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Hazlett: Universal Service Requirement Hinders Competition

Commenting on the Connecticut Department of Public Utility Control's ruling against AT&T in a skirmish over cable competition, Professor Thomas Hazlett questioned why the government would want to stand in the way of increased competition and lower prices for at least a portion of the consumer market.

Regulators ruled out consumer choice between AT&T's new U-verse service and cable TV for as many as 150,000 consumers in areas where U-verse was about to become available. U-verse delivers an alternative to cable by offering television programming over telephone lines, but regulators told AT&T it could not expand the service and had to apply for a franchise. AT&T has argued that the imposition of universal service requirements would require it to provide TV service to all customers in its franchise area, possibly the entire state. If forced to adhere to the universal service requirement, AT&T has said it will drop its more than 7,000 U-verse customers in Connecticut and provide the service elsewhere.

Hazlett told The Hartford Courant that challengers to cable will not come into markets if they are required to meet the universal service requirement.

"You can't get 100 percent," he said. "If you can't, get 10 percent or 20 percent."

Phone TV Conflict Blurry: Officials Try To Defend Choice By Denying it, The Hartford Courant, October 21, 2007. By Mark Peters.

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