Comment Re:Awesome quote (Score 1) 232
Comcast and Time Warner did not "voluntarily" choose not to compete. They were each given monopolies in certain areas and then bought up the other companies which had been given monopolies in other areas. Back when cable TV was new, local governments were given the power to limit who could provide cable service int their area. As a result, most local governments (if not all), issued only one permit to provide cable service. The justification for this was that cable TV was a "natural monopoly". Local jurisdictions which faced push back on the "natural monopoly" argument, argued that by granting monopoly status to a cable provider they could require them to give service to the entire municipality (or portion of the municipality in larger cities, some of which initially divided the city up between providers...long since all bought out by the same company in most cases).
While Comcast and Time-Warner could possibly have overcome this restriction to compete with each other, why would they? What would they gain from spending the amount of money it would take to overcome the regulatory obstacles to competing with each other? The likelihood of smaller profit margins and the significant possibility smaller total profits.
While Comcast and Time-Warner could possibly have overcome this restriction to compete with each other, why would they? What would they gain from spending the amount of money it would take to overcome the regulatory obstacles to competing with each other? The likelihood of smaller profit margins and the significant possibility smaller total profits.