FCC to Investigate Skyrocketing Cable TV Rates, Ignores Telcos

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.

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16 Responses to FCC to Investigate Skyrocketing Cable TV Rates, Ignores Telcos

  1. jasonthe says:

    AT&T is currently testing the caps in Reno NV. It will be interesting to see the results of the test, but Reno NV? Really? How many options do they have to drop AT&T for another provider out there? From a purely business perspective, it seems like a horrible way to test an idea.

  2. Jesse says:

    I think Charter is the cable company out there, so heaven help Renoites.

  3. u235sentinel says:

    Results of the AT&T test? I’ll tell you right now. It will be a tremendous success. People will be demanding for less options and more charges on their bill. They want to pay more for less since that’s their ‘fair share’.

    Yeah I’m making a point here. Basically it will happen regardless of the results. If they have a monopoly (or duopoly) in the area then they will do it. That’s what a monopoly does. They don’t make products good for the people. They make products that are good for the company

  4. Capt. Video says:

    I’m confused on this a little.

    We all know that bandwidth cost something.
    There are a small number of users that use very large amounts of bandwidth. Bandwidth hogs.

    There should be some way of having people pay for the bandwidth they use. Rather than charging everyone for their actual usage, why not have some high cap and charge those that use above the cap?

    All the caps I’ve seen are most generous and very, very few users will be effected by the cap.

    I think the question here is, “Should companies take REASONABLE measures to limit the bandwidth usage of the very small percentage of customers that use very large amounts of bandwidth?” or “Is is wrong to ask heavy bandwidth users to pay for the bandwidth they use?”

    I’d love to hear the service provider view on this issue. No network has unlimited bandwidth and bandwidth management is important even on UTOPIA. Remember it’s ALL shared bandwidth..cable networks or UTOPIA.

  5. Jesse says:

    When caps are used to truly encourage fair use of the network, it’s not a problem. I think Comcast’s 250GB/mo cap is very fair and should be enough for most heavy users. On the flip side, however, you have Frontier proposing a 5GB limit, far less than even most casual users will consume, with overage fees that are literally over 100 times the cost of the bandwidth. AT&T (20GB) and Time Warner Cable (40GB) aren’t too much more generous and use the same markups. The question is if it’s fair for them to use such arbitrarily low limits with such incredible markups on overages when there are so few options in the marketplace. I say no.

    (And note that this is one of the few times where I’ll be praising Comcast for doing the right thing.)

  6. Capt. Video says:


    The “abuse” of bandwidth caps will likely serve to increase the number of providers in a market as they might see opportunity to compete?

  7. Jesse says:

    That’s where UTOPIA providers can make a strong case in Tremonton where Frontier reigns. They can tout caps as high as 500GB versus Frontier’s cap of 5GB and clean up appropriately. In areas where Comcast competes with a generous cap, that particular aspect doesn’t have much relevance (though Qwest does have a non-disclosed cap and reserves the right to terminate heavy users without warning like Comcast used to).

  8. u235sentinel says:

    The “abuse” of bandwidth caps will likely serve to increase the number of providers in a market as they might see opportunity to compete?

    Captain Video. If that’s true then where is the competition? New York, California, maybe a couple other states. The majority however have one or perhaps two options if they are lucky.

    BTW, abuse of bandwidth is a valid argument if (and only if) those limits are advertised. Now that they are, we’ll see if Concast truely will abide by it’s published limits.

    Personally I believe people will stay under the 250 Gig limit however they will still be terminated. Florida’s AG discovered and sued Concast for terminating the top 1000 customers who use the Internet regardless of their usage. They did loose in defending themselves also.

    I was going to post this on my blog but you can read it here too



  9. Capt. Video says:

    I would bet MOST American’s have some choice in providers today! Almost everyone has at least two choices.

    As almost all cable and phone companies in the country offer data services, only those living in small towns and remote areas have no competition…and that is a small percentage of American’s.

    Satellite TV competes with cable everywhere, Vontage competes with the phone company everywhere there is high speed data.

    The cable company AND phone company in small Utah towns like Price, Castledale, Orangeville, Ferron, Moab, St. George, Cedar City, Springville, Spanish Fork, and hundreds of other communities both offer high speed internet.

    Satellite TV is available everywhere cable TV is. Vontage and other phone providers are available everywhere there is high speed data.

    Given the cost of building a wired network, two choices is enough to have competition. More is better, but not realistic or very cost effective.

    I remember when there was only 1 telephone company in most of the country and not many cable companies…and none in bigger cities.

    I suggest that Sports programming is the single biggest factor in high cable rates. The cable companies are not the cause, but they are the victim in many cases. The inability of the cable operator to offer packages without sports programming (due to their contracts with the providers like ABC/Disney which owns ESPN) is very bad for consumers.

  10. u235sentinel says:

    I noticed you didn’t mention providers that actually provide similar services. You have Concast which provides very high speed internet but then you talk about phone companies which typically provide at about 1/5th the speed or slower. Then Satellite which is even worse especially considering the latency.

    That’s hardly competition and options.

    No, most people don’t have options. There is usually only one in any region that provides high speed service then a second who provides a greatly reduced service for about the same price.

  11. jonathan says:

    Lets remember Comcast tends to look pretty on the out side. But they treat their customers like criminals some times. They may have started advertizing the 250 Gig limit but, unlike the providers with lower limits you can’t buy more. They will just cut you off.

    The same goes with their port 25 block. If you get cut off on that (which the majority of people don’t care). They treat you like why wouldn’t you use our server to send email. What why would you use your work smtp server to send work email. Well we will turn it back on this once. But just this one time as a favour. The phone call left me feeling like a criminal who was let off.

    I was cut off two times by false positives on the port 25 thing. I know they were false because I added a port 25 block of my own on my firewall. The first time I am pretty sure it was a timing thing my IP changed only the day before the block happened. The second time I can only think it is/was backscatter.

  12. luminous says:

    pity they won’t sell you a static ip address without buying a mega expensive business account. I sure am glad my Xmission DSL comes with a static ip address, I am hoping that I can keep the same ip address when I move from Xmission DSL to Xmission Utopianet.

  13. Jonathan says:

    Agreed with Luminous. I should clarify my work SMTP server comment. I wasn’t self hosting. I was using Thunderbird to send to an external SMTP server.

    With Comcast for home its lowest common denominator all the way.

  14. luminous says:

    depending on the situation sometimes you can use a different port to send mail on, the problem you are having is actually more common then most would think, if you have access to a machine at work you could forward from that machine on a certain port of your choosing to a different port on another machine. I don’t think you can do this on windows however the forwarding machine would have to have a firewall system capable of doing that such as iptables or pf firewall. or if you can talk you mail admin into it maybe he can open up the server on an uncommon port for access from locations with “difficult” network policy’s. I have the pleasure of having to result to many interesting solutions around insane network policy’s where i currently work. That said Mail is a funny issue for alot of people on many different ISP networks, I bet that Warren Woodward has many interesting story’s about port 25 over at Xmission or least his tech’s do hehe.

  15. jonathan says:

    Yea had they said no I would have walked down the hall and asked our mail guys to setup a listener on 587 or what ever the mail submission port is. I mostly use the webaccess for work stuff now.

    Its always fun at work to receive emails about virus spamming machines on the network. Usually a student with an infected laptop on the wireless. If we are watching we can see it on some of our tools that monitor netflow data for patterns like that.

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