PITTSBURGH, April 3, 2014 - U.S. Rep. Peter Welch (D-Vt.), a Capitol Hill leader with a solid record of bipartisan accomplishment in advancing broadband services and infrastructure in rural America, yesterday expressed concern over the increasing cost of cable service for consumers and their lack of voice and choice.
Consumer cable bills have gone up 6% a year for 20 years, said Rep. Welch, who serves on the House Energy & Commerce Committee's Subcommittee on Communications and Technology. While he acknowledged that the number of channels available to consumers has increased during this same time - from 40 to 100 - he added that most households watch only 18 of those channels. "Is that really consumer choice? Do consumers really benefit from these bundled services? Congress needs to start asking that."
Rep. Welch pointed to skyrocketing programming costs as a significant reason for the price increases. "From 2007 to 2011, cable programmer revenues grew by 37%. That's an indication of the enormous amount of pricing power," he said, adding that big sports fees and a 10-fold increase in retransmission consent fees contributed largely to the continued price escalation.
"In 1995, sports networks accounted for 17 of license fees to programmers. Now that's close to 40%. ESPN will be charging upwards of 6 bucks a month to carry their channel," Welch said.
The problem for consumers and independent cable operators is the inability to control sports costs. "With the exception of [Red Sox slugger David Ortiz] -- whose contract cannot be fat enough -- a lot of these contracts are absurd. You are giving these aging, over-the-hill athletes an incredible payday for ten years. They are going to be on Social Security before they stop getting paid," Welch said.
He noted that sports teams and broadcasters simply pass these costs on to cable subscribers, resulting in a lack of accountability, which is a concern.
"Eighty percent don't watch sports. If you like it and someone else doesn't, should they help you pay for the sports you are watching? That, I think, is a pretty fair question," Welch added.
So the job for Congress is to bring parties together, including the consumer. "I want Congress to understand that consumers will pay a fair price, but let's not break their backs," he said.
Welch noted that cable programmers and broadcasters are offering a good product, be he called for "restraint."
"Consumers," he said, "have to be part of this model. At a certain point, you are going to break the back of that everyday family that wants your service and benefits from it."
The ACA Summit, taking place April 1-3 at the Grand Hyatt, 1000 H Street NW, Washington, D.C, is unique in that it highlights the special role that independent cable operators play in providing world-class communications services to consumers in hometown America.
As cable's premier event for smaller, independent and competitive cable operators, the ACA Summit is widely considered to be the best opportunity for small business owners that provide advanced communications services to advocate for change in direct exchanges with Obama Administration officials, Capitol Hill lawmakers and senior FCC personnel.
The 21st ACA Summit extends a long tradition as the most important forum nationally for honoring the critical role played by independent cable operators that serve rural and remote regions of the country that are typically much more costly to build out with advanced technology.
The theme of this year's summit - Our Time Is NOW! - underscores the important legislative and regulatory goals ACA and its Members are pursuing on Capitol Hill and at the FCC.
Please visit the ACA Summit 2014 website by clicking here: ACA Summit.
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing about 850 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit http://www.americancable.org/.
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