EPB will raise its rates for video services in April, adding anywhere from $2 to $9 a month for most of its cable TV plans.
The Chattanooga utility, which typically raises its video rates each year in November, delayed the increase for five months due to the pandemic. But EPB directors approved the increase Friday to reflect the increase in costs charged to EPB by its cable TV and local broadcast providers.
The new rates will boost EPB's base Bronze rate by $2 a month to $26.99, raise the price for EPB's most popular Silver plan by $7 a month to $83.99 and increase the cost of EPB's premium Gold plan by $9 a month to $103.99.
EPB President David Wade said content providers that provide the television programming for EPB's video plans have increased their charges to cable TV providers like EPB an average of nearly 9% a year over the past decade "and we anticipate these increases to continue."
"I have never seen anything that has increased so routinely and consistently above the typical inflation rate with annual increases of 8% to 9% a year (from most major cable TV and sports networks) and up to 24% from the local content providers," Wade said. "All we are doing are passing along those charges that we are having to pay our content providers."
EPB said it is not changing what it charges for its internet and telephone services and pricing will remain the same for premium channels and equipment. Bundle discounts for taking two or more fiber optic services also still apply.
EPB, which also provides electricity service in Chattanooga, also doesn't plan any increase this year in its base electric rates after its wholesale supplier, the Tennessee Valley Authority, offered EPB and other local power companies rebates for signing a long-term power supply contract and to compensate for the impact of the coronavirus pandemic.
The biggest cost increases for EPB's video services have come from local broadcast stations that provide the major network programming for EPB's video service, EPB officials said.
"It's tragic that these rates have gone up so dramatically, especially from our local providers," EPB Director John Foy said.
EPB last raised its video prices in November 2019 when the utility added $1 for Bronze Channels, $6 for its most popular service, Silver Channels, and $8 for Gold Channels.
EPB's video rate increases average from 2.4% to more than 5.8%.
Chattanooga's biggest private cable TV provider, Comcast, raised its average bill for video, voice and internet service in Chattanooga this year by 3.2%. Comcast added a $4.50-a-month price increase on Broadcast TV subscribers, in addition to a $2 hike to the Regional Sports Network fee.
"Rising programming costs – most notably for broadcast TV and sports - continue to be the biggest factors driving price increases for all content distributors and their customers, not just Comcast," said Alex Horwitz, vice president of public relations for Comcast.
Streaming service options
In response to the higher video rates, EPB last fall launched a free service to help customers find the TV channels and content they want at the best value-whether that includes EPB's own Fi TV or simply streaming services carried on EPB's internet-only service. The Chattanooga utility partnered with a web-based service, MyBundle.TV, to help consumers pick the best video plan for the channels they want to watch.
Wade said MyBundle provides "a quick and easy way for customers to comparison shop thousands of TV streaming options.
"In many cases, we find customers can get more of the content they want while paying less," Wade said.
TV streaming services can help customers save money by eliminating their need to pay monthly set-top box rental fees. At the same time, EPB MyBundle helps customers find streaming services that cost less because they are more specifically focused on the TV content the customer wants.
Wade said after answering a few easy questions, EPB MyBundle gives each customer personalized recommendations about which streaming services offer the closest match to the customer's TV preferences at the best price.
As video rates have increased, the share of EPB Fiber Optic customers subscribing to video services has declined and more consumers are using the internet-only option from EPB, Comcast or others and turning to streaming services offered over the internet for video service.
"When we first began offering our telecom services, well over 90% of our subscribers had one of our video plans and that has now declined to less than 50%," Wade said.
But streaming services also are raising their rates. Wade noted that YouTube TV was originally priced at $30 a month and has since increased its most popular plan to $70 a month.
"Programming costs are driving up prices for all providers, including streaming services, as seen by the significant price increases by distributors this year alone," Horwitz said.
A study by One Poll found that the average person has access to four streaming services, while 38 percent of poll respondents said they logged into five or more platforms.
"When customers begin to piece together all of these services, we believe Comcast can offer greater value to them - whether they want fully integrated video service with X1, or the ability to just stream content with Xfinity Flex," Horwitz said. "And with Flex, we are the only provider to offer video service, a streaming device, and voice remote at no added cost for internet only customers. This has become a very popular option for customers."
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340