Cable operators with "effective competition" and those without it raised their rates by the same percentage, according to the FCC's just-released annual cable price survey.
Each raised rates by an average 5.8% for the 12-month period ending July 1, 2000, compared to the comparable year-earlier period, while also adding channels. In fact, the per-program price of basic stayed flat at 57 cents, the study showed, while that for pay increased by a penny (from 65 cents to 66).
On average, customers with no cable competitors in their market paid $34.11 per month in 2000 versus $32.40 for those in a market with cable competition, or an additional 5.3%. Those numbers were $32.25 and $30.63, respectively, for 1999, with the same 5.3% differential.
Basic rates rose an average 2.3%, while pay was up 8.3%. The study also showed a big boost in digital cable offerings, with 57% of cable systems surveyed offering a digital tier, double the 27% who had one in 1999. "The cable industry continues to hold the line on cable prices despite escalating programming costs-especially higher sports rights fees and system upgrades," said National Cable Television Association President Robert Sachs, responding to the study. Sachs also pointed out that basic's 2.3% increase was below the 3.7% inflation rate. "Cable customers are receiving more channels and better value for their dollar," he said.
Advocacy group Consumers Union saw it differently. "Looking at a 5.8%increase, another day another couple bucks on your cable bill," said Consumers Union spokesman David Butler. "That's what happens when the government deregulates a monopoly. The report demonstrates that it's time for Congress and the FCC to clamp down on cable monopolies and find new ways to jump-start competition."
- Bill McConnell