Monday, May 09, 2005

Cable Rates and Consumer Value

The cable industry has invested a staggering $75 billion in network upgrades since 1996 in an attempt to migrate from an analog, one-way, low-bandwidth service to a digital, two-way, high-bandwidth system.

This not only makes cable a better value for consumers by offering more channels and services, but it also allows cable to put greater competitive pressure on other service providers, such as telephone companies and satellite firms.

Whereas cable subscribers only had access to an average of 27 channels in 1986, today they have an average of 58 channels. Of course, the total number of channels available on any system can go into the hundreds if all services are considered, including music channels and video-on-demand. In fact, while not available on every cable system, there now exist over 300 different national cable programming networks compared to 87 in 1992.

While cable companies have been busy expanding upon their core mission to become better video programming providers, they have simultaneously made impressive strides in an entirely new sector—data delivery—and become America's primary provider of high-speed Internet access.

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