Cashing in on Cable

Municipalities should think twice before entering the cable TV/Internet business. This is the conclusion of a new study released today by the Beacon Hill Institute at Suffolk University. The study, entitled Cashing in on Cable: Warning Flags for Local Government, identifies some of the political and financials pitfalls that threaten municipalities contemplating entry into the cable TV/Internet business.

Explaining the purpose of the study, David G. Tuerck, BHI executive director, said that the cable TV/Internet business is especially alluring to municipalities like the Massachusetts towns of Norwood and Braintree. These towns have an existing electric power business and believe they can compete effectively with the incumbent private-sector cable TV/Internet provider. The problem is that, given the highly competitive, technically changing nature of the telecommunications industry, entry into the cable TV/Internet business poses risks for any entrant, public or private. “As our study points out,” said Tuerck, “the rough-and-tumble cable business is not something for which the average town hall is well suited.”

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