Saturday, December 04, 2004

"Cable TV rates rise"

'Tis the season for cable increases. My Cox tracking devices have been pulling up a series of stories like this one in the Salina Journal in Kansas. Rates are rising across the country ranging from about 4 to 8%, depending, according to Cox on a vaugely described complex formula that takes into account such non-cost factors as living costs but is generally driven by programming costs. Cable rates have been the subject of much concern nationally as they have consistently outstripped the rate of inflation since degregulation—a move that was intended to increase competition and so drive down rates.

It is currently possible to discover how much (roughly) Cox spends on programming through stockholder reports and information that must bemade available to stockholders on request. With Cox's being taken private, announced this morning (and blogged by Mike) it will be much more difficult than even it is now to come to a rational conclusion about whether Cox's pricing policies are fair.

Most of the Salina Journal story is about local numbers but the following closing remarks are more widely relevant (emphasis mine):
Most of the nation’s cable companies, including Cox, have announced rate increases, as have their main competitors, satellite television providers. Higher programming and operating costs are the reason, Peck said.

Across the country, consumers now pay 56 percent more for cable than in 1996 when cable rates were deregulated.
Deregulating a natural monopoly simply does not work. Most of the country can only hope for price relief by turning to the bandwidth-limited alternative to cable, satellite TV. Few will have, as it now seems Lafayette will, the opportunity to move to public provision through the bandwidth-superior technology of fiber optics as way of ensuring local control, controlling costs, and making sure that our alternative is technologically unlimited. We should thank our lucky stars.

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