FCC says cable rates drop 6.6% overall

July 15, 1994|By Michael Dresser | Michael Dresser,FCCSun Staff Writer

Cable TV rates of regulated systems in the nation's 25 largest cities have dropped by an average of 6.63 percent since last August, the Federal Communications Commission reported yesterday.

According to the FCC, its "informal and preliminary assessment" found that the typical subscriber's monthly bill from those systems dropped by $1.67 in the wake of two rounds of commission-ordered rate rollbacks. Among the 15 systems that felt the full impact of regulation under the 1992 Cable Act, the average bill dropped $4.57, or 16.46 percent -- close to the FCC's target of a 17 percent rollback.

The report confirmed that Baltimore cable subscribers were among those who benefited least from the rate rollbacks. After rate revisions implemented yesterday, subscribers to United Artists Cable of Baltimore are paying 15.2 percent more than they were last Aug. 31, the day before the first round of price cuts went into effect.

United Artists Cable is owned by Tele-Communications Inc.

"This survey indicates the 1992 Cable Act is working," said Meredith Jones, chief of the FCC's Cable Services Bureau. "The overwhelming majority of subscribers to regulated systems in the survey are paying less today than before rate regulation went into effect."

Stephen R. Effros, president of the Cable Telecommunications Association in Fairfax, Va., agreed -- to a point.

"To the degree that the 1992 Cable Act was designed simply to force rates down, I'd say she's right," he said. "There's always a price to pay, and nobody should forget that. It has taken a tremendous toll on the ability of the cable industry to compete in the future."

He said that the law had its worst effects on companies that create cable programming, because cable operators have cut back on the new channels they otherwise would have added.

The study of 43 cable systems released yesterday differed in some details from those reported in The Sun yesterday after a briefing by Ms. Jones.

In both dollar and percentage terms, Maryland's price rise since last August was the largest among 27 regulated systems around the country, but two of the 16 fully or partially deregulated systems showed greater increases. The increase in United Artists' typical subscriber bill, reported yesterday at $4, was listed as $3.04 in the report.

FCC defines a typical subscriber as one who takes both basic and enhanced cable service, one converter box and one remote control unit.

In addition, United Artists was the only cable system surveyed to raise its rates after both rounds of price rollbacks. Its rates increased $2.52 after the first round of cuts, as programming increases more than offset equipment cost cuts. They went up an additional 52 cents in February as equipment cost increases offset cuts in programming rates.

While Baltimore's typical bill went up more than those at other regulated systems, at $23.04 it ranked near the middle in dollar terms. Rates at regulated systems ranged from $18.69 at TCI in Seattle to $28.79 at Century Communications in Los Angeles.

Coles Ruff, president of United Artists Cable, said Baltimore's cable rates compare favorably with those in neighboring areas. "Baltimore was, prior to rate regulation, and remains, a great value for the entertainment dollar," he said.

One reason United Artists' price has not gone down is that it has been classified as a "low price system." Under the commission's January order imposing a second round of rate cuts, systems claiming low-price status had to reduce their prices only to the FCC's "benchmark" levels. The benchmarks are based on the commission's estimate of what rates would be in a competitive market.

Among the 12 low-price systems in the report, changes between last August and yesterday ranged from Baltimore's 15.2 percent increase to a decrease of 28 percent at Seattle's TCI affiliate. The average low-price system cut its typical monthly bill by 30 cents, or 1.27 percent.

In its report, the FCC served notice that it would take a hard look at systems that claimed low-price status to determine whether they would be required to reduce their rates further.

The FCC is planning a more comprehensive survey for later this year.

LOW-PRICE SYSTEMS SURVEYED BY FCC

Cost for a typical subscriber* as of July 14, 1994, and percent change from Aug. 31, 1993

CITY ... ... ... ... SYSTEM ... ... ... COST ... ... ... ... % CHG

Baltimore .. ... ... TCI ... .. ... ... $23.04 ... ... .. .. 15.20%

Boston ... .. .. ... Cablevision .. ... 22.95 ... ... ... .. 9.81

Manhattan ... .. ... Paragon ... .. ... 23.65 ... ... ... .. 7.74

Manhattan ... .. ... Time Warner .. ... 23.58 ... ... ... .. 7.43

Los Angeles .. .. .. TCI ... ... .. ... 23.67 ... ... ... .. 5.91

Bronx ... ... ... .. Cablevision .. ... 25.01 ... ... ... .. 4.64

Queens .. ... ... .. Time Warner .. ... 24.10 ... ... ... .. 0.63

Philadelphia ... ... Greater Media ... 23.27 ... ... ... ... -2.02

Brklyn/Qns .. .. ... Time Warner .. ... 22.65 .. ... ... ... -11.28

Philadelphia ... ... Comcast ... .. ... 22.06 .. ... ... ... -15.12

San Antonio .. .. .. Paragon ... .. ... 22.62 .. ... ... ... -15.28

Seattle ... .. .. .. TCI ... ... .. ... 18.69 .. ... ... ... -28.0

Weighted avg. ... ... ... ... ... .. .. 23.32 .. ... ... ... -1.27

* basic and enhanced basic service, one converter box and one remote

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