Told You So: Cable Rates Continue To Rise Despite Wisconsin Law

Today the Wisconsin Legislative Audit Bureau reported that in spite of the 2007 "Cable Competition Act," cable rates kept going up. Surprise!  Lower cable rates were explicitly and implicitly promised by the law's legislative and corporate sponsors, not to mention its astroturf advertising campaign. But rates keep rising.

This isn't exactly news: Jason Stein's story last month in the Wisconsin State Journal had a great online headline: "Price promises of backers of cable bill fall flat."

Waxing America covered it to death in 2007. 

Scott Bauer's AP story was headlined: "Audit: Wisconsin cable rates rose 21% in two years."

Basic cable rates in Wisconsin increased an average of 21 percent over the past two years, despite a new law designed to increase competition and lower costs, an audit released Tuesday said.

The data suggests that the law which took effect in 2008 did not have a substantial effect on either lowering charges or slowing their growth, State Auditor Janice Mueller said in a letter to lawmakers who chair the Legislature's Audit Committee.

"This isn't a surprise because cable rates go up every year no matter what happens in a state Legislature," said University of Wisconsin-Madison telecommunications professor Barry Orton. He lobbied against the changes and predicted then that they wouldn't live up to the hype. Orton said Tuesday that the audit proves he was correct.

"Rates would have gone up just the same if the law hadn't been passed," he said.

There's some movement in the legislature to revisit the 2007 Act. The Cable Consumer Repair Bill, authored by Rep. Gary Hebl (D- Sun Prairie) and Sen. Kathleen Vinehout (D- Alma) and now accumulating co-sponsors, fixes many of the Act's problems, moving franchise authority to the Public Service Commission from the Dept. of Financial Institutions, allowing municipal oversight over consumer protection, and restoring local access channel funding mechanisms.

“I hope this report spurs some serious consideration of the other promises made during the passage of the Cable Competition Act and will get people to think about all we can gain with my Cable Consumer
Repair Bill,” Hebl said.  “We gave up important consumer protections, local control and funding for public access stations to receive the benefits promised under the Cable Competition Act.  If those
promises aren’t real, it’s time to pass a bill that will get back what we lost.” 

My prediction that cable rates would continue to rise was correct.  Next I use my awesome powers to predict that rain will fall downwards.

- Barry Orton

Comments

[anon]

The quality has dropped, too, thanks to the new, improved digital signal.

[R.J.]

ergo, poorly contrived competition is bad?

[dread3]

Barry...In the interest of making your point, you might consider that not all of us know what you mean by "DFI" and "PEG funding mechanisms."

[Barry Orton]

dread3: Fixed; thanks.

[nonheroicvet]

Hmmm - could it be that polititians who took money from the cable industry and assured us that all will be well were mistaken? It would be interesting to see a list of those honestly mistaken folks and their party affiliation.

[Jon]

While I don't wish anyone ill, this episode does make me feel that the demise of the newspaper industry is well earned. How could they have reported the 2007 Act as a "cable competition" bill when in fact there was NOTHING to prevent companies from competing prior to its passage? Either reporters also received payments from the cable industry, or they're stupid, or they're lazy. I give them the benefit of the doubt and assume the latter.

[Todd]

I thought with the entry of AT&T's U-Verse that rates would become more competitive. However, U-Verse in some regards is more EXPENSIVE than Time Warner Cable. How in the world can they promote competition and that new competitor overshoots the Cable rates?

This is a game that will continue to go on. And have you ever noticed that whenever Time Warner offers great deals for their service it is NOT open to existing customers?!

And furthermore, whoever thinks Government regulation will cure this ill is totally fooling themselves. :(