Increases in cable TV rates outpacing inflation

Feb 19, 2001  •  Post A Comment

Cable TV rates rose about 5.8 percent last year, well ahead of the 3.7 percent rate of inflation, according to a Federal Communications Commission report released last week.
However, the report also said that during the study period-the 12 months ending July 1, 2000-systems that don’t face competition in their markets raised rates on cable programming service tiers by 8.3 percent.
According to the FCC report, cable operators attributed more than 40 percent of their rate hikes to increases in programming costs. But that was down from almost 50 percent the year before.
In addition, the report said systems increased their channel offerings by more than 4 percent, and the rates charged per channel remained virtually steady over the study period.
Systems that face competition in their markets charged 57 cents per month per channel throughout the year, according to the FCC. Rates for systems that don’t face competition went up 1 cent, from 65 cents per month per channel to 66 cents.
Industry critics said the study made the case for reconsidering the wide-ranging deregulation of cable rates provided by the Telecommunications Act of 1996.
“This report underscores why Congress and the FCC need to clamp down on cable monopolies,” said David Butler, a spokesman for the Washington office of Consumers Union.
But the National Cable Television Association said the figures demonstrate that operators have been holding the line on rates in the face of increased costs for programming.
“Cable customers are receiving more channels and better value for their dollar than ever before, plus opportunities for exciting new services such as high-speed Internet access, cable telephony and other advanced services,” said Robert Sachs, NCTA president and CEO.