Comcast-NBC Merger to Accelerate Substantial Increase in Cable Prices

NEW YORK, Jan. 26, 2011 /PRNewswire/ -- The FCC's January 18th approval of the Comcast and NBC merger is setting the stage for accelerated cable rate increases nationwide.

The FCC's approval did not require any commitment from Comcast to limit their rate increases to the consumer price index (CPI), which has been averaged 1.5% since 2008.  Absent such an express agreement during merger negotiations, the 1996 Telecommunications Act strips the FCC of the legal authority to review cable rates. All that is required for cable companies to raise rates is some form of public notice, no matter how obscure.  This all culminates in Comcast's ability to now pass on additional costs of the $30 billion merger directly to its customers.

According to Alexander Per, an economist with CBSaver, a cable bill negotiations service, "Cable prices have been spiraling out of control, well outpacing increases in other household goods.  We are talking about 100% plus growth in the cost of cable in past decade and it is has only just begun.  It really is a David v. Goliath situation."

The FCC's most recent Report on Cable Industry Prices found that the cost of expanded basic cable service has grown by 122% since 1995, from $22.35 to $49.65. CPI has risen only 38.4% over the same period.  This all comes on the heels of Time Warner Cables' recent 7% price hike announcement, which is set to go into effect on February 1.

In related events, Forbes recently reported that while the FCC did condition the Comcast-NBC merger on taking affirmative steps to promote content competition, they did not institute any price increase restrictions on cable services.  Comcast will only be required to offer a fixed price $49.95 broadband option for 3 years.

So what can you do to help battle these rate increases?  CBSaver recommends a last resort of cutting down on unnecessary cable equipment and considering bundling services.

"What really helps consumers is talking with their cable providers.  Let them know you aren't satisfied, let them know you cannot keep paying their outlandish rates," Per said.  "And if you feel your voice isn't being heard, use a client representative to amplify the volume.  Call your city's office of cable television, call CBSaver, and even call your Congressman.  Just don't become complacent."

SOURCE Verified Ltd