Sunday, July 16, 2006

CABLECO V. TELCO://Los Angeles proves KPN is wrong

KPN did not do well in court last week, claiming Dutch cable companies should be regulated the same way KPN is. I have written about it before and believe that the unconsolidated state of the Dutch cable market has a lot to do with it (other arguments include: cable is not unregulated; KPN has managed to acquire 18 companies over the last few years, of which 7 ISPs), even if they together reach almost 100% of all homes.

Last week, the Wall Street Journal ran a story on the LA cable market, which is split by 5 companies. It very much resembles the Dutch market. Some quotes:

"Satellite-TV and telephone-company rivals have been able to outmaneuver
cable companies, which have been hamstrung in their marketing efforts and their
ability to introduce new technology."

"Gaining critical mass in major markets is crucial for cable operators,
which face competition not only from their traditional satellite-TV rivals but
also from phone companies that are upgrading their networks to offer faster
high-speed Internet service and television."

"More than 30% of the households in the region get high-speed Internet
connections from telephone companies, compared with a 20% share for cable

"Until now, the five cable operators in Los Angeles have been reluctant to
use regionwide advertising because their pitches would be wasted in
neighborhoods not able to get their services."