Despite ‘over the top’ rivals, cable costs still rising in Connecticut
It came as a welcome surprise for new Altice USA customers entering 2018 after the company chopped $10 off its cable TV installation fees in Connecticut even as it dangled for their consideration a newfangled box for the home.
As for Altice USA’s existing customers? The $10 in extra monthly surcharges they absorbed last year was a most unwelcome development — but they have plenty of company in TV dens across Connecticut.
Despite ongoing defections by pay TV subscribers to “over the top” rivals that feed TV programming outside the cable hierarchy, traditional carriers continue to tack on extra charges in Connecticut. In some cases, they are doing so by inflating base rates on select packages; in others, via fees they did not levy previously, including surcharges in the wake of new contracts with content providers like ESPN and CBS.
Cox Communications becomes the latest to hike rates starting in March after disclosing this month price increases across multiple TV packages it offers in nearly 20 towns in central Connecticut, including a $3 monthly increase in its “Cox Economy” offering that represents a 9 percent increase from the $35 customers currently pay.
In a letter to the Connecticut Public Utilities Regulatory Authority, Cox’s head government affairs manager in Connecticut justified the bumps in part on increased costs for programming from CBS and others, while referencing overall inflation in the industry.
“While Cox absorbs as much as these price increases as possible, a portion has to be passed to the consumer,” stated Peter Talbot in a Feb. 8 letter to PURA. “We are in a competitive business and we work to keep our prices as low as possible. … Cox is not the only service provider raising costs, and our retail prices remain extremely competitive.”
Under state regulations, carriers must relay changes in pricing to PURA, but those rates are not subject to the agency’s approval as the case with electric, gas and water rates, on grounds sufficient competition exists between cable, satellite and Internet-based services.
If cable TV rates are competitive with satellite TV and Frontier Communications, which provides service in most of Connecticut, traditional pay TV costs more than what customers would pay to “cut the cord” and subscribe to a streaming video service to a smart TV, with several studies in the past year differing on the total savings.
But for many, it is a daunting step to jettison their familiar TV platform and experiment with alternatives like DirectTV Now, Hulu or Sling TV that offer narrower channel sets and limited access to sought-for programs like live sports.
Still, more are doing so. According to the New Hampshire-based market research firm Leichtman Research Group, Sling TV and DirectTV Now added 536,000 subscribers in the third quarter of 2017 for a 22 percent increase.
By comparison, major cable, TV and satellite carriers including Altice USA, Charter Communications, Comcast and Frontier suffered the loss of 943,000 subscribers for a 1 percent decline over the three-month period.
“There are lot of pressures in the video business with the pricing and packaging,” said Tom Rutledge, CEO of Stamford-based Charter, during an early February conference call in which he referenced the emergence of non-traditional TV content streamers. “There are a lot of people being priced out of the market.”