[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 <a href="http://
www.fcc.gov/Bureaus/Cable/WWW/csb.html">http://
www.fcc.gov/Bureaus/Cable/WWW/csb.html</a>

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