Dennie Quill, Contributor

Cable television has grown rapidly over the last decade or so and many urban dwellers, rich and poor, have decided that, in the current era of violence, it is better to relax at home and be entertained rather than risk becoming a victim in our mean streets.

In many inner-city communities, parents make a sacrifice to subscribe to cable because they argue that it will keep the children off the streets. The matter of what they are viewing is not really important, so long as they are out of harm's way.

Reasonable service

So, cable lines have steadily replaced television antennae across the length and breadth of the island. First, there were a number of cable operators providing reasonable service to residents of the Kingston Metropolitan area, then a company calling itself Flow, but officially named Columbus Communication, elbowed its way into the marketplace. Like Columbus of yore, on his voyages to the Caribbean, the new company snapped up a number of small players in the cable industry and now it seems Flow is the only game in town. Almost.

Research done in the United States has found that cable television rates in markets without meaningful competition are as much as 25 per cent higher than those in competitive markets. For many subscribers, the basic package is all they can afford to keep their household reasonably informed and entertained. But we find that the cost of the basic package has almost tripled in the last 12 months. So, while the Government has raked in millions of dollars in franchise fees, the subscriber now finds himself in a cruel squeeze, watching bills soar even higher than inflation.

Making consumers happy does not appear to be Flow's priority. Flow is part of a huge conglomerate that is interested in thickening the bottom line. And with the virtual stranglehold that Flow has on the market, what is the alternative? It is not inconceivable that Flow could one day decide that it will not provide service to inner-city communities. I don't believe there are quotas for these areas. It may also decide that consumers must start paying for channels which were hitherto considered part of the basic package. So, it comes right down to competition and choice.

Monopolies in Jamaica

It seems we have turned back the clock to the time when monopolies thrived in this country. Don't forget that monopolies charge monopoly rates. For many decades, consumer advocates fought Jamaica's telephone monopoly, using compelling evidence to buoy their argument that when there is true competition prices are lower and service is better. And the Jamaican consumer has witnessed head-to-head competition in the local telecoms market with the result that service has improved and prices have been lowered. The benefits of competition, especially to the mobile phone user, have been immediate and substantial. Telephone monopoly was bad for Jamaica and cable monopoly will also hurt the Jamaican consumer.

Flow is able to raise its rates as high as it wants because it has strong market power at the point of sale. We recognise that the cable provider is running a business, that he must make capital investment in order to upgrade his system. These investments allow the cable operator to offer new add-on services, which are not cheap. It means there is no need to increase basic rates to pay for this investment, as the upgrades literally pay for themselves.

Acquisition block

We know that the Broadcasting Commission must be concerned about these developments. One can draw this conclusion from their attempt to block Flow's acquisition of Entertainment Systems earlier this year. Maybe it was a little too late. So what is going to be done about cable rates? Who is going to protect the consumer? All over the world, cable monopolies are being dismantled, in keeping with the demands of free market competition.

The Commission should be re-commending to government that it seeks to encourage new entrants in the cable market. We have seen, in the telephone industry, that competition spurs lower rates. If there is competition in cable, many subscribers would be able to step up from basic service and those who do not now have service may acquire it.

Competition is, indeed, key.

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