Congressional investigators explore rising cable rates and claim potentially inaccurate FCC data makes finding the cause difficult. A study released by General Accounting Office indicates that while sports programming and network upgrades may be responsible, changing to a-la-carte programming (letting consumers pick their cable line-up) could result in even higher costs and the death of "niche" channels (see Associated Press or Atlanta Journal Consititution). This goes against suggestions made from Congress and organizations like U.S. PIRG (see their recent report).

As criticism began to emerge from Senator John McCain and consumer groups, the industry consistently blamed programming costs and networks upgrades. One Time Warner public affairs exec recently opined: "You are dealing with the sports world and the entertainment world....We all know about the costs of entertainers and athletes today." The GAO indicates they weren't able to fully confirm this, arguing that the FCC data on cable competition "may not provide reliable information on the factors underlying recent cable rate increases."

The GAO also reinforced statistics showing that when consumers have a choice of more than one cable provider, they'll typically pay around 15 percent less. According to the GAO, only around 2 percent of communities have access to more than one cable provider. The GAO also found that when satellite competition is present, local cable companies on average wind up offering a 5 percent broader selection of networks than they would otherwise.

That's why groups like the Consumer's Union have shrugged off networks upgrades and programming costs as the culprit, and instead blame monopoly strangle-holds for the hikes (as they reported in this January 2003 report). The report argues that revenues for the cable industry are exploding, with each $1 price hike on average resulting in an $800 million increase in revenues.

The report also argues that around one-third of the cable providers have partial ownership of national networks; a half have partial ownership of local networks; so the money profited from increased programming costs is often simply being transferred from one subdivision of a corporation to another. The CU suggests that "merger mania" is more responsible for increased costs than programming or network upgrades. Both the Consumers Union and U.S. Pirg argue that this kind of monopoly control affects broadband pricing as well.

While the GAO urges the FCC to improve their data collection methods, McCain, who promises hearings on the issue soon, summed up the GAO's findings simply: consumers "continue to be fleeced by their cable operators."