When cable company pays cable operator to boost prices
Posted On August 5, 2021
Posted December 10, 2018 03:00:18 When a cable company decides to offer more than its competitors, that usually means a price hike.
But the cost of the new cable is often offset by the additional value of the existing service, and in some cases, the new company can benefit financially.
In the case of Optus and iiNet, both of which pay their cable operators for the right to carry their services, the cost difference between their services and those of the smaller players has become one of the biggest factors driving price increases.
The Australian Competition and Consumer Commission (ACCC) has reported the case to the Federal Court and has warned that “unfair competition” can lead to a “price distortion” of the Australian market.
A number of major cable operators, including Telstra, Optus, Vodafone, and Frontier, have already been found guilty of unfair competition for charging consumers for the same services.
In recent years, many major cable companies have sought to increase prices by using fees to push up their own revenue.
The price hikes have led to a rise in the prices of many services, such as the TV service Optus TV and the phone service iiNet.
However, the Federal Government has been unable to pass legislation that would make the cable companies pay the costs of the increased price of their services to the smaller competitors.
When the ACCC filed the case, it was seeking to ensure that cable companies were not using their revenues to boost their own price.
“The ACCC is concerned that a price distortion could result from unfair competition between cable operators that result in unfair prices for consumers,” the ACCCA said in its complaint.
This is because they would benefit from increased market share by offering their services at a lower price.
However, the ACCCC found that in the Optus case, “the cost of Optuses services has been offset by Optus services fees”.
When it comes to the price of a new phone, the company is often more interested in increasing the price that the customer pays.
There are several reasons for why the costs to the larger competitors may be higher.
Firstly, some of the higher prices are paid to the incumbent telco, and they may not be willing to sell their customers to the new companies.
Secondly, the smaller telcos often have a much smaller network and are often less experienced at operating their own networks.
Thirdly, the higher price of the phone can often be offset by increased costs to them of providing the services themselves.
If you are a customer of a smaller telco that is not interested in upgrading, then you may find yourself paying more than the advertised price, or you may not have access to a service at all.
While the ACC said it was concerned about unfair competition, it did not say what the cost could be for the smaller companies, or what the prices were to the big players.
It will be interesting to see what the ACC has to say about the Optuses case in the Federal Circuit Court. Read more: