Comcast customers will have to pay an extra 78$ through the year, AT&T raised the monthly fee by a yearly total of 108$, while Hulu takes the head with an increase of 10$ per month, for a total of 120$ per year, although many of its customers are families who switched to the streaming service to cut the cord from high-priced cable and satellite TV companies.
Outraged Internet and Cable TV customers throughout the United States lash against their providers for the sustained increase on their bills, as the price hike takes effect this January 2021.
DecisionData.org recently published a report based on a publicly available dataset that contained municipal and state data and achieved an alarming conclusion: The average U.S. household cable bill stands at 217$ per month, an amount that exceeds what these same households pay in most of their other utilities combined.
The DecisionData report also gives a worrying claim: “It’s normal for the average consumer to look for ways to save money on things like their electric or water bills through conservation efforts, but what we still don’t hear discussed more frequently is how to cut costs on what is becoming every household’s biggest utility bill.”
“Price hikes for cable TV and internet service have practically become an annual tradition over the past two decades, about as certain as death and taxes,” says Mark Cooper, director of research at the CFA (Consumer Federation of America), located in Washington. He also added “It’s always more than inflation. They do it every January, and there’s absolutely nothing we can do to stop this.”
Is Cooper’s claim true? Unfortunately for customers, it is. Since congress passed the Telecommunications Act in February 1996 (Which allowed providers to modify customer rates without any control from the government) to December 2020, the price charged by telecommunication companies has risen 250%, which is about a 3.9% yearly increase on prices, while the average inflation rate stands at a 2.2% per year.
Cooper expressed his concern on behalf of the CFA especially regarding internet service costs since about 48% of Americans work from home due to the pandemic. “It’s not as if cable is optional anymore, with having internet access at home being almost as important as electricity at this point.” stated the spokesman.
But what do cable companies and ISPs have to say about this issue?
Big network owners and media giants like Viacom, AT&T, NBC, and Warner Media state that they face historical high prices when producing content, while cable companies blame the price hike on networks like Disney, ABC, and ESPN (being the sports networks the most expensive in the U.S.) since they need to pay these networks for the rights to broadcast their content.
Cooper also states that cable companies beat even technology giants like Google, Facebook, and Amazon in terms of return, since they make about an 80% return before amortization, depreciation, interest, and taxes, and that the only reason they can get away with it is that there isn’t enough competition, giving these companies all the market power they need.
But the consumers ask themselves. Is there any light or hope about this issue? There seems to be.
The Television Consumer Protection Act (TCPA) which went into effect this month, enforces cable TV service providers to give each customer a detailed and thorough breakdown of all the fees and extra charges, as well as an accurate estimate on the taxes collected by these companies while letting their customers cancel their contracts under 24 hours without any charge.
While this won’t necessarily decrease cable TV costs, Cooper and the CFA assure that this will put pressure on the networks and companies, prompting them to find a new business model that doesn’t take unfair advantages on their users.
What do you think of all this polemic? Do you think that the TCPA will work? Or that it will antagonize the smaller service providers? Let us know in the comments!