AVERAGE MONTHLY CABLE BILL ROSE 7.5% LAST YEAR, FCC FINDS
Nationally, subscribers’ average monthly bill for cable and equipment increased 7.5% to $36.99 in 12-month period ending July 1, 2001, FCC reported. Statistics were contained in Commission’s annual report to Congress on cable industry prices. Staff examined monthly charges for basic service and expanded basic tiers, monthly charges for equipment, installation fees, reconnect fees, tier change fees. Specifically, average monthly charge in year for equipment increased 9.1% to $3.24 and for basic and expanded basic programming 7.3% to $33.75.
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NCTA said report “confirms that escalating costs have challenged all multichannel video providers, with cable systems facing head-to-head competition experiencing the same price increases as all others.” Assn. also stressed that price per channel remained relatively constant, “despite substantial operator investment in programming and personnel to support cable’s more advanced services.” NCTA said cable customers were getting more channels and “better value” for their money, as well as advanced services, such as high-speed Internet and cable telephony, both of which were being offered “in a highly competitive environment.”
Report also compared prices charged by cable operators facing “effective competition,” as defined by FCC, with operators not facing such competition and found that those without competition charged more. Both groups increased their average monthly rate for programming and equipment 7.5%, report said. As of July 1, 2001, cable operators facing competition were charging average of $34.93 and operators not facing competition $37.13. Difference in average monthly rates between competitive and noncompetitive groups was 6.3% for both 2000 and 2001. Competitive and noncompetitive cable operators, respectively, charged 55 cents and 60 cents per channel as of July 1, 2001 -- 9.4% differential in average monthly rate per channel. Average price per channel was unchanged for competitive operators and increased 1.5% for noncompetitive operators in year. Competitive group averaged 60.9 channels and noncompetitive group 59.3 channels, reflecting increases in channel offerings of 5.9% and 5.5%, respectively, report said.
Competitive and noncompetitive operators attributed, on average, 64.7% and 58.2%, respectively, of rate increases to higher programming costs. Other factors cited for price increases were system upgrades and inflation. Growth in capacity and advanced services continued for both operator groups. About 2/3 of all cable systems -- 68.7% of competitive operators and 63.2% of noncompetitive operators - - achieved capacity of 750 MHz and above. In year ending July 1, 2001, percentage of noncompetitive cable systems deploying digital video service to at least portion of their subscribers increased to 77.6% from 57.8%. Similarly, percentage of systems deploying Internet service rose to 70.8% from 51.4%. Those offering cable telephony, however, remained virtually constant at 21.1% in July 2001, compared with 20.7% in July 2000.