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Senate Dems press Wheeler on cable/broadband rates and competition

Four Democratic Senators sent a letter to Federal Communications Commission chairman Tom Wheeler complaining about cable and broadband industrial consolidation and requesting that the commission use its annual report on cable industry prices to provide more detailed information on what Americans pay to access Facebook and watch Game of Thrones.

Sens. Bernard Sanders (ID-Vt.), Al Franken (D-Minn.), Elizabeth Warren (D-Mass.) and Ed Markey (D-Mass.) want the commission to reveal average cable and broadband prices by state, by telecommunications provider, and by urban and rural geographies so that “at the very least, Americans should be able to understand the price of the product they are buying and what their neighbors are paying for the same service.”

The lawmakers prefaced their request with a broadside against the cable giants.

“Many Americans have few, if any, options when it comes to choosing their local cable and Internet providers,” opens the missive sent July 9. “And, as the telecommunications industry has become increasingly concentrated, this lack of choice has resulted in huge price increases and often poor services for customers.”

The letter also complains about the proliferation of fees and escalating rental charges for equipment rentals such as cable modems.

The FCC is required to “conduct and make public periodic surveys of consumers” to determine what they pay for cable services. The commission’s report on cable industry prices details the U.S. average monthly price for basic, expanded basic and “next more popular service” and compares  average prices in “non-competitive” markets and “competitive sub-groups,” but does not detail prices by state and telecommunications provider.

According to the FCC, basic cable rates since 1998 have grown  at a compound annual growth rate (CAGR) of 4.0 percent, rising from an average of $12.06 per month, to the 2014 average of $22.78 per month.  Expanded basic grew from $22.78 per month in 1995 to $66.61 per month in 2014, an annual rate [CAGR] of 5.9 percent.  In contrast, the Consumer Price Index has grown at an annual rate of only 2.345 percent since 1995.