What you are about to read should not come as a shock to
you, especially if you are a subscriber of cable TV.
Comcast Corp, the dominant cable provider in the nation,
has raised cable TV rates for the third time in three years
The rates will go up about 6 to 7 percent, depending upon
where you live. Other cable providers, like RCN, have
also raised rates by about 8 percent.
7 percent is double the rate of inflation. Comcast’s prices
have risen three times faster than inflation since 2000.
Although cable price increases have moderated in recent
years from the double-digit hikes of the 1990s, many
research analysts predict that costs will keep going up.
“Operational costs” are the culprits for the rate hikes.
“Operational costs” include energy costs, improvements in
customer service and network maintenance. Cable companies
have millions of miles of outdated lines buried below
ground, and are in the process of converting their
technology to digital, which will be expensive. Comcast spent
nearly $200 million in the past year to maintain and enhance
its fiber-optic network in the Bay Area alone.
More Facts
Cable rates have climbed 40 percent in the past six years,
from an average $34.40 in 2000 to the $47.93 just announced
for 2006. During that same period, inflation increased 14.3
percent, according to the federal Bureau of Labor
Statistics.
Is it any wonder why the sale of satellite TV is increasing?
There are about 65 million homes nationwide with cable TV, a
number expected to decline to 61 million by 2008. DirecTV
accounts for 15 million subscribers and EchoStar’s Dish
Network for 12 million.
Because satellite providers don’t have to pay taxes levied
by local governments and feature smaller infrastructures,
consumers get more bang for the buck with satellite.
With cable, additional charges are typically assessed for
installation and equipment. These charges range from $30 to
$80. Satellite TV offers free installation, free movie channels,
and free upgrades, usually as an incentive to get customers to
sign up for their services.
More pros of a satellite dish.
* Digital picture means better quality
* More flexible programming options
* Cost is cheaper per channel
* Good solution for those living in rural areas
According to a J.D. Power study, the average cost of satellite
service is about 4% less than cable. Satellite subscribers
save an average of about $2.00 monthly compared to cable.
So, as the rates for the cable companies continue to rise,
you can expect consumers to continue the migration to
satellite TV.
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