Cable TV Rates Up Sharply, FCC Says

Cable television rates rose 8.2% during the year ended July 1, 2002, more than fivefold the inflation rate during that period, the Federal Communications Commission said Tuesday.

The rate increases topped the 7.1% average monthly rise of the previous five years, according to the FCC’s annual survey of 755 selected cable operators. Cable operators attributed more than 60% of their average monthly rate increases to programming costs, Commissioner Michael Copps said in Washington.

“The cable industry has risen to new heights in their apparent willingness and ability to gouge the American consumer,” said Sen. John McCain (R-Ariz.), chairman of the Commerce Committee.

The panel, which oversees the FCC, “will continue to focus on this issue in the months to come,” McCain said.

Cable companies such as Comcast Corp., with more than 21 million subscribers, attribute the rise to higher prices they pay television and movie studios for programs and the cost of upgrading systems. Most cable customers now have access to fast Internet service and more channels.

“Although cable prices have increased, cable consumers are also enjoying increased value for their entertainment dollar,” said Rob Stoddard, a spokesman for the National Cable & Telecommunications Assn.

Cable operators invested more than $15 billion in system upgrades during the year covered by the FCC report, Stoddard said. Personnel and programming costs also rose at a rate greater than inflation, he said.

Comcast and AOL Time Warner Inc.’s Time Warner Cable, with more than 11 million subscribers, are the two largest U.S. cable operators. “We took on major initiatives to improve customer service,” company spokesman Keith Cocozza said.

Consumer Reports magazine found that cable rates rose nine times faster than those of satellite broadcasters from 1996 to 2001, the Satellite Broadcasting and Communications Assn. said. The number of subscribers to satellite services such as EchoStar Communication Corp.’s Dish Network grew by more than 10% from April 2002 to March 2003, the group said.