In a year that has been tough on everybody, the biggest ISPs have decided to give us all a holiday present this year with a new round of rate increases.
Charter usually starts the rate increase season and raised broadband rates again this year on December 1. This year the rate increase is a large one as Charter raised rates on all standalone broadband products by $5 per month. That raises the rate for the basic broadband tier to $74.99, an increase of 7.1%. Charter raised cable rates in August.
Charter has also petitioned the FCC to allow the company to start charging for data caps in May 2021. The company has been prohibited from charging data caps until May 2023 as a condition of the merger with Time Warner Cable – but the company is asking to be released from that condition two years early.
Comcast is raising broadband, cable, and other rates effective January 1, 2021. Broadband rates are increasing by $3 per month for all packages. The company’s primary product, Performance broadband is increasing to $76, an increase of 4.1%.
Comcast is also increasing cable rates. For example, the cost of its basic TV product Choice TV is increasing from $25 to $30. That increase is carrying through larger cable plans. In addition to increasing the rate if basic cable, Comcast is increasing the hidden fees it charges. These are rates that are not advertised for new subscribers but for which all cable customers pay. Depending upon the market, Comcast is raising the Broadcast Fee by $4.50 per month. For many markets, this means an increase from $11.70 per month to $16.70 per month. Comcast is also increasing the Regional Sports Network fee by $2 per month. Altogether, for a customer that is not locked into a promotional special, this is an increase of as much as $11.50. Even customers on promotional plans will see the increases in the hidden fees. As usual, Comcast blames the increase of cable fees on programmers (without mentioning that it owns the NBC family of broadcast channels).
Comcast is not stopping there and is increasing other rates as well. Installation and home-visit fees are increasing from $70 to $100. Comcast is raising the cost of the first settop box from $5.00 to $7.50 but is decreasing the cost of additional boxes from $9.95 to $7.50. Comcast is increasing the cost of its home security and smart home packages by $10 per month.
AT&T is increasing the cost of its cable products for DirecTV and U-verse TV effective January 17. AT&T is increasing the price of the 160-channel Entertainment package from $97 to $102. The price of the 185-channel Choice package is going from $115 per month to $122. AT&T is raising the rates on the 250-channel Ultimate package from $142 to $151 and is raising the rates on the 330-channel Premier package from $197 to $208. AT&T is increasing U-verse TV by similar amounts, between a $5 and $9 increase. Similar to Comcast, AT&T blames the cost increases in programmers although it owns the suite of programming it acquired with Warner Media.
AT&T is also adding a ‘Federal Cost Recover fee of $0.19 per month that it says covers the expenses that DirecTV pays to the FCC. However, there seems to be no basis for this fee and it’s not being charged elsewhere in the industry.
One thing is clear from this round of rate increases – the big cable companies are feeling their monopoly power and feel free to raise broadband fees by 4% to 7% annually. You don’t have to do a lot of math to foresee basic broadband rates reaching $90 per month within five years. Unfortunately, higher broadband rates are the only way for the big cable companies to keep meeting Wall Street earnings expectations.
It’s worth noting that AT&T and Verizon are not raising rates for fiber broadband. The cable companies don’t face competition from fiber in the majority of their footprint and have largely won the monopoly broadband battle. AT&T recently announced it will no longer sell DSL products and it won’t be surprising to see Verizon follow suit.