Cable Rates Continue to Rise

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The FCC has released its annual Report on Cable Industry Prices (Report).  Section 623(k) of the Communications Act requires the Commission to publish annually a statistical report on the average rates that cable operators charge for delivery of basic cable service, other cable programming, and cable equipment.  The statute also requires the Commission to compare rates for cable systems subject to effective competition with the rates charged by cable systems that are not subject to effective competition.

The Report finds that overall, looking at all cable operators without regard to the presence of competition, the average monthly rate for basic service increased by 2.3 percent over the 12 months
ending January 1, 2015, to $23.79. Expanded basic service rates increased by 2.7 percent, to $69.03 during this same period.  These price changes compare to a 0.1 percent decline in general inflation as measured by the Consumer Price Index (CPI) (All Items) over this same period.   However, when looking at cable prices on a per channel basis to account for the increase in the number of channels available on expanded basic service tiers, the Report finds that the price per channel (price divided by number of channels) for subscribers purchasing expanded basic service actually decreased by 1.8 percent over the 12 months ending January 1, 2015, to 46 cents per channel.

When comparing cable systems subject to effective competition with systems not subject to competition, the Report found that on average the rates for basic service were lower for the group of operators with an effective competition finding.  The Report also finds that the average price of expanded basic service increased by 3.3 percent, to $67.85, for those operators serving communities without effective competition. For the effective competition communities, the average price of expanded basic increased by 2.0 percent, to $70.31.  The higher average overall price for expanded service in communities subject to effective competition reflects the fact that operators in effective competition communities carry, on average, more channels on expanded basic service than operators carry in communities without this finding.  When taking the number of channels offered into account,  the price per channel decreased by 0.6 percent in communities without a finding of effective competition, to 49.7 cents per channel, and decreased by 3.3 percent in effective competition communities, to 41.2 cents per channel. Accordingly, the price per channel is 17 percent lower in effective competition communities than in communities without a finding of effective competition.

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