Cable, Internet rates increasing for some customers

Cable, Internet rates increasing for some customers

January 17th, 2012 by Ellis Smith in News

Monthly cable, voice and Internet rate changes for 2012

Monthly cable, voice and Internet rate changes for...

Photo by Laura McNutt /Times Free Press.

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Comcast and AT&T will raise prices for some customers starting Feb. 1, a move that will cost some subscribers as much as $15 per month more on their bills.

The companies say the new prices mainly are driven by content costs as TV networks jack up the fees they charge cable providers for popular TV shows and programming.

Comcast will raise fees for the first time since fall 2008, and AT&T will raise rates nearly across the board for the third year running.

EPB has no plans to raise TV, Internet or phone rates this year and can't do so without board approval.

"The cost of doing business changes over time," said AT&T spokeswoman Cathy Lewandowski. "We are making some modest price adjustments that reflect those increased costs."

Affected U-verse customers will pay between $2 and $5 more in TV rates, while Internet customers will pay higher equipment-fee charges of between $4 and $7, Lewandowski said.

Most customers will pay $6 to $8 more on average each month, which primarily reflects higher-priced programming, she said.

"The content costs are a large part of our business costs," Lewandowski said. "It indicates the competitive market we're in today."

Inflation alone has risen more than 5 percent since 2008, which means companies would have to charge $63.05 today to make the same amount of money they made on a $60 bill in 2008, according to the U.S. Bureau of Labor Statistics.

In addition, the cost of adding new technology, such as mobile apps and access from anywhere, can add to business expenses. Consumers have played a role in these higher costs, demanding more mobile and online content.

Jim Weigert, vice president and general manager of Comcast in Chattanooga, said the company held off on rate increases during the recession but had to give in to cost pressure.

"We think this is fair for our product and services," he said.

Weigert said the hike will affect fewer than half of all Comcast customers. He also noted that the cable giant is cutting the price of its Internet offerings and leaving phone prices at the same level.

"We've had lots of TV programming increases in the last four years, so it's really on that side," he said. "I don't think it's a secret that programming costs do change."

As the Internet age has eroded traditional television revenue due to viewers moving online, the last few years have seen media producers attempt to make up the difference by charging higher content prices to programming distributors, officials said.

Those higher prices have led some distributors to take certain stations off the air while negotiations were under way, leading to very public contract disputes.

In contrast to Chattanooga's national providers, local utility EPB likely won't raise TV, Internet or phone rates this year, and won't have a timeframe for rate increases until it finishes contract negotiations with content providers, said Greg Eaves, executive vice president for finance and chief financial officer.

"For the most part, we are still operating under the content pricing that was negotiated at start-up," Eaves wrote Monday in an email.

Other groups that won't see price increases are some of Comcast's double- and triple-play customers, users of its Internet Essentials program, AT&T customers on some promotional plans and U-verse Internet customers who signed up before Feb. 21, 2010.

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