‘This is a political situation and the cable industry does not want to be seen as taking advantage of the end of regulation.’ – Sasha Samberg-Champion, cable TV expert.
AT midnight on Wednesday, the rates most cable TV systems charge will be free of government regulation.
Cable companies will be able to hike fees at will – though few believe that cable charges will be going up right away.
But the prospect of unregulated cable fees is scary – and the two cable giants which dominate the New York area, Time Warner and Cablevision, are tiptoeing carefully around the questions: How soon and how much?
“I think it’s going to be a big yawn – our customers, certainly in the very short term, won’t see any change in their rates,” said Charlie Schuler of Cablevision, which services 2.7 million homes in Long Island, North Jersey, Rockland County, Westchester, Brooklyn, Queens, the Bronx and Southern Connecticut.
“We have no plans to change anything about our standard service beyond the rate changes that we made last February,” said Barry Rosenblum, president of Time Warner Cable in New York City, which is seen in 1.1 million homes in Manhattan and three other boroughs.
“We’re probably not going to see any major cable rate increases in the near future,” said Sasha Samberg-Champion, a cable industry expert with Communications Daily, an industry trade publication.
“This is a political situation and the cable industry does not want to be seen as taking advantage of the end of regulation. Cable companies are still going to be looking at a situation where regulations could be passed by Congress at any point if they do anything that raises any political heat.”
“I don’t think it makes any sense to have a major increase in our rates,” Rosenblum said. “You always want to do as much as you can to keep your customers happy and excessive rate increases will ultimately just work against us – it’s simply not good business.”
The federal government froze certain basic cable rates in 1996 – allowing modest increases since then.
That law is set to expire March 31, leaving the cable companies free to set their own rates without restriction.
Both Cablevision and Time Warner have raised rates about 5 percent this year.
“We’ve set our rates for ’99 and those plans will remain unchanged in relation to any regulatory development,” Schuler said. “And the rates for next year just haven’t been set yet.”
Rosenblum said Time Warner raised the price of standard cable last month by about 4.9 percent – and that there are no plans to change that strategy despite deregulation.
Rosenblum added that the rate-hike New Yorkers will experience next February could easily be the same 4.9 percent as this year.
“Next year’s increase will all depend on what happens to our programming costs,” meaning what channels like ESPN and CNN charge operators to carry them, he said. “That’s typically the big driver. Our basic philosophy is to take the smallest increase that we can.”
Samberg-Champion said that the future deregulation may allow cable operators to change their service tiers from the usual basic, standard and premium packages to packages more tailored to subscriber viewing preferences.
“Regulation really confined the way they could set it up their tiers,” he said.
