The FCC recently released its annual report on cable industry pricing which shows that consumer cable charges increased by 5.2 percent over a 12-month period ending Jan. 1, 2005. That equates to an average monthly cable bill of $43.04, up 93 percent since the period immediately prior to the enactment of the Telecommunications Act of 1996.
A breakdown of the numbers behind the report indicate that monthly basic service charges increased by 3.3 percent and expanded basic service charges rose by 6.2 percent. The report also revealed that the prices charged for the most highly subscribed digital tier of service (including set-top converter and remote control) rose by 1.2 percent. The report noted that of the 98 percent of all cable subscribers with access to digital video service, 37 percent subscribed to the digital tier.
According to the report, competition has a bearing on cable pricing. On average, cable operators without direct competition charged $43.33 per month for basic and expanded basic programming, while operators with "effective competition" charged $40.15. The report said that DBS competition did not appear to constrain cable prices.
The report also provided information on ancillary services provided by cable operators, indicating that as of Jan. 1, 2005, about 87 percent of all system subscribers had access to cable systems that had been upgraded to at least 750 MHz capacity. Cable-provided Internet service was available to 96 percent of subscribers and 42 percent of subscribers were offered telephone service from their cable operators.
The report also provided an econometric analysis of the data collected, revealing that cable prices tended to be higher in local markets where operators had a larger share of the subscription video market.
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