Times Are Hard? Raise Cable Rates!

Home prices are plummeting, people are maxing out their credit cards, the stock market is in convulsions, health care costs are out of control, and the economy is rocketing into recession. America needs a morale booster. What better time to raise cable television rates?

If you were worried about cable executives standing in soup lines, worry no more. Cablevision has announced a 3.5 percent rate hike for next year. Cox will demand 3.7 percent more from subscribers who buy services in bundles. Time Warner admits rate hikes are coming for 2009, but hints that subscribers who buy services in bundles won't feel a hand in their pocket. Charter has nothing to say at the moment.

Looking for an alternative to cable? Verizon, having already raised FiOS rates by a hefty 12 percent six months ago, may come back for more after the new year. DirecTV and the Dish Network are keeping mum for now.

Consumers Union sent a letter of protest to Congress, noting that the DTV transition is bringing new opportunities for cable price gouging: "With the DTV transition quickly approaching, consumer confusion in the television programming marketplace is at its peak. Cable operators appear to be leveraging content to strong-arm confused consumers into paying much more every month for cable programming they have previously received at no extra fee. We believe the timing of this rate hike is deceptive."

CU has data to back up its assertions: "In an October 2008 Consumer Reports Survey, we found that over two-thirds (68%) of cable only consumers have televisions in their home without set-top boxes. Nearly one-fifth (19%) of these consumers have noticed a reduction in the number of channels they are able to receive. The majority (60%) have taken no action and are paying the same monthly bill for less service; 28 percent have called their cable company to complain, and 21 percent have swallowed the extra equipment charge. This represents a significant number of cable customers who are either paying for less service, or being forced to pay more for the same service."

Federal Communications Commission chair Kevin Martin is paying attention: "We agree with Consumers Union. Over the last decade average cable rates have more than doubled. And now cable companies are charging consumers more but consumers are receiving less. We have also received complaints that cable companies are moving channels to a digital-only tier and charging consumers the same monthly rate for a reduced number of channels. If consumers wish to continue watching the same channels that they were before, they must now buy a more expensive package or rent more expensive equipment. This is an unfortunate trend for families facing increasingly difficult economic times."

To get into the mood for your coming cable rate hike, rent the Criterion Collection DVD of Robert Bresson's film Pickpocket. And boycott VOD.

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