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FCC says cable TV rate increases outpace inflation
WASHINGTON -- Cable television rates rose faster than inflation last year, the Federal Communication Commission said in its annual report on the industry's prices.
The FCC said the average consumer's cable bill, including programming and equipment, rose by 8.2 percent during the 12 months ending last July, from $37.06 to $40.11. During the same period, the inflation rate was 1.5 percent.
But the commission also said that cable operators increased the number of channels they offered, meaning the cost per channel rose only 1.2 percent.
The FCC report, released Tuesday, found rates were lower in areas where two or more cable customer companies competed for customers. The average monthly charge in competitive areas was $37.84, compared with $40.26 for cable monopolies, a 6.4 percent difference.
During the past five years, cable rates rose an average of 7.1 percent annually. During the same period, the annual rate of inflation averaged 2.3 percent.
The industry's trade association defended the price increases, saying they reflected the increased costs to operators, including technical improvements to cable systems, better customer service, new and improved channels, and additional services.
"Although cable prices have increased, cable consumers are also enjoying increased value for their entertainment dollar," said Rob Stoddard, a spokesman for the National Cable and Telecommunications Association. "Compared with taking a family of four to a single movie, concert or professional sports event, a month of basic cable remains a superior entertainment value."
Commissioner Michael Copps, one of two Democrats on the five-member FCC, dissented from the agency's report. He said the FCC did not properly follow its congressional mandate to do a thorough analysis of cable rates. For example, he said, the agency needed to audit cable companies to make sure the information they reported was accurate.
"When consumers keep getting hit in the pocketbook year after year, we must commit the resources necessary to gather the information so we can make informed decisions to ensure that consumers are protected," Copps said.
The commission's other Democrat, Jonathan Adelstein, concurred in the report, but also said the FCC needed to do a better job of studying prices.
The three Republicans on the commission supported the report without issuing separate statements.
On the Net:
Federal Communications Commission: http://www.fcc.gov
National Cable and Telecommunications Association: http://www.ncta.com