In the news

The News & Observer
By
Sabine Vollmer

Time Warner Cable is continuing a New Year's tradition -- as in years past, the Triangle's cable television provider will raise rates effective Jan. 1.

Most cable TV packages will go up $3 to $4 per month, according to notices mailed to customers. The total bill to get standard cable, for example, will rise to $56.66 a month, from $53.45. The package includes the main networks as well as popular channels such as Disney, Lifetime, ESPN and MSNBC.

The cost for basic digital cable TV will increase to $71.95, from $68. When cable is combined with the company's telephone and high-speed Internet services, monthly bills can easily top $150.

The timing of Time Warner's rate increase comes as customers, reeling from a deepening recession, are cutting back. Last month, Time Warner Cable reduced its 2009 sales forecast, citing slower national subscriber growth and less revenue from pay-per-view services, premium channels and digital-video recorders.

"This is a time everybody is tightening their belts," said Shana Becker, staff attorney with N.C. Public Interest Research Group. The rate increase "could be hard for working families."

These are difficult times for consumers, Time Warner spokeswoman Melissa Buscher acknowledged. But the cost of doing business continues to increase, she said. "This is about the time we raise our rates annually."

Last year, Time Warner raised its cable rates 3 percent to 6 percent, depending on the package.

Time Warner, which has about 750,000 customers in Eastern North Carolina, blames rising costs to air sports and other programming. And the company is investing in new technology to reduce outages.

Time Warner also has added 21 high-definition channels and three digital channels in the past year. It will start airing the Bravo Channel next week. More additions are in the works, including a service that will allow customers to watch a show from the beginning even though they tuned in late.

Still, one consumer advocate attacked cable TV's history of rate hikes that outpace inflation.

Time Warner can get away with price increases because of its dominant market position and a lack of regulation, said Mark Cooper of the Consumer Federation of America. "It's the lack of competition. It's the abuse of market power. It stinks."

Satellite TV has long been a cable competitor. DirectTV, a satellite TV provider in the Triangle, isn't raising its rates.

More competition just cropped up. AT&T this month started selling its U-verse TV service in the Triangle.

But those competitors haven't been able to put much pressure on Time Warner, Cooper said.

Some prices won't change for Time Warner customers. The cost of high-speed Internet and digital phone services will remain the same.

Also, customers who buy cable TV services on promotional offers won't see their bills go up until those offers expire.

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