so confusing that it's a wonder anyone picked them up.
Since then, in 2000 Western became Cableworks and then got promptly sold to Cogeco but Mountain and Southmount (now Source) were seen as untouchable. Until today. Shaw is a bit of a surprise since some years ago they, Rogers and Cogeco swapped some territories to avoid a "hop-scotch" and Shaw actually pulled out of the Toronto area; so coming back to Southern Ontario is a bit of déjà vu. Still, it amounts to a choice between a cable monopoly, satellite TV or wireless cable.
Real choice would be being able to have several cable companies plus the phone company's fiber optic service competing for our business for television, telephone, cellular and Internet service. One family may be laughing to the bank today, but in the end it's the customers who are the losers. Call me nuts, but it would be interesting if there was some way for Rogers and Videotron (as well as smaller companies across Canada) to be able to compete for our business. Then prices would really drop. This isn't like health care where it's in the public interest to have a government monopoly. We should extend net neutrality to its logical conclusion -- real competition.

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1 comment:

WesternGrit said...

All the big cablcos benefit from their individual monopoly areas. Rogers and Shaw apparently agreed to split Canada
any years ago. Rogers left Vancouver & Shaw left TO. Ted Rogers & JR Shaw despised each other, but could sit together when their monopolies would benefit. The "truce" lasted up to Ted's passing. Perhaps - to the benefit of consumers - the war will be back on. Both companies have good free capital flow and availability.

Let's hope the war is back on. I just wouldn't count on it lasting... They're too cunning for that.

Ps: JR and family are originally from Sarnia, so expect more expansion in that area. As with any "new money" mogul's dreams, total monopoly is the goal.