Surprise, Surprise: Basic Cable Costs More in Towns without FCC Regulation

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Guess what happens when regulators don’t restrict cable rates, and when there’s not much legitimate competition in the marketplace? Cable companies jack up the rates. Whodathunkit?

In Boston, where the FCC doesn’t regulate cable prices, the rates charged by Comcast for basic cable have increased by more than 60% in the last three years. The result is that in Boston and other municipalities without FCC regulation, basic cable costs far more—sometimes more than double—the rates charged in nearby towns where the FCC steps in.

The Boston Globe cites data rounded up at the behest of Boston officials by Front Range Consulting showing basic cable rates in three Massachusetts communities with regulation (Cambridge, Chelsea, Malden) range from $7.30 to $11.72 a month—a fraction of the $15.80 – 17.50 monthly basic cable costs in Boston, Brookline, and Everett, which have no FCC regulation.

Why do some communities have regulation, while others do not? Well, regulators are supposed to stay on the sidelines in towns that have more than one cable company. The idea is that competition should, in theory, keep rates from soaring. In Boston, RCN competes with Comcast for cable subscribers, but it’s not much of a competition: RCN has only 15,000 subscribers, compared to 170,000 residents paying Comcast each month. And those Comcast subscribers are paying significantly more than they did just a few years ago: The cheapest basic cable cost just $9.05 a month in 2008, and now rates are up to $15.80.

Part of me wonders why anyone pays at all for these limited basic cable packages. Granted, they’re cheap(ish), but they get subscribers only about 20 channels. That’s not much more than you’d get by purchasing an antenna and watching free over-the-air TV. City officials in Boston are asking the FCC to start regulating cable rates, but perhaps the best thing the city could do for residents is hand out or offer discounts on antennas.

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