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Senators Want FCC to Probe Cable, Broadband Prices

Four Democratic senators, in an unanticipated letter to FCC chairman Tom Wheeler, urged the FCC to require cable and broadband operators to provide customers more details about pricing.  They cited "huge price increases and often poor service" - along with the "increasing concentration in the industry" as reasons for the Commission to accelerate its scrutiny of cable operations and creation of greater transparency to consumers. 

Senators Bernie Sanders (I-Vt.), Al Franken (D-Minn.), Elizabeth Warren (D-Mass.) and Ed Markey (Mass.) in a July 9 letter asked the FCC to demand that broadband operators provide detailed information about how they establish prices using numerous criteria. They requested transparency for all factors of the monthly bill, including fees and terms such as user caps, modem rental fees, advertised and actual data speeds.  The letter stipulated several cost components that the FCC should be able to identify, including state-by-state and rural-vs.-urban comparisons as well as pricing by various telecommunications providers.

The senators' letter, which surfaced late Friday, seemed to be unexpected by cable lobbyists.  Attempts to obtain comments from the usual sources - and to find out why the senators launched their effort now - were not successful over the weekend.

American Cable Association president and CEO Matt Polka posted an online response, in which he acknowledged that, "Media consolidation has gotten too big and too harmful to consumers."

Polka blamed program content owners, singling out ESPN's lawsuit against Verizon FiOS.

"ESPN doesn't want choice. It wants all consumers to pay for the big bundle of programming and channels that no one wants but still pays ESPN and the other programming conglomerates every month," Polka fumed.  He also urged the lawmakers to call Wheeler "today, and tell him to impose conditions on AT&T-DirecTV merger to protect consumers."

In their message calling for increased industry price transparency, the senators characterized the "de facto telecommunications monopolies" in the U.S, noting that "just 37% of Americans had more than one option for high-speed broadband providers."

"Consumers are often unaware of the various fees that are tacked onto their monthly bills," the letter explained. It cited a Time Warner Cable structure which saw the monthly cable modem rental fee go from $3.95 in 2012, to $5.99 in 2013 to $8 currently: "a 203% increase in three years' time in addition to monthly broadband charges."

"At the very least, Americans should be able to understand the price of the product they are buying and what their neighbors are paying for the same service," the letter said.

In a statement accompanying the letter, Sanders said that the FCC investigation "would help policymakers evaluate the impact of corporate mergers, such as a proposed deal involving Charter, Time-Warner Cable and Bright House Networks."