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Cable Technology Feature Article

April 13, 2012

Boston Wants to Regulate Cable TV Rates. Is This a Trend?

By Gary Kim, Contributing Editor

The Federal Communications Commission has ruled in favor of Boston Mayor Thomas M. Menino’s petition asking for a return of basic cable rate regulation in Boston, a move that will be challenged by Comcast (News - Alert), the city’s main cable TV provider.

The move could signal another oscillation in cable TV regulation, which has periodically swung from a more-regulated to less-regulated to more-regulated to less-regulated climate, on both federal and local levels.

Rate regulation rules were generally loosened in the last swing of the pendulum, in 1992, both at national and local levels, so Boston’s possible move back towards basic cable rate regulation could be a sign of a period of heavier regulation.

The 1992 Cable Act, though getting the FCC (News - Alert) out of the rate regulation business, did give that power to local franchising authorities. Local regulators have lately been quiet on that front.

Cable operators of course hope it’s not the case, for several reasons.

Cable executives naturally prefer the freedom to set their prices, not live with pricing caps, as such rules direct limit potential revenues. But the ramifications also will spread back into the rest of the ecosystem. Without the ability to raise rates, cable operators will be forced to bargain much more toughly with networks that seek to raise their fees, as cable operators will lose the ability to pass those price increases on to customers.

Projected rate increases significantly in excess of background inflation rates, and driven in large part by rapidly-growing sports and other programming costs, might prop up the political effort to put a lid on rates.

Edited by Braden Becker

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