Analyst: Comcast-NBC Universal Merger Will Accelerate Cable Price Increases27 Jan, 2011 By: Chris Tribbey
The recently approved Comcast-NBC Universal merger will result in accelerated cable rate increases nationwide, according to Alexander Per, an economist with CBSaver, a cable bill negotiations service.
He said Comcast’s negotiations with the Federal Communications Commission did not include any commitment from Comcast to limit its rate increases, and noted that the 1996 Telecommunications Act keeps the FCC from reviewing cable rates. Per said he fears Comcast will pass on the costs of its $30 billion merger directly to consumers.
“Cable prices have been spiraling out of control, well outpacing increases in other household goods,” he said. “We are talking about 100%-plus growth in the cost of cable in past decade and it is has only just begun. It really is a David vs. Goliath situation.”
An FCC report shows the cost of basic cable has grown 122% since 1995, from $22.35 to $49.65. Time Warner Cable has a 7% rate hike going into effect Feb. 1.
“What really helps consumers is talking with their cable providers,” Per said. “Let them know you aren’t satisfied; let them know you cannot keep paying their outlandish rates. And if you feel your voice isn’t being heard, use a client representative to amplify the volume.”