FCC: Cable Rates Grew 5.4 Percent in 2003

Prices for cable television services increased at almost three times the rate of inflation during 2003, according to a Federal Communications Commission (search) report issued Friday.

Rates for basic, expanded basic cable service and equipment rose 5.4 percent to an average of $45.32 per month in the year ended Jan. 1, 2004, up from $42.99 a month the prior year, according to the FCC's latest annual cable price report.

The U.S. inflation rate during that period was 1.9 percent, or 1.1 percent when food and energy prices are excluded.

The 5.4 percent increase was slower than the 7.8 percent rise in 2002.

Cable operators have blamed higher prices on rising programming costs but have also said customers are getting more channels to watch.

U.S. lawmakers last year failed to advance legislation that would have allowed consumers to pick and choose the channels they wanted in an effort to curb price increases.

The FCC report showed basic and expanded basic cable subscribers received an average of 70.3 channels in 2003, up 4.1 percent from 67.5 channels a year earlier, while the price per channel rose 1.2 percent to 66 cents from 65.2 cents.

Cable companies have been facing increased competition from satellite television services and telephone carriers like SBC Communications Inc. (SBC) that are seeking to provide customers with video service.