Arrow-right Camera


Cable Hikes Quadruple Inflation Rate Deregulation Knocked Out Competition, Says Fcc Chief

Wed., Jan. 14, 1998

Cable TV rates have been rising nearly four times faster than inflation, the Federal Communications Commission reported Tuesday.

“Rates are rising, (and) they’re rising fast,” said FCC Chairman William E. Kennard, adding that the competition Congress envisioned when it phased out regulation of cable rates “is not here and is not imminent.”

The 215-page FCC report to Congress found that cable rates jumped 8.5 percent for the 12 months ended last July, generating an additional $1.5 billion in revenues over the previous year. In comparison, the consumer price index rose 2.2 percent during the same period.

Although the report does not examine rates in specific markets, Consumers Union, a Washington, D.C., watchdog group, said cable subscribers in several states face double-digit price increases.

The FCC report is likely to reignite a public furor over cable TV that provoked Congress in 1992 to override a presidential veto and pass a sweeping law reforming regulation of the $30 billion-a-year cable industry.

“I believe the FCC’s competition report amply demonstrates why the commission must take action soon to restrain excessively high cable rates and to spur competition to cable monopolies,” said Rep. Edward J. Markey, D-Mass., a critic of the industry.

Kennard, however, said Congress must take action if the FCC is to have sufficient authority to crack down on rate increases.

Cable industry officials have blamed price increases on rising programming costs as well as the expense of adding channels.

But critics point out that many of the nation’s largest cable companies, including Time Warner and Tele-Communications Inc., own the companies that supply some of their own programming. The FCC report, for instance, found that eight of the 15 most popular cable channels are owned by cable system operators.


Click here to comment on this story »