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Cable rates

Cablevision up 7% in NY; Time Warner sticks with 5% 11/26/2000 07:00:00 PM Eastern

Tis the season when cable operators start notifying customers about rate hikes, and basic increases appear to be falling in the 5% to 7% range.

The first MSO out of the gate is Cablevision Systems, which said it is boosting basic prices by an average of 7% in its metro New York systems. That's a blend of rate increases for broadcast basic, enhanced basic and other higher basic tiers.

Time Warner Cable plans an increase of no more than 5% in the bulk of its systems. A company spokesman said, however, that a few recently rebuilt systems getting a lot of new channels will see higher increases. That's the third year Time Warner has stuck to an average hike of 5% or less. Cox Communications said its increase will also be in the 5% range.

Customers of those companies will see increases in their bills during January and February.

Charter Communications said it was still finalizing budgets but will not boost rates all at once at all of its systems. AT&T would not disclose its plans, a spokesman saying, "It's a matter between us and our customers."

Even though federal rate regulation expired last year, cable operators have been cautious about increasing basic rates-in part to avoid provoking Congress into reenacting price caps, in part from fear of driving even more customers to DBS services and overbuilders.

"I've always said that, once the market comes to regulate cable, they're going to miss the FCC," said Bear, Stearns & Co. analyst Ray Katz. "The satellite guys are rooting for the highest cable rate hikes possible. Not only can they say, 'We're cheaper,' but they can raise their rates, too."

Cablevision's hike is higher than the 5.6% at the beginning of 2000.

The company declined to identify specific rate changes in individualcities. In the past, some systems have faced increases of 11% to 13% when Cablevision finished rebuilding a property and added a new slate of channels. The company said, however, that no systems will see hikes that large this round.

MSOs must notify customers and franchising authorities a month before any rate changes, so more-detailed information about January and February hikes should start emerging within the next couple of weeks.

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