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FCC: Cable rates are rising

Mon, 05/19/2014 - 1:39pm
Brian Santo

Competition in a video market has a minimal effect on cable prices, and cable prices keep going up. In other words, no surprises in the latest FCC report on the industry.

According to this report, which includes data from 2012, basic cable rates were up 6.5 percent, expanded cable was up by 5.1 percent.

In markets deemed competitive, the starkest difference in prices between cable operators and their competitors was in the basic cable tier, but in most cases, the cable operators offered more channels on the basic tier.

 “On average, prices were 0.8 percent lower ($65.64) for incumbent cable operators in communities with a rival operator and 4.8 percent lower($62.96) for the rival operators. Prices were 0.8percent higher ($66.70) for findings the Commission granted on the basis that the DBS market share met the 15 percent threshold established by the statute. Prices were 3.7percent lower ($63.66) in the “Other” subgroup of cable operators, those competing with a wireless MVPD system or who met the low penetration test as a result of serving fewer than 30 percent of households.”

The FCC report does not examine costs, including escalating programming costs, the reason most cable operators cite for increasing fees. The report does not take into account the relative strengths and weaknesses of delivery technologies, and does it draw inferences about market strategies.

The survey included data from 800 cable operators, serving 486 out of the 24,238 communities without a finding of competition and 314 out of the 9,417 communities granted an effective competition finding pursuant to the statute.

The full report is here.

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