Key Issues

In a highly competitive multichannel video marketplace, consumers are enjoying better value as a result of the additional choices, higher quality programming and more advanced technology that’s available. Since the Telecommunications Act of 1996, competition spurred cable to invest well over $100 billion in new broadband services and equipment, leading to the introduction of exciting new interactive services that are meeting consumers’ total needs in entertainment, communication and lifestyle. Cable customers today enjoy more value and better services than ever before.

Cable channels, cable content, and cable value have increased dramatically:

• The annual increase in the average basic cable monthly rate has been less than 4% in each of the last 3 years, 2005 through 2007 (Source: SNL Kagan)
• If the price of a cable subscription is divided by the number of hours per month spent viewing basic cable networks (price per viewing hour or PPVH), the cost was less per hour in 2005 than in 2002. Cable’s nominal PPVH decreased by 3.3% on a nominal basis between 2001 and 2006 and 15.4% on a real, or inflation-adjusted basis (Source data: Average basic cable rates from SNL Kagan divided by average basic cable network viewing time from CAB)
• Basic cable network viewing time in cable homes increased 68 percent from 1995 through 2005 – evidence that the quality of channels is increasing. (Source: Cabletelevision Advertising Bureau)
• For the sixth consecutive year, ad-supported cable is projected to beat out the broadcast networks in prime time, boasting a 55.4 percent household share year-to-date, compared to a 40.4 share for the six broadcast networks combined. (Source: Cabletelevision Advertising Bureau)
• During the 2006-2007 television season, for the first time ever, the Cabletelevision Advertising Bureau (CAB) reported that cable channels combined out-rated broadcast network channels combined, on four out of seven nights of the week.

The bundle is delivering cost savings and top quality:

• Cable’s bundle of video, high-speed Internet and voice service costs 23 percent less than the inflation adjusted price ten years ago, according to data compiled from MSOs and the Bureau of Labor Statistic’s Inflation calculator.
• Internet access speeds are an incredible 17,000 percent to 50,000 percent faster than they were 10 years ago. (Data compared the 1996 average Internet speed of 28K to current 5Mbps-30Mbps speed available from cable operators today.)
• In 1996, it would have cost more than $102 for local and long distance service, 46 channels of cable, and incredibly slow 28K Internet access – $129 adjusted for inflation. That’s compared to today’s typical introductory triple-play bundle at $99, and the consumer gets so much more. (Source: FCC Trends in Telephone Service, FCC 2004 Price Survey, and historical data on dial-up Internet costs)

Cable’s competitors are raising prices at a faster rate:

• From 2005 to 2006, DBS’s average price to customers rose 8.1 percent. (Source: Kagan)
• In November 2007, Verizon announced that it was increasing the price on its core "FiOS Premier" service offering by 11.6% for 2008. Prices for premium channels and specialized programming packages will also increase.
• In November 2006, Verizon announced that it was increasing the price of its brand new video service for new customers by 7.6%.

Price Per Viewing Hour
Expanded Basic Cable Television Service

Average basic cable rates (per Kagan research) divided by average basic cable network viewing time (per CAB)

Source: NCTA