The Change Mariner

Little Outcry From Viewers as Rates Rise for Cable

NYT:
...A recent report by the General Accounting Office, an investigative arm of Congress, shows that the average monthly rate for what the industry calls expanded basic cable service is $36.47. That is up 40 percent since 1997, when the monthly average was $26.06. And it contrasts sharply with the rise of 12 percent in the Consumer Price Index for the same period.

Yet the comparison is not quite as stark, considering that the average expanded basis cable tier - a menu of nonpremium services, typically including CNN, ESPN and MTV - is 63 channels, compared with 48 in 1997. That may partly explain why there has been relatively little consumer outcry over the steady increase in cable rates since the industry was deregulated seven years ago. And the expansion of satellite television has provided an alternative, particularly in rural markets, for customers seeking specialized programming like sports.

Consumer groups argue that the public has simply given up protesting the increase in cable rates because no one in Republican-controlled Washington these days seems interested in doing anything about it - a theory supported by Representative Edward J. Markey, Democrat of Massachusetts, who tried to preserve cable regulation in 1996 and has long been seen as a consumer advocate in communications matters. Even if someone is unhappy about cable rates, Mr. Markey said in a telephone interview, "They can't go to the House, they can't go to the Senate and they can't go to the president, because nobody cares.''

The GAO report, commissioned by Senator John McCain, Republican of Arizona, stopped short of saying anything should be done about price increases or whether they were justified. But it did recommend that the Federal Communications Commission continue to monitor the state of competition in the pay-TV business. Cable industry executives insist that consumers are not complaining about their monthly bills because they are getting so much value for their cable dollar. And cable executives argue that much of the money from the higher rates has been reinvested in network technology. A report by the National Cable Television Association says that the industry has made $75 billion in capital expenditures since 1996 to upgrade systems and to add digital video, fast Internet access and telephone calling capabilities. Today, of the nation's 70 million cable subscribers, about 21 million take digital video and 15 million use high-speed Internet access.

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