THERE'S A LOOK that tired counterpeople get when they think they're dealing with a crazy man. Surely, I can get myself straightened out by talking to a supervisor ... I'll have a dash of HBO,
and a pinch of Showtime,
but hold the Starz, please
By Burl Burlingame
bburlingame@starbulletin.comIn this case, I was attempting -- as a long-time Oceanic Cable subscribee -- to alter my package. I wanted to save money by ordering premium channels ala carte, instead of as package deals. No can do, said the supervisor lady. Take it or leave it.
Curiously, Oceanic president Nate Smith had said the opposite only half an hour before. "Well, we're the last to know," said the supervisor lady.
At issue is the Cable Television Consumer Protection and Competition Act of 1992. After 10 years, cable companies were mandated to allow customers to order preminum channels -- anything over "basic tier" rates -- on an individual basis, at a fraction of the cost of ordering the whole enchilada. Only want the eggs in that bag of groceries? Sorry, you have to purchase the whole bag.
These new rules supposedly went into effect in October, but cable companies have been slow to let consumers know they can save money by being allowed to buy less.
"We're starting to figure out how to do it," said Smith. "It's certainly going to mean more flexibility for the consumer and lower costs. We just need to design a billing system."
"The 10 years was a grace period to allow the cable companies to develop the technical capability to offer this option," said Michelle Russo, with the Federal Communications Commission. Russo added there was nothing in the law requiring cable operators to tell subscribers about it.
The 1992 Cable Act was designed to lower cable rates. A study two years ago by the Rand Journal of Economics discovered while basic cable cost went down, cable expenditures as a whole went up. The average consumers' bill bloated, thanks primarily to loading up on preminum packages.
Major cable companies such as Comcast, Cox Communications and AOL-Time Warner Cable (of which Oceanic is a partner) reported strong earnings last year, primarily from pitches persuading customers to sign up for services such as digital cable, high-speed Internet access and local-phone service. Advertisements stress the package deals, while there's been no word on alternatives.
Customers who wish ala carte preminum channels could save substantially. Only want HBO, but not all six HBO channels offered by Oceanic's digital cable service? Then you should only pay one-sixth the amount.
"But there's only one rate for HBO," explained the Oceanic supervisor lady. "If you only want HBO, then the other channels are free, because you have to pay the full rate."
According to David Butler, a director at Consumer's Union, "Cable operators know that if customers have the option of paying less and getting fewer, better channels, many would scale back and save money."
Last year, AOL-Time Warner Cable informed analog subscribers in New York City they could no longer receive preminum channels such as HBO, Starz and Showtime unless they installed digital service for an additional $9.95 a month.
In an interview with BusinessWeek last fall, Starz executive Que Spalding said, "This wouldn't work in any business but a monopoly."
According to the National Cable and Telecommunications Association., 97 percent of subscribers chose to buy additional cable programming.
Which might explain why consumer cable bills have gone up a whopping 45 percent since 1996, according to the Bureau of Labor Statistics.
(Some figures in this story courtesy Albany Times Union)
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