Lawmaker Slams US Cable Industry as Consumer Charges Soar

09 July 2003

A new report from the Federal Communications Commission reveals that the average cable-TV bill jumped 8.2% from $37.06 to $40.11 in the twelve months to June 2002.

This compares with a 7.6% increase in the same period one year earlier. Over the past five years, cable subscription rates have increased an average of 7.1% annually, while overall inflation has remained sedately at just over 2% per year.

And there are instances of far greater price-hikes. The FCC cites popular cable-TV shows such as ESPN’s SportsCenter and TLC’s Trading Spaces, for which bills rose last year by over five times the rate of inflation.

Cable operators point a finger at the rising fees they are compelled to pay for popular channels such as Walt Disney Company’s ESPN, which upped its charges to cable firms by 20% per year.

The co-director of Consumers Union Washington office Gene Kimmelman is not optimistic that lawmakers will fully regulate the cable industry, but hopes “they might be willing to back a … measure [that] allows consumers to choose and pay for only the channels they want in the hopes such a la carte pricing would lead to lower rates for most consumers”.

And although Senate Commerce Committee chairman John McCain (Republican, Arizona), whose panel has jurisdiction over the industry, slammed cable companies for rising “to new heights in their apparent willingness and ability to gouge the American consumer,” his spokeswoman said the senator had no plans to hold hearings on cable rates or introduce any legislation affecting the industry.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff