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TechFreedom Op-Ed Counters Claim that Cable Makes 97% Profit Margin
by Matt Starr & Will Rinehart
  •  
Feb. 15, 2013
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Last week, the MIT Technology Review’s David Talbot claimed that “cable distribution giants like Time Warner Cable and Comcast are already making a 97 percent margin on their ‘almost comically profitable’ Internet services.”  TechFreedom's Matt Starr and Will Rinehart respond to these claims in an op-ed in The Daily Caller, pointing out that the number is patently false,

The “97 percent margin” assumes cable infrastructure materializes out of thin air, ready for broadband use and requiring no upgrades. It’s another misleading statistic all too easily accepted by those who insist that cable is a rapacious monopoly requiring public utility regulation. 

Talbot cited the highly respected telecom analyst Craig Moffett as his source. But Moffett was referencing “gross profit margin” (GPM), a statistic that doesn’t take into account the infrastructure-heavy models of broadband providers. Talbot conveniently left out Moffett’s next sentence: in which he said that “this is not as crazy as it first appears,” and explained GPM’s pitfalls.

Read the entire op-ed at The Daily Caller.

 

 

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    About Matt Starr
    Legal Fellow

    Matthew Starr is a Legal Fellow at TechFreedom. Prior to joining TechFreedom, he worked as a Public Policy Fellow at Comcast.

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    About Will Rinehart
    Research Fellow

    William Rinehart is a Research Fellow at TechFreedom. For most of the last decade he has been involved in print publications, beginning first as a reporter for the Illini Media Company, and then moving to production management and advertising.