Madison
60° F
Partly Cloudy
Partly Cloudy
Advertisement

Reality Check: Cable Prices To Drop?

Published On: Apr 23 2007 08:02:04 AM CDT
Updated On: Apr 24 2007 08:07:44 AM CDT
MADISON, Wis. -

On Tuesday, state lawmakers will vote on a bill that, if passed, would deregulate the cable industry. But could it mean a drop in prices?

The bill would allow other companies -- likely the telephone companies -- to provide video service with a state franchise. Lawmakers in favor of the bill said it would increase competition and lower rates for consumers.

Whether the bill will actually help is subject of the latest "Reality Check."

A group called TV-4-Us has flooded the airwaves lately, and recent reality checks showed that the group was really a coalition of several groups, including AT&T.

AT&T has been attempting to get into the cable industry, but has had trouble breaking through what it calls monopolies in order to cut rates for consumers, WISC-TV reported.

Cable prices have risen 93 percent nationwide in the past 10 years. TV-4-Us cited a study in favor of the bill that showed that prices would drop if more competitors sprang up. The study showed that Wisconsin cable subscribers could save $148 million, assuming a 15-percent cut in prices.

Two government surveys done in 2004 reflected the same numbers, finding savings between 15 and 23 percent on average when competition was introduced. According to the Wisconsin Policy Research Institute, Madison customers could save almost $138 a year.

Despite the studies' rosy pictures, however, in Montgomery County, Md., -- a suburb of Washington, D.C. -- real prices showed that when three different providers entered a market there were no price cuts.

The county reported that between Comcast, Verizon and RCN, prices actually rose between 4 and 15 percent and there wasn't the promised "price war," WISC-TV reported.

While AT&T promised price cuts, chairman Ed Whitacre said not to expect a price war, but a value war.

"I don't think there's going to be a price war," said Whitacre in early June 2006, "I think it's going to be a war of value and of services."

Several factors go into the price, which makes it hard to predict. They include the cost of programming, how many customer must a company serve, how much will they pay for public access channels and maybe most importantly, how much can a customer will save if they bundle cable with Internet and phone services, WISC-TV reported.

Anyone with an idea for a future "Reality Check" can send an e-mail .

Advertisement
  • Marysville Pilchuck school shooting 4

    KOMO

    2 dead in school shooting near Seattle, sources say

    A school shooting has been reported at Marysville-Pilchuck High School in Marysville, Washington, about 35 miles north of Seattle.

  • Craig Spencer

    CNN

    America's Ebola patients

    An American doctor who was working with Ebola patients in Guinea was been diagnosed with the disease after returning to New York. Learn more about him and America's other Ebola victims.

  • Hot peppers

    Karimala/iStock

    Notable food recalls

    A North Carolina producer of peppers and hot sauces is voluntarily recalling 6,215 pounds of fresh serrano chili peppers because some tested positive for salmonella. Here are other notable food recalls that made headlines.

  • jack-o-lantern Halloween pumpkin

    Juliet James/SXC

    Halloween

    Games, recipes, trick-or-treating, scary movies and everything else you need to make your Halloween extra spooky.

  • Politician, politics, debate, election

    iStock / bns124

    Election Coverage

    Get up-to-date on political stories, Reality Check the latest political ads, learn about the candidates and find election results in our special section.

  • Ebola virus pink

    CDC

    Ebola special coverage

    Get the latest news on the Ebola outbreak and resources to help you learn more about the deadly virus.

Advertisement