FCC Confirms Soaring Costs for Video Programming, Retransmission Fees

The average price for basic cable TV service increased 2.3% to $23.79 for the 12-month period ending January 1, 2015, driven in large part by soaring costs for video programming, according to a new Federal Communications Commission pay TV price survey. Expanded basic cable service rates increased by 2.7% between 2013 and 2014 to $69.03. Those are substantial increases, considering that the overall inflation rate was essentially flat for that time period.

FCC data also suggests that soaring retransmission consent fees were a key driver of the price increases. The average pay TV provider paid nearly $12.7 million to local broadcast stations for retransmission of broadcast programming in 2014 – up from $7.8 million in 2013. That’s an increase of 63.2% in one year. The monthly fee per subscriber per broadcast station was $1.07 in 2014, up from 75 cents in 2013 – a 43% increase. The FCC survey was based on information provided by cable TV providers and telecom companies offering video services but did not include input from satellite TV providers or AT&T U-verse. Survey results were published in the FCC’s “Report on Cable Industry Prices” released October 12.