If you have a television set in your house and receive programming via any method other than an old-fashioned antenna, you may have a rate increase coming.
Of course, this probably comes as zero surprise to you. It seems there's always some senator or some consumer group complaining about the cable industry, in particular, and vowing to fight rate hikes. And considering I'm paying more than three times as much for basic service as several years ago, they're not doing a very good job.
According to USA Today, more price increases are coming from both cable and satellite providers. Here's the lowdown on the high hikes:
| Company |
Service |
Avg. Increase |
|
DirecTV (NYSE: HS ) |
Satellite |
3% |
|
EchoStar Communications (Nasdaq: DISH ) |
Satellite |
1.7% |
|
Comcast (Nasdaq: CMCSK ) |
Cable |
5.4% |
|
Time Warner Cable (NYSE: TWX ) |
Cable |
4.9% |
|
Cox Communications (NYSE: COX ) |
Cable |
3%-4% |
|
Cablevision (NYSE: CVC ) |
Cable |
3.2% |
|
|
|
Source: USA Today
Why isn't competition keeping prices down? Because in this age of broadband and bundled services, it's not a matter of just choosing the least expensive service. For instance, I pay Comcast an agonizing $43.74 each month for the most basic of cable. If I didn't need ESPN during baseball, football, basketball, soccer, lacrosse, rugby, and hockey seasons, I'd drop it altogether and go back to a rooftop antenna.
Now, I could get basic satellite service for at least $5 less per month. But if I did that, my monthly Comcast broadband Internet fee would jump 35%, from $42.95 to $57.95! As an alternative to cable broadband, Verizon (NYSE: VZ ) is offering DSL service for $34.96 per month, but get this... it is "scheduled to be available in your area: 02/29/2008," according to Verizon's website. That's right, folks, the company may not know how much it will earn next quarter, but it's got my DSL date pegged to the exact day in 2008.
So, there's the problem in a nutshell. It's a labyrinthine nightmare trying to figure out the best value when it comes to cable TV and Internet -- and that's not even counting bundling telephone service with any of this. It's not hard to see why many customers simply throw up their hands and stick with their existing services when faced with rate hikes.
I'll bet you have great ideas in getting television, broadband, and telephone services at a decent rate. Please tell me about them on The Motley Fool Take discussion board.
Rex Moore doesn't own any companies mentioned in this article.
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