FCC Chairman Takes Aim At Cable Monopolies

Newly emboldened FCC Chairman Kevin Martin plans to wield the Cable Communications Act of 1984 to shatter the cable industry’s anti-competitive practices. The proposed regulations would give consumers flexible, diverse programming at cheaper rates, while capping the cancerous growth of conglomerates like Comcast and Time Warner.

The commission is preparing to take steps to make it less expensive for rivals of the largest cable conglomerates to buy their programs — so that, for instance, a satellite company would find it less expensive to purchase programs by the Turner Broadcasting System, a unit of Time Warner.

One of the proposals under consideration by the commission would force the programming of the largest cable networks to be offered to the rivals of the big cable companies on an individual, rather than packaged, basis. That proposal, known as “wholesale à la carte,” is vigorously opposed by the large cable companies.

The agency is also preparing to adopt a rule this month that would make it easier for independent programmers, which are often small operations, to lease access to cable channels.

And Mr. Martin has been circulating a plan that would use the finding on cable television dominance to set a cap on the size of the nation’s largest cable companies so that no company could control more than 30 percent of the market.

À la carte programming would allow us to subscribe exclusively to Comedy Central without paying for useless filler like The Disney Channel. Selections may vary by household.

The Chairman is assuming the broad new regulatory powers under what is known as the 70/70 rule. Once the FCC finds that cable is available to 70% of American households, and that 70% of those households subscribe, the FCC is empowered by the Cable Communications Act of 1984 to promote “diversity of information sources.” Expect the cable industry to poach Verizon’s dragon-riding lawyers to argue that the requirements of the 70/70 rule have not yet been met.

F.C.C. Planning Rules to Open Cable Market [NYT]
(Photo: Jiri Kopsa)

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  1. homerjay says:

    1) This would be nice if I could opt-out of home shopping and the spanish channels

    2) This would be nice IF the cable companies didn’t charge $5/mo per channel. “Sure, you can buy your channels a la carte. But you’ll save about $30 a moth by buying our regular package”

  2. savdavid says:

    Here in Savannah we have lots and lots of screaming Christian channels (no other religions need apply!), lots of cheesy shopping channels, lots of cheaply produced channels of various kinds but little of what I consider real entertainment or education. Hopefully, the FCC would limit the amount cable could charge us per channel.

  3. doormat says:

    Its not likely you’ll be able to get rid of the shopping channels as they’ll be offered to you for free. Why? Because instead of your cable company paying money per subscriber, the home shopping channels pay your cable company for carriage.

  4. Pylon83 says:

    This is a terrible idea. A la carte programming will result in higher prices, and certain channels being basically unavailable. With a la carte, you might get 20 channels for the $50/month that you now pay for 100 channels.

  5. SuperSally says:

    But who the hell cares if those 20 channels are ones you watch regularly? I’d rather pay the money and get rid of the useless filler than have a 80 channels of bullshit I have to wade through to get to the twenty I watch.

  6. ogman says:

    @Pylon83: Unfortunately, you are probably right. Cable companies need a new reason to raise rates without providing any new or better services.

    I recently switched to Dish and it’s fantastic. None of the myths about satellite, that cable companies would like you to believe, has turned out to be true. I have more channels, more services, more HD, and I pay less.

  7. bohemian says:

    The FCC just needs to address the obvious retaliatory price jacks the cable companies will try to do when things would go ala carte for consumers. Something that would not allow them to inflate ala carte prices as punishment or dis-incentive for consumers. I would guess they could come up with some sort of percentage or other pricing structure they have to abide by.

    If you have the big dish with an updated receiver you can buy things like Comedy Central for something like $5 a year. This should give people a good basis what cable companies SHOULD be charging for ala carte on such channels. Right now if we want the Anime channel as an add on it is $6 a month. You can get basic Showtime off the big dish providers for $5 a month.

    What angers me is that we have to buy the super premium package in order to get BBC, History International and Boomerang. The rest of the channels in that package besides the movie channels are crap. Sports, more religious crap, shopping channels etc.

  8. It would be nice if the FCC could force companies to offer service! My county is almost 40% unwired, and Comcast refuses to wire anything that’s not new construction.

    I have a cable of theirs that ends at my mailbox, and they refuse to offer service to me or my neighbors. We’ve been trying to get service for ELEVEN years from Comcast, and they refuse. There’s 20 homes where I live, and we’re less than 3 miles from the nearest town and less than 500 yards from the nearest neighborhood where they offer service. Yet they refuse, and we have no recourse.

    Monopolies SUCK.

  9. homerjay says:

    @ogman: I have the same experience with DirecTV. FiOS signed on to my town two months ago and I couldn’t find a reason to leave DirecTV. They’re good to me (who can say that about ANY company).They’ve given me hundreds of dollars worth of credits without bring pressured. They’re product is fantastic- especially the HD content, and even the HD DVR that I totally expected would be a piece of shit is actually damn nice- even compared to my Tivo’s.

  10. Pylon83 says:

    @bohemian:
    It’s not the cable companies that will be the cause of the increased prices. It is the actual networks that control how much the company pays per sub per channel. They typically bundle the channels together to make sure that some of the less popular stations are available to those who want them. It’s basically a subsidy system. The cable company gets channel X for a lower price if they agree to also offer channel Y in their basic lineup. If this system ends, the prices for channel X and channel Y go up. I think the government needs to stay out of this matter, and let the market regulate itself. Satellite provides an alternative for those who do not wish to have cable, and satellite is available nearly anywhere in the country. More government meddling in private business is not what we need here.

  11. Comedy Central, Cartoon Network, Food Network. That is all.

    I will specifically NOT get the Living Network because I am disturbingly addicted to house remodeling shows.

    Meanwhile, how many Americans REALLY do you think are going to pay for Fox News if they have to specifically choose it as something to pay for? I’m surprise Murdoch hasn’t weighed in.

  12. bdjdr says:

    As usual, the FCC is completely off-base here. The problem isn’t a lack of “a la carte” programming or a lack of real regulation, but the fact that, for instance, I can’t get anyone but Comcast in Manchester, NH. The lack of competition from city to city is the real problem with keeping costs up.

    Want to switch to a la carte? I fear the more niche channels I enjoy disappearing. I fear the cost being higher for them if they don’t disappear, and my bill being higher as a result. And let’s not forget that the more involved the government gets in the matter, the closer we’ll get to the government ruling on content, too.

  13. CumaeanSibyl says:

    @Pylon83: I’d be totally fine with that. If I’m going to be paying the same amount anyway, why not cut out the fat? I don’t watch 100 channels.

  14. Pfluffy says:

    Funny how when you get a cell phone, you can pay to get text messaging (you’re not required to have it), camera capability (you’re not required to have it), or ‘net access (which you’re not required to have it). You can pick and choose your service features. Same deal with land line telephones. You can have everything from basic service to complete choice — you can choose what features you do and don’t want. You can’t do that with cable TV.

    Every time my basic cable bill has increased, I called my cable CSR to ask why.

    They all say it’s “because ESPN and sports channels are so expensive to buy — players’ salaries and all..”

    “Why can’t I just drop the daylights out of ESPN and all of the sports channels?”

    “You can’t. We can’t.”

    “You mean I’ve been paying for all these athletes’ lifestyles and social mishaps by paying way more than I should for my cable tv?”

    “You could put it that way, but we have contracts and obligations. And currently the FCC does not allow consumers to order cable al a cart. Your balance is due on or before the 3rd. Have a nice day.”

    *Click*

    I have been very tired of having almost all of my basic cable channels be home shopping channels or sports channels or religious programming. Sure my monthly basic cable TV package is cheaper than monthly expenses of nightly sleep medication. Snoozing through the programming is kind of defeating the purpose of having the cable TV, don’t ya think?

    But channels that I want, like movie channels and other entertainment channels, are on a higher tier. I don’t need 7 versions of ESPN, 8 channels of home shopping, and another 6 channels of religious programming! I want my local broadcast stations — I NEED cable to even get them on my old TV. I want my national news, and a few entertainment channels. I don’t buy premium channels. I don’t want to have to pay for a higher tier when I find the basic tier nearly unwatchable. I’m not home enough to enjoy them.

    I may not be alone, but I DON’T want my MTV anymore, thanks.

    I hope that al a cart availability doesn’t have to INCREASE the price of cable. I’ll just buy a front loader washer and dryer with the windows on the doors and watch them wash and dry my laundry and then cancel my cable TV in that case.

    I hope to lower my bill by only getting programming that I may actually watch if we can get what we want al a cart. If I can’t, I’ll just hang out with my laundry. It’s much better than watching some home shopping hostess come up with 40 thousand different things to do with a plastic paperweight on the fly. And besides, other people seem to enjoy my April Freshness.

    It would be great not to be REQUIRED to be chemically enhanced to enjoy television again. My laundry awaits. I’m trying a new fabric softener and just can’t wait.

  15. jbl-az says:

    @Pylon83: More regulation by government is needed, especially where monopolies or near-monopolies have existed. It’s where corporate USA has been left to self-regulate (“Let the market control these things”) by a government backed by big business, the first consideration has always been company owners and stockholders and the corporation; consumers’ interests come way down the list. That’s why consumers have not had any power in “market regulation” That’s why it’s much harder for middle class citizens in serious debt problems to declare a Ch. 11 bankruptcy; why the credit card companies get to keep raising their fees, tightening up their conditions and limit recourse to arbitration panels that work in their favor; and why cell phone companies get away with all the crap they do like early-termination fees. The consumer is under-represented just about everywhere, and anything that puts a damper on corporate self-interest riding roughshod over the consumer is welcome.

  16. boandmichele says:

    actually, i am going the OTHER way with this.

    i let my tivo do its thing, and i dont worry about what channel a movie comes on. so say, AMC. i never watch that channel, but this halloween my tivo recorded about 100 various horror movies for me. i like that, i told it to record scary movies and it did.

    now, getting rid of the useless filler, sure its a great idea. just offering another point of view. anything to de-monopolize the industry is a good thing.

  17. Pylon83 says:

    @jbl-az:
    The consumers representation comes with their dollar. No one forces anyone to have a credit card, to have a cell phone, or to have cable TV. Cash still exists and can be used to pay bills. Highly regulated land-line phones are still available. Broadcast over-the-air television is still available. The services you mention are are luxuries and because of that the government should not get involved. You have no “right” to ESPN, MTV, Comedy Central, USA, etc. You do have a right to the local, over-the-air broadcasts. That’s why they are “must carry” channels on all of the cable companies lineups. They MUST offer those channels on the most basic tier. If you don’t like it, don’t do business with them. They should not have to bend over to make you happy. If you are unhappy, go somewhere else. Satellite, over-the-air, or buy the shows you like on iTunes or NBC Direct.

  18. veronykah says:

    @BaysideWrestling: After all the stories about Comcast, WHY would you want to use them?
    I had DirecTv for 5+ years and LOVED them. Satellite is the way to go. Plus, they will give you a dish!

  19. spinachdip says:

    I have this totally awesome remote control that has these number buttons, so I can punch in the channel I want directly and don’t have to scroll through channels I don’t want!!!

    Look, I hate the telecom/cable monopolies as much as the next guy, but a la carte programming isn’t the answer. My cable bill isn’t going to be appreciably cheaper if I opt out of the Style channel – remember, these disparate niche cable channels that appeal to a minority of the viewers are very efficient ad sales vehicles for cable providers, and they don’t charge high per-subscriber fees.

    I mean, I don’t go to a restaurant and expect a cheaper tab if I ask to opt out of free sugar packets and ketchup, because I understand that some things are cheaper for to offer as part of the package whether the customer want them or not.

  20. JustAGuy2 says:

    Guys, try to actually read the story. The FCC is talking about WHOLESALE a la carte – the only thing this would do would be to lower costs to people like Directv and Dish Network when they buy programming from Time Warner or Comcast. Time Warner wouldn’t be able to say “ok, if you want to buy channel X, you’ll have to buy channels Y and Z too.”

    This wouldn’t even affect the programming sold by companies like Viacom or Disney who don’t own cable operations.

  21. stanfrombrooklyn says:

    Why do people say “let the market decide” in the industries of cable, telecom, and even professional sports teams? These industries are not and have never been regulated by the open market. These are industries in which the government has always let certain industries gain near-monopoly status and in return they let the government regulate them for the betterment (or supposed betterment) of the consumer. The problem is that recent administrations have let these industries operate like they were in a free market even though they aren’t. And if you think they are in a free market, then go out tomorrow and start up a competing cable company. I will be the first to switch to you.

    Still, a la carte pricing will mean that 2/3 of the channels will disappear and ESPN alone will be $50 a month.

    By the way, almost every cable box and remote control now allows you to “hide” channels you don’t want to watch. Take 10 minutes and consult your manual.

  22. swalve says:

    @bdjdr: Yes, exactly. Who cares if they’re available in 10% or 100% of the market if they have a monopoly on the customers they do have? If each individual consumer has no choice, then there is no choice.

    Let the cable companies lay as much cable as they want and compete for the same customers. That’s good for the consumer.

    @Pfluffy: I agree. But the way cable tv is funded is very complicated and I worry that ala carte could be very expensive for the consumer. Unless there are various bundling options available.

  23. Trai_Dep says:

    @stanfrombrooklyn: because they’re robotic ideologues without a lick of independent thought?

    I’d like a la carte, merely so I can starve the 2,000 Sports, Religous and Shopping channels. Even the ones that pay-to-play will get smacked down, since they’ll no longer be able to say, “We’re carried in 200m households – bow!”

    And, with real competition, I’m sure that the channels will price themselves downward, once consumers are able to separate individual channels from the racks they’re currently embedded in.

    But really, hurt the sports providers and the televangilists. Hurt them good.

  24. Pylon83 says:

    @spinachdip:
    That’s one of the best analogies I’ve heard yet. “Waiter, I’d like to have my bill reduced by $0.77 because I did not use any sugar or salt packets, and I did not drink any of the water you placed on the table absent my request. I also will not require a take-home bag. I am certain that the price of all of these items has somehow been figured into my bill, so I request that you un-figure them from it and reduce accordingly”.

  25. iamme99 says:

    I wrote the following to the FCC & my Congressional representatives back in Feb 2007.

    ============================================
    As of February 1, 2007, Comcast has again increased their monthly charges for my cable service to a total of $52.95 (including taxes)! And I don’t even have a cable box or any other hardware from Comcast.

    As reference, when Comcast took over the cable service from AT&T in June 2003, my bill for the same exact service was $37.39. That is a 41% increase in 3 1/2 years. Further, on January 1, 2000, the monthly charge was only $28.27.

    Comcast is out of control and seems bent on making the most of their monopoly position, as there is no effective competition for them in my area.

    I have the Limited Basic plus the Enhanced Basic services. These combines plans total 77 channels. However, I watch only 17 of the 77 channels, and at least 50% of the 17 are watched only very occasional, at best.

    WHY should I have to pay for channels that I never watch? Why don’t we have an “a la carte” choice?

    The Cable companies say that a la carte service would be more expensive. I find that difficult to grasp and believe. If I use less of something, then it should cost less than if I use more. If there were less channels, then logically, one would expect that the remaining channels could charge more for their advertisements, since there would be less venue’s for advertisers to display their wares on.

    It is high time that Congress and the FCC do something to provide powerless cable subscribers with a real choice. I think a la carte programming is the best solution.
    =============================================

    Update: As of January 2008, Comcast is again raising their rates here (another $5/month?).

    AT&T has a service that offers an alternative to cable. Figuring I might be able to pair this with my net service ($24.99 month for unlimited 3MB DSL) and get out from under Comcast’s big thumb, I did some research. Unfortunately, their service requires a satellite install and doesn’t run over the copper wire DSL that I use for the net. This makes no sense for if I wanted satellite, I would go directly to Dish or whomever.

    AT&T is as clueless as Comcast. I regularly read about new technologies that allow copper wire to transmit at over 100mb/sec but we never seem to see these technologies deployed in the USA. Big sigh.

  26. JustAGuy2 says:

    @stanfrombrooklyn:

    FYI, only DirecTV and Dish offer the ability to hide channels. Cable doesn’t.

  27. JustAGuy2 says:

    @trai_dep:

    The religious channels would still be carried, unless you specifically call up and say “block them,” which nobody will do. Same with shopping. No a la carte plan will require you to select channels that are free – if it were imposed, those would be included, regardless of which channels you choose.

  28. bohemian says:

    I am guessing that if things were changed to an alacarte system you could buy individual channels or some sort of package where you can pick 20 tier one channels, 10 tier two channels and various movie packages for a flat rate.

    Today the issue isn’t technology. Providers COULD buy ten units of something obscure like the Horror Channel and buy 10,000 units of ESPN from the content provider. This is licensing not equipment. Most cable providers are computer and digital based and if content providers sold units rather than blanket service this could be possible and allow more channels.

  29. Pylon83 says:

    @JustAGuy2:
    Not true. The MoxiBox, from Motorola, will allow you to hide ANY channel in the lineup.

    @bohemian:
    The remedy that you suggest also involves the actual channel providers, not just the cable company. It’s the content providers decision, not the cable companies. All of the big networks basically control the contract negotiations. No cable company is going to “walk away” from the bargaining table with ESPN. ESPN says “this is how much you will pay us”, and the cable company says “OK.

  30. SOhp101 says:

    @Pylon83: You’re right, but who watches ALL 150 channels offered in the package? Other than local channels, my channel watching is probably maxed out at around 10.
    10*$5 = 50
    $50<$80

    Looks like I would still win.

    @spinachdip: Your analogy doesn’t make sense–a better one would be that cable would be the steakhouse that only offers the appetizer/salad/steak/2 sides/dessert combo. Thanks, that is probably a better value, but I prefer spending money only on the steak and 2 sides.

  31. spinachdip says:

    @SOhp101: I realize my restaurant analogy was flawed, but I think mine is still closer to how cable companies operate than yours, and my point, that removing things that you don’t want from a package doesn’t necessarily mean a lower cost, still stands. Outside of the fee that the cable company pays the provider, the marginal cost of an additional channel to the cable company is minimal, as opposed to a restaurant menu item – the restaurant has to make up for costs in labor, heating, refrigeration, and disposal.

    And as I mentioned, niche channels are attractive ad vehicles despite their relatively low viewership, so if the cable companies were to lose potential viewers to those smaller cable channels, I imagine they’ll try to make up the lost revenue elsewhere. Plus, as has been mentioned by other commenters, cable companies themselves don’t have a choice since they themselves are getting package deals from providers.

  32. therealhomerjaysimpson says:

    OK, time to pull out the handy dictionaries, folks. Since the vast majority of people can get their HBO and their MTV from multiple providers, there is NO monopoly–not by Time Warner, not by DirecTV, not by Comcast, not by Dish Network. Whether the signal comes to your living room from a wire attached to a pole or a satellie dish is wholly irrelevant. It’s like saying McDonald’s has a monopoly on hamburgers because they fry them instead of grilling them.

    Moreover, cable TV is a luxury item. I’ve checked my constitution, and for the life of me, I don’t see a RIGHT to The Real World anywhere.

    What’s most infuriating about this waste of my tax money at the hands of the FCC is that the phone companies and satellite companies aren’t similarly regulated in their TV offerings. The satellite companies can serve 100% of the country. And the phone companies can certainly serve well over 30% or whatever socialist cap Mr. Martin thinks is the magic number.

    News flash folks–the telcos and the cable companies are offering the exact same products. TV, internet, phone–it doesn’t matter how they started out, it matters what they’re doing now. And if Mr. Martin is half as interested in consumer competition as he claims, he’d recognize that the cable companies are offering phone competition the same way the telcos are offering TV competition. Ergo, keeping a competitor out of the market is ANTI consumer.

    An artificial cap and needless regulation interfering with the free market will only keep competition in phone, and in some cases Internet, services away from consumers in smaller cities, where mom-and-pop type operations don’t have the resources to do what the big guys can do. Only by letting a Time Warner or a Cox, or whoever, into those areas will you see those new services in some cases.

    The FCC is a waste of money, and should be disbanded. Stop wasting my money–if I don’t like what my satellite or cable company does, I can choose not to take their services. It’s capitalism at work–the way it should be.

  33. randombob says:

    @Pylon83:

    Oh I beg to differ that it’s a terrible idea. The reason I don’t have cable now? I want a few of the HD channels, that’s IT. Right now, to get that I have to pay AT LEAST $60 a month, for the privilege of having the cable companies saddle me with at least 198 other channels I don’t want and will never watch anyways. Sure as hell I”d pay a few bucks per channel to have just the select few channels I wanted to watch.

    No, this is a great idea.

  34. AD8BC says:

    The real reason that “a la cart” Cable TV hasn’t been offered up to the masses is that, until the recent creation of digital cable, the ability to have individual stations available at the cable outlet wasn’t technically feasible.

    With analog cable, in most cases the cable line on the pole contains every analog channel. “Basic cable” is provided to your home via a filter that blocks all the premium channels. “Economy Basic” is provided via a filter that blocks “Basic” and “Premium” channels.

    Filters come in a few flavors. “Low pass” filters allow some of the lower channels through while blocking the higher ones. The flavor of the “low pass” filter determines at which channel you stop receiving.

    It is technically impossible to reliably allow one channel through, or to allow channels interspersed throughout the band through while blocking others. Add too many filters and the whole band suffers from signal losses.

    It gets more detailed than that… but although “A la carte” has been asked for for a long time, it is only recently possible by the programming of individual digital boxes.

    And, since digital cable is more expensive than analog cable, most thrifty people would probably only buy basic or economy basic… you would have to pay the digital premium to get the ability to purchase digital channels a la carte. All of the analog channels (generally below 84) would still be available, like it or not.

  35. marsneedsrabbits says:

    @BaysideWrestling:

    Get a dish.

  36. marsneedsrabbits says:

    @spinachdip:

    Your restaurant analogy doesn’t really work, because there are only 2 choices here and many places: Comcast and a dish. If I don’t like the menu in a particular restaurant, I can go to hundreds of others. If I don’t like Comcast, I have to hope I like the dish & that I can receive it where I live.

    In my community, the cable company gets to do its stuff only after promising to serve the community as a whole. In theory, anyway. In actuality, it has meant Comcast has loaded up on shopping channels, Christian religious channels, and Spanish language channels, which, while I am sure they are money makers, are channels I did not watch. It means that all the religious/Spanish/shopping channels edge out what are considered basic channels if you have the dish.

    It also means bad service, snotty phone support, never coming to fix what they say they’ll fix, and one price increase after the other with no channels I actually want to watch.

    In my rather large town, there is no “other restaurant” for many people when it comes to cable.

  37. Pylon83 says:

    @marsneedsrabbits:
    There are actually 4 choices. Cable TV, DirecTV, Dish Network, Over-the-air, and no TV. You do not have a RIGHT to cable television. If you don’t like one, choose another. If you don’t like any of them, go without TV.

  38. therealhomerjaysimpson says:

    @Pylon83:

    And in some cases 5 or 6 choices, if you have companies like Wide Open West, or RCN in your area plus AT&T or Verizon.

    And yet still we have seemingly educated people throwing around the “monopoly” argument. No, not every person has all of those choices, but the majority of folks do.

    As to the religious, foreign language and shopping channels, how many of them are over-the-air stations? For all of those, you can thank, yet again, the FCC for forcing one type of company to do business one way–i.e. carrying those channels–yet letting other companies delivering the same product play by different rules.

    This is why the feds need to stop tinkering with the marketplace–even if you believe, and I certainly don’t, that they have good intentions, nothing the government ever touches to “help” people works out. (Medicare Rx plans and the “donut hole” ring a bell?)

  39. Boberto says:

    Did anyone actually read the story?
    It’s NOT about YOU buying ala carte. It’s about your service providers (like comcast,like DirecTV) being able to say to Time Warner, “we’ll take HBO and Showtime, and piss on the rest of your lineup, you can’t force us to force it on our customers anymore”

  40. hoot550 says:

    I am a satellite junkie and I also have a big dish. There are still a lot of options available if you have space for one of these big dishes. It also becomes more of an adventure to watch tv, because you never know what you’re going to find.

    It was just introduced recently, so I’ve not heard too much feedback on it, but there’s a new dish option out there. It’s a 33″ fixed dish and is very reasonable price wise. I’m not an affiliate or employee or anything, I thought that some of you may be interested in it. And if you’re not a “big dish” person, it’s unlikely you’ll hear about it. [skyvision.com]

  41. iamme99 says:

    Excerpted from [hraunfoss.fcc.gov]

    Federal Communications Commission FCC 06-179

    STATEMENT OF CHAIRMAN KEVIN J. MARTIN

    Re: Implementation of Section 3 of the Cable Television Consumer Protection and Competition Act of 1992, Statistical Report on Average Rates for Basic Service, Cable Programming Service, and Equipment, MM Docket No. 92-266

    Congress requires us to issue an annual report on the price of basic cable services. This year’s report reveals what we already know from our monthly bills: cable rates are rising. In fact, for the past decade, cable rates have risen faster than the rate of inflation.

    In 1996, Congress passed a comprehensive statute that embraced the idea that competition was preferable to regulation. Since then, the price for every service the Commission regulates has decreased-except for cable. For instance, the average rate for wireless service has plummeted 80% and average interstate telephony rates have decreased almost 40%. This is, in part, because those other services have been subjected to competition from providers who have competed on price, as well as on service options and quality. In contrast, cable prices alone have increased, and they have risen more than 90%. (See attached chart.)

    Cable does face some competition from DBS, but our report reveals that DBS and cable do not seem to compete on price. In other words, the presence of a DBS operator does not have an impact on the price the cable operator charges its subscribers. Significantly, however, where a second cable operator is present, cable prices are significantly lower ($43.33 without competition vs. $35.94 where there is competition).

    And we are not alone in this conclusion. The Government Accounting Office also concluded that the average monthly cable rate was significantly lower only in areas with another wire-based competitor.1

    In light of these findings, I believe it is critical then that the Commission act to remove regulatory barriers to the ability of a second cable operator to enter the market. When consumers have the ability to choose among more than one cable operator, they receive one of the most important benefits of competition that the 1996 Act envisioned: lower prices. I look forward to continuing to work to foster additional cable competition and choice that can lead to greater consumer benefits.

  42. erratapage says:

    I love how people say that cable tv is a luxury that you don’t have to buy. I mean… that’s almost like saying, “If you don’t like America, move.” Or… “You could get by on powdered milk, yanno.”

    Or, how about a society that won’t give me a bus within 13 miles of my house that tells me I should ride public transportation if I’m not happy with the price of gas?

    Or, how about the fact that my health insurance deductible was raised to $5,000 (from $2,500) per year, effectively increasing the cost of any healthcare that I might use by 100%.

    Seriously, just because I want to spend a little money on a luxury doesn’t mean I should get screwed by monopoly pricing.

  43. iamme99 says:

    For those above saying you have the choice to go to another provider, this isn’t alway true, particularly if you live in an apartment, condo or townhouse.

    By FCC rules, the landlord or association cannot prevent you from installing a disk in your exclusive area, as long as you don’t drill any holes in the common wall. But if you face north in the northern hemisphere, then you cannot position a disk correctly, so you are SOL.

    Also, if you are not on a lease or otherwise protected from eviction, there is nothing stopping the landlord from giving you notice to move at any time they want.

    Furthermore, if your landlord has negotiated service with a particular supplier and offers that service centrally, you MAY not be allowed to opt for another supplier.

    Details here:
    [www.fcc.gov]

  44. Pylon83 says:

    @iamme99:
    You are not being forced to live in that particular condo, apartment, or townhouse. Looking into these sorts of matters is all part of due diligence when you are selecting a place to live. Don’t try to put off your personal choices on your landlord, condo association, or HOA.

  45. erratapage says:

    Oh man… now I’m being told that I can move if I want to get a new provider! Moving sounds like a lot of problem for a luxury. Oh, wait… my choice is to pay what they want me to pay or move… isn’t this a GREAT country? Hmmmm….

  46. Pylon83 says:

    @erratapage:
    Then perhaps that luxury is not worth it. Maybe you should re-evaluate your needs and wants. And what does “the country” have to do with it? It’s simply business, and it is all one big waterfall. What do you think the writers strike will ultimately result in? Higher prices for televised entertainment. The production companies agree to bump up the royalties to the writers, and make up for it on the back end. Now don’t construe that as me saying I am against the strike, but it is simply the natural result of such an action. You want your cable provider to bend over backwards, and charge you little or no money to receive their service. At some point, it becomes un-profitable for them and they pull out of the market. You can always get a set of rabbit ears and snag the locals over the air.

  47. dirtymoney says:

    I just want to pay for channels I ACTUALLY WATCH!

    Gimmie all the main movie channels (HBO, SHOWTIME,CINEMAX,STARS etc. etc.) & maybe a few regular channels (History channel, comedy central,BBCAmerica etc. etc.) & dont charge me a fortune for them…… THEN I might actually consider getting cable.

    DirecTV was my ONLY option (besides the dish network) where I used to live (rural area) & they treated me VERY well ($60 for the full package minus sports… I hate sports)….. but not the local cable monopolly here where I live now! They wanted $90+ for what I basically had with direcTV & they were complete pricks about it. They had the “if you dont like it… too bad!” attitude. They also promised one thing & when I went to get it & confirm…they acted like they never even made the offer. I havnt had any kind of cable/satellite service since ( my place doesnt face south so I cant get satellite tv)…..and wont until the cable companies get their act together & stop treating their cusomers like shit.

  48. drjayphd says:

    @Pylon83: Thanks for completely missing the point. erratapage was just saying that just because cable isn’t a necessity, it doesn’t mean the customers should be entirely at the mercy of companies that constantly jack up prices for the sake of doing so. Doesn’t have anything to do with re-evaluating your own needs in life, and more to do with the cable companies bending over customers, rather than the other way around.

  49. humbleish says:

    @spiderjerusalem:
    Considering Fox News has higher ratings than CNN and MSNBC combined, you would see far more people drop the other cable news networks than Fox News.

  50. BigNutty says:

    Forget the FCC. If consumers really want to screw the cable companies, cancel your service like I did. Millions of subscribers not paying them anymore. That might make them change their ways.

    But it’s only a dream because most of you couldn’t live without your cable or satellite. You might have to read a book, play with your kids or engage with your family more.

  51. iamme99 says:

    @PYLON83 – Do you happen to work in the cable industry by chance? Seems probable given your responses.

  52. Raziya says:

    I would be thrilled with a la carte…we watch Court TV, Comedy Central, Discovery, the History Channel, USA, and A&E…that is about it.

  53. SoCalGNX says:

    If I were able to delete “religious”, shopping, spanish, sports (except NASCAR) and the completely good-for-nothing PAID PROGRAMMING (WHICH IS LIKE being bill twice for nothing), I would be happy. Don’t care if the FCC does it or just good competion but the differences between satellite and cable are non existant from what I have experienced.

  54. @erratapage: “I love how people say that cable tv is a luxury that you don’t have to buy.”

    I don’t think you should get screwed on the pricing (and it’s utterly absurd) but, um, it IS a luxury you don’t have to buy. Something like 1 in 9 Americans are still on rabbit ears, and I’m one of ‘em.

    @Raziya: “I would be thrilled with a la carte”

    I would even be thrilled with semi-a la carte, where they’d give you plan levels, like “pick 5″ or “pick 10″ and then you’d get 7 or 12 channels, the last two on the plan beings ones they add for you, which would give content providers space to attempt to introduce me to their latest channel or another channel in their suite in the hopes that I’ll buy it when they take it off the “free channel” rotation. If I like History, Discovery, TLC, etc., it’s a good bet that I’ll like, say, Animal Planet, and if I can pay lower prices and pick my channels a la carte, I’m willing to have them provide me a couple extra they want to advertise to me.

  55. savvy999 says:

    @Pfluffy: outstanding!

  56. Pylon83 says:

    @iamme99:
    Actually, I do not. However, I did about 2 years ago. Most of my opinion stems from my belief that more government regulation of a private, non-necessity business is not the answer. What’s next, the government regulating the escalating price of Coca-Cola?

  57. erratapage says:

    My husband made a valid point last night when I was discussing this thread. He suggested that we reevaluate what is luxury and necessity. Is it a luxury to have access to the dominant culture of our society?

    We went through our “discretionary” expenses, and realized that some of them are about conveniece, some are about making it possible for me to earn more money, and some are about being connected with the outer world. I’m not sure being connected with the world is so much a luxury, even if it isn’t a true necessity.

    However, yes… my original point (and I will admit to being very crabby last night) was that I shouldn’t have to pay monopoly prices for anything… be it a luxury like my XBox360, a semi-luxury like cable tv, or a necessity like eggs.

    As for this topic, I don’t know whether ala carte pricing will be better or worse for the consumer. I have a suspicion that it will not help cultural diversity much, but that might be a small price to pay for having the ability to control the messages that come into my home.

  58. Pylon83 says:

    @erratapage:
    Perhaps you would prefer a Socialist or Communist government over our current regime then. Government price controls are not appropriate for items that are not absolutely necessary to live, such as heat, electricity, and water. Gas, Eggs, cable TV, X-Box’s should all be free-market items without the government meddling in the business of those who sell such items.

  59. axiomatic says:

    This is a good thing. I want “a la carte” pricing.

  60. Raanne says:

    For people saying it is a luxury, what about areas that dont receive through-the-air programming? is cable tv still a luxury? or is your access to local news a “right”?. (I just mention this, because where I live doesn’t receive any channels clearly through the air)

    What has made dish network and others become as expensive as cable (at least when i was pricing it out) is their dependance on phone lines, which many people dont have anymore. (at least in the under 35 bracket). this limits your options for any dish service, as well as for internet access, so the price of a home phone line must be added on top of the cost of any of those items.

  61. cyclade says:

    For those of you bemoaning the lack of competition in the cable industry, it’s actually not the FCC’s problem — it’s your local (city, county, or perhaps state) franchising authority that is the problem. As I recall the Federal telecom act’s cable TV provisions (which I haven’t read for several years), the law reflects a policy choice (somewhat dated now) in favor or local licensing of cable TV providers. The stated goal for keeping cable locally rather than federally regulated was something like “protecting” local voices in the media and “diversity”, etc. In reality, the state and local regulators were simply afraid of being displaced — and local TV stations afraid that they’d become irrelevant if cable allowed you to bypass the local affiliate stations. The local regulators’ onerous requirements and/or preference for a particular provider are what keeps competition from happening.

    For example, in Cambridge Mass. where I live, we only can get Comcast for cable service. You simply cannot get service from RCN or even Verizon FiOS here. Somerville, the city next door, has at least RCN, and several adjacent communities have access to FiOS. There’s no geographic issue — the cities are close together and are easy to wire urban areas, so that’s not an issue. What *is* an issue, however, is that Cambridge requires Comcast to offer about a half dozen “public access” channels that put on programming that make “Wayne’s World” look to be well produced and high in social value. The regulators also seem to require multilingual programming (on channels labeled for other networks’ content!) to placate the city’s various non-English speaking populations (I’m fine with a la carte that pricing that gets me off the hook for paying for Chinese, Portuguese, or Spanish stations I can’t understand.) Until these requirements are dropped, we’re stuck with Comcast and a not insignificant amount of crappy content most people don’t want, because some unelected licensing board crams it all down our throats.

    Before fiber optics, broadband, and realtively easy installation technologies, etc. you could have made an argument that cable TV service was a classic “natural monopoly” that required regulation to prevent monopolistic practices because it was so impossible to get a competitor into the industry. Nowadays, however, (at least in urban areas), the only basis for the monopoly is a statutory one. It’s time for Congress and state and local governments to junk the 70s-era regulatory thinking and let us see the benefits of freewheeling competition in the cable market.

  62. barty says:

    @jbl-az: No, the REAL reason why companies continue to get away with this is because, WE as consumers let them.

    People are great at complaining about something, but don’t do anything past that. If you’re sick of the way a company does business, fire them! Most everything you mentioned aren’t necessities, think of all of the money you can keep in your pockets by choosing to do without and not have to deal with the monopoly at the same time!

    We get the shaft because people refuse to go through the minor inconvenience of finding an alternative or can’t do without some perceived “need”. This is America after all, where we should never be denied any pleasure. Companies are very aware of that and exploit it because consumers allow them to.

  63. Freedomboy says:

    Wife and I are close to not watching anything in real time anymore, we record the 5 shows we still watch and use the ‘net for the rest. Now 5 shows is only 5 away from none so if the cable [Comcast] company thinks that bright tech savy folks NEED them they are even more of an asshat than we all think. Add to that Peerflix for cheap DVD’s and on-line radio for politics and such and I think we can all see the future is not so bright for monopoply TV suppliers.

    Think blacksmiths and buggy whip vendor’s fates as a model for the future.

  64. iamme99 says:

    @PYLON83: Perhaps you would prefer a Socialist or Communist government over our current regime then. Government price controls are not appropriate for items that are not absolutely necessary to live, such as heat, electricity, and water. Gas, Eggs, cable TV, X-Box’s should all be free-market items without the government meddling in the business of those who sell such items.

    I think you should get off this horse. Government regulates to stay in business. W/O regulation, government would have nothing to do [lol]. Maybe your argument would hold some water if nothing was regulated and everything was free market. In this case, every company that offered TV signals could offer their service to anyone, anywhere. But this doesn’t exist now and is unlikely to exist in the future. Therefore, if consumers don’t have total free choice, then pricing needs to be regulated to protect consumers from predatory companies like Comcast.

  65. Pylon83 says:

    @iamme99:
    How is Comcast predatory? They might be expensive, but they are in no way predatory, seeking out customers who can least afford their service and exploiting them. Further, I’m not sure I am against predatory business practices. As a society, we should be able to expect at least a reasonable level of intelligence from consumers. If you don’t like how Comcast does business, don’t do business with them. But don’t go on a campaign to have them regulated and affect the way they do business with customers who do understand what they are offering and what they are paying for. I’m not saying that everything should be free market, but I think most things certainly should be.

  66. @cyclade: I actually lived in an area with “cable choice.” What happened was that the rates went up for BOTH available cable companies, went up by quite a bit, and then one of them failed completely … and the other one left the rates high.

    (There was something to do with cost per served consumer for why the rates skyrocketed, I don’t remember the economics.)

    Things-that-come-into-your-house-on-wires — phone, cable TV, electricity — are more or less natural monopolies as well, because someone has to own the lines. Competition almost never works out as planned, because either the company that owns the lines get screwed (has to reduce rates for competitors to use the lines while paying for upkeep that makes the owning company non-competitive) or the companies that don’t own the lines get gouged.

    I think it’s weird that we DON’T expect competition in things-that-come-into-your-house-in-pipes (water, sewer, gas) but we DO expect it in things-that-come-into-your-house-on-wires.

    The real competition for wire-line telephones is cell phones. The real competition for cable has been satellite, not other cable companies.

    “Cambridge requires Comcast to offer about a half dozen “public access” channels”

    Providing public access channels on cable is actually federal law, not local.

  67. iamme99 says:

    @PYLON83, you keep coming up with these non-sequiturs! What year are you living in?

    First you expect government to magically go away and let companies do whatever they want to do. Now you expect consumers to have a reasonable level of intelligence? Whew.

    As has been discussed throughout this thread, many people do not have the option of choice when it comes to TV service, either do to their location or restrictions on adding satellite dishes in apartments and such. So Comcast is predatory because they take unfair advantage of their near monopoly in many locations.

  68. HeHateMe says:

    Hmm,… So whats with Kevin Martin and his anti-cable agenda? Dish and DirecTv raise their rates. You can’t pick ala carte with them. They also own networks and sell them to cable providers for high costs. Yet, I see that this is directed only at cable companies, just like his apartment/condo legislation from a few weeks ago. Seems like Martin had a “bad” experience with a cable company and is taking it out on them. I’d hate to be the CSR that got on his bad side. Talk about a bad move.

  69. iamme99 says:

    Hopefully, should this come to pass, all types of providers will get on board. If Comcast, for instance, suddenly allowed people to choose just the channels they wanted and the price came in at say 50% less than what people pay today, this would ruin the business models for satellite companies. They would likely gain a lot of new customers. Satellite companies would lose business and would have to then modify their business plan, likely adopting the a la carte model also to regain a competitive position.

  70. Atomike says:

    @spiderjerusalem: You need not worry about people not wanting the FOX News Channel – it’s the highest rated news channel, and often has the highest rated shows in all of cable. It is the ONE channel that will surely survive. CNN should worry. Personally, I don’t want news filtered through communist shills like Dan Rather, Katie, and those folks. Based on the ratings, I’m not alone.

  71. iamme99 says:

    FOX – what’s their slogan? “Fair & Balanced”? [ROFLOL]

    The fact that FOX ratings are so high says a lot about the intellectual ability of the average American. And what it says is not positive. Also explains why Bush got elected to another term as el Presidente.

  72. drjayphd says:

    @Atomike: “Communist shills”? Say no more.

    No, really. You may want to clam up before you look even dumber.

  73. zacl15 says:

    I am so sick of paying outrageous fees for cable. I have a package deal with Time Warner for digital cable, internet, and phone. With taxes, it costs about $150/mth. I’m sick of paying fees. No one holds the companies accountable for anything.

    I pay a huge markup for their service and they charge me to rent the box? I mean its not like i can go to the store and buy a box that does all three things, not to mention it isn’t smart cause Time Warner warranties the equipment if it breaks.

    But come on, they nickle and dime us cause their stock isn’t doing so hot. Do companies ever think about the consumers? Hmmmm. If we cost less than satellite TV maybe we will get more customers and more money. Instead, the raise prices and lose customers so they raise prices again.

    Supply and demand time warner. Supply and demand. Lower the price of your supply and your demand will increase, then you will find an optimum point. Perhaps you could find ways to lower your costs internally! its called running an efficient busy..supply management. lower your costs, lower our costs.