A white envelope tucked between the Christmas cards and the holiday gifts in December brought not good tidings and great joy, but news of rate increases that will affect most cable and DSL customers in Chattanooga.
While it's typical for major TV, Internet and phone companies to announce rate increases near the end of the year, this year's news will include fees unfamiliar to some customers.
Come January, Comcast and AT&T will join the ranks of cable companies that break out costs incurred from local broadcasters into a separate billed fee.
Comcast, the world's largest cable provider, will charge $1.50 to customers who receive local broadcast stations through their cable connections, said Jim Weigert, vice president and general manager of Comcast in Chattanooga. The fee will affect nearly all of Xfinity's customers, and with Comcast's adoption the policy will become an industry standard.
"Local broadcasters have now started to charge cable providers to retransmit their signals," Weigert said. "That wasn't the case in the past. It's more than doubled in many cases. Comcast nationally just decided this year to introduce the broadcast TV fee to recover some of that cost. That way, if there are changes to it, the customers can see it."
AT&T's U-Verse and Charter Cable also charge the fee, which ranges from $1.50 to $2.15 depending on the cable provider. But while the broadcast TV fee will be nearly universal, other fees will vary depending on customers' service plans.
About one-third of Comcast's customers are on a promotional plan and won't see any change before the promotional period runs out. EPB video customers also won't be seeing any rate change, at least not anytime soon, said John Pless, a spokesman for the city-owned utility that competes with Comcast.
But U-Verse customers will be seeing rates rise between $3 and $6 each month -- including the local broadcast surcharge -- depending on their level of service, said Cathy Lewandowski, senior manager for corporate communications at AT&T of Tennessee and Kentucky.
"We are making some modest price adjustments to our U-Verse TV and high-speed Internet offerings that reflect increased business costs," Lewandowski wrote in an email. "We continue to add new apps, features and content on U-Verse TV, U-Verse.com and our U-Verse smartphone and tablet apps to make the experience even better."
U-Verse high-speed Internet customers will see an increase of $5 per month, for a total average increase for AT&T customers of between $6 and $7 per month, unless they're on a promotional plan.
"What customers can expect is that we will continue to bring innovative features and content to AT&T U-Verse and that we are firmly committed to giving customers the best value, the best product, and a better TV experience," Lewandowski said.
Most Comcast customers' rates will climb from 50 cents to $5, depending on dozens of factors spelled out in a large price sheet included in their December bills. The cost of Internet increased $2. Modem rentals went up $2. Double and Triple Play packages saw incremental increases, depending on the type of plan.
Most of the costs are being passed on from content producers.
"The biggest driver is programming costs," Weigert said.
But some of the fee increases are supporting Comcast's investments in mobile, OnDemand and connectivity improvements that allow customers to access content from virtually anywhere. The company is rolling out its new X1 cloud platform that includes smart TV features like apps and a redesigned interface, and is building new features into its phone plan like texting and call forwarding.
"There is continued pressure on the programming side, but there's also continued investment in our products and services," Weigert said. "All of that is a huge addition of value."
Customers with questions or complaints about their bills can call 1-800-Comcast, Weigert said, or can visit one of the company's payment centers to explore other options. But Weigert says he isn't worried that Comcast will become less competitive because of the price increase.
"The value that we give with all of our services, whether it be video, Internet or Xfinity home, just continues to grow," he said. "We feel really good about the products we offer."
Contact staff writer Ellis Smith at 423-757-6315 or email@example.com.
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, ...