It’s probably no surprise that pay-TV packages are getting more expensive this year. It's an annual routine. But what's less obvious is that while providers have announced only modest increases—generally in the 3 to 4 percent range—they're also imposing add-on charges, such as “broadcast TV fees” and “regional sports fees,” that will further inflate your cable bill each month.
According a recent report by the Federal Communications Commission, TV providers are adding the fees to cover rising costs while holding down the prices they promote in their advertising.
The cable companies we contacted said the price hikes are mainly driven by the rising costs they face for carrying both traditional broadcast networks, such as CBS and Fox, and regional sports channels. According to some analyst estimates, these costs have climbed between 8 and 10 percent over each of the past four years.
A breakdown of the price increases consumers will see appears below. No price hike is welcome, but companies may be absorbing some of the increased programming costs instead of passing them on to consumers, analysts say.
Bruce Leichtman, president and principal analyst at Leichtman Research Group, says that the real money for cable companies these days is in selling bundles that include TV programming, internet access, and perhaps phone service. "It's in the provider’s interest to make increases as modest as possible," Leichtman says. "They have to be as palatable to the consumers as they can so the bundles don’t blow up. More than ever they want to hold that customer."
That's probably little comfort for anyone forced to dig deeper to pay a monthly bill. Here's what you can expect; note that prices may vary by region.
How Much Your Bill Will Rise
AT&T: AT&T U-verse video subscribers will now pay $2 to $8 more per month on most video packages. The price hike doesn't affect AT&T's U-basic plan. The company is also boosting its broadcast TV surcharge from $5 to $6 per month. Like other companies we contacted, AT&T blames the price hike on the increased cost of acquiring programming.
Cablevision/Altice: The company tells CR that it made "modest adjustments" to pricing back in December for Cablevision and Suddenlink customers. The average customer bill will increase 3.4 percent, it said, and that figure includes any increases in broadcast and regional sports fees. “Our pricing remains extremely competitive in the face of rapidly rising programming costs,” a company spokeswoman said in an email.
Comcast: As the new year started, Comcast raised prices by an average of 3.8 percent, with the amount varying by package. In addition, the company's broadcast TV fee jumps from $5 to $7 each month, and the regional sports fee gets a hike from $3 to $5 per month. If you combine these two fees, the add-ons total $12, which represents a hefty 50 percent increase from last year. Comcast says the price increases are necessitated by the rise in programming costs.
Charter/Time Warner Cable: Despite our repeated attempts to get information about price increases, we haven't received a response from Charter. Last fall, the company said it would be adjusting Time Warner Cable customers' plans, which it called "mispriced," and would be less generous in extending promotional plans or discounts to those customers.
Cox Communications: On average, the company says, video customers will see a total price increase of approximately 2 percent in their video packages. Cox is also bumping itemized broadcast fees from $3 to $4 across the board, and customers will be paying regional sports network fees that range from $2.60 to $6 per month, depending on the market. The company attributes the increases to "rising content costs associated with regional sports and local broadcast networks."
DirecTV: DirecTV, owned by AT&T, raised the price of nearly all its base programming packages between $2 and $6 per month. DirecTV's Family plan is the only base package that will not see an increase. It is now also imposing a monthly regional sports channel fee up to $2.56, but not in every market. The satellite TV service blames the increase on "the higher cost of programming."
Dish Networks: The average Dish customer will probably see a $5 increase in their total monthly bill. In January the company started separately listing the cost of local channels. "We have done this so customers can see the impact of the rising charges demanded by local channel owners," a company spokeswoman said in an email. To offset this change, Dish has cut the cost of its core programming packages by $5 per month, but says the combined impact of these changes will result in a $5 increase to the monthly bill. Dish says its largest cost is programming fees, adding that the fastest-growing costs relate to local channels. "Dish is absorbing some of these costs rather than passing everything on to our customers." Prices remain in effect for customers who are locked into a two- or three-year price guarantee or who are still part of a promotional pricing period, the company said.
Verizon: Last month, Verizon instituted a $3-per-month price hike in FiOS TV plans for customers who aren't locked into a contract or taking advantage of a price-guaranteed term of service, the company tells us. Customers will not see this increase until "12 months after their last increase or contract expiration, so it will happen in waves throughout the year," the company says. In addition, there will be a small 50-cent bump in regional sports network and broadcast fees for most FiOS TV customers this year.
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