Hargray raising cable, Internet prices; more fee hikes likely

dburley@islandpacket.comMarch 7, 2014 

ILLUSTRATION

Hargray Communications will increase prices on cable television for most customers by $5 a month -- along with other fee hikes -- beginning April 1.

The bigger cable bills are part of an industrywide trend unlikely to end soon, Hargray executives say.

Customers will also see a $2 monthly increase for Internet connection. That means someone with a cable TV-Internet bundle will pay $7 more a month, or $84 more per year.

Hargray attributes the rise in Internet fees to improvements to its equipment, including a widened network of lines that allows for more and faster service, said Andrew Rein, vice president of strategic planning and development.

The cable bills are a different story, however, as prices have jumped across Beaufort County and the rest of the country.

For instance, Time Warner Cable's standard television service, which includes about 80 standard-definition channels, went up $3 a month for customers nationwide beginning in March. Expanded Time Warner packages increased at similar rates. The average customer saw a 6.4 percent increase, according to a news release.

Attempts Friday to reach representatives from Comcast, which is buying Time Warner, were unsuccessful.

Cable company representatives blame the hikes on the high prices networks charge them to carry content.

"If Viacom or Turner or ESPN/Disney chooses to charge us more, we and other distribution channels are simply passing that cost along to our customer," Rein said.

Hargray paid 8 to 10 percent more this year to carry popular channels such as ESPN, FOX, NBC and USA, according to a letter this week to its 30,000 cable customers.

Broadcast fees increased 40 percent across the country for Time Warner, according to company spokesman Scott Pryzwansky. Area-specific data were not immediately available Friday, he said.

Hargray executives said the heavy costs put them in a bind. They must either accept them and risk losing money or drop networks and eliminate channels.

"I think the whole content model is broken," said Gerrit Albert, Hargray vice president of sales and marketing.

But what if a customers wanted just ESPN or Fox News? Couldn't they pay less to receive fewer channels instead of paying for dozens of networks they don't watch?

Albert said the deals networks strike with cable companies prevent this.

"They dictate how you distribute their channels," he said. "If we're working with Viacom and say, 'Can we put MTV in a different tier, because not everybody wants MTV?' They say, 'No. Everybody has to have MTV, and put it in your largest bundle.' ''

Albert and Rein said the short-term fix to these high price tags, which ultimately fall on the customer, is government intervention.

Two bills were filed in Congress in December to regulate negotiations between cable companies and broadcasters. Neither has gone far.

Until a change occurs, Rein says, the fees will be passed along to customers.

"We're a business," he said. "And, unfortunately, it's our customers who feel this, too."

Hargray's last fee increase was in December when it announced that customers who do not have digital cable must purchase a converter box to continue receiving those channels.

For existing customers, the converter is free until the end of 2014, and $1.99 a month per TV after that. New customers pay $2.99 a month per TV.

Follow reporter Dan Burley on Twitter at twitter.com/IPBG_Dan.

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