- The Washington Times - Tuesday, June 26, 2001

If you are paying more than $40 a month for cable, perhaps you should blame Alex Rodriguez.
Cable subscribers in Fairfax County last week became the latest victims of a nationwide wave of rate increases, which cable companies attribute to rising programming costs, especially for sports.
Cox Communications raised its rate for expanded-basic cable service by $2.20, or 6 percent, to $40.40 per month. Fairfax subscribers also saw raised charges for descramblers and remote controls. Earlier this year, Cox ceased distributing a free monthly programming guide and now offers a regional edition of TV Guide instead for $3. Some residents viewed that change as a de facto rate increase.
Consumer advocates claim cable providers are gouging customers. The cable industry insists it is simply doing what it can to accommodate increased programming costs and meet consumer demand.
"Programming costs were really the biggest factor," said Kathryn Falk, president of the Virginia Cable Telecommunications Association. "The cable companies are caught between consumer demand and the programming."
Cox Communications spokesman Scott Broyles said his company spent $561 million on programming in 1999 and $858 million in 2000.
Sports programming, in particular, has become quite costly. ESPN, for example, has increased the price it charges cable companies 20 percent each of the past two years, Mr. Broyles said. At the same time, consumer demand for the all-sports channel has increased, and the cost to broadcast events such as professional football, college basketball and Major League Baseball has gone up along with player salaries.
Miss Falk cited the recent 10-year, $252 million contract of Texas Rangers shortstop Alex Rodriguez as a contributing factor.
"It's the whole trickle-down thing, unfortunately," she said. "Sports programming costs don't seem to be going down anytime soon."
David Beckwith, vice president of the National Cable and Telecommunications Association, said he sometimes cringes when he sees a big contract like the one of Rodriguez.
"One part of me says 'good, that's the American way,' but another says 'ouch, my wallet is going to be lightened down the road,' " Mr. Beckwith said. "Alex Rodriguez is eventually paid for by three types of people: People who watch TV, people who buy tickets and people who buy food at the ballpark."
In its most recent quarterly report, the Walt Disney Co., parent company of ABC and ESPN, revealed that it will spend $12.6 billion on programming rights over the next six years. Disney attributed about 78 percent of that, or $9.8 billion, to sports programming.
"The costs of [sports programming] contracts have increased significantly in recent years," Disney said in its March report.
Over the past two years, ESPN and ABC both signed record contracts for the rights to broadcast Major League Baseball, the National Hockey League and the National Football League. Turner Sports also signed a record contract with the National Basketball Association, and Fox spent a record sum for the right to broadcast several games each week on its Fox Family and FX cable channels.
Added into the mix are demands from regional sports stations that they be included as part of basic cable packages rather than as premium channels.
Satellite TV services are also putting pressure on costs by offering expansive sports programming. Consumers see what the satellite services are offering and demand that their cable companies match it.
"Consumer demand overall certainly would affect rates," Miss Falk said. "To add programming, there is a cost."
A Federal Communications Commission survey released in February showed that cable rates rose more than 5 percent between July 1999 and July 2000. Cable companies attributed about 44 percent of those increases to increased programming costs.
But Consumers Union members contend cable companies are getting away with price increases because they face no serious competition.
"Our position is that cable companies are doing this because they can," said Chris Murray, spokesman for the Consumers Union. "There's no sort of check to prevent gouging consumers."
Consumers may be paying more, but they are getting more, cable companies say. Cable industry representatives point out that the FCC survey shows the cost per cable channel has remained steady.
Cox Communications' recent rate increase came with the addition of five channels to its expanded basic plan, including the Food Network, Oxygen Channel and TechTV. Two former premium channels Disney and Comcast SportsNet are now part of that plan.
Cox also noted that it is in the middle of a $500 million program to upgrade its system to offer digital service and high-speed Internet access.
Consumer advocates concede there is little that can be done to curtail cable-rate increases, but they have urged cable companies to consider "a la carte" programming that would allow cable subscribers to pay for small packages or even pick which channels they get to see.
"I think what we would like to see is cable companies give customers options," Mr. Murray said.
Some cable companies have begun offering such services but have met resistance from programmers. The problem, Miss Falk said, is that some programmers control more than one channel, and insist that a cable provider offer all of their channels as a package.

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