The City of Frederick is considering a request from a second cable television company to offer service to the residents, a proposal which at first blush offers the hope of competition which would keep the current provider on its toes.
Competition in any field usually means that both companies try to keep down prices and improve service in an effort to hold onto old customers and attract new ones. Cable TV competition might be able to do that, but we have to wonder if this is a development that is about a decade too late to help Frederick consumers much.
Shenandoah Cable Television has asked the city to approve a cable franchise agreement to provide cable services, including fiber-based broadband, voice, and video to residents and businesses in the city. Based in Edinburg, Va., the firm serves customers in Virginia, West Virginia, Maryland, Pennsylvania, and Kentucky.
An agreement to provide an alternative to Comcast, the city’s current single provider, would have to be approved by the city’s Board of Aldermen.
Bryan Byrd, a spokesman for Shenandoah, told the city’s aldermen and mayor that the company would build a fiber optic network to offer broadband service with the same speeds for uploads and downloads.
Stephen Davis, an assistant city attorney, told the board that federal law requires the city to make it feasible for other companies to establish a franchise that can compete fairly.
Mayor Michael O’Connor said the demand for broadband service is increasing with more people working from home during the coronavirus pandemic. He said the city wants a level playing field for any competitors.
In April 2018, Comcast announced a $1 million expansion in its network in Frederick, adding about 14 miles of additional fiber optic cable in and near downtown Frederick.
Byrd said Shenandoah would hope to start serving customers two to three years after construction on the company’s infrastructure begins.
That sounds good, and we are generally supportive of new companies coming into the city and offering healthy competition. But the cable TV industry is in such flux, we have to wonder if Frederick consumers will see significant savings.
The trend for the last several years has been for an increasing number of cable customers to “cut the cord” and end their cable subscriptions.
The Wall Street Journal reported that large cable and satellite companies lost about 5.5 million customers in 2019, a roughly 8% decline. That was up from 3.2 million lost subscribers the previous year.
Allconnect.com, a website reporting on the telecommunications industry, said about 80 million households in the country subscribe to cable or satellite television, down from a peak of 100 million a decade ago.
Comcast and other cable companies are already competing hard to hold on to their customers even without a direct cable competitor. The cable companies are adjusting to the new reality, offering free streaming and other enhancements, though prices remain high.
At least one industry analyst believes that the cable firms are evolving in ways that might benefit Frederick customers if a second cable company starts operating here with its own broadband network.
Bruce Leichtman of Leichtman Research Group told CNet, the tech website, earlier this year: “Keep in mind what we call ‘cable providers’ are now broadband providers. Their main source of earnings is broadband. The traditional pay TV business is not as much a priority for them as it used to be.”
So, it seems that the city should welcome a new broadband company which happens to also offer pay TV. If it works, competition for broadband customers could help restrain the cost for consumers who are increasingly reliant on their connection to the Internet, for work and for entertainment.
At this juncture, it is hard to know how the cable TV world will change, but it seems certain that the broadband world will keep growing.