If you keep writing the previous year in dates on Jan. 1, good news: Your pay-TV or broadband service may remind you that it’s no longer 2019 by socking you with a fee increase or three in the new year.
A dollar here and two dollars there may not seem like much. But combined over a year, these add-ons can add up to $66 a year—the figure at Comcast (CMCSA), America’s largest cable operator—and look more like paying for a 13th month of TV service.
This annual ritual encapsulates a few bad habits in residential telecom: The price you pay doesn’t match the advertised price, providers increasingly try to recover cost increases through fine-print rate hikes, and then the companies involved think you’ll keep paying up.
As the past few years of cord cutting show, that last assumption seems increasingly suspect—especially among pay-TV services, which lost a combined 1.2 million subscribers in the third quarter of 2018.
Hikes among the top five
Here’s how the five biggest pay-TV firms have treated four common add-on charges: the “broadcast TV fee” for local channels; the regional-sports-network fees for the local networks that carry your home pro sports teams' games; the rental fee you pay for a TV-tuner box; and the fee to rent a modem or gateway for your internet service.
AT&T (T), with 23,294 million connections, is hiking broadcast and regional-sports fees. At its fiber-based U-verse TV, the broadcast fee will increase Jan. 20 from the current $4.99 to $5.99. DirecTV satellite subscribers will pay up to $1.90 a month extra for “RSNs”—at a zip code near AT&T’s Dallas headquarters, that charge will jump from $6.64 to $8.49.
Comcast, with 22 million video subscribers, is raising three of those four fees Jan. 1. The broadcast fee will increase from $8 to $10, the RSN fee will go up by $1.50 from today’s $6.50 to $6.75, and renting its home gateway modem/router box will cost $13, versus $11 today.
Satellite-TV service Dish Network (DISH), with 10.3 million subscribers, is standing pat on its broadcast, RSN and tuner fees.
Charter (CHTR), with 16.6 million video subscribers, in November increased its broadcast surcharge from $8.85 to $9.95 and raised the rent on its receiver boxes from $6.99 to $7.50.
Finally, Verizon (VZ), Yahoo Finance’s parent firm, increased the router fee from $10 to $12 for its 6 million Fios internet subscribers in November.
Found only in fine print
In most cases, these fee increases come on top of higher programming-bundle costs. But while those top-level charges should be fairly obvious, you may not know about these smaller price bumps unless you spot them on your bill.
At AT&T’s site, I clicked through its signup sequence for a bundle of U-verse TV and internet all the way to the page requesting subscriber info without seeing the local-broadcast fee broken out.
Comcast, meanwhile, mailed a 16-page “Connected Life” publication to my house that buried these surcharges in a small forest of fine print on page 14 that warned of “Broadcast TV Fee (up to $10.00/mo.), Regional Sports Fee (up to $8.25/mo.) and other applicable charges.”
Charter’s fee increases got their first major exposure in a report from the Asheville, N.C. Citizen-Times, after which the firm confirmed they would apply to subscribers nationwide.
AT&T and Comcast did not return requests for comment emailed last week. Comcast provided a statement blaming “the continually increasing costs associated with carrying the programming our customers demand, especially broadcast television and sports programming.”
It’s true that local and sports content costs keep climbing. But a receiver or modem that’s already in a subscriber’s home is another matter, although Verizon publicist Ray McConville noted that its gateways now include a new McAfee Home Network Protection feature.
What you can do
Although your state may attempt some action—on Dec. 21, outgoing Minnesota attorney general Lori Swanson sued Comcast for this pattern of bill stuffing—you’re most likely on your own to do anything about this.
Rate hikes on modems and gateways are the easiest to escape: Buy your own and stop renting one from your broadband provider. It may take several months to pay off that cost—and picking one will be harder if you also need it to support any landline phone service from the same company—but that one-time expense should be vastly preferable to an ongoing charge that, as we’re once again seeing, can increase.
If you’re fond of your pay-TV bundle, you may be able to duck receiver-fee increases by getting rid of the extra boxes in your home. Some cable operators will let you replace that with an app on a Roku (ROKU) or other media player; with others, your only option is to use that TV only for online streaming-video services and, if your location allows it, over-the-air TV reception.
Or you could take the step that a few million other Americans took in 2018 and drop pay-TV entirely. The third-quarter reports of these five companies tell that tale: Comcast lost 106,000 video subscribers, Verizon 63,000, and Charter 54,000. Satellite services were especially brutalized, with Dish losing 367,000 subscribers and AT&T’s DirecTV 359,000. Only AT&T’s U-verse gained subscribers, all of 13,000.
How many more subscribers will respond to this latest round of hidden price hikes by joining those numbers? Stay tuned.
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Email Rob at email@example.com; follow him on Twitter at @robpegoraro.