Cable Rates Continued Climb in 2009, FCC Finds in Study Released in 2012
Cable rates increased at a rate higher than inflation again in 2009, an FCC survey of cable operator prices during that year found. Basic cable rates increased at a higher rate than rates for expanded tier service, the survey found. On a per-channel basis, rates didn’t increase as quickly.
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The price of expanded basic cable service increased 3.7 percent to $54.44 a month in the year ended Jan. 1, 2010, the report said. That compares to a 2.5 percent increase in the consumer price index during the same period. Rates were slightly higher in areas where the cable operator had been let out of local rate regulation as a result of an effective competition petition, but the difference wasn’t statistically significant, the report said.
Rates for the basic service tier, which includes broadcast TV programming, increased faster than other tiers, the survey found. Basic rates overall increased 5.5 percent to $17.93 a month. In effective competition subgroups, monthly basic rates increased 7.3 percent to $17.84. But the price of expanded basic service on a per-channel basis actually fell 7.3 percent to 56 cents during 2009, the survey found.
Those looking for evidence to support changing retransmission consent rules can probably find it in the survey results, said a cable industry lawyer who has pushed for such changes. “The basic tier, which is where the signals that are most affected by retransmission consent are located, had the highest percentage increase of anything they looked at."
The average number of channels on the basic service tier increased 11 percent to 41, while the number of channels on the expanded basic tier increased 15 percent to 117, the report said. On average, distributors carried 8.6 stations through retrans deals and 8.8 stations under must-carry rules, the report said.
The survey also found that the vast majority of cable systems deliver broadcast programming to subscribers in analog, standard definition (SD) and high definition (HD). The survey found that 84 percent of cable systems surveyed deliver all three signals, while 8 percent use customer premises equipment (CPE) to convert an HD signal to standard definition and then again to analog, another 5 percent send an analog and SD signal and 2 percent use CPE to convert to SD. Another 2 percent deliver just analog versions of local TV station signals, and 2 percent send an SD signal and use CPE to convert that signal to analog.
The commission requested data from a random sample of 800 cable operators -- 528 serving non-competitive areas and another 272 serving areas where the commission has granted a finding of effective competition, it said. The report came out two years later because it has never been seen as a high priority for the FCC, agency and industry officials have said. About a year ago, the commission released a report looking at 2008 cable rates (CD Feb 16/11 p8).