Why cable TV bills are rising

Jul 13, 2009 By Marc Ransford

(PhysOrg.com) -- Consumers often grouse that their cable television bills go up every year, but multichannel video program distributors (MVPD) are often just passing along ever increasing costs, says a new report from Ball State University.

"The Truth about Cable Rates" finds that while the cost for basic cable television has increased by 54 percent over the last decade, customers are getting more channels, technologies and services that were not available at any price 10 years ago.

"The increase in fees often leaves consumers angry, but on the other hand, people are getting far more than they could have imagined just a few short years ago," said Dom Caristi, a Ball State telecommunications professor and principal author of the study prepared by Ball State's Digital Policy Institute for the Foundation for Rural Service (FRS).

Caristi reviewed the study July 9 in Washington, D.C., as part of a FRS-sponsored educational seminar open to all members of Congress, telecom staffers and press. FRS draws attention to rural challenges, goals and achievements and educates the public about providing service in rural America.

"Unfortunately, many customers assume that cost increases have been initiated by their local MVPD, but these companies are often only passing along rising costs that are eating into their bottom line," he said. "Local providers are facing increased fees paid to the government and fees charged by for channels formerly free."

Other factors contributing to the cost of cable charges include:

• taxes that can make up to 10 percent of a monthly bill
• spiraling prices of updated state-of-the-art technology needed to distribute programming
• paying for over-the-air television signals that used to be free
• legally mandated service requirements not imposed on most other industries
• bundling of video, landline telephone services and Internet access

Caristi also blames sports programming for higher fees.

"We also have providers charging cable operators more for their programming to offset the costs of acquiring expensive sports programming, including NFL games. We also have new cable channels coming on board and wanting a new fee for each subscriber."

Especially disadvantaged in today's increasingly competitive digital communications marketplace are the smaller video providers who lack the negotiating clout of national program distributors, Caristi said.

Local providers are often required to carry channels they would rather not, include them on the most basic programming tiers and then transfer higher charges to all their customers.

"In order to compete, smaller providers will have to form some sort of consortium," Caristi said. "If you only have 500 customers, a network is not going to negotiate with you. But it is a different story if you represent 50,000 or more viewers. That is clout."

Provided by Ball State University

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User comments : 7

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Sophos
5 / 5 (4) Jul 13, 2009
You mean consumers are getting more crap channels they don't want
OregonWind
5 / 5 (2) Jul 13, 2009
Yes, more cable junk and less quality TV and they charge you more.
VOR
not rated yet Jul 14, 2009
yeah fat chance paying for just the channels u want. nothing like paying all that and still getting all the commercials. yippie.
Paradox
not rated yet Jul 14, 2009
I am thinking of giving up the cable and just keeping the internet. I only watch 3 or 4 of the 100 or so channels I get...cable tv blows
jcrow
not rated yet Jul 14, 2009
Yes, Drop your cable. Cannot believe how many commercials get shown relative to material.
Rent/Download the things you want to watch.
What a rip off.
Doug_Huffman
not rated yet Jul 14, 2009
Welcome to my Galt's Gulch. With a 75' mast and rotating Yagi I get one DTV channel so it has been easy to wean from TV.

We subscribe to NetFlix and WildBlue satellite ISP.
MorituriMax
not rated yet Jul 18, 2009
"customers are getting more channels," that we don't want or watch. I have the basic time warner cable plan and watch maybe 5 channels of the 50 or so they have.

Give me the specific channels I want, don't load me up with all the crap like Shopping Network, TV Guide uh I mean advertising and gossip channel (seriously has anyone else noticed that the TV --GUIDE-- channel devotes less than half of the actual screen to channel information?), Black/Hispanic/Other ethnic channels, miscellaneous tv (mtv), and various other junk.

HELLO! Let me pick the channels I want! I am so close to cancelling the tv at least once a week, all I need is the internet part of their services.