COMMENTARY

President Obama Bats For Consumers

Against Cable Companies

President Obama in his weekly address noted that one of America’s greatest strengths is its free market.

“A thriving private sector is the lifeblood of our economy – it’s how we create jobs, expand opportunities, and give everybody a shot at success.  It’s what has made America the strongest country on Earth,” said the President.

Photo Credit: Whitehouse - President Barack Obama.
Photo Credit: Whitehouse – President Barack Obama.

He stated that competition is an essential ingredient in any free market, but noted many companies today were engaging in practices that stifle competition.

He said that this has not only led to consumers paying higher prices for lower quality products and services, but also cause workers to receive lower wages than they otherwise would.

Additionally, he opined that this squeezed small businesses and entrepreneurs out of the market as the playing field is stacked against them thus making it unfair and bad for the economy.

“The deck should not be stacked in favor of the wealthiest individuals and the biggest corporations, against working Americans.  That’s why my administration is doing everything we can to reverse this trend and promote more competition in the marketplace.  In addition to enforcing the rules on the books, I’ve directed federal agencies to identify anti-competitive behavior in different industries, and find new and specific ways to promote competition,” the President declared.

He argued that cable TV is an industry that demands change as 99 percent of cable and satellite TV customers rent set-top boxes from their providers and surveys has shown that this costs households an average of more than $230 per year.

“We spend some $20 billion to rent these devices.  While we have almost unlimited choice in what we watch on television, from traditional programming to online content, there’s next to no competition to build a better, user-friendly product that allows you to easily access all this content in one place,” he said.

The President bemoaned the fact that consumers have no choice but to accept what the cable company offers. Consequently, there was no incentive by the cable company to innovate, he noted.

He said his administration has encouraged the FCC to remove the barriers to competition that prevent new players from offering innovative cable box options to consumers.

“We know this works.  For years, Americans had to rent our telephones from the phone company.  This was a while ago, but when the FCC finally unlocked competition for home phones, the marketplace was flooded with all kinds of phone options with new features, and at different price points.  Consumers suddenly had many options.  And the whole industry moved forward as a result.  The same can happen with cable boxes, and in dozens of areas of our economy – all of which can make a difference in your everyday life,” explained the President.

He concluded that competition was good for consumers, workers, businesses, and the economy and promised that his administration was going to keep doing everything to make sure that the free market works for everyone.

Davy Desmond, Readers Bureau, Fellow

Edited by Jesus Chan

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