Research Center
ASK YOURSELF WHY...CABLE RATES GOT SO HIGH
The first in a series of reports showing how American families are harmed by special interest campaign donations.
A report from the Common Cause Education Fund
BIG CABLE’S $100 MILLION INVESTMENT IN WASHINGTON PAYS OFF
In the mid-1980s, Congress deregulated cable television, only to witness huge price increases. As a consequence, and over the veto of then-President George H.W. Bush, Congress re-regulated cable in 1992. The Federal Communications Commission mandated rate reductions that saved families an estimated $3 billion.1
But just four years later, in one of the biggest flip-flops in history, Congress reversed itself. It passed the Telecommunications Act of 1996. That Act freed the cable industry from nearly all curbs on rate hikes.
The Act lifted all regulation on rates for non-basic cable service, effective immediately for most small cable systems, and for all cable companies by 1999. Proponents in Congress argued that competition from satellite and phone companies that soon would offer video programming would keep prices down.2
The competition Congress predicted did not materialize. As a result, cable rates have increased more than 90 percent since 1995.3 Now American families, on average, are paying more than $45 a month for cable service.4
And while telephone and cable companies may be competing for high-end customers with packages that include high-speed Internet and digital cable, companies are not offering these special deals to every customer. In 2006, alone, for example, Comcast, the country’s largest cable operator, hiked by 6 percent the price it charges for its standard cable package.5
You can read the rest of the report here.