Comcast Hikes Rates, Cites Better Value, Rising Fees

Updated: 02/18/2013 6:22 PM By: Stephen Tellier

How much are you paying for cable?

Chances are, it's quite a bit more than what you were paying a few years ago -- even a few months ago.

Comcast has hiked its cable television rates. The new rate took effect in January, and on average, it's an extra 3.3 percent tacked onto every bill.
"I have cable, internet and phone. I pay like $178 a month," said Albert Kay, a Comcast customer.
Kay had just picked up a new box from Comcast when we told him he should get ready to pay even more than that.
"That's terrible because it's hard for me to pay the bill now," Kay said.
For many people, cable bills have been ballooning for years, with one market research firm predicting $200 cable bills will be the norm by 2020.
"I think they're taking customers for a ride myself," Kay said.
But Dave Vang, a finance professor at the University of St. Thomas, said there are some legitimate reasons for rising rates.
"The cable companies themselves really have to change their rates in order to maintain profitability," Vang said.
A Comcast spokeswoman says customers are now getting better value, with more products on multiple platforms. She also said higher rates fund continuing investments in its network, and are just keeping up with rising programming fees -- the money cable companies have to pay networks to beam their shows onto your TV set.
"Sports and reality programs frequently can have low viewerships, but they tend to be very popular in terms of being included in packages," Vang said.
Sports are often singled out as the culprit. According to research conducted by SNL Kagan/Barclays Capital, of the networks with the ten highest cable subscriber fees, six carry regular sports programming.
Those costs often get passed on to customers.
"It's just ridiculous to me," Kay said.
But if Kay is so upset about his cable bill, why doesn't he just switch?
"Where I live, they won't let me put the satellite on the building. So I'm stuck with Comcast," Kay said, with a laugh.
Vang believes cable rates will not continue to climb indefinitely. He predicts a plateau once new technology like internet television catches on even more, and forces cable companies to keep rates lower in order to compete. But exactly when that will happen, no one knows.