GAO’s analysis confirms that cable price increases reflect significant investments by cable operators in infrastructure and programming, which have improved the quality and consumer value of cable television. The report also shows, significantly we believe, that proposals to reregulate cable program service would not benefit consumers. Rather, forcing cable operators to package programming a la carte, would produce a net loss for many cable customers, who would end up paying higher prices for fewer channels.
While GAO reports a price differential in the relatively few markets that have a second wireline broadband provider, GAO has not done any economic analysis to determine whether the differential reflects sustainable pricing or may be explained by anomalous factors.
GAO also recognizes that the cable industry faces significant competition from the two national DBS providers. As GAO notes, these competitors increasingly provide local broadcast signals as part of their offerings, further leveling the video playing field. This rigorous competition, GAO found, benefits cable consumers through competitive rates for video services, improved service quality, and expansion of video and non-video products.
NCTA supports GAO’s recommendations regarding modifications to the FCC’s annual price survey forms. To the extent that the FCC’s price survey fully captures costs which underlie cable prices, we believe it supports the fact that cable prices fairly reflect costs.