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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Peter V who wrote (48281)	1/14/2000 5:31:00 PM
From: BillyG	Read Replies (1) \| Respond to of 50808

Inflation news (from your local cable company) Cable Rates Up Despite Competition By KALPANA SRINIVASAN .c The Associated Press WASHINGTON (AP) - Despite the growing popularity of competing services such as satellite broadcast, cable TV providers last year continued to raise prices faster than most American businesses, the government said Friday. A study released by the Federal Communications Commission found that between June 1998 and June 1999, cable rates increased 3.8 percent. That's nearly double the Consumer Price Index, which measured general price increases of 2 percent during the same period. The big jump in prices occurred even as direct-broadcast satellite companies and other companies snagged customers away from local cable TV providers. As of last June, 82 percent of TV viewers who received multichannel video programming got it from cable companies, compared with 85 percent a year earlier. But cable customers - almost 67 million of them - still far outnumber the 14 million households subscribing to other services. ``Competition is the best way to reduce cable rates for consumers,' said FCC Chairman Bill Kennard. ``Americans still need more competition and choice in multichannel video.' The difference between the rise in cable rates and inflation was smaller in the period covered by Friday's study than in years past. For example, between June 1997 and June 1998, cable prices rose a staggering 7.3 percent, compared to a 1.7 percent increase in the CPI - despite the fact that cable rates were subject federal price regulations. Cable companies said they tried to be more moderate in raising their rates this year, even absorbing costs as they upgrade systems to support high-speed Internet and phone services. ``This reflects a sensitivity on our part to our customers' reaction to price increases,' said Mike Luftman of Time Warner, which has 13 million cable TV customers. The average price for the company's customers who get an expanded basic package is in the mid-$30 range. But consumer advocates argue that cable companies exercised restraint during parts of the period covered by the study to ward off the threat of being regulated again. The FCC stopped regulating most cable TV services in March, following the directive of a 1996 law. ``There was clearly a concerted effort by the industry to dampen rate increases, while Congress was focusing attention on whether to extend regulatory authority,' said Gene Kimmelman, co-director of the Washington office of Consumers Union. ``If history is any guide, rates will spike up again when policy makers are not watching as closely.' Some cable providers already have announced rate raises for the year. Time Warner plans a 5 percent increase. Cablevision is boosting its prices by a little more than 5 percent, and MediaOne is raising its basic cable TV rates by up to 6 percent. Regulators and lawmakers have expressed hope that satellite television companies would become stronger rivals to cable - and thus serve as a check on cable pricing - after Congress passed a law in November allowing satellite companies to beam local channels into subscribers' homes. Satellite companies had long-cited the inability to offer local channels as a hurdle to attracting customers. As soon as that barrier was removed, satellite companies started seeing the benefits. The nation's largest satellite TV provider, DirecTV, had a record month in December, acquiring 225,000 new customers. ``The full impact of local channels will be realized this year,' said Bob Marsocci of DirecTV. Some consumers could also benefit as cable companies begin offering packages that include cable TV, high-speed online connections and telephone service. ``You will get a better value the more you bundle,' said Mark Siegel of AT&T, one of the nation's top cable companies. For example, in test promotions, AT&T has given customers receiving long-distance and digital cable TV service 10 percent off each bill for a year. AP-NY-01-14-00 1650EST