FCC: Cable-Rate Increases Slowing


Washington-In a survey released last week, the Federal Communications Commission found that cable-rate increases on a percentage basis slowed in 1999 compared to the prior year.

The survey broke down cable operators into two categories: those that face competition-either an overbuilder or a satellite carrier with 15 percent penetration, or both-and those that don't contend with that level of competition.

For the 12 months ending July 1, 1999, the FCC said, the competitive group raised rates 4.6 percent compared with 5.8 percent for the noncompetitive group. For the prior year, competitive operators' rates went up 6.7 percent compared with 6.9 percent for the noncompetitive groups.

The statistical survey, required by Congress since 1992, calculated rates for basic, expanded basic and equipment.

"Both competitive and non-competitive operators attributed about one-half of their rate increases to higher programming costs," the FCC said.

Other factors cable operators cited for higher rates were inflation, equipment costs and system upgrades.

The FCC found that cable operators that face competition charged less per month than operators that do not-a trend that widened between 1998 and 1999. Noncompetitive operators charged 4.6 percent more in 1998 ($29.97 vs. $28.66) than competitive operators, compared with 5.7 percent in 1999 ($31.70 vs. $29.99).

Because both groups of operators continued to add channels, the FCC found that cable subscribers served by competitive and noncompetitive operators paid the same amount on a per-channel basis: 62 cents and 65 cents, respectively.