Senators Scream at Cable

Senate Commerce, Science and Transportation Committee members wonder why the price of cable TV has risen 50% since deregulation:

Key members of a Senate Committee lashed out at the cable television industry yesterday for repeatedly raising rates on service that effectively forces consumers to subscribe to dozens of channels they may never watch.

....Chairman John McCain (R-Ariz.) said the price increases have followed merger wave that has left just a few big players dominating the industry. "I do not subscribe to the notion that big is always bad in the corporate environment," McCain said. "But along the way to significant consolidation in the cable industry, we have seen a pattern of annual rate increases imposed on consumers that greatly outpace inflation."

Since 1996, when Congress voted to deregulate the industry, the average monthly cable bill has risen 50 percent — more than three times the rate of inflation.

Yesterday's hearing is one in a series that McCain has held to examine the impact of consolidation in the media industries. Next month, the Federal Communications Commission is scheduled to vote on whether to change regulations to allow media companies to get even bigger.

....McCain suggested consumers are suffering because the cable industry does not face enough competition.

McCain said he was disappointed that the federal government rejected last year the proposed merger of two satellite television companies, EchoStar Communications Corp. and Hughes Electronics Corp, parent company of DirecTV, the nation's largest satellite provider. He said the merger would have created a stronger competitor for cable.

McCain released a General Accounting Office report showing that, in markets where cable companies compete with one another, monthly rates are 17 percent below the national average. But that is in a minority of markets. Less than 5 percent of the more than 70 million cable consumers have a choice of providers. [Washington Post]

Yet another reason to prohibit even more media consolidation. Fight on Senator John.

Article Author: Eric Olsen

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