Rutledge on Franchise Reform

by on April 20, 2006 · 2 comments

On Tuesday I had the pleasure of helping to show Dr. John Rutledge around Missouri. Rutledge was an architect of President Reagan’s economic policy in 1981, and today he’s actively involved in helping bring together American capital with Chinese businesses in the interests of promoting economic growth in both countries. Here’s his take on Missouri’s cable franchise reform debate:

Alice, who drives a cab for Best Taxi, told me “My cable bill is too high.” The Missouri Senate is sitting on a bill that would make it easier for new entrants in providing video services across the state. Similar laws, already passed in Texas, and Indiana have triggered price wars between new entrants and incumbent cable companies that have pushed prices for consumers down by about 50%. The legislators could give everyone in the state a $50/month tax cut and make Missouri more attractive for businesses at the same time. Wonder why they aren’t getting it done? The state Senator who is holding up the bill with the threat of filibuster is a former owner of cable stations. Now there is a coincidence. When I told this story to a receptionist she said, “I thought they were supposed to work for us.”

At a press conference with the Missouri Chamber of Commerce, Rutledge talked about the fact that in many cases, the lack of telecommunications infrastructure in the United States makes it easier to outsource service jobs to India and China than to a small town in America. He argued that franchise reform would be an important spur for increased infrastructure investment, which will have a positive economic impact that will extend far beyond the cable TV industry.

Of course, this is an issue that’s relevant beyond Missouri. We hear a lot about how the broadband market isn’t competitive enough. Well, this is one sure-fire way to increase broadband competition.

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