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Timing was bad for Time Warner Cable’s price increases

Even by its own shaky standards, Time Warner Cable sank pretty low in the timing of its price increases.

I’m not sure Ebenezer Scrooge would pick the day after Christmas to send subscribers the news that they are going to have to pony up more to see their favorite programs and scour the Internet.

But my bill arrived Friday – on one of the days that companies like to bury news – with all the increases. A few hours later, the local media reported on them, even though Time Warner hadn’t sent out an announcement.

The cable company wants subscribers to take it at its word that the increased broadcast and sports programming costs require the increase. But it would be easier to accept if Time Warner were more transparent and actually told subscribers what it is paying to carry every channel.

Here are my top five takeaways about how to deal with the increases and what is to blame for them.

Buy a modem: The cost to lease an Internet modem has gone up more than $2 to $8 a month, or $96 a year. You could buy one for about that. You might even be able to go online and get one cheaper than $96. After a year, the remaining years before the modem becomes defective will essentially be free. I’m told they usually last 4-5 years, and TWC will walk subscribers through the process of activating them.

Punishing those who can’t afford it: The cost of a digital adapter to get up to 100 channels is going up $1.76 to $2.75 a month. Once again, it is time to investigate buying one. I’m told that you can get them for less than a cost of leasing them for a year. Generally, the adapters are used for older sets, and the subscribers using them don’t pay for the more expensive packages.

Paying more for something that is free: The extra charge for receiving all the local channels you can get for free without cable – it is called the broadcast TV surcharge – is going up 50 cents a month to $2.75. In other words, Time Warner subscribers are paying $33 a year to get Channels 2, 4, 7, 17, 23, 29, 49 and a few others because the companies that own the network affiliates have forced Time Warner to pay for them or drop them from cable. The networks and their affiliates have successfully argued that they still have the highest-watched channels offered by cable and deserve compensation, which the company passes down to its subscribers. In a fair world, Time Warner could allow its subscribers to reject a local broadcast package and just buy a gadget that would allow them to see them for free. But the words “fair world” and “cable” don’t belong in the same sentence.

TWC is being a bad sport: For more evidence that life in the cable world isn’t fair, let’s address the sports programming surcharge. It is bad enough that cable subscribers who ignore sports programming already pay monthly fees for ESPN, TNT, TBS, YES, MSG, SNY, TWC’s own sports channel and some other sports channels even if they don’t watch one down, one pitch or one jump shot.

Now that more high profile sporting events are leaving broadcast TV for cable – Thursday’s national college football semifinals and one NFL playoff game are on ESPN – somebody has to pay for the extremely high fees that the colleges and leagues get from cable. And that somebody is you. The $2.75 monthly sports surcharge impacts every subscriber – and not just the ones who watch sports. That is an extra $33 a year per subscriber added to the fees every subscriber already pays for the sports channels. ESPN alone reportedly gets about $6 monthly from every subscriber. In other words, people who hate sports can be paying hundreds of dollars annually to get the sports channels they don’t watch. Of course, sports fans also pay for a lot of channels they don’t watch, either. The subscribers could be saved if cable offered channels a la carte, but the cable industry has argued that would result in the death of many channels.

Bad time for HBO to raise rates: Except for “Game of Thrones,” the pay-cable channel doesn’t have a lot of heavily-watched, buzzed-about original programs. Two of my favorites, “The Newsroom” and “Boardwalk Empire,” finished their final seasons. The comedy “Silicon Valley” is a winner but not a ratings grabber. I’m a huge fan of John Oliver’s “Last Week Tonight” and HBO’s sports documentaries. But there may not be enough hit programs for HBO to bump up its monthly rate more than $2 to $16.99 a month without losing some subscribers. That’s more than $200 a year to watch HBO. A Time Warner customer service representative told me that HBO’s recent decision to stream its programs is behind the increase because $16.99 is expected to be the rate it charges its streaming subscribers, and it wants the price to be consistent for its cable subscribers. That suggests that TWC subscribers essentially will be paying extra because of HBO’s decision to start streaming. Bah humbug.


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