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Multichannel News: Per-Channel Cable Prices ‘Clashed’ with FCC's Rate Survey Conclusions

In “Martin FCC Purges Per-Channel Rates,” Ted Hearn at Multichannel News notes a change in the FCC’s cable pricing survey that stayed largely below the radar immediately following the Commission’s release of the survey last week:

Although the FCC has routinely crunched the per channel data in previous reports, it did not do so in the latest one. “This [per-channel] data is [sic] not included in the 2005 price survey report because of the weaknesses associated with using it,” the FCC said. “If cable operators offered consumers the option to purchase channels individually, it would be appropriate to consider the prices charged to consumers for those channels.”


One possible reason for the new policy: While the price of cable programming tiers has risen, inflation-adjusted per-channel cable rates have declined in the decade before January 2005.

The FCC contends the per-channel analysis is irrelevant because consumers can’t buy channels a la carte and can’t get refunds for channels they block. In the FCC report and in virtually every quote issued about it last week, the Commission focused on a “93% increase” in cable prices since 1995. But according to MCN, the per-channel rates can still be extrapolated from the survey: “For the decade, nominal per-channel cable rates rose 19.6%, from 51 cents to 61 cents. Inflation, according to the Bureau of Labor Statistics, was 25.05% for the same period. Since inflation outpaced per-channel rate hikes, real per-channel cable rates actually declined, a result that clashed with Martin’s emphasis on bundled cable rates.”

Posted on December 28, 2006 04:42 PM | Comments (0)

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