[Chrysalis]

Originally Posted by Stuart C

Prices tend to go up when competition dies. Innovation (in terms of new products and services) goes down, because to a large extent, that innovation is created by the need to win customers.

Want proof? How much did BT innovate (in terms of new services) and how much did they lower prices between the time they were privatised and the time competition established itself?

You really think Sky would have lowered prices if they *hadn't* had competition from both Cable and OnDigital?

While conditions for Consumers would probably not get any worse, they would not get better either.

I am not saying that competition is the be all and end all. It isn't. It has resulted in artificially low broadband prices (it actually costs more for the ISPs to provide their faster tarrifs than they charge). This has caused ISPs to cut investment in their networks to the minimum, introduce measures like STM, and look at alternate revenue streams, such as music/video downloads and Phorm.

What I am saying is that without competition, you do not generally get innovation. Say Sky did become the only pay TV provider in the country. Everyone who wanted Pay TV would have to go to them anyway, so why would they spend money developing new facilities on their boxes (such as the Press Green to record on ads, and remote recording from mobiles)?

Yes I said prices going down is about the only benefit of competition, but I think lower prices are not always a good thing.

BT is a good example. Prior to been broken up by ofcom one could get a engineer callout for broadband fault with relative ease, prior to the wholesale pricing changes enforced by ofcom traffic shaping wasn't in existance or at least not on such a large scale, BT have effectively gone on record saying one of the prime reasons for a lack of FTTH rollout is the fact they would be forced to unbundle it to competitors (I dont often defend BT but they are in the right here).

Now moving on to tv. Sky have a good track record of investment, they spend billions on premiership football coverage and its the best in the country. Then regulation forces the premiership football rights to be fragmented and whats the result? Higher prices for the consumer as they forced to pay for setanta to get their prem plus games back and setantas coverage is poor in comparison. If the paytv market was broken up by breaking up sky the only winners are sky's competitors but not the consumers. Look at ofcoms regulation history they there to benefit who they regulate and make a competitve market often at damage to the consumer. This is because they often over regulate.

Ofcom are almost certianly stifling investment, a over competitive market is not a good place to invest. A market with low retail pricing is not a good place to invest as there is no ROI.