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Cable rates up by 7.5% in FCC price survey

Thu, 04/04/2002 - 7:00pm
Anne Kerven

Competition got mixed results yesterday when the Federal Communications Commission released its industry pricing report. Operators facing "effective" competition and those who don't both raised monthly rates by at least 7.5 percent.

Competitive operators charged less than noncompetitive ones, but carried an average 1.6 more channels. And more competitive operators have reached the 750 MHz or higher capacity the FCC uses as a gauge.

For the 12 month period ending July 1, 2001, cable operators with competition charged an average $34.93 per month for programming and equipment, while those with less competition charged $37.13 a month, for a difference between the groups, or competitive differential, of 6.3 percent for 2000 and 2001, the FCC says.

The competitive group charged 55 cents per channel, with noncompetitive prices reaching 60 cents per channel, for a differential in rates per channel of 9.4 percent. That price didn't change for competitive operators over the year, but rose 1.5 percent during that period for noncompetitive groups.

Both groups saw channel offerings rise, with the competitive group at 60.9 channels and the noncompetitive one averaging 59.3 channels, or an increase of 5.9 percent and 5.5 percent respectively, the FCC says.

Both groups blamed higher programming costs: competitive operators credited 64.7 percent of rate increases to it and noncompetitive ones lagged slightly, placing 58.2 percent of the blame on programming. System upgrades and general inflation also contributed to increases.

Overall, cable programming and equipment rates rose 7.5 percent from $34.42 to $36.99. The average monthly charge for equipment jumped 9.1 percent, from $2.97 to $3.24, while charges for BST and CPST programming services rose 7.3 percent, from $31.45 to $33.75.

Two-thirds of all cable systems — or 68.7 percent of competitive operators and 63.2 percent of noncompeting ones, had upgraded to a capacity of 750 MHz or higher.

The number of cable systems deploying digital video to "at least a portion of their subscribers" rose from 57.8 percent last year to 77.6 percent by July 2001, the FCC notes. Those deploying Internet access service increased from 51.4 percent to 70.8 percent, but those offering cable telephony stayed constant, at about 21.1 percent.

"It's worth noting that prices per channel remain relatively constant, despite substantial operator investment in programming and personnel to support cable's more advanced services," the National Cable & Telecommunications Association says in a statement.

The FCC is required to publish the report under the Cable Television Consumer Protection and Competition Act of 1992. The agency polled 283 of the 368 operators in the competitive group and 472 of the 9,789 operators in the noncompetitive group, it says. Of the 755 questionnaires mailed out, 731 were answered, and 723 were usable.

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