WisBusiness: Cable industry disputes state audit that finds rising prices

By WisBusiness Staff

The cable industry is taking issue with the state audit that found prices rose between 2007 and 2009 despite legislation designed to increase competition.

The Legislative Audit Bureau report found basic and expanded basic prices rose by double-digit percentages over the time period studied.

The Wisconsin Cable Communications Association said the report didn’t properly take into account how phone, cable and Internet services are now bundled at a cheaper rate than if they were all purchased separately. The group cited a report that found bundled services are 31 percent cheaper today, when prices are adjusted for inflation, than they were when sold separately a dozen years ago.

“Anyone who understands the economics of a McDonald’s value meal understands the value of bundled products,” the group said in a statement.

Thad Nation, executive director of the group Wired Wisconsin, which supported the competition bill, pointed out the number of channels offered through basic and expanded basic packages increased more than the prices for those services.

“That means consumers are getting more for their dollar in 2009 than they were in 2007,” Nation said in a statement.

Gov. Jim Doyle said the goal of the cable competition bill was in the long run is to foster consumer choice in multi-channel television service. He said the struggling economy over the past year may have stalled benefits of the bill, and it may take some time for the old system of “licensed monopolies to disappear and become one of real competition.”

“Let’s hope when the economy gets turned around money starts flowing again (and) businesses start making large capital investments that we are going to see real competition for multi-channel TV,” Doyle said.

But western Wisconsin Dem state Sen. Kathleen Vinehout, one of the sponsors of legislation to repeal some of the cable competition bill’s provisions, complained those who pushed the legislation two years ago promised $148 million in savings promised for Wisconsin families that has not materialized.

“Deregulation didn’t work for Wall Street and it hasn’t worked for cable services,” said Vinehout, D-Alma. “Cable companies should compete against one another, but they also should play by the rules. They need to respond to customer complaints and deliver promised services. They should live up to their commitment to our communities and public access stations.”