Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, October 21, 1993 TAG: 9310210043
SECTION: NATIONAL/INTERNATIONAL PAGE: A-7 EDITION: METRO
SOURCE: The New York Times
DATELINE: WASHINGTON LENGTH: Medium
The survey is the first comprehensive examination of how cable companies responded to the new regulations, and it comes after widespread complaints from consumers and members of Congress that cable prices were going up instead of down.
James H. Quello, the commission's chairman, said late Tuesday that it was possible that cable rates had increased for as many as 40 percent of subscribers.
Quello said the commission had been predicting that about two-thirds of customers would get rate decreases. He said that the results of the survey still may be in line with the FCC's goal of delivering $1 billion in annual rate reductions. But Quello admitted being a bit surprised that prices were going up for many people.
The FCC is still trying to calculate the bottom line on whether prices are lower or higher than before, and agency officials said Tuesday that they still did not know how big the average increases and decreases were. The commission is expected to release a full analysis of the survey at its meeting today.
"After we have the full results," Quello said, "the next step will be a widespread inquiry, again with investigative overtones, about whether these increases are in compliance with the rules." The FCC could decide to order refunds.
Quello said last month that he expected more rates to drop than rise. When the cable rate regulations were adopted by the FCC in April, few people expected rates to increase.
In its survey, the FCC asked the top 25 cable companies to explain pricing changes for each of their 10 largest systems, using the commission's pricing formulas.
Eleven of the 25 systems are using an "a la carte pricing" system. That means subscribers pay a certain amount for basic cable, defined by the law as local broadcast stations, as well as public and government-access cable channels. Each cable network channel is priced separately.
The other 14 systems offer a basic cable price and group the cable network channels into tiers.
Overall, rates went up on cable systems using a la carte pricing, Quello said.
On the 14 other systems, partial survey results showed about 69 percent of the rates decreased and 31 percent increased, Quello said.
He said the rates seemed to rise for customers who subscribed only to basic cable, but the survey shows just 4 percent of all subscribers take basic cable alone.
The big issue seems to be the a la carte cable rates. Since the law regulates only basic cable, companies could take additional channels out of their lowest price package. Previously, basic cable may have cost $25 for 25 channels, including 10 cable networks. Now, basic may still be $25 but each of those cable channels could be 50 cents extra.
Quello said the commission was still trying to determine how much prices rose for the a la carte channels and if the increases complied with the new rate regulations.
by CNB