Have you noticed that video rates have been going up at a painful rate? FCC Chair Kevin “I love Ma Bell” Martin did and he wants answers. Despite also naming Verizon in the inquiry, it’s pretty obvious that cable is the real target. The focus is on the move of more and more channels out of analog tiers and onto more expensive digital tiers, a practice he believes is compelling consumers to pay bigger prices for the same set of channels. We’ve already seen a bunch of cable providers up their rates with Cablevision and Time Warner both getting in on the hikes.
Unfortunately, Martin is not investigating how wholesale rates from programmers have gone through the roof and has more-or-less abandoned “a la carte” programming options. He’s also ignoring caps from both Frontier (5-20GB) and AT&T (20GB) that are designed to boost revenues. Telcom in general is hurting right now and companies may see rate increases as a way to soften the dropping subscriber numbers. Both Qwest and Cox are planning lay off workers and Comcast had disappointing earnings results.
We may, however, see some big changes in store once the new president takes office. Word on the street is that Martin will voluntarily resign to pursue political ambitions in North Carolina. It’s anyone’s guess as to who would take over his spot and what they would do about these out-of-control telcom prices.