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NEWS
[ Wednesday, Feb. 28, 2001 ]

Lack of competition causes rise in cable cost

Collegian Staff Writer

Forget the electricity problems in California — deregulation has caused other problems and is upsetting some students who have cable television.

Earlier this month the Federal Communications Commission (FCC) released its report on cable industry prices.

In the report, the FCC found that operators had an average increase of 5.8 percent last year.

The increase reflects a trend that began in 1999 when the FCC decided to deregulate the industry.

Since some deregulation, cable rates have increased by about 5 percent each following year.

Gene Kimmelman, co-director for Consumer Union's Washington, D.C., Office, attributed the inflated prices to a lack of a competitive market in the industry.

"Another day, another couple bucks on your cable bill. That's what happens when government deregulates a monopoly," Kimmelmen said. "This report demonstrates why policymakers need to require effective competition before deregulation."

In a press statement, the consumer union said cable viewers could save $4 billion dollars a year if communities nationwide had two companies going head-to-head for business.

"It's time for Congress and the FCC to clamp down on cable monopolies and find new ways to start competition," the press release said.

The increases in cable prices are reflected in costs for services through the example of AT&T, the nation's largest broadband cable companies.

Last month AT&T announced to its customers and local franchising authorities that its cable prices would be increasing by 4.8 percent.

According to a company press release, the increase is the result of a rising cost of providing services, which include programming, technical grades and investments in customer service.

The rise in cost is also attributed to a 10-percent rise in fees, which AT&T said it has to pay programmers for the rights to distribute programming.

AT&T said these fees are expected to increase by 10 percent, with sports programming accounting for the largest portion of the increase.

Some students said they aren't happy with the increase and find prices to be too high already.

Scott Fyffe (junior-marketing) currently receives digital cable and splits the bill with his roommates. Fyffe said unless he lived with other people, he probably wouldn't subscribe to digital cable.

"I think the price we pay is sort of steep," Fyffe said.

"Especially because everyday I sit and flip through all these channels, and I still can never find anything to watch."

Fyffe also said that sometimes the movie channels aren't worth the cost because their variety and scheduling is very limited.

However, Melissa Haynal (senior-human development and family studies) said she would definitely pay extra money to receive the amenities of expanded cable.

Haynal, who receives her cable through her realtor, said she would like the increased options offered by digital cable.

"I don't think paying the extra money would be a big deal," Haynal said.

"I think the prices of cable are affected by where you live.

"They may be a little more expensive here because there's not enough companies here, but in major cities the prices aren't that bad."

 

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Updated: Tuesday, February 27, 2001  11:19:03 PM  -4
Requested: Tuesday, October 07, 2008  12:45:57 PM  -4
Created: Wednesday, May 07, 2008  6:33:03 PM  -4