TMCnet News
Satellite TV business growing; cable provider alters pricing policies [The Leader-Telegram, Eau Claire, Wis.](Leader-Telegram (Eau Claire, WI) Via Acquire Media NewsEdge) April 28--Rising prices and new options are prompting more Chippewa Valley residents to cut the cord to cable TV. Long a popular target of complaints, cable bills have finally reached the point at which an increasing number of people, including longtime cable customers, have made a change. Frequently, they are switching to satellite TV or combining over-the-air reception with Internet streaming options to satisfy their video entertainment cravings. Local companies that sell satellite TV packages report sky high demand in recent months after Charter Communications began telling existing cable customers it has ended the practice of annually renewing promotional packages that offer significant discounts. "The number of calls we're getting is unbelievable," said Jason Goodland, manager of LinkZone Satellite in Eau Claire. "We're installing satellite TV for five to seven new customers a day just in the Chippewa Valley." Likewise, Tim Fitzmaurice, events coordinator for InTouch Communications, said the Osseo-based company's satellite TV business also is booming. The company is installing satellite TV for three to five new customers a day. Kim Haas, a Charter spokeswoman in Wisconsin, confirmed the company implemented new pricing and packaging of its residential offerings last summer intended to "ease the transition for customers rolling off promotions." "Promotional rates, by their very nature and across all industries, have terms and conditions and expiration dates," she said. "If a customer's promotion has expired, we feel confident we can offer them a package that continues to provide exceptional value." Seeking an alternative Laura Talley of Altoona is one of those longtime Charter customers who finally pulled the plug on her cable service in recent weeks. "We've noticed that the prices from Charter just kept going up, and for the little bit we watch TV, we just didn't want to pay that much anymore," Talley said. Talley, who didn't have a digital cable box, also said she was irritated that at the same time cable prices were going up, the number of channels she received was going down. Charter confirmed in January that 11 channels no longer were available to customers without digital receivers or DVRs who just have their TVs connected via coaxial cable to wall sockets. The change is part of the company's push toward gradually eliminating older analog signals and adopting all-digital service in the next few years. When the digital transition is complete, customers will be required to rent a digital box for each TV, just as satellite providers already mandate for their all-digital service. "Digital format provides our customers a consistent experience throughout their homes and enables interactivity, parental controls and the ability for us to offer greater choices on demand and in HD, faster Internet speeds and much more," Haas said. She indicated that more than 90 percent of Charter TV customers subscribe to digital cable with digital equipment on at least one TV. Still, Fitzmaurice said, "the majority of people we switch are coming over from cable because their cable prices are going up exponentially and their channel lineups are going down." As for Talley, who now has digital receivers and DVR capabilities on all of her TVs at a DirectTV introductory rate, reported the new service is working well so far, adding, "and it's way cheaper." Talley made the same swap for several rental properties she owns in response to requests from tenants. Making the switch Her experience is similar to what thousands of cable customers have been reporting when they inquire about the possibility of making the leap to satellite, said Goodland, who sells DirectTV, Dish Network and Charter services through Eau Claire-based LinkZone throughout Wisconsin and in about 19 other states. "I can only assume that Charter is losing tons of cable customers," Goodland said. "There's no way when you make a change like this that people aren't affected." The changes have upset many people enough they finally are motivated to look at new options, even if they really are most comfortable sticking with the status quo, often a highly promoted discount on a "bundle" that includes cable, telephone and Internet service, Goodland said. "Charter has it beat into people's heads that they need to bundle to save money," he said. "But consumers can bundle services with different companies and save more money." Charter's financial reports suggest consumers nationally are beginning to change the way they watch -- and pay for -- TV. The report shows that video customers declined by 4 percent in 2012 at the same time Internet customers increased by 8 percent and phone customers rose by 7 percent. The company lost 36,000 residential video customers in the fourth quarter, down from 44,000 in the same period of 2011. The situation in the Chippewa Valley appears to reflect a national trend, as a 2012 Nielsen study revealed that the number of U.S. homes subscribing to wired cable had decreased 4.1 percent in the previous year, compared with increases of 2.1 percent for satellite TV and 21.1 percent for video provided by telephone companies. Free TV Mike Brown of the town of Seymour encountered a similar situation with his cable bill this winter but chose a different solution -- one that combines old-school and newfangled TV technology. Brown, a cable TV customer since 1987 and a subscriber to a Charter bundle for several years, had fallen into a pattern common for many of the company's customers, calling each year upon expiration of a promotional rate package to register for a new, similarly priced one. But this year the result was different. After his package ran out in December, he called customer service and was told the best bundle deal he could get would cost him $155 a month, or about a $25 increase over his previous after-tax total. He explained that the rate was too expensive for his taste, hung up and called again later only to get the same answer from a different agent. "$155 was just over my pain threshold," Brown said. After exploring his options, Brown elected to join a small but growing group of consumers who have stopped paying for cable or satellite TV service altogether. He put up VHF and UHF antennas to receive local broadcast channels -- for free -- and the family also subscribes to Netflix to stream movies and television shows. The household receives 12 channels over the air, including PBS, Fox and major networks CBS, NBC and ABC, all in high definition. As for replacing the rest of his bundle, Brown kept Charter Internet service but replaced the phone service with an Ooma voice-over-Internet phone service that costs him $3.75 a month. The bottom line, he said, is that he's saving about $100 a month. For the most part, Brown said, the family hasn't had any complaints. "There are a few channels we miss, but it's not a big deal," he said. "We'll see when football season rolls around and we can't get ESPN and 'Monday Night Football.' I'm not that much of a diehard, but I would certainly watch if the Packers were on 'Monday Night Football.' Now I guess we'll have to go to someone's house who has ESPN or go to a sports bar." It's a small sacrifice compared with the big savings, Brown said, pointing out that the family expects to save $1,000 the first year even after taking into account the roughly $175 they spent on antennas and accessories. No oversight Though the city of Eau Claire still receives calls from consumers who want the city to do something about cable rates, local officials no longer have the power to negotiate rates with private cable companies, said city attorney Stephen Nick. That ended in January 2008 after the Legislature passed the so-called Video Competition Act, which eliminated local franchising authority in response to telecommunications companies arguing it was too burdensome for them to negotiate contracts with individual municipalities across Wisconsin. The Federal Communications Commission confirmed that the city no longer has any authority to regulate Charter's basic cable rate when it issued a memorandum opinion in February 2011 finding that Charter is subject to effective competition in Eau Claire and therefore no longer subject to city oversight, said Becky Noland, city finance director. The standard for "effective competition" is 15 percent of the market, and Charter was able to provide evidence that other providers, including satellite TV companies, in the area have at least 15 percent of the market, Noland added. The result, according to state Division of Trade and Consumer Protection spokesman Jerad Albracht, is that when it comes to cable TV service, "most price and service decisions are left to the market." Lindquist can be reached at 715-833-9209, 800-236-7077 or [email protected]. ___ (c)2013 the Leader-Telegram (Eau Claire, Wis.) Visit the Leader-Telegram (Eau Claire, Wis.) at www.leadertelegram.com Distributed by MCT Information Services |