UPDATED, 12:33 p.m.: Some readers have responded with details on the rate increase. See below in bold.
The letters announcing price hikes for 2010 began arriving this week, Time Warner Cable has confirmed. But not all customers in the Orange County and Southern California region will see a higher bill in January.
Company spokesman Darryl Ryan said that he can’t easily categorize the average increase since every bill will be different. Many customers won’t see any increase at all if they are in a promotion. These customers won’t see rates rise until their existing promotions are over.
One way to avoid a rate hike is to call Time Warner and commit to a one or two-year plan, he said. Called the Price Lock Guarantee, Time Warner began offering long-term commitment deals earlier this year, a tactic that the satellite and Internet TV companies have been offering for years.
Right now, Time Warner’s best offer for TV, phone and 15 Mbps Internet service is $109.99 a month with a one-year commitment. Otherwise, it’s $10 more per month. If you commit to two years, the price drops to $104.99 per month. More details HERE.
UPDATE, 12:33 p.m.: Thanks to readers who have shared details on the rate increase.
The price hike should be no surprise. Every TV service seems to tell customers in December that they will be paying more in the new year. But a big reason why prices continue to increase is because the TV channels ask for more money, also called carriage fees, from every TV company that offers those channels. Cable, Internet and satellite TV services all face rising fees.
Remember last New Year’s Eve? Time Warner customers almost lost access to Comedy Central, Nickelodeon and MTV because the channels’ parent Viacom wanted Time Warner to pay more money per subscriber. It amounted to an extra $39 million for the year, which was on top of a much larger fee Time Warner already paid Viacom. The two resolved their issues just before midnight.
This year, Time Warner reported that fees to TV channels were up 6 percent from a year earlier to $1 billion during the third quarter. For the first 9 months this year, Time Warner paid $3 billion in these fees, up 7 percent from a year earlier. (Added this graph for more context at 10:25 a.m.)
Last month, Time Warner did something novel: It decided to publicize the tactics of the TV networks. Within two weeks, nearly 400,000 people told Time Warner to get tough and put a stop to rising fees even if it means fewer channels (read earlier story: “400,000 consumers tell Time Warner to stop price hikes“).
And company chief executive Glenn Britt sounds like he’s ready to fight the constant price increases. He said, “Our customers clearly agree that the current programming business model is broken. One comment we’re hearing pretty consistently is that customers would like the choice to buy smaller packages of channels. As an industry, we need to listen to those kinds of concerns.”
Apparently, the campaign was too late to have an effect on next year’s billing.
The pro-family TV organization Parents Television Council called the marketing campaign “self serving,” said Tim Winter, the organization’s president.
“Whenever a distributor or cable company gets into the carriage fee argument, they resort to getting consumers involved. At the end of the day, it’s just posturing and trying to squeeze a few pennies in the contract,” said Tim Winter, the organization’s president. Parents Television Council advocates for a la carte TV, which would let customers pay only for the TV channels they watch.
It runs the HowCableShouldBe.com Web site, which offers a nifty chart detailing how much the average consumer pays monthly to get ESPN ($3.80), the Disney Channel ($0.95) and several other channels. The information is two years old and prices are probably higher by now, Winters said.
“Let consumers pick and choose networks they want. What will happen is the best products will have the most demand,” Winters said. ”Customers would have the ability to say, ‘Is Nickelodeon worth $5 to me?’”
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