Rate Check: FCC 2013 Survey Finds Expanded Basic Cable Rates up 5.1%

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The FCC released its latest survey on basic cable rates, and not surprisingly, they’re still heading north. The avg monthly price of expanded basic cable service increased overall by 5.1% to $64.41 over the 12 months ending Jan 1, 2013, while the avg price per channel increased by 2.1% to 48 cents/channel, according to the Media Bureau-conducted survey. On an avg annual compound basis, the price per channel is actually lower by 0.3% over the 18 years from 1995-2013. Randomly selected operators are asked to respond to a price survey questionnaire, with the FCC also announcing Fri that it’s soliciting info for its 2014 report (covers Jan 1, 2013-Jan 1, 2014). In the just released-2013 report, a little more than half of the 800 systems studied were subject to local franchise authority regulation of basic cable rates, while the other systems were not. Those operators exempt from rate regulation had higher rates, which the Bureau attributed, at least in part, to the fact that those ops provided a greater number of video channels. Where operators were subject to rate regulation, the survey found an avg price increase of 4.6% for expanded basic to $63.03 vs 5.8% to $66.14 for those exempt from regulation because of a finding of effective competition. The FCC’s 3 previous studies found higher prices where effective competition existed, but surveys before those last 3 found generally lower prices in effective competition markets. The Bureau doesn’t appear overly concerned about the reversal, citing several factors, including an increase in communities deemed to have effective competition based on the DBS market share. Speaking of DBS, the Media Bureau compared the national avg for cable’s expanded basic service to comparable packages by DirecTV (Choice) and DISH (America’s Top 120). Cable’s $64.41 price tag was higher than both—$63.99 for DTV and $59.99 for DISH. DirecTV offered 211 channels compared to cable’s avg of 160 and had a lower price per channel (30 cents vs 48 cents). DISH offered fewer channels (150), but had a 40 cent/channel price point. As for customer premises equipment, most prices increased on an annual basis. “Increases in the overall price for the most commonly leased equipment ranged from 4.4% for basic service, to 4.2% for expanded basic, to 3.9% for the next most popular service,” the survey said. “These percentage increases were lower than the programming price increases for those services (6.5 percent, 5.1 percent, and 4.2 percent respectively).”

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