April 18th, 2006
Stanford economist named Yale: consumers would save with telco tv
My colleague Marguerite Reardon reports on a study by University of California at Berkeley economist and information systems pricing specialist Yale Braunstein that envisions big consumer savings if phone companies are allowed to compete with cable companies for television services. Like Verizon’s FiosTV, for instance- which is pictured at the top and is available today in some markets.
In California markets where each alternative was available for television, prices dropped 15 to 22 percent on average, Braunstein found.
If telephone companies compete on a wider scale throughout California, Braunstein predicts average monthly prices falling about $56.40 per month to between $43.99 and $47.94 per month. He said that since more than 60 percent of California’s 11.5 million households signed up for cable service, that would result in savings of between $690 million and $1 billion.
The study was paid for by AT&T, by the way. The same ruthless monopoly that wants to crush third-party services that compete with their own.
I cannot question the sincerity of Braunstein’s findings, but neither can I trust AT&T to maintain low pricing once they get the upper hand. And doing so is about all they are. And Verizon? We shall see..
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
