Further rollbacks in cable TV rates will threaten cable’s ability to deliver information superhighway technologies to consumers, the National Cable Television Assn. claimed Thursday.
NCTA’s claims come in the heat of a pitched battle to influence Tuesday’s vote at the FCC on further rollbacks in cable rates beyond the average 10% industrywide reductions announced last April. The exact size of the new cuts has not been decided, although one agency source said Thursday that new FCC chairman Reed Hundt is having difficulty lining up support for further across-the-board rate cuts of up to 10%.
Nevertheless, the source said a further lowering of benchmark pricing guidelines adopted by the FCC last April is a near certainty. It’s also expected the FCC will crack down on cablers who are deemed to have exploited a loophole in the 1992 Cable Act — and thus evaded rate regulation — by shifting most basic cable programming to a la carte.
NCTA prez Decker Anstrom said in a statement: “The record before the FCC is clear; deeper cuts will damage cable companies’ capacity to invest in new technology and programming. The government can’t repeal basic business economics.”
Anstrom said the rules adopted by the FCC last April “already … are unprecedented. At no time has an entire industry had its revenues cut so deeply as a result of regulatory action.” The NCTA prez said cablers plan to invest more than $ 14 billion in the next decade to upgrade systems, and that further rate rollbacks will “undermine the industry’s ability to bring new technologies and services to the marketplace.”
NCTA also released a pricing survey of the 25 largest cable companies to determine the impact of rate regulation. The trade org’s analysis found that:
- Monthly bills dropped by 10.5% for regulated cable services, from $ 25.64 to $ 22.96.
- Nearly three-quarters of all cable customers saw cable rates decrease for regulated services.
- The monthly price-per-channel for basic service dropped 15.2%, from 66 cents to 56 cents.
- And households with two additional outlets and three remotes saw their monthly cable bill drop 42%, from $ 40.45 to $ 23.45.