Television is a source of news and entertainment for millions of people. In the US, 76 percent of households with televisions subscribe to pay television service, also known as multichannel video, a number that has been steadily declining in the past few years. A recent study found that the only group which has increased its television viewership in recent years is adults age 50 and older, while younger people are “cutting the cord” and receiving programming via streaming services, saving money by paying only for broadband internet but not cable television. At the same time, the costs of receiving all but free—though very limited—over-the-air television have been rising.
More recently traditional telephone companies have begun to offer their own television services. Pay television is particularly relevant to older Americans, many of whom are less mobile and thus depend on television (often via cable) for news and entertainment.
According to the Federal Communications Commission, the price of expanded basic service has increased at a compound average annual growth rate of 5.9 percent between 1995 and 2014, while the Consumer Price Index increased at a compound average annual growth rate of 2.4 percent over the same period.
The average consumer regularly watches only 17 television channels. To receive those channels, however, consumers must buy subscription packages that typically include hundreds of channels. Many consumer advocates and some members of Congress believe that pay television operators need to adopt à la carte programming; this involves pricing channels individually and letting consumers buy only the ones they want.
Cable, Satellite, Internet-Based TV, and Other Services: Policy
The Federal Communications Commission should make appropriate recommendations to ensure just and reasonable pay-television subscription rates.
Policymakers should ensure that pay-television operators offer options, such as à la carte pricing, that give subscribers more control over content and cost.
Policymakers should protect consumers’ right to public-access programming on pay television.
Regulators should prohibit anticompetitive mergers and acquisitions involving pay-television operators.
Legislators should enact, and regulators should vigorously enforce, consumer protection principles for providers of pay-television service. The principles should include:
- price and quality comparisons—to facilitate and encourage comparison shopping, regulators should require that consumers have access to information that is low-cost or free, comprehensive, and easy to read. Regulators should sponsor and disseminate price and quality comparisons of goods and services;
- disclosure—prices for goods and services should be disclosed up front. Contract terms should be clear and concise;
- privacy—consumers should be protected from the unauthorized use of records and personal data;
- choice—consumers should have a choice of vendors, all of whom should have a fair chance to compete for customers;
- oversight and enforcement—consumers should have a right to fair, thorough, and effective oversight and enforcement of consumer protections by state and federal regulators;
- public participation—consumers should be adequately represented in public policy decisionmaking relating to pay-television service;
- redress—timely and effective means of redress should be available to consumers when they encounter problems. Vendors must clearly explain how and where consumers can lodge complaints. Mandatory binding arbitration should be prohibited; and
- usability—consumers should have easy access both to customer service agents (rather than just an automated call system) and to user-friendly instructions for goods and services.