Comcast is set to raise rates an average of 4 percent for Xfinity customers starting in 2013, and AT&T's not far behind with price hikes for its U-Verse customers.
Chattanooga's city-owned utility, EPB, has no plans for any increase, which would have to be approved by its board before taking effect.
Comcast's rate hike will primarily affect Xfinity Triple Play customers, who have not seen their rates rise since the new packages were introduced in 2010, said Jim Weigert, vice president and general manager of Comcast Chattanooga.
"Of our approximately 150 products, less than a third had any changes at all," Weigert said. "It doesn't affect everyone."
Comcast attached notifications to cable bills that began shipping out at the end of November, which list the company's current pricing as well as its new pricing starting on Jan. 1, 2013, he said.
Triple Play customers will see rates rise about $5, while basic cable customers will see their rates rise between 90 cents and $1. A smattering of other products will see prices rise in that same range. Customers who are enrolled in a promotional plan will see no price change until the promotion ends.
"We continue to add more and more content, additional apps, new channels, new features, and we include HBO at no additional charge for most of our triple play feature packages, so when you add up that value over time, you have to adjust accordingly," he said.
For instance, the company recently launched an iTunes-like feature that allows users to download one of the more than 100,000 pieces of OnDemand content and watch it offline on a mobile device. Comcast also launched Streampix this year, which competes with Netflix, Hulu Plus and Amazon Instant Video. Weigert says those type of features cost money to provide, though he says Comcast remains one of the most affordable choices for TV, phone and Internet.
"We feel good about how we compare," he said.
Cathy Lewandowski, AT&T spokeswoman, said the U-Verse price hikes would begin on Jan. 27, 2013.
Most TV customers will see monthly increases of between $2 and $4, she said, which includes a broadcast TV surcharge. Internet customers will see an extra $3 to $5 on their monthly bill, depending on the date they ordered U-Verse, she said.
"We are making some modest price adjustments to our U-Verse and high speed Internet packages that reflect increased business costs and increased costs for the TV content we offer," Lewandowski said, noting it was "an issue that affects all TV providers."
The largest increase any customer will see is about $9, she said.
"A reality for any company is that the cost of doing business changes over time, including the cost to maintain and improve our infrastructure, and supplier and labor costs," she said.
Like Weigert, Lewandowski defended the price hike by pointing to recent service upgrades.
"The price adjustments are outweighed by the additional value we've added for U-Verese customers, including introducing several new apps and features and adding new content on TV, Uverse.com and our U-Verse smartphone and tablet apps," she said.
While EPB is subject to the same pricing pressure from content providers as its competitors, the utility has a ways to go before announcing any rate increase, said Danna Bailey, vice president for corporate communications at EPB.
"We are evaluating our contracts with content providers now, and will determine whether an increase is needed once we've completed those contract negotiations," Bailey said. "If it is determined that a rate increase is needed, we will take that to our board of directors for a vote before anything is implemented."
Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...