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Why cable bills are rising again and what can you do

  • FILE - This Wednesday, May 30, 2007, file photo shows a cable box on top of a television in Philadelphia. Cable and satellite TV providers are ringing in 2018 with an unwelcomed gift: higher cable bills. Although annual rate hikes are inevitable, many consumers manage to lower their bills by pushing back and getting promotional rates. (AP Photo/Matt Rourke, File) Matt Rourke



Associated Press
Sunday, January 07, 2018

Cable and satellite TV providers are ringing in the new year with an unwelcomed gift: higher cable bills.

Comcast, for instance, says customer bills will rise 2.2 percent, on average, in 2018. AT&T is raising DirecTV’s prices by up to $8 a month in mid-January. Smaller providers are planning increases, too.

Over the past decade, prices for TV service have risen almost twice as fast as inflation, according to an analysis of government data. Data provider S&P Global Market Intelligence says customers’ cable and satellite TV bills have soared 53 percent since 2007, to $100.98 in 2017.

Annual rate hikes are as guaranteed as death and taxes. But you can push back and trim your bill.

Why prices rise

Cable companies point to rising fees they pay to carry TV networks. The networks, in turn, have their own rising costs – particularly sports, as they willingly pay more to sports leagues for what they consider must-have programming. But the networks also know they can pass those costs back to cable companies and ultimately their subscribers.

It’s industry convention that a cable bundle needs live sports. Otherwise, cable companies risk losing subscribers to Netflix and other sports-less alternatives.

The consulting firm PwC estimates that sports leagues in North America raked in $18.4 billion in 2016 from TV, radio and tech companies that stream games, up from $11.6 billion in 2012. That’s expected to keep growing as tech companies such as Amazon and Facebook become more interested in sports, meaning more competition for rights to televise games.

In all, S&P Global Market Intelligence estimates that network fees that cable companies are paying are nearly 2.5 times what they were a decade ago.

Push back

You can threaten to ditch your cable company in hopes of getting a discount. Companies will often offer a promotional rate for a year or two – though they may also try to get you to upgrade packages in the process. BillFixers, a service that fights on your behalf in return for a cut of your savings, estimates that 55 percent of customers are on a promotion at any given time.

Cord-cutting

An increasingly popular option is to just peace out. Though there are still 94 million cable and satellite TV customers, that’s roughly 4 million fewer than two years ago, according to MoffettNathanson Research.

You don’t have to drop TV networks completely. Online TV services such as YouTube TV, DirecTV Now and Sling TV offer smaller packages of channels, often for less than what cable charges. Make sure the service has your favorite channels, as these services have notable gaps.

Be careful: Paying for online services to replace TV could eventually add up to more than a $100 cable bill.