June 17, 2004

SCATURO FIGHTS FOR RAHWAY CABLE SUBSCRIBERS

Rahway – On June 16, the City Council approved a resolution sponsored by Third Ward Councilman Jerry Scaturo that asks Comcast for a five-year rate freeze, a discounted rate for senior citizens and an “a la carte” option allowing cable subscribers to select and pay for only the channels they want.

A 2003 FCC report said the overall average monthly rate for cable programming services and equipment increased by 8.2 percent, from $37.06 to $40.11, over a 12-month period ending July 1, 2002. This compares with a five-year compounded annual rate of increase of 7.1 percent from July 1997 to July 2002.

“It’s outrageous that cable rates are rising at a rate that is three times that of inflation,” said Scaturo.  “Consumers are left paying the bill for Comcast’s failed acquisition of Disney and are receiving channels they do not want at a higher cost each year.”

According to a 2003 report by Consumers Union, operating margins have been increasing dramatically since 1997.  The operating margin for the industry as a whole will reach $18.8 billion per year in 2002, $7 billion more than it was in 1997.  Operating revenues per subscriber have increased dramatically over that period, from $208 per year to $273.  That is, after taking out all the operating costs, including programming costs, cable operators have increased their take per subscriber by over 30 percent.

“Comcast is abusing its monopoly status by giving consumers less choice at a higher price,” said Scaturo.  “That’s like being forced to order soup and salad at a restaurant when all you really want is a sandwich.  Of course, you would only have the ‘choice’ of eating at one restaurant.”

The General Accounting Office recently found that, in communities where there are two cable companies (and two satellite providers) cable prices are on average 17 per cent lower for comparable services than in communities with two satellite providers and just one cable company.  Some 95 percent of American homes only have access to one cable provider.

“This resolution is only a small step to help our residents have a say against the Comcast monopoly,” said Scaturo.  “There must be bigger change at the national level to give consumers a break.”