Cable TV rates to rise

Some hit 3 times the inflation rate

jmurawski@newsobserver.comNovember 26, 2011 

Monthly bills are going up again for cable television and other subscription TV services some people regard as indispensable even as they curse the cost.

Rising costs have exceeded the rate of inflation year after year, and this time some of the increases will be double and triple the inflation rate.

As in past years, the cable and satellite companies say they are being forced to pass on price increases from the networks and broadcasters that sell them shows and games. They say they also incur higher costs for new technologies and advanced features.

Not everyone believes the communications companies have so little choice in the matter. But the rate increases are expected to continue indefinitely until viewers have other options, or until they get fed up and boycott a popular form of household entertainment.

"History doesn't suggest any letup in the rate increases," said Carl Howe, a consumer and data services analyst at The Yankee Group research firm in Boston. "Ultimately we'll see some pushback just because there will be fewer subscribers."

Time Warner Cable, the region's dominant TV service, is raising prices for many stand-alone services and bundles, with most of the increases ranging from 5.5 percent to 9.9 percent. By comparison, the nation's 2011 inflation rate through October was 2.8 percent.

Time Warner Cable spokesman Keith Poston said this year's price increases, effective Dec. 5, are consistent with price increases in past years. Time Warner has 1.5 million customers in North Carolina, including 460,000 in the Triangle.

AT&T's U-Verse television service will implement similar price increases in February. For example, AT&T's U-Basic package will remain unchanged at $19 a month, but the higher level U-Family package will go up by 5.5 percent, to $57 a month.

AT&T does not provide statewide subscription totals for U-Verse, but the TV service has 3.58 million customers nationwide, spokesman Josh Gelinas said.

TV subscription costs have gone up even as inflation came to a standstill during the recession and is just now reaching pre-recession levels. Last year, the nation's inflation rate was 1.6 percent and in 2009 it fell to minus 0.4 percent.

Jeff Kagan, an Atlanta communications analyst, said in any given year, the cost of cable TV is about 100 percent more than it had been a decade earlier.

Poston said most Triangle customers won't be affected by the price increases immediately. More than half of Time Warner customers are on special discounts and promotional offers, and won't pay the new prices until their promotional plans expire.

Time Warner's broadcast cable, the basic tier of channels, will increase from $18.19 to $19.99. Just three years ago, the same service cost $12.25.

Some stand-alone services, like Road Runner broadband Internet and Digital Home Phone, will remain unchanged.

Murawski: 919-829-8932

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