Aided by the Federal Communications Commission, cable companies are shedding price controls for their basic tiers of video service.
According to a story in the Philadelphia Inquirer, while most of cable’s price controls were eliminated in 1996, cable companies can petition the FCC for exemption from the remaining constraints if they can prove there is effective competition in a town from a satellite video provider, a telco provider such as AT&T or Verizon gaining a video franchise, or a municipal-owned cable service.
Deployments by satellite and telco providers have increased the pace of deregulations, according to the story. In the past 18 months, the FCC deregulated basic cable rates in 4,215 towns across the United States. The procedure by the FCC doesn’t require a public vote of the commissioners. Overall, the FCC has deregulated basic cable rates in a total of 7,542 towns over the past 15 years.
The story said information from the federal Bureau of Labor Statistics said the prices for cable and satellite services, which can be swayed by unregulated services, increased at a rate twice that of inflation from May 1996 to May 2009.
Groups such as the New Jersey Division of Rate Counsel oppose the price control requests by cable operators such as Comcast. A spokeswoman said the increases negatively impact subscribers who are already having difficulty paying the previous basic rate.
A spokeswoman for Comcast said 70 percent of the company’s franchise areas are already deregulated for basic cable for three reasons: competition, a local town has no laws in place to regulate basic rates or state laws have eliminated basic cable regulation.