Cable Choice and Competition Act

[Garrett Wollman]

<<On Sun, 10 Jun 2007 10:51:43 -0400, "radiotony" <radiotony@comcast.net> said:

> It seems illogical though that Verizon would want to cherry-pick inside a
> city or town though, since, even in the poorer communities, the purchase of
> phone and cable services are kinda standard. 
> Speaking from experience, most lower-middle class folks choose to spend a
> bit more on cable because they don't have a ton of money to spend on
> entertainment outside of the home, like theaters, or buying/renting DVDs. In
> other words, more often than not, it's a captive audience. 

There's obviously a balancing act for any would-be cable company:
lower-income neighborhoods are generally denser, and therefore cheaper
to serve, but the subs are generally a greater credit risk, and may
not spend as much on more-profitable services like pay-per-view,
premium movie channels, and high-speed Internet.  In Verizon's case it
may be worse: I think their fiber-to-the-curb technology is actually
*more* expensive in denser neighborhoods.

But the real issue, I think, is cost of capital.  If the franchising
authority says "you must serve everyone in town within five years",
that requires them to build out a much bigger network (which may never
be used to capacity) than if they confine their efforts to those most
likely to subscribe.

-GAWollman