10 Unforeseen Effects of Deregulation


Remote Decontrol

As cable television developed, its prices were largely regulated by local governments. With deregulation moves in the mid-1980s, prices began to jump. In the early 1990s, regulations were imposed again. The massive Telecommunications Act of 1996 compelled Congress to ease most oversight and regulations on rates.

The idea was to promote technological advances and competition. The thinking was that telephone companies, wireless systems and direct broadcast satellites would compete with cable companies. Market forces then would help keep prices down and encourage companies to come up with creative ways to offer customers more TV choices.

The thinking was wrong. Nearly a decade after the deregulation, cable bills had increased by almost 60 percent in most places [source: Hear Us Now]. About 98 percent of Americans had only one cable company available to them.

The new technologies didn't emerge as well or as quickly Congress had expected. Not everybody has a good location for satellite. Wireless cable didn't work well. Cable rates kept rising.

Telephone company competition didn't help much, either. Many cable companies now offer telephone and Internet along with TV. After introductory packages expire, rates tend to go up.

Consumer advocates have been pressing for a new regulation that might help keep prices down. They want cable companies to be required to let customers choose only the channels they want rather than have to buy packages.

Read on for some positive -- or are they? -- unforeseen effects.