Tags: cable | inflation

Cable Inflation: Price You Pay To Watch TV Is Climbing Wildly

Tuesday, 20 May 2014 08:19 AM

By Nick Sanchez

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Cable prices are on the rise and they're outpacing inflation four to one according to a new report from the Federal Communications Commission.

The increase was recorded in the 12 months ending Jan. 1, 2013, and was the most substantial rise since 1995, ArsTechnica reported.

Specifically, basic cable prices increased by 6.5 percent to $22.63, expanded basic cable increased by 5.1 percent to $64.41, and at a compound average annual rate of 6.1 percent over the 18-year period from 1995-2013.

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

This costs in the figures included data from both traditional coaxial cable as well as fiber services like Verizon FiOS, and did not include taxes, fees, or equipment charges, the latter of which increased by over 4 percent.

Notably, the data collected also included cable companies operating in environments for which no effective competition exists, as well as those that are. The communities without competition saw average price increases of 4.6 percent, and those with competition experienced an average increase of 5.8 percent.

"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 stated.

According to SiliconBeat, "The report comes at a critical time for the industry with the FCC about to consider two proposed mega-mergers . . . AT&T, the second largest broadband provider, announced plans to buy DirecTV, the largest satellite television company. Earlier this year, Comcast, the largest cable company, announced plans to acquire Time Warner Cable, the no. 2 player."

Consumers are getting more channels each year, however consumers only watch 17 out of 189 channels available to them.

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