For many pay-TV subscribers, the new year will bring a rerun of an old habit among cable and satellite operators: a new round of rate and fee increases.
These shouldn’t come as a surprise, considering the history of pay-TV price hikes: An October 2016 report by the Federal Communications Commission, the most recent in an ongoing series, found that cable costs had increased faster than the overall rate of inflation every year from 1992 to 2015.
But that doesn’t mean that you should like these latest increases, or that there’s nothing you can do about them. You have options beyond swearing, or swearing off, pay-TV entirely … though if cutting back on service doesn’t do enough to trim the bill, you shouldn’t rule out the cord-cutting alternative either.
Changes at some major providers
Going from biggest to smallest, here’s what the top seven pay-TV providers have in store for your monthly bill. In most cases, subscribers receiving a promotional discount for the first year or two of service shouldn’t see any increases.
AT&T (T): At its DirecTV satellite service, the monthly rates on all its bundles, with the exception of a minimum-service option, will increase from $2 to $8 starting Jan. 21, while all but the lowest tier of regional sports networks will cost 70 cents to $1 more a month. On the company’s U-verse fiber-optic TV service, all but the basic bundle will increase by $2 to $8 a month starting Jan. 21.
Comcast (CMCSA): The nation’s biggest cable operator isn’t raising rates uniformly across its markets — although it says the increase nationwide will average 2.2% — but sent a PDF provided to Washington subscribers outlining price hikes that went into effect Dec. 20. It shows every TV bundle but “limited basic” increased by a dollar or two a month. For instance, “expanded basic” went from $50.90 to $52. Meanwhile, the broadcast-TV fee climbed from $7 to $8 and the regional-sports-network fee is now $6.75, up from $5.
Comcast’s internet service also got generally pricier — for instance, the “Performance Pro” tier now costs $89.95, versus $84.95 before — and the cable-modem rental fee that you should avoid by buying a modem for yourself went from $10 to $11 a month.
Charter (CHTR): Publicists for the company that does business as Spectrum did not answer two emails requesting a breakdown of its price changes, but the Lexington Herald-Leader reported that city subscribers will see basic TV service go from $15 to $20 starting Jan. 1 (although expanded-basic TV will drop from $54.99 to $49.99), while all of its triple-play combinations of internet, TV and phone service will get $10 a month more expensive. The paper also reported that sports channels and cable boxes will get more expensive.
Verizon (VZ): Yahoo Finance’s parent firm does not have any general rate increases planned.
Cox: TV bundles will get from $1 to $5 more expensive each month, the broadcast fee will almost double from $4 to $7 and regional-sports-network fees will rise by $4.20 to $5.15, depending on market. Finally, internet plans will cost from $2 to $4 more. These rate hikes will take effect beginning Jan. 5, although some markets may not see them three months later.
Altice: Subscribers to its Optimum cable-TV service already got hit with rate increases. Norwalk, Connecticut’s The Hour reported in October that Altice would hike the cost of its “broadcast basic” bundle to $20, an increase of $2 to $6 depending on when people signed up, and would impose a $4 broadcast fee on existing subscribers to that package who had been exempted from that fee before.
What you can do about these
The easiest rate hikes to dodge are those involving equipment: Remove a cable box from the second or third TV in your house and replace it with an over-the-air antenna (if your reception is good enough) or streaming video services (if you have 10 megabits per second of bandwidth, which most broadband subscribers do).
That streaming app may even come from your cable operator. Although the industry as a whole quietly walked away from a “Ditch the Box” pledge to develop these apps when the Federal Communications Commission was moving to require cable operators to offer them, some have since shipped their own. For example, you can dodge any increase in Charter’s box-rental fee by putting its app on a Roku player.
With programming increases, you’ll have to rethink the value to you of regional sports networks, long the biggest source of inflation in the pay-TV universe, and high-end channel bundles. Switching from cable to satellite TV or vice versa is an option too, but not for many apartment dwellers or anybody without a clear view of the southern sky–and most Americans don’t have a choice of two cable operators.
Or you can do what millions of Americans already have and dump traditional pay TV entirely in favor of a live streaming-TV service like AT&Ts’ DirecTV Now, Dish’s Sling TV, Hulu, Google’s (GOOG, GOOGL) YouTube TV, or Sony’s (SNE) PlayStation Vue.
Pay TV’s transparency problem
This annual ritual of price increases represents a serious problem for cable and satellite TV operators. Considering that the entire business model of the traditional gigantic channel bundle relies on TV networks getting a third party (your cable or satellite service) to pass on a channel’s cost to somebody with no say in that channel’s inclusion (you, the subscriber), it may not be one they can solve anytime soon.
But cable and satellite companies could and should own up about these increases by documenting them on their websites–as AT&T did but the other firms above did not–instead of letting customers discover them in an e-mail or a bill insert. That’s no way to earn a customer’s trust or their continued business.
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