Frequently Asked Questions
Who Regulates Cable?
Cable television is one of the most regulated businesses in the United States, subject to federal statutes, the Federal Communications Commission (FCC), some state governments, and substantially all local governments. The Communications Act of 1934, the Cable Communications Act of 1984, the Cable Consumer Protection and Competition Act of 1992, and the Telecommunications Act of 1996, and the Rules and Regulations of the FCC, provide a comprehensive set of federal requirements governing the operation of cable systems.
Because a cable system uses local streets and rights-of-way, it is subject to local regulation, typically imposed through a franchising process. Consistent with federal statutes (ie.aforementioned Cable Act), cable operators generally enter into a franchise agreement with each municipality (known as a “local franchising authority” – LFA). As part of this agreement, the municipality may require up to five percent of revenues as a franchise fee. The LFA may choose to regulate the price of the lowest tier of cable service and related equipment and installation fees. LFA’s also may enforce customer service standards and require public access channels.
Isn’t Cable A Monopoly?
By law, there are no exclusive cable franchises. Many communities only have one “hard-wired” cable system for simple economic reasons – a cable system requires millions of dollars in up-front investment. However, with the advent of new technologies, competition in the multichannel video marketplace continues to grow. Today, the television consumer can choose from a variety of multichannel video providers, including Direct Broadcast Satellite, broadband overbuilds, telephone companies, and utilities. As a result of this competition, 22% of multichannel video subscribers now obtain video programming from a source other than their local cable company.
Why Should I Pay for Television – Aren’t The Airwaves Free?
Cable television is not delivered via the free airwaves. Rather, it is piped into cable households by an extensive and expensive network of fiber and coaxial cable, distributed from a super headend containing millions of dollars in telecommunications equipment. In the year 2000 alone, cable companies invested $12.43 billion in infrastructure, upgrades and facilities improvement. Also, the people who create your favorite cable TV shows spend millions of dollars on equipment, production and satellite distribution costs, talent salaries, licensing fees, etc. Without a steady revenue source to support these expensive programs, new, high-quality programs could not continually be produced. Furthermore, experts report that everyone pays for supposed “free” over the air broadcast signals” – whether you like it or not, whether you watch it or not – whether you even have a television or not. Advertisers pay billions of dollars (remember, the Super Bowl ads) each year for television ads on broadcast television. As we all know, advertising dollars increase the cost of products we buy – a cost increase borne by every consumer – at an estimated cost of$510 per year, per family and rising.
Why Do Cable Companies Charge Late Fees?
Like other providers of ongoing service to the home, such as telephone, electric and gas companies, and now, Internet providers, cable systems charge late fees for overdue payments. The late fee offsets the additional costs associated with delinquent payments.
Why Isn’t Channel “XYZ” Carried On My Cable System?
Cable operators are sensitive to viewer interests, and often invest a great deal of time, money and effort in surveying customers to determine what programs they want to view. There are several factors that impact the selection of programming in addition to customer market surveys such as: the system’s channel capacity, the cost of programming, and other contractual obligations negotiated with programmers in return for carriage agreements. This subject is related to current legislative issues. Click "a la carte" and "must carry" to read more.
Why Do I End Up Paying For New Program Services I Don’t Watch?
Extensive market surveys and program previews allow operators to determine the program their customers want to watch. Consequently, the cable channel line-up reflects a variety of tastes and personal preferences much like the Sunday paper with its news, comics, real estate automotive and sports sections. While all readers may not take advantage of each section, they pay the same price as those who do.
How Can I Get My Cable Provider To Add The Networks I Want?
Call, write or respond to your cable company’s surveys. Cable operators keep track of customer requests and often use that information when deciding what channels to add. That is why new, emerging program networks often produce commercials that urge cable TV viewers to call their local cable operator to ask the network be added.
Why Do Cable Companies Carry Duplicate Broadcast Channels?
Many cable customers appreciate having more than one channel of each of the major network affiliates for several reasons: one network affiliate may opt to cover a local event instead of the network feed; broadcast news programs develop extremely loyal viewers; and finally, network affiliates often offer very different sports schedules, appealing to different segments of the viewing audience. Also, a federal regulation called Must Carry/Retransmission Consent affects a cable company’s channel line-up. Under federal law, a local broadcaster has the right under the Must Carry rules to require the cable operator to carry the station. If a local broadcaster exercises its Retransmission Consent option, the cable operator must negotiate with the broadcaster for the rights to carry that station.
What Is Considered A “Local Broadcaster”?
A local broadcaster isn’t always the broadcast station that’s closet to the cable company geographically. The Federal Communications Commission defines a local broadcaster as one located in the same market (or “Area of Dominant Influence”) as the cable system. The demarcation line may seem somewhat arbitrary.
Why Can’t Cable Serve All Geographic Areas?
Unlike electric and telephone companies that were provided subsidies by the federal government to serve sparsely populated areas, cable companies receive no such incentives. Cable companies, supported by private investors, not public funding, can only serve areas where they can expect reasonable return on their investment. It costs about $30,000 on average, to construct one mile of fiber optic and coaxial cable plant. So, when a cable operator evaluates whether or not to build out – each project must stand on its own economic merit.
Can a cable TV construction crew dig a trench for the placement of cable television wires or string wires on poles on my property without my permission?
Cable television operators have a right under state and federal law to access private property for the purpose of installing their facilities. These areas that the cable operators may access are public rights-of-way, that often extend beyond the surface of a paved road, and similar easements that already contain wires, cables, pipes or other equipment used to provide telephone, electric, and other utility services.
Telephone and utility companies acquired the right to use these rights-of-way from property owners, developers or from government entities that owned the underlying properties when they first began installing telephone and utility networks. Even if you did not grant the utility company the permission to use the rights-of-way on your property, a previous owner likely granted permission. When you acquired your property, you acquired it subject to the telephone or utility owners’ right to maintain their facilities in those corridors. State and federal laws give cable operators the right to use these rights-of-way without obtaining any additional permission from the underlying landowner.
Why Would Your Town Want To Build Its Own Cable System?
Competition in the utility industries has city governments searching for new services to offer to replace lost revenue, but communities that have actually constructed their own cable systems, have run headlong into the realities of the marketplace. While in every case, the promise of lower rates was the common denominator in building a government run system; no city in the US has successfully competed with an existing system for more than five years without increasing taxes or fees. This calls into question whether or not it is good policy or good business for a government entity with powers of taxation to compete with a private company in the provision of entertainment and communication services. And, whether government ought to risk the public tax monies to offer a nonessential service citizens can readily buy in the private sector. Furthermore, the unintended consequences of government-owned cable systems warrant consideration. How will it affect a community’s ability to attract private enterprise and private investment in telecommunications in the future? How likely is a private entrepreneur willing to risk private dollars in a community where the threat of competition from the local government looms large? And, finally, what about government controlled media? Do you want local governments looking at your individual programming choices or even choosing them for you?
How Does Cable Television Figure Into Your Concept Of Value?
Perception of value is a personal judgment call each one of us makes based on a variety of factors. What does it cost? How long will it last? How much enjoyment or productivity will it provide? Compare, for example, the average cost for a month of cable service (about $35 national average) to:
· One night at the movies for a family of four
· Two music CD’s
· A ticket to a sporting event such as baseball
· One video game cartridge
Consider too, as you compare costs, that cable offers a full month of local and national news, entertainment, educational programming and sports, delivered 24 hours a day, 7 days a week. Now, that’s value!