Syracuse, NY — Spectrum customers will soon pay more for cable TV.
The company informed customers that starting March 18, it would increase its monthly “broadcasting” fee by $3, from $18 to $21. These are monthly fees that have increased 9 times since they were first imposed in 2014.
Spectrum will also increase its monthly equipment fee by $1, from $8.99 to $9.99, for each HD receiver.
In addition, the company is reducing the discounts on the TV packages that customers receive. The largest percentage of affected customers will see an increase of less than $5 per month on their bills due to this change, according to the company.
For new customers who pay a promotional price for their Spectrum TV, Internet or Voice package, the higher price of the regular package will not take effect until the end of the promotional period.
Spectrum spokeswoman Lara Pritchard said the company is passing on higher fees charged by television programmers.
“Television programmers continue to increase fees each year to air their content, driving higher costs across the industry,” she said in a statement. “As a direct result of the increasing cost of the television network programming we carry, we are passing these increased fees on to viewers.”
What is a “television broadcasting” tax?
Spectrum’s predecessor, Time Warner Cable, introduced a “TV streaming” fee in 2014, setting it at $2.25 per month, and almost immediately began raising it.
TWC said the fees were designed to “educate” its cable TV subscribers about the rising cost of retransmission fees – the fees cable companies pay to local broadcast stations (e.g. ABC, NBC, CBS and Fox ) to broadcast their shows live. programming on their cable networks.
Spectrum maintained the fees and its annual increases when its parent company, Charter Communications, acquired Time Warner Cable in 2016.
Depending on their proximity to local station broadcast towers, viewers can pick up live signals with a simple, inexpensive antenna. However, Spectrum customers will still have to pay the extra as they don’t have the option to opt out of the channels through their cable package. Spectrum claims that the federal government requires it to carry local broadcast stations.
However, the federal rule is not that simple.
The “must-carry” rule
Under the Communications Act, cable operators must obtain the consent of local commercial and non-commercial stations to broadcast their channels. And these local stations can require cable operators to pay a retransmission fee for the rights to broadcast their channels.
Local stations can even force cable companies to carry their signals under what is known as the “must-carry” rule. However, if they invoke this “must-carry” rule, they cannot demand compensation from the cable operator for the routing of their signals.
The latest increase means fees are now just over nine times higher than they were when introduced eight years ago.
The latest hike means Spectrum customers will pay $36 more in TV streaming fees per year. Fees will now total $252 per year.
Spectrum says TV programming costs are skyrocketing out of control compared to many goods and services. He cited a report by SNL Kagan which estimates that spending on television programming has increased by 179% between 2006 and 2021 and that retransmission fees paid to local broadcast stations have increased by 850% over the same period.