Cable Prices Up

By Coorsh, Richard | Consumers' Research Magazine, October 1996 | Go to article overview
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Cable Prices Up


Coorsh, Richard, Consumers' Research Magazine


According to information from the Bureau of Labor Statistics (BLS)--part of the Department of Labor--cable television rates in the United States, as of the end of August, have risen an average of 10.4 to this year.

According to the ELS statistics, the 10.4% aver&ye cable rate hike compares to 3.5% for consumer prices overall. In 1996, cable rates rose 4.1% on average, and in 1994, they dropped 2.6%, due to Federal Communications Commission (FCC) rate caps.

Cable rates are still regulated by the federal government, but cable operators are allowed by the FCC to raise rates to account for inflation and for the expense of providing new channels and programming. Cable rates are slated to be deregulated completely in three years under the recently approved Telecommunications Act of 1996.

The act seeks to spur the competitive marketplace to work to lower prices. Direct broadcast satellite companies (such as DirecTV) as well as telephone companies and others are expected to challenge cable for subscribers.

More than three million homes in the United States receive programming from direct broadcast satellite transmissions, compared to fewer than 100,000 just two years ago.

In a related development, satellite dishes may move out of the closet--and into the back yard. New FCC rules, stemming from the Telecommunications Act of 1996, are intended to "eliminate local laws and housing covenants designed to thwart the growth of small satellite dishes as competitors to cable television," reports The Washington Times.

Some local officials complain that the rules will interfere with ordinances meant to protect historic districts and ensure safety. But the dishes could still be banned in historical areas, like Colonial Williamsburg, and in places like fire escapes where they would present a hazard, David Withrow of the Satellite Broadcasting and Communications Association told the Times.

It is likely the cities are upset at the prospect of losing franchise fees from cable operators to whom they granted monopoly service.

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