FCC investigates cable's channel drops, price hikes

(Credit: Federal Communications Commission)

Some cable subscribers may have been "forced" into purchasing a set-top box and a more expensive digital subscription to receive certain basic cable channels, according to a new investigation launched by the Federal Trade Commission.

The FCC sent out letters (PDF) to Comcast, Cablevision, Time Warner Cable and other major cable companies, requesting a tabular list of information, from the "number of overall subscribers in each affected cable system at the time of the analog-to-digital channel change" to "whether Company permitted subscribers affected by the analog-to-digital channel change to modify their service at no charge for 30 days after receiving notice of such change." Verizon Communications' FIOS network, which isn't explicitly a cable service, is also being investigated. The investigation doesn't affect satellite providers.

The investigation seems to have been initiated by a letter that the Consumers Union, publisher of Consumer Reports, sent to the Senate Committee on Commerce, Science, and Transportation, according to Ars Technica.

Switching to digital is good business for cable. The New York Times reported that Time Warner Cable and Cablevision had better than expected profit this quarter. While Time Warner attributed this to phone and Internet subscriptions, it still "lost 31,000 basic video subscribers in the quarter, but added 124,000 digital video subscribers." Cablevision also gained a significant amount of digital cable subscribers.

We've reported that the cable industry has taken advantage of the confusion surrounding the upcoming DTV transition, and this may be another example. HD Guru Gary Merson, as mentioned in the article, found that Time Warner Cable had reduced its analog cable offering from 74 to 13 channels in the New York City area.

The FCC also announced that it "expressed concern as several cable companies recently announced plans to raise their rates for next year," as reported by the Columbia Tribune. The article mentions that "rising programming costs" and the high costs for preparing for the DTV transition are the reasons behind this.

While that may be true, we speculate that cable providers want to "force" consumers to an all-digital cable package because it's cheaper for the company and provides a good excuse for a price hike, by way of rental fees for digital cable boxes and increased subscription fees. A cable provider can fit roughly 12 digital channels in the space that 1 analog channel would occupy. Most cable providers will continue to provide analog channels alongside their digital offerings after the February 17, 2009 DTV transition, but what happens after that? Subscribers, as of right now, may have to pay an additional monthly fee for a set top box to receive basic cable once their providers decide to go all-digital, meaning shutting down the channels that they offer in analog. If the FCC's investigation is any indication, the DTV transition may be as troublesome for cable subscribers as it is predicted to be for customers who receive their channels over-the-air--in price hikes and forcing subscribers to purchase a set top box.

In the meantime, of course, anybody can get a converter box for as little as $10 or $20 after coupon, and skip out on cable.

What do you think? Is the FCC's investigation finally a culmination of the confusion and price hikes surrounding the DTV transition for cable provider? Are you an analog cable subscriber whose provider has cut channels or forced you to switch to digital? Sound off in the comments section.

[zizzybaloobah]

Investigate away! - my Comcast bill keeps going up and up, and I'm seeing little if any improvement in my channel line-up, service, or internet access. Probably because I won't kick in and subscribe to their stupid phone service.

[earnestp]

If you live in the Los Angeles area and own a Tivo, as I do, this year you have seen your ability to record simultaneous programming severely impacted by the analog to digital shove. Tivo Series 2 devices are able to receive analog signals but not digital, so every channel over, roughly 30, has become unavailable to Tivo, except when received via converter box. Thus, if you want to record two programs airing on expanded basic cable-- say something on Comedy Central and something on VH1--you're out of luck as you'll only be able to tune one of the channels. What's outrageous is that for some reason, Time Warner Cable's customer service people seem to be completely unaware of the issue.

[fcg1502]

I've got cablevision in my new place I moved into last year. At the time I moved in, I got one digital DVR for my HDTV downstairs, and just plugged my regular TV into cable upstairs to get analog channels. Slowly but surely, over the last couple of months, analog channels just keep dissapearing. I think I've lost something like 6 of them in all with absolutely no warning. I've obviously known about this DTV switch for a while, but I didn't see them just flat out dropping channels without notice because they need to free up room. It's ridiculous.

[sappororamen]

I called Comcast cable and I was told that in three years, every TV in your house will have to have a converter box to receive any programming. In other words, you will have to buy or lease a box for every TV in your house. If your TV is plugged in directly into a cable outlet, it will no longer work in 2012. You will have to get a box which you will have to PAY for. It seems the cable company is going to take this opportunity of digital conversion confusion, and force us to pay for a converter for every TV in the house in three years. As another blogger said, you can choose not to have a converter box in 2012, buy by then, the cable company will have switched everything over so that your TV will no longer be able to receive any broadcasts from your cable company. We finally got rid of every box for every TV, but in 2012, we will going right back to it. We are already paying for the programming. Why do we have to pay for the box because they are going all digital. The boxes should be provided free of charge!

[rsctp]

Stop whining and start writing and calling your local officials. very locality is hurting for new revenue. Suggest or demand a surtax on cable profits based on the number of channels removed from analog on the cable. We heard for years why the cable companies couldn't offer fewer channels for less money because of the complexity of customizing the menu and eliminating just some cable channels, Lets agree to save 'em money by insisting they keep 'em all or pay a 10% surtax per channel for every one they drop.