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December 5, 2010

Editorial: Government Encouraging Monopolies

I'm surprised at how over the last few decades, Democrats have warred over 'big business.' Yet, some of the very policies they've created have caused businesses to remain cumbersome and large.

For example, the Federal Communications Commission (FCC) is the primary regulator of cable companies. Like health care companies, cable companies are geographically limited to operating in certain number of areas.

Have you ever wondered why you only have one cable company to choose from? (Some lucky people have two). What would happen if everyone were allowed to compete wherever they wanted?

New cable companies coming into your area would have one goal in mind, getting new customers. What would these companies have to do to attract new customers? Deliver value.

They could do this by adding features at no price increase, eliminating those fixed term contracts, or just by dropping prices. All of these strategies benefits the consumer. The existing cable company, losing customers, would have to match or beat the competitor's offer in order to stay in business. Again, this benefits the customer.

The cable company example can be used in several other industries, including, but not limited to electric/utilities, banking, airlines, and health insurance. By controlling who goes where, the government allows large corporations to hold local monopolies in their localities across the country. This limits customer choice, and while the government supposedly controls prices, prices are still high.

So, what's wrong with giving the consumer choice and quality at the same time by deregulating these industries?




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