Broadband Cable Association of Pennsylvania

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June 20, 2012

Although the fierce competition between cable companies and online-video services should be good for consumers, experts say it might end up raising both TV and Internet bills.

The Justice Department is conducting an antitrust investigation into whether cable companies colluded to restrict competition from online-video providers such as Netflix, The Wall Street Journal reported. Cable companies want to cap data downloads among heavy users, which would affect those who have abandoned "pay TV" in favor of streaming shows and movies over the Internet. Although more people have "cut the cord" in recent years, analysts say it hasn't resulted in the price cuts that many expected. "Cable prices won't go down unless cable investors get hurt, and that will only happen when even more customers cancel their cable," technology analyst Jeff Kagan said. Nine percent of homes with televisions cut their cable services in 2011, while an additional 11?percent said they planned to do so, a survey by Deloitte this year found.

Despite this, cable prices doubled over the past decade, Kagan said. Customers have been complaining about price increases for years. "This is backwards compared with other technologies, but cable-television pricing continues to go up," he said. And they might double again in the next decade, analysts say. In light of the Justice Department's investigation, cable companies might look for other ways to maintain their revenue and market share.

One option: Do what cellular networks are doing and move toward usage-based pricing for broadband Internet service, said Craig Moffett, senior analyst at Bernstein Research. The shift to usage-based pricing would be good for the cable operators but bad for consumers who want to watch more on-demand television online, he said. Broadcast and cable TV networks also have no interest in lower prices, experts said. "The (cable) companies are caught in the middle and have to pay more year after year to networks," Kagan said. Netflix, Time Warner and Comcast did not respond to requests for comment.

Cable companies also have responded to the competition with new tech offerings such as apps that allow viewers to watch TV on multiple devices and video-on-demand, said Brian Dietz, a spokesman for the National Cable & Telecommunications Association. Google and Apple, which have streaming-video offerings, might be in the best position to upset the status quo, he said. "These two companies changed the wireless space," Kagan said. "Perhaps they can change the television space as well." MarketWatch


Former Democratic state Rep. Mike Veon of Beaver today was sentenced to at least another year in state prison after his conviction on corruption charges. Dauphin County Judge Bruce Bratton sentenced the one-time House majority whip to a prison term of one to four years, fined him $1,500 and ordered him to pay $119,000 in restitution. Veon, 55, is already serving six- to 14-year prison term -- the longest handed out in a state corruption probe -- for illegally using public resources for political purposes. Tuesday's sentence was for his conviction for misusing state funds at a nonprofit he once ran in Beaver County. Veon and his mother both addressed the judge before he imposed the sentence. Veon apologized and said he takes full responsibility for his actions. Associated Press


Former state Sen. Jane Orie will not get out of prison while she appeals her case, an Allegheny County judge ruled Tuesday. Common Pleas Judge Jeffrey A. Manning denied a request from the former senator to get out while she appeals her 14 convictions of using Senate staffers for campaign work and introducing forged documents during a trial. Orie's attorney, William Costopoulos, filed the request Friday. He did not return a call for comment. Orie, 50, is at the women's state prison in Muncy in Lycoming County, serving a 21/2- to 10-year sentence. Prison officials said she could be eligible to move to Cambridge Springs in Crawford County after processing at Muncy. Cambridge Springs generally houses lower-risk female offenders. Manning has until July 4 to decide how much money the McCandless Republican must pay in restitution. Prosecutors suggested that amount could be about $2 million. A jury convicted her in March, and Manning imposed the sentence last month. Orie, who served 11 years in the Senate, is seeking a new trial or a reduction in her sentence. Manning has yet to rule on those requests. Mike Manko, spokesman for District Attorney Stephen A. Zappala Jr., declined to comment. Pittsburgh Tribune-Review

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