Comcast bills rising 3.8%
Regulators had hoped competition from satellite and phone firms would bring discounts. But so far it hasn't.
Competition doesn't appear to be holding down cable rates. Comcast Corp. is boosting customer bills in the Philadelphia area an average of 3.8 percent this year, which is slightly more than last year, the company says.
And Verizon Communications Inc. is raising the introductory rate on its most popular TV service about 12 percent.
Comcast's higher cable prices will vary by product category and region. Customers who order the company's phone and high-speed Internet will not see any changes in 2008, Comcast says.
The Triple Play - the package of cable, phone and high-speed Internet services - remains unchanged at an introductory price of $99 a month.
But for those who subscribe to the usual expanded basic package of channels in Pennsylvania, the rate increase is 4 percent to 5 percent, according to bills and pamphlets the company has sent to customers.
In Lower Bucks County, the expanded basic package will increase 4.8 percent, or $2.50, to $54.70 a month. In Delaware County, expanded basic will rise 5 percent to $52.25 from $49.75.
In the Cherry Hill area, cable rates will increase $6.97 a month, or 14 percent, to $56.20, in part because the company folded its Value Pac level into expanded basic cable, according to figures from the New Jersey Board of Public Utilities and information sent to customers. Comcast says that this increase will hit only about 1.3 percent of its Cherry Hill customers and that the vast majority will see the typical 4 percent boost.
Some add-on services will see jolting changes. Digital classic, which is a package of 20 channels, will jump 25 percent, or $3 a month, to $14.95 in Pennsylvania and South Jersey, the company has told customers.
Comcast's 1.8 million Philadelphia-area customers were told of higher rates in December, and the new rates have begun showing up in this month's bills.
Verizon, Comcast's new big competitor in video services, also is making it more expensive for customers to watch TV.
On Feb. 17, the telecommunications giant will raise the rate on its 200-channel FiOS TV Premier service 11.6 percent, or $5, to $47.99 a month from $42.99. The company said it would not raise bills for those who have the service, or order the service, before Feb. 17.
The rate for Verizon's Spanish-language-focused La Conexion will increase 15 percent to $37.99 a month from $32.99 at the same time. About half the channels are in Spanish.
"We believe that both [FiOS TV Premier and La Conexion] offer great value, even for the extra $5 a month," said spokeswoman Sharon Shaffer.
Verizon is adding a $79.99 fee for service repairs and set-top box installation and retrieval, and the company will boost its rate for the Playboy Channel $1, to $16.99 a month.
Industry publication Multichannel News reported yesterday that satellite providers Dish Network and DirecTV also are poised to raise prices on some of their offerings, with an analyst saying the Dish Network increases will average 8 percent.
Regulatory experts have hoped that increased competition in video from satellite and phone companies would lead to price discounting. But that has not happened so far.
"We are not seeing meaningful price competition, because the only thing the major phone companies and the major cable companies will compete on is the Triple Play bundle," said Gene Kimmelman, a vice president for Consumers Union, the nonprofit publisher of Consumer Reports.
Soaring cable rates have drawn attention in Washington, with Federal Communications Commission Chairman Kevin Martin saying cable rates rose 93 percent between 1995 and 2005 as prices of other telecommunication services fell.
Martin would like the cable companies to sell individual channels instead of bundles of 70, 100 or 200 channels. Cable executives say the pay-per-channel model will not lead to lower rates.
One criticism of cable companies is that the rate increases regularly exceed inflation.
According to data from the Bureau of Labor Statistics, the Consumer Price Index for all items - including energy and food - rose 4.1 percent in 2007. Without food and fuel, the index rose 2.4 percent.
"Once again, cable beats the rate of inflation, which has been the standard," said Mark Cooper, research director at the Consumer Federation of America. "Joe Six-pack who gets basic and expanded basic is taking the hit," he said. It appears the cable rate increases are less than they have been in the past, he said.
Comcast, the nation's largest cable company, says its prices are justified because of the huge amount of television viewing it gives customers, with video-on-demand services, channel bundles and high-definition.
Comcast spokesman Jeff Alexander said the rate hikes in the Philadelphia area would help pay for $500 million in system upgrades and new products. Comcast says it has hired 2,500 employees in the region since January 2007. New customer-service centers are opening in Voorhees and Newark, Del.
"We place a large emphasis on added value and an improved customer experience in the last year," Alexander said, "and what I laid out for you underscores that overarching goal."