With so many community broadband stories breaking this week, I did not dig into an update to Boston seeking authority to regulate some cable rates in response to the many rate hikes they have endured from Comcast. Boston's mayor has previously complained about basic cable rate increases.
The Ars Technica story offers some good regulatory background that limits the power of Boston to do much about rates.
According to the City, Comcast's 2011 Basic Service Rate change went from $13.30 to $15.80 a month. This came in the wake of previous rate hikes—to $9.05 in 2008, to $10.30 in 2009, and to $13.30 in 2010.
That all adds up to "more than 60%, on a service that is supposed to be affordable and is identified in the industry as ‘lifeline service'," Boston says.
"In addition, when comparing Boston to neighboring communities that have rate regulation, Comcast has over-collected approximately $24 million from Boston's Basic Subscribers during the four year period from 2008 through 2011," the City's statement claims. Its own research indicates that neighboring cities that are still regulated, such as Cambridge, have cheaper rates.
This has led the Boston Globe to editorialize "If cable firms act as monopolies, cities should be able to regulate.
When the Federal Communications Commission took away Boston’s power to regulate basic cable rates almost a decade ago, the assumption was that competition for pay-TV services would hold prices down for consumers. That assumption has not panned out. Comcast Corp., the successor to Boston’s original cable franchisee, still dominates — not least because its former monopoly status conveys lingering advantages that hamper competition even now. Those advantages help explain why Comcast’s charges for basic cable — now $15.80 a month for a package of 35 channels, according to a city report — have risen by 75 percent since 2008.
We are strong proponents of public ownership (via local government, coops, or nonprofits) in part because the regulatory environment leaves communities practically no tools to ensure local businesses and residents have fast, affordable, and reliable access to essential telecommunications services.
Senator Kerry has stepped in to ask important questions regarding the FCC's classification of where meaningful competition exists.
Mayor Menino is right to ask for an explanation of why that is, whether it requires you to revisit your finding of competition in Boston and other markets like it, and what you recommend to families facing rising prices for access to basic cable services. Given the importance of access to service and the growth in the cost of media for families, I am particularly concerned about the rise in what would have been rate regulated services without the FCC finding of competition.
The US has practically no competition in telecommunications services, which the FCC has historically refused to admit - perhaps because it would require more sensible government policies to ensure Americans have a meaningful choice in telecom services.