FCC Releases Cable Rate Survey
January 21, 2009
The average cost of an expanded basic cable subscription was up 5 percent last year to $49.65, according to the FCC’s annual cable rate report. The increase outpaced 2007, when rates rose by 4.6 percent, and 2006, when the increase was 3.9 percent. From 1995 through 2008, the price of expanded basic grew from $22.35 to $49.65, an increase of 122 percent, compared general inflation of 38 percent.
The price of expanded basic plus “the most highly subscribed digital tier” was included in the report for the first time. The price for that package grew 7.4 percent last year, to nearly $59.
Cable operators often cite the growing price of programming for rate increases. Networks generally demand carriage fees from operators, who in turn pass all or part of the cost on to subscribers. The cost of programming grew 9.5 percent during 2006, the most recent year measured. That year, nearly $15 of the subscription price for expanded basic went to programming costs. The figure was $13.60 in 2005; and $12.54 in 2004.
Communities with one primary multichannel video provider had the highest rates. Those with a second cable or telcoTV operator had the lowest rates. The presence of DBS didn’t seem to affect prices as much as wireline competition. In markets with two wireline providers, the rates charged by the incumbent operator were more than 14 percent less than in monopolized markets.