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TMCNet: For price hike, cable TV thinks inside box

[March 31, 2012]

For price hike, cable TV thinks inside box

TAMPA, Mar 31, 2012 (Tampa Tribune - McClatchy-Tribune Information Services via COMTEX) -- Cable television will be a bit more expensive in the Tampa Bay area, even for customers who think they have a price locked in with a contract.

Both Verizon and Bright House are raising the price of renting their DVR set-top boxes, a price hike that will multiply depending on how many televisions are in a customer's home. A big reason: Sports.

Verizon is adding $1 to the rental rate of each DVR set-top box in all FIOS markets, including Tampa Bay, going from $15.99 to $16.99 a month, effective May 6. For customers paying promotional rates, the DVR set-top box fee will jump $4 from $12.99 to $16.99.

In a statement to customers, Verizon said, "We hope you understand that to continue to bring this level of programming and technology to you, from time to time we need to modify our rates," adding, "The best is yet to come. We are working right now to build a more exciting product, with even more TV channels in HD and new equipment in the home to allow you to view your favorite programs on all your screens." A Verizon contract that locks in a monthly price only covers the television channel lineup, plus telephone and Internet service if they opt for a package deal. Set-top boxes are a separate item on the bill. This allows customers to add or subtract a box without losing the contract rate, said Verizon spokesman Bob Elek.

Other states that have Verizon are seeing changes, too. Customers in New York, New Jersey and Connecticut will pay $1 more per month for their high-definition and standard set-top boxes.

Verizon's chief rival in Tampa Bay, Bright House, also boosted rates recently, but in different ways.

Bright House does not require customers to sign a contract, and cable TV service includes one standard-definition box. An additional box, including a high-definition box, is $8 per month. Bright House did raise the rate of their DVR box by $2 this month, to $11.95 per month.

Satellite TV companies are taking a somewhat different approach.

Dish Network has not changed set-top box fees in the past year, and charges $7 per month for the first TV, and $10 for a DVR box. DirecTV includes a standard box, and charges $6 for each box after that. Their prices have not changed in the past six months.

Unlike many other consumer products or services, "cable TV prices certainly aren't going down," said Michael Hodel, an analyst who covers the telecommunications market for Morningstar.

A big reason is content companies like ESPN and the NFL are raising the rates they charge cable companies for their programs.

That trend won't end anytime soon, Hodel said.

"You just saw some folks pay $2 billion for the L.A. Dodgers," he said. "They didn't do that anticipating revenue they can make from TV is going to go down." ___ (c)2012 the Tampa Tribune (Tampa, Fla.) Visit the Tampa Tribune (Tampa, Fla.) at www.tampatrib.com Distributed by MCT Information Services

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