Opinionated: Camps Debate Cable Pricing

The Consumers Union continued to question Wed what it calls "deceptive" price increases from cable ops, and the FCC felt compelled to pile on late in the day. After the CU issued a letter to Sen Commerce Cmte leaders alleging that MSO’s are moving analog channels to digital to increase customers’ bills—a charge it 1st bandied earlier this month ( Cfax, 10/9)—the FCC expressed agreement with the sentiment. "Over the last decade average cable rates have more than doubled," said FCC spokesperson Mary Diamond. "And now cable companies are charging consumers more but consumers are receiving less. This is an unfortunate trend for families facing increasingly difficult economic times." Across-the-board video price increases by Comcast and Cablevision are accelerating the blaze. Comcast has plans to institute a company-wide avg increase of 3.7% in all markets over the next few months, and Cablevision said Wed that it will raise video prices next year by an average of 3.5%. To date, no other multichannel op has announced standard ’09 price hikes. NCTA said the FCC and CU are missing a critical point. "During today’s tough economic climate, the significant price savings offered by cable’s triple play bundle of video, broadband and phone service is even more valuable to consumers," said spokesman Brian Dietz. Results of a study issued Thurs by BackChannelmedia included these cogent points: the cost of service is the overwhelming gripe, and more than 40% of subs who have never switched providers have considered doing so in order to reduce their bill. To prevent price-related churn, said BackChannel, providers need to offer customers enhanced services and new products—and that’s just what Comcast and Cablevision said they are focused on doing. While stressing that its ’09 price hike is again below the rate of inflation, CVC pointed to the added value of its footprint-wide WiFi deployment (free to HSD customers) and advanced features like Caller ID on the TV. Comcast, meanwhile, is busy ramping DOCSIS 3.0 upgrades at no additional cost while underscoring other video-specific offerings such as its free basic cable promotion to support the DTV transition. "When we move markets to digital cable line-ups," said the MSO in direct response to CU’s claims, "consumers will benefit because we will give them equipment for no additional charge and give them thousands of VOD choices, digital quality picture and sound as well as other interactive features."