Press Release
Consumer Groups Urge FCC to Set Limits on Cable Giants
Contact: Timothy Karr, 201-533-8838
WASHINGTON -- Consumer groups today urged the Federal Communications Commission to establish tough new limits to keep big cable companies from growing even larger.
In comments filed with the FCC today, Consumers Union (CU), Consumer Federation of American (CFA) and Free Press argued for a national ownership cap between 20 and 30 percent of the national market to protect consumers from skyrocketing cable prices.
The groups argue that cable companies have been abusing their monopolistic power to overcharge consumers billions of dollars every year, citing ever-increasing monthly cable bills and the expensive packages of channels and services consumers must buy in order to keep receiving the small number channels they actually choose to view. For example, in order to get access to digital services like video-on-demand, consumers must spend more than $60 per month.
"Consumers are often forced to pay astronomical monthly fees for bundles of 100 or more channels simply to receive the 20 or so they actually watch," said Mark Cooper, research director at CFA. "The cable industry is making billions of dollars by forcing consumers to pay for channels they don't want and never watch."
Cable companies have also used their market stranglehold to discriminate against independent programmers, making it nearly impossible for them to gain carriage on cable systems. Without an agreement with Comcast and Time Warner, new networks cannot reach the 60 million households they need to charge advertising rates high enough to succeed. This discrimination gives veto power over new and independent content to the two largest cable companies.
"New networks are at the mercy of these two cable behemoths," said Ben Scott, policy director of Free Press. "For all practical purposes, new networks must be carried by both Time Warner and Comcast to succeed. This reality gives these cable giants unfettered control over the programming the majority of Americans are allowed to watch."
"In today's cable market, there is no real competition," said Jeannine Kenney, senior policy analyst for CU. "The two dominant cable companies determine which channels and services their customers will receive and how much they will pay for them. It is critical that the FCC set tough new limits on ownership to ensure consumers get the services they want without having to pay through the nose."
A copy of the comments is available here.
In other comments expected to filed later today, CFA and CU told the FCC that the proposed merger of Adelphia Communications with Comcast and Time Warner would illegally divide and allocate existing markets of the two cable giants, producing anticompetitive effects that require its rejection under antitrust laws.
"The merger represents an unacceptable increase in the concentration of the national market, but its greatest impact will be in regional markets," the groups said. The merger increases the market share of the two companies in eight of the top 25 markets, setting Comcast and Time Warner up to dominate more than half of the top 50 markets.
In comments filed with the FCC today, Consumers Union (CU), Consumer Federation of American (CFA) and Free Press argued for a national ownership cap between 20 and 30 percent of the national market to protect consumers from skyrocketing cable prices.
The groups argue that cable companies have been abusing their monopolistic power to overcharge consumers billions of dollars every year, citing ever-increasing monthly cable bills and the expensive packages of channels and services consumers must buy in order to keep receiving the small number channels they actually choose to view. For example, in order to get access to digital services like video-on-demand, consumers must spend more than $60 per month.
"Consumers are often forced to pay astronomical monthly fees for bundles of 100 or more channels simply to receive the 20 or so they actually watch," said Mark Cooper, research director at CFA. "The cable industry is making billions of dollars by forcing consumers to pay for channels they don't want and never watch."
Cable companies have also used their market stranglehold to discriminate against independent programmers, making it nearly impossible for them to gain carriage on cable systems. Without an agreement with Comcast and Time Warner, new networks cannot reach the 60 million households they need to charge advertising rates high enough to succeed. This discrimination gives veto power over new and independent content to the two largest cable companies.
"New networks are at the mercy of these two cable behemoths," said Ben Scott, policy director of Free Press. "For all practical purposes, new networks must be carried by both Time Warner and Comcast to succeed. This reality gives these cable giants unfettered control over the programming the majority of Americans are allowed to watch."
"In today's cable market, there is no real competition," said Jeannine Kenney, senior policy analyst for CU. "The two dominant cable companies determine which channels and services their customers will receive and how much they will pay for them. It is critical that the FCC set tough new limits on ownership to ensure consumers get the services they want without having to pay through the nose."
A copy of the comments is available here.
In other comments expected to filed later today, CFA and CU told the FCC that the proposed merger of Adelphia Communications with Comcast and Time Warner would illegally divide and allocate existing markets of the two cable giants, producing anticompetitive effects that require its rejection under antitrust laws.
"The merger represents an unacceptable increase in the concentration of the national market, but its greatest impact will be in regional markets," the groups said. The merger increases the market share of the two companies in eight of the top 25 markets, setting Comcast and Time Warner up to dominate more than half of the top 50 markets.
