[Federal Register Volume 62, Number 36 (Monday, February 24, 1997)]
[Notices]
[Pages 8245-8246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4425]
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FEDERAL COMMUNICATIONS COMMISSION
[MM Docket No. 92-266; FCC 96-499]
Statistical Report on Average Rates for Basic Service, Cable
Programming and Equipment
AGENCY: Federal Communications Commission.
ACTION: Notice; Report.
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SUMMARY: Section 623(k) of the Communications Act of 1934, as amended,
47 U.S.C. 534(k), which was added by the Cable Television and Consumer
Protection Act of 1992, requires the Commission to publish
[[Page 8246]]
annually a statistical report on average rates for the delivery of
basic cable service, other cable programming services, and equipment.
Pursuant to this requirement, the Commission conducted a survey and, on
January 2, 1997, released its Report on Cable Industry Prices
(``Report''). The Report contains data and information that summarize
survey responses from 756 cable franchises concerning cable industry
prices for the delivery of basic cable service, other cable programming
services, and equipment on three dates: August 31, 1993, July 14, 1994,
and January 1, 1995. The Report is intended to examine the effects of
the Commission's regulation of the cable industry on cable prices.
FOR FURTHER INFORMATION CONTACT: Dan Hodes, Cable Services Bureau (202)
418-7041 or Kiran Duwadi, Cable Services Bureau (202) 418-7028.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Report in MM
Docket No. 92-266, FCC 96-499, adopted December 31, 1996, and released
January 2, 1997. The complete text of the Report is available for
inspection and copying during normal business hours in the FCC
Reference Center (Room 239), 1919 M Street, N.W., Washington, D.C.,
20554, and may also be purchased from the Commission's copy contractor,
International Transcription Service (``ITS, Inc.''), (202) 857-3800,
2100 M Street, N.W., Suite 140, Washington, D.C. 20037. In addition,
the complete text of the Report is available on the Internet at http://
www.fcc.gov/Bureaus/Cable/WWW/csb.html
Synopsis of the Report
1. Pursuant to the statutory requirement, the distributed survey
gathered information on the prices charged in two groups of cable
franchises: (1) those in which there was effective competition,
referred to as the ``competitive group,'' and (2) those in which there
was not, referred to as the ``noncompetitive group.'' A significant
portion of the noncompetitive group, representing more than two-thirds
of the total number of subscribers served by cable operators in
franchises included in the sample, was subject to rate regulation. The
remaining one-third subscribed to services from cable operators in
franchises which were unregulated. Three of the more significant
findings of the Report are summarized below.
2. First, the Report found that prices charged in the
noncompetitive group were higher in all three time periods studied than
those charged in the competitive group. In addition, the Report found
that the price differential between the competitive and noncompetitive
groups was significant prior to the implementation of rate regulation
under the 1992 Cable Act, and that the differential narrowed
substantially after rate regulation was instituted. This finding is
consistent with expectations since the intent of rate regulation was to
simulate the effects of a competitive marketplace.
3. Specifically, the Report found that prior to the implementation
of rate regulation, on August 31, 1993, the average cable rate for
services and equipment charged by the competitive group was $20.51 per
month, and the average charged by the noncompetitive group was $22.23
per month, a differential of 8.4%. After the imposition of rate
regulation, the differential narrowed to 2.7% ($21.04 charged by the
competitive group compared with $21.61 charged by the noncompetitive
group) in July 1994, and narrowed further to 2.3% ($21.25 charged by
the competitive group compared with $21.74 charged by the
noncompetitive group) by January 1, 1995. Similarly, a comparison of
the regulated portion of the noncompetitive group with the competitive
group indicates that the differential in prices charged for equipment,
basic, and other programming services narrowed even further to 2.1% in
July 1994 and to 1.6% in January 1995.
4. Second, the Report found a large drop in equipment prices
between August 1993 and July 1994, the period during which rate
regulation took effect. For example, the monthly rate for remotes for
the noncompetitive group dropped from $1.32 per month in August 1993 to
$0.26 in July 1994. Similarly, over the same period, the average
monthly rate for nonaddressable converters dropped from $1.58 to $1.27
and for addressable converters, from $2.46 to $2.17.
5. Third, the Report found that the average monthly rate per
channel charged by cable operators in franchises subject to rate
regulation fell from $0.62 per channel to $0.53 per channel between
August 1993 and July 1994, a drop of 14.5%. This decline reflects both
an increase in the average number of channels received as well as a
decline in the average monthly rate for programming services. Between
July 1994 and January 1995, the per channel rate remained steady at
$0.53 because the underlying average rate per month and the average
number of channels offered remained roughly the same. The number of
channels received and the average price per channel provide a
comparable way of measuring the services received by cable subscribers.
Ordering Clause
6. It is Ordered that this Report is issued pursuant to authority
contained in Section 623(k) of the Communications Act of 1934, as
amended, 47 U.S.C. 534(k).
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-4425 Filed 2-21-97; 8:45 am]
BILLING CODE 6712-01-P
