Cablevision Raises Rates

Cable rates are rising again, at least for subscribers to Cablevision Systems. On Friday, November 21, the New York-based cable provider announced that 2004 rates would go up an average of 3.2%, approximately 50% higher than the current rate of inflation.

The increase follows a 5.3% rate hike instituted in January of this year. The new plan will retain the $9.95/month charge for Cablevision's "iO" digital cable service, added to the basic monthly package. Rates for the company's "Family Cable" basic analog service will rise an average of 3.5%, or $1.51. Cablevision subscribers in New York City and its suburbs - including Long Island and parts of Connecticut and New Jersey - typically pay $42.80 to $44.31 per month. Rates for the company's premium digital cable service will go up as much as 3%. Approximately 25% of Cablevision's subscribers have the high-end digital feed.

Cablevision has opted not to raise rates for its broadband Internet service, which will stay at $44.95/month, nor for its "Optimum Voice" service, which will stay at $34.95.

On November 17, in something of a pre-emptive strike, direct broadcast satellite (DBS) service EchoStar Communications Corporation launched a marketing campaign aimed directly at rising cable rates. "Stop Feeding the Cable Pig," the satellite service tells potential converts, noting that cable rates have risen about 40% over the past five years, five times the rate of inflation. The Littleton, CO-based company's TV and print ads feature a pig in a sweater bearing the name "Cable Co." and warn consumers that the porker can "eat them out of house and home."

EchoStar is currently offering a three-room system (including satellite receivers) that delivers 50 channels of the most popular programming for $24.95/month. Beginning next month, the DBSer will expand its high-definition offerings with a 40" HDTV to sell for $1499, with an HD satellite receiver, satellite dish and professional installation. For its third fiscal quarter, EchoStar reported net income of $35.1 million on revenue of $1.45 billion. During the same period the company added 285,000 new subscribers.