The Greed of TV Providers

Gee, it is the early part of the new year and the price increases have already been announced in the cable TV biz. It used to be said that there were only two certainties in life, death and taxes. We can now add a third, an annual cable TV bill increase. Most of the major players have announced price increases, such as Comcast and DIRECTV. The Comcast increase in particular is clearly designed to push people into accepting the Triple Play. Even Verizon has gotten in to the act, announcing a $5 per month increase in their TV package, effective for new customers only. Current customers will not get hit with a rate increase just yet. I am sure it is coming however and soon enough.

It was hoped that having multiple players in a given market, like Verizon hitting the Philadelphia market, would help keep prices down. Maybe it has kept prices down but in the sense only that it has slowed the rate of price increases. The companies continue to raise rates even in the face of competition and a slowing economy. They claim that they have to raise rates due to increased programming costs and infrastructure upgrades. However, I am sure that an analysis of their books will show that their annual rate increases far exceed those added costs.

The real reason behind the rate increases is greed -- pure and simple.

The cable companies, including the telcos and DBS, are trying to suck every last penny they can out of us, figuring that where are we to go, the prices on the other side of the street are just as bad. Frankly, the cable companies do have us over the barrel and there is really nothing we can do about it at this point other than drop cable altogether and rely on over the air transmission for TV. Not exactly a viable option for most of us for many reasons, ranging from lack of programming choices to issues with digital reception.

What to do? Well, I would suggest that we try to put pressure on of representatives in Congress to pass legislation requiring a la carte cable channel selection. That is, allowing us to purchase only the programming that we want so that we are not required to purchase a bundled package, saving us money. There are those out there who will buy the argument from the cable companies and the content providers that this will only increase our rates as they will have to charge far more for each channel individually than if they are bundles. ESPN is often given as an example, that we will have to pay $15 for that channel were it offered a la carte. To that I say BS. Disney will not be able to charge more than what people are willing will pay for their channels and no one would be willing to pay that much. The idea is that choice and the freedom to reject certain channels will keep the prices of those channels down. In my opinion, throwing out the current cable model will result in more choices at increased savings as the content providers will have to fight for the right to enter our homes something they now take for granted thanks to bundling.

It is time for those knuckleheads in Congress to do something that actually benefits the consumer for a change and enact a la carte enabling legislation. I will even be happy to pen the language in the bill myself. You know where to reach me Washington.

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