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Cable Technology Feature Article

January 03, 2012

Argentina to Cable Company: Freeze Your Rates

By Michelle Amodio, TMCnet Contributor

The cable situation in Argentina is heating up. Less than two weeks after a security raid on Argentina’s cable monopoly, Clarin, the federal government of the country is now forcing a rate freeze for basic cable television.

Clarin is no stranger to government feud. In 2008, Clarin had a falling out with President Cristina Fernandez, and since things just haven’t been exactly right as rain. The cable conglomerate was raided after a complaint from rival company, Supercanal, cited competition issues.

“This company is citing competition issues,” Clarin's lawyer Damian Cassino said. “This is part of a political battle and (Supercanal) has yielded to the government,” reports Reuters.

Adding even more speculation to an already-scrutinized organization, the cable company is now being forced to freeze its rates, as per current president Cristina Kirchner, and there is no sign of backing down on this matter.

“In a resolution published in the Official Bulletin, the powerful Domestic Commerce Secretariat run by Guillermo Moreno set at 116 pesos ($27) the monthly fee that cable television provider Cablevision SA can charge for its basic package during the first quarter.,” reports Dow Jones.

Grupo Clarin is the named group that owns Cablevision and is the biggest newspaper in Argentina. The group also owns LS85-TV which is the 2nd highest-rated TV station in Buenos Aires.

Fernandez says her goal is to break up monopolies as a way to ensure freedom of expression in Argentina.

In the US, the Consumer Federation of America and Consumers Union, the publisher of Consumer Reports magazine, have long said that the primary reason cable rates have skyrocketed in recent years is that cable companies are taking advantage of their monopoly power.

The groups say that exorbitant cable rate hikes are largely due to the lack of direct competition that exists for the vast majority of cable companies nationwide.

It seems, based on Argentina’s current situation, the idea is likely universal. When cable companies raise rates, they often blame the cost of programming, such as sports channels, and the expense of upgrading systems, however it has been argued that revenues from advertising, digital cable, and other add-on services are enough to cover the expense of upgrades and programming costs.

Michelle Amodio is a TMCnet contributor. She has helped promote companies and groups in all industries, from technology to banking to professional roller derby. She holds a bachelor's degree in Writing from Endicott College and currently works in marketing, journalism, and public relations as a freelancer.

Edited by Jennifer Russell