Society

Cable Prices Went Up Four Times The Price Of Inflation In One Year, FCC Says

| by Sarah Fruchtnicht

On average cable prices in the U.S. have gone up four times the price of inflation over a one-year period, according to a report issued by the Federal Communications Commission.

"Basic cable service prices increased by 6.5 percent [to $22.63] for the 12 months ending January 1, 2013. Expanded basic cable prices increased by 5.1 percent [to $64.41] for those 12 months, and at a compound average annual rate of 6.1 percent over the 18-year period from 1995-2013," the FCC report said.

The rising price of sports programming is helping to drive up the cost, Ars Technica reported.

In addition to bi-annual rate hikes, "equipment prices for basic and expanded basic services increased by 4.4 percent and 4.2 percent, respectively, for the 12 months ending January 1, 2013," the report says.

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"These price increases compare to a 1.6 percent increase in general inflation as measured by the CPI (All Items) for the same one-year period," the FCC wrote. "The CPI’s compound average annual rate of growth over the 18-year period was 2.4 percent."

The survey found the vast majority of cable providers had no local competition.

"We surveyed operators serving 486 out of the 24,238 communities without a finding of competition and 314 out of the 9,417 communities granted an effective competition finding pursuant to the statute," the report said.

But even communities with cable competitors didn’t pay lower prices.

"Over the 12 months ending January 1, 2013, the average price of expanded basic service increased by 4.6 percent, to $63.03, for those operators serving communities for which no effective competition finding was made as of January 1, 2013," the report said. "For the effective competition communities, the average price of expanded basic increased by 5.8 percent, to $66.14."

Meanwhile, consumers continue to buy bundle channels they don’t even watch. On average, homes have 189.1 TV channels and only watch 17.5 of them.

Sources: DSLReports.com, Ars Technica