Cablevision Systems ups TV rates, FCC concerned

Long Island Business News, Oct 30, 2008 by David Reich-Hale

Cablevision Systems Corp. said late Wednesday that it will increase the cost of its television product by an average of 3.5 percent, but it will not increase how much it charges for its Internet or phone services.

In a release, the company boasted it has not increased the price of its Optimum Online or Optimum phone services for six years.

The new television charges will take effect over the next few months, depending on a customer's location and billing cycle.

Cablevision noted that the price increase on video services falls below inflation and said it's also building a Wi-Fi network that its Internet subscribers will be able to use for free.

But the Federal Communications Commission, on hearing the announcement, said it was concerned about the rate hike.

An FCC spokeswoman said the trend could hurt already-battered consumers.

"Over the last decade, average cable rates have more than doubled. And now cable companies are charging consumers more but consumers are receiving less," said spokeswoman Mary Diamond, referring to cable moving some analog channels to more expensive digital-only tiers.

"This is an unfortunate trend for families facing increasingly difficult economic times," Diamond said.

Her comments echoed a letter of complaint that Consumers Union, the nonprofit publisher of Consumer Reports magazine, sent federal lawmakers on Wednesday.

Cablevision, however, wasn't the only cable company to announce a rate hike.

Philadelphia-based Comcast Corp., the nation's largest cable company, plans to raise rates by an average 3.7 percent on customers who buy multiple services in a discounted bundle.

A corporate spokeswoman said she couldn't say what specific increase customers who subscribe only to cable TV will see because those rates are set on a regional level. But the company didn't dispute newspaper reports that Comcast told customers they would see increases around 6 percent.

Similarly, Time Warner Cable Inc. acknowledged it will raise rates next year but said specifics weren't available because they are determined on the regional level.

The Dayton Daily News in Ohio said last week that Time Warner Cable will raise rates by 10 to 12 percent for basic and expanded basic cable for customers in the Dayton area starting in November. Prices for bundles of services won't change.

A spokesman for Time Warner Cable said video service price increases don't show what most customers experience because 60 percent receive discounted bundles of services.

The New York-based company also said customers can lock their subscription price for two years through its Price Lock Guarantee program.

Cox Communications Inc., based in Atlanta, also said it plans to raise rates for 2009 but needs time to calculate the average increase.

New York-based Verizon Communications Inc. said it already raised rates by 12 percent in February on its FiOS TV Premier tier, the company's most popular video plan. It will revisit rates again in early 2009.

DirecTV Group Inc. in El Segundo, Calif. said it's too early to talk about 2009 rates.

Dish Network Corp., in Englewood, Colo., said it had no announcement to make. AT&T Inc., based in Dallas, declined to comment.

Charter Communications Inc. in St. Louis didn't immediately respond to questions about price hikes.

The Associated Press contributed to this report.