Looking for a reason why people hate their cable companies? Well, there are likely several reasons but one of them is undoubtedly the constant stream of price increases and fees that are taking out more and more of consumers’ wallets every year. A major new study from the Federal Communications Commission has found that basic cable prices increased by 6.5% throughout 2012 while expanded basic cable prices rose by 5.1% over the same period. In contrast, the general rate of inflation as measured by the Consumer Price Index throughout 2012 was just 1.6%, meaning that basic cable prices rose at more than four times the rate of inflation in 2012 while expanded basic cable prices rose by more than three times the rate of inflation.
The FCC also found that cable prices have been growing much more quickly than inflation for a very long time now, as the compound average annual rate for expanded basic cable services between 1995 and 2013 was 6.1% while the compound average annual growth rate for the CPI over that same period was 2.4%. Counterintuitively, the FCC also found that prices for cable services ever since 2009 have been growing faster in areas with “effective competition,” which means that there are two cable companies or more operating in the same market, although the study also found that just 25% of cable subscribers live in markets that are effectively competitive.