Large-Scale Cable Television and Internet Companies Increasingly Dominate the Industry

Just about every city in the United States enforces a highly regulated cable market, an approach that can be both beneficial and harmful to residents who use the related services. Typically what happens from the start is that particular providers are allowed to enter a market once they have committed to a certain level of investment, with the idea being that a free for all in terms of installing and maintaining cable would never work out in practice. In some cases, cities that encourage and cultivate the right level of competition can make sure that their residents have a range of appealing cable options to choose from. In other places, what happens instead is that one provider begins to assume an overly dominant position, and that can turn out to be bad news for customers.

One thing that is for certain, though, is that this common way of doing business makes the cable industry notably different from many others. With mixed-market arrangements of this kind prevailing all over the country, expanding into new locations is often difficult to do. As a result, even the most successful cable companies sometimes find themselves unable to grow beyond their existing boundaries by the usual means, often ending up with an excess of capital, as a result.

Because of this, cable television and Internet companies have been even more likely than many others, historically, to seek opportunities for buying out or merging with competitors. As a result, a great deal of consolidation has happened over the years, with local-scale cable companies now looking like members of an endangered species. In a great many cases, any choice that is available in a particular local market will be between a couple of national-level providers, with locally based competitors becoming scarcer with every passing year.

The latest news in the industry regarding the merger of Charter and Time Warner shows that this is not likely to change anytime soon. With the resulting provider set to become the country’s second-largest as a result, over thirty-five million Americans will look to it for service. That may not bode well for the cause of competition, but it seems to be a reflection of where things continue to head.