FOR IMMEDIATE RELEASE
March 27, 2014
TVfreedom.org Calls on Congress, Federal Regulators to Investigate Pay-TV's Spurious Claims of Cost-Savings Passed On to Consumers
Washington, D.C. – TVfreedom.org today called on Congress and federal regulators to conduct a comprehensive investigation into whether the National Cable Television Cooperative (NCTC) and other buying groups are truly helping lower consumers’ monthly pay-TV bills through negotiations with cable programmers to purchase their TV channels for cable operators.
“We believe America’s consumers deserve to know whether buying groups, like NCTC, provide any savings at all to consumers on their monthly cable bills, particularly when bills are increasing at twice the rate of inflation and are expected to rise to $200 per month by 2020, even in the face of increased competition and greater consumer choice in the U.S. video marketplace,” said Robert C. Kenny, director of public affairs, TVfreedom.org.
According to the NPD group, consumers today are paying, on average, approximately $86 per month for pay-TV service, with expected monthly bills of $200 per month on the horizon by 2020 if current market trends continue. A new Consumer Reports’ analysis released this week on the pay-TV industry reveals that monthly cable bills have increased at double the rate of inflation in each of the past 15 years through 2012.
Despite these marketplace trends, the American Cable Association (ACA) asserts in a March 24th press release, on behalf of its pay-TV membership, that the NCTC has produced significant programming cost-savings that cable providers are then passing on to America’s pay-TV viewers to help keep their monthly cable bills down. ACA also urged the Federal Communications Commission (FCC) to “recognize the important role” of NCTC and other buying groups in lowering programming costs as part of its current review of the state of competition in the video marketplace.
In response to ACA’s assertions that these joint negotiating activities by NCTC benefit consumers, TVfreedom.org coalition members are urging Congress and federal regulators to investigate the true impact that the NCTC and similar pay-TV supported buying groups are having in the video marketplace.
As part of the inquiry, TVfreedom.org is asking lawmakers and regulators to uncover the answers to the following questions:
1. Are activities of NCTC and other buying group effectively lowering cable programming costs for cable operators?
2. If yes, then what percentage of those cost-savings are being passed onto consumers by cable operators annually?
3. If not, are these joint negotiations just a cable industry driven mechanism aimed at managing programming costs, while cable operators continue to make record profits?
4. If NCTC and other buying groups are effectively negotiating for lower cable programming fees on behalf of cable operators, what has caused consumers’ monthly pay-TV bills to rise at twice the rate of inflation for the past 15 years?
5. Are there concerns among cable programmers regarding the NCTC activities to conduct joint negotiations on behalf of hundreds of cable operators? If yes, what are those concerns?
In addition to identifying glaring problems related to these joint negotiations as part of its investigation, TVfreedom.org is asking Congress and federal regulators to recommend solutions to correct deficiencies and/or consider prohibiting these buying groups from conducting joint negotiations on behalf of cable operators across the country.
Kenny said, “TVfreedom seeks to better understand the role and impact of the NCTC and other buying groups in the marketplace and whether or not cable operators are actually passing any of the alleged cost-savings generated by these business activities onto consumers.”
TVfreedom.org believes that over-valued cable-generated programming costs significantly add to consumers' rising pay-TV bills, along with extra fees for set-top boxes and DVRs, one-time 'change-of-service' charges and punitive early-termination fees.
“We certainly believe that a congressional and/or regulatory investigation into these types of dubious pay-TV business practices is needed on behalf of America’s pay-TV consumers,” Kenny concluded.
About Us
TVfreedom.org, is a coalition of local broadcasters, community advocates, network television affiliate associations, multicast networks, manufacturers and other independent broadcaster-related organizations committed to helping protect consumer interests, ensure emergency and weather related programming access, promote the value of broadcast-TV programming, and preserve a fair and free video marketplace. In the coming weeks and months, the coalition will look to add to its charter membership and will work closely with consumer and community groups, as well as public safety and law enforcement organizations.
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