November 5, 2008 in Business

FCC to investigate cable pricing

Agency worried users getting less but ‘being charged the same or more’
By DEBORAH YAO Associated Press
 

PHILADELPHIA – The Federal Communications Commission has opened an investigation into the pricing policies of major cable operators and Verizon Communications Inc.

The agency wants to ensure that customers are being treated fairly, FCC Chairman Kevin Martin said in an interview with the Associated Press.

“I’m certainly concerned with the increasing cable prices that consumers are facing,” Martin said. “They are getting less and being charged the same or more.”

The FCC wrote to Verizon and 11 cable companies last month about their practice of moving analog channels into digital tiers to free up bandwidth for other uses, such as high-definition channels.

To watch channels that have been moved, subscribers to analog service must either subscribe to a more expensive digital tier, rent a digital set-top box or use an adapter, which service providers are starting to offer for free.

The FCC’s Oct. 30 letter went to Comcast Corp., Time Warner Cable Inc., Cox Communications Inc., Charter Communications Inc., Cablevision Systems Corp., Bright House Networks, Suddenlink Communications, Bend Cable Communications, GCI Co., Harron Entertainment, a unit of Harron Communications, RCN Corp. and Verizon. Verizon was included because it offers pay TV through its FiOS service.

Cable providers are in a race with satellite TV and phone companies to offer the most high-definition channels. About half of the nation’s 65 million cable households buy only the analog basic or “enhanced basic” tiers.

The agency also will investigate whether providers are misleading customers into thinking that when analog television channels move to the digital tier of service the shift is related to the federal government’s mandate that all broadcasts be digital by February, Martin said.

© Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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