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Comcast Only Latest to Bury Retrans Hikes in Below the Line Fees
by Karl Bode 06:18PM Monday Nov 25 2013
Cable operators have made their dislike of broadcast industry retransmission fee hikes very clear, and as you'd expect those price hikes are being passed on to you. Curiously though, instead of just raising the price of services (which they do anyway), cable operators have taken to placing these fees below the line, where they can jack up customer prices further -- but keep the advertised rate the same.

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AT&T recently jacked up the price of their "Broadcast TV Surcharge" to an additional $2.50 per month for U-Verse TV users.

"While broadcast stations distribute their signals over the air using free spectrum granted to them by the federal government, they charge Charter significant amounts to carry their TV signals," Charter's website informs customers. Charter was one of the first cable companies to start charging the fee.

"These signals were historically made available to Charter at no cost, or low cost. However, the prices now demanded by broadcast stations have necessitated that we pass these costs on to customers," states the company. Why this cost can't simply be reflected in your overall bill instead of being hidden below the line isn't made clear.

Meanwhile, cable operators who don't yet charge this fee probably will soon. As noted last week, Comcast is the latest to join the fun, charging customers $1.50 more a month on top of frequent rate hikes via their "Broadcast TV fee." Many Comcast regions will begin paying the new fee on January 1.

Regulators have long turned a blind eye to the practice of burying fees below the line to pretend to keep their advertised prices artificially low(er). The "regulatory recovery" fee is another fee commonly found on cable operator bills, imposed to rather ambiguously counter the cost of entirely unspecific government regulation, edging ever skyward even as the amount of actual regulation on cable operators decreases.

It's not getting better anytime soon. A recent report by SNL Kagan predicts that retransmission consent fees are expected to jump 130% by 2019.

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PRpush

@comcast.net

Putting as separate line item is PR leverage

The cable companies put these costs below the line and not in the advertised rate for a good reason. And that is to put heat on the broadcast stations to try and force them to keep their charges lower. Will it work? Probably not. Because the cable company customers won't complain to the FCC to do something about it. They will whine, but keep paying.
Crookshanks

join:2008-02-04
Binghamton, NY
Reviews:
·Frontier Communi..

Re: Putting as separate line item is PR leverage

What the hell is the FCC going to do about it? Congress passed the law, there are exactly three people you need to complain to about it, and not one of them works for the FCC.

If you're going to get riled up about something you should at least familiarize yourself with it.

PRpush

@comcast.net

Re: Putting as separate line item is PR leverage

said by Crookshanks:

What the hell is the FCC going to do about it? Congress passed the law, there are exactly three people you need to complain to about it, and not one of them works for the FCC.

If you're going to get riled up about something you should at least familiarize yourself with it.

The FCC does have the power to affect how retransmission contracts are handled: »www.fcc.gov/encyclopedia/retrans···-consent
Crookshanks

join:2008-02-04
Binghamton, NY
Reviews:
·Frontier Communi..

2 edits

Re: Putting as separate line item is PR leverage

I love when people link things without reading them.

Pray tell, what part of that document suggests the FCC has any teeth whatsoever when it comes to carriage disputes?

quote:
On March 3, 2011, the Commission adopted a Notice of Proposed Rulemaking(NPRM) on proposed changes to the retransmission consent rules that would minimize disruptions to consumers if an agreement between the parties was not reached. Specifically, the NPRM asks for comment on proposals that would:

Provide more guidance to the negotiating parties on good-faith negotiation requirements;
Improve notice to consumers in advance of possible service disruptions caused by impasses in retransmission consent negotiations; and
Eliminate the Commission’s network non-duplication and syndicated exclusivity rules, which provide a means for parties to enforce certain exclusive contractual rights to network or syndicated programming through the Commission rather than through the courts.
Awesome, they can provide guidance on good-faith negotiation! As if the parties are negotiating in bad faith, seeking to deliberately cut consumers off from their respective products.

Team America wisdom:

Hans Blix: I'm sorry, but the UN must be firm with you. Let me see your whole palace, or else...
Kim Jong-il: Or erse what?
Hans Blix: Or else we will be very, very angry with you... And we will write you a letter, telling you how angry we are.

Frankly, I'm not sure Congress has any teeth here either, given the changes in the TV marketplace, but at least it's the proper place to start trying to affect change in our political system, not an unelected regulatory agency that has limited authority on the subject in question.

BTW, I say all this as someone who gets all of his original programming via OTA, and who stands to lose much of it in the years to come. The advertising dollars just aren't cutting it anymore, so what choice do the major networks have? They can reduce costs (more cheap reality TV), increase revenues where allowed (carriage fees), or use a combination of the two to remain economically viable, which is what they're doing.

Even with these measures I'm not sure how much longer the current model is sustainable. Cable has proven that people are willing to pay for original programming, even with commercials (it's not just HBO anymore), Netflix is further disrupting the ecosystem by moving us closer to a la carte, and the major networks have considerable legacy costs that their competitors don't have to contend with.

I would never suggest trying to stop innovation, but it's still a bit depressing to think about the choice I'll be looking at in the next few years: pay more or go without.

At least those of us on OTA will still have syndicated shows and PBS.
BiggA

join:2005-11-23
EARTH

Re: Putting as separate line item is PR leverage

They want to double-dip to make more $$$. They shouldn't be allowed to do that. In all reality, the good content is going to move to cable, the big networks all own channels, and the whole Aereo thing will factor in too. They will probably throw a hissy fit, everyone will go tell them to stuff it because they're a bunch of cry-babies crying over their big piles of cash, and then they will slowly, quietly, move all the good content to cable, and OTA will be syndicated garbage, old movies, and re-runs with some local news, and that will be that. Another problem is that there are way too much channels, so you get a lot of junky content. If there were relatively few channels, and each one got a good amount of money from carriage fees, there would be more high-quality content, and things would be cheaper. Hopefully a-la-carte is brought about somehow, as that will force the networks to compete, and in the process, be better.
Crookshanks

join:2008-02-04
Binghamton, NY
Reviews:
·Frontier Communi..

Re: Putting as separate line item is PR leverage

said by BiggA:

They want to double-dip to make more $$$.

How are they double dipping? By charging for advertisements and retransmission? Every cable channel has done that since the beginning and nobody called it double dipping. I don't think it's pure greed, I doubt the ad dollars alone allow them to break even. Production costs for everything (except reality garbage) are going up, ad dollars are going down, the difference has to come from somewhere.

I agree with the rest of your analysis, though I think that some original programming will remain OTA. It will slowly become the exception, rather than the rule, but it will be a long time before it goes away entirely. PBS isn't going anywhere, and we may see a return to first run syndication for a few shows produced by independent studios.
Skippy25

join:2000-09-13
Hazelwood, MO

Re: Putting as separate line item is PR leverage

Cable in the beginning was commercial free in pretty much every channel that was not broadcast. However, broadcast got to force the cable channels to carry them. It wasnt until recently that they saw they can "double-dip" by making them pay and still collect on advertisements in addition.

I personally don't disagree with them breaking it out. I think they should break out all contract channel cost on the bill and that it should all be included in the bottom line price they quote and advertise. Let us see a detailed itemized bill for our services. One that is not PR related or a guise to hide a rate increase.

What I do disagree with is that the base price did not change lower. They simply added the fee which was on top of the fees they are already collecting in the base price. My assumption is that their cost did NOT go up another $1.50 per subscriber in addition to what they were already paying for the same material. Without knowing the detail I actually doubt they even pay $1.50 in total per subscriber for the contracts they just signed for all the material it covered.
BiggA

join:2005-11-23
EARTH
Charging for something that they're giving away for free and getting the ad and retrans money. It's double-dipping. It should be law that if it's free OTA, it's free for cable to retransmit.

syclone

@sbcglobal.net
Part of the reason they keep paying is because they can't opt out. If this was really fair and not about hiding fees, they would offer it as an additional package to their 'basic' cable with a notice that it isn't needed if you have an antenna that gets the channels already.
BiggA

join:2005-11-23
EARTH
Yeah, and I actually like that aspect of it, as the broadcasters are out of control. I hope that this causes some backlash at the broadcasters who are ripping us all off.
TBBroadband

join:2012-10-26
Fremont, OH

Charter or Comcast

Is this about Charter or Comcast? The title says Comcast but the post is about Charter and AT&T. Very confusing.
Bob61571

join:2008-08-08
Washington, IL
Reviews:
·Frontier Communi..

1 recommendation

Comcast should List the Fees for ALL Channels.......

(example only, I do not have any knowledge of what they pay for each channel)

ESPN $8.25
Disney Channel $2.23
Weather Channel $.50
QVC pays Comcast $.10
NBC Sports (owned by Comcast) $1.11
.
.(etc.)
.
.......
Total for all Channels in your Super Deluxe HD Plus Magnificent package $59.99
osravens

join:2011-01-26
Cumberland, MD

Re: Comcast should List the Fees for ALL Channels.......

But then their profit margins would be revealed, and customers would probably not like what they see there.
TBBroadband

join:2012-10-26
Fremont, OH

Re: Comcast should List the Fees for ALL Channels.......

Actually that wouldn't show any profits, the rest goes into plant and network builds, upgrades, trucks, employees, and everything else. This would only show that what they pay based on their contracts for content.

hobgoblin
Sortof Agoblin
Premium
join:2001-11-25
Orchard Park, NY
kudos:9

1 recommendation

Burger King should then of course list how much they pay for the ingredients in all their meals.

Hob

Sensafries

@rr.com

Re: Comcast should List the Fees for ALL Channels.......

BK gives you the option to not combo your meal. Idiot argument

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4

1 recommendation

yeah them crooks tried to charge me $1.25 for one slice of "cheese" and it wasn't even real chesse!!1
--
Despises any post with strings.
Skippy25

join:2000-09-13
Hazelwood, MO
When I go to ring out and that BK broiler goes from the advertised price of $2.99, to $3.49 because of a $.50 below the line fee, I would expect to see the same push.

However, being only your local monopoly / duopolies video providers play this game I dont see that happening you clown.

AnonMe

@comcastbusiness.net

Shake up the industry a bit

Maybe Cable Co's need to rethink thier whole pricing structure, if they are really so upset about paying retrans fees.

Option 1)
Charge customers a (cheaper) base price to be able to recieve cable tv, but then have a retrans fee for channels you want to receive. Don't pay the retrans fee, then don't get the channel. Sounds like a-la-carte.

Option 2)
If the content providers are the ones making all the money, as the cable co's claim, then charge customers a (cheaper) base price to receive cable, and make the content providers pay the cable companies for the priviledge for the cable companies to pass through the content along with the content provider's commercials.

Think about the rammifications of that one for a moment.

bear73
Metnav... Fly The Unfriendly Skies
Premium
join:2001-06-09
Derry, NH

Re: Shake up the industry a bit

I like option 2 as this would return things to how it originally was for OTA broadcast. While the spectrum may have been "free"the broadcasting company had (and still has) to pay for the equipment to put that signal into the air (called transmitters) and they aint cheap.
It really grinds my gears that cable companies sit there and whine that OTA spectrum is given to them "free" when they leave out the $$$$ that OTA broadcast pays in equipment and salaries to maintain that footprint. Whatever the hell happened to truth in advertizing?!?! Oh yea... never existed...
Skippy25

join:2000-09-13
Hazelwood, MO
Option 2 would bring the parties back to a better balance.

I am not sure why or what happened but somehow the content providers got the upper hand on the cable providers and this is beyond me. They both need each other and neither can really survive without the other. As a matter of fact beyond the locally broadcasted channels, the content providers need the cable companies 100% to survive as probably 95%, if not more, of ALL channels would die if cable providers simply stopped providing them to their consumer base.

I believe this is just a love hate relationship and they both use each other to deflect criticism while they both enjoy an increase of profit margins after every "conflict".

Simon707

@184.151.114.x

FREE!

BROADBAND IS NOW FREE AT "Insert random company here".

In tiny text underneath the ad: Surcharges up to 200$ may apply + modem location and various other maintenance fees.
biochemistry

join:2003-05-09
92361

Broadcast fees

Start listing the detailed OTA broadcast fees on the bill and don't include the channels unless paid for separately. I don't think OTA broadcast is where cable companies are making their profit at the moment so it shouldn't be kept any secret.

CBS: $2
NBC: $3
ABC: $2.75

etc.

When consumers see these prices, maybe they'll dump broadcast and install an antenna.
--
Unicorns! Show ponies! Where's the beef?!
cramer
Premium
join:2007-04-10
Raleigh, NC
kudos:8

Re: Broadcast fees

Or they'll dump the worthless pile of "reality tv" BS they don't watch anyway. Sadly, we already know those worthless OTA stations are a significant number of cable subscribers. (as seen by how many leave when these sort of retrans fights surface. otherwise, TWC, Comcast, etc. would tell the locals to go stuff themselves. The locals know they're walking a very fine line, as well -- they'll lose a substantial number of eyeballs if they're dropped.)
biochemistry

join:2003-05-09
92361

Re: Broadcast fees

Sadly many people don't realize that broadcast HD can be picked up via an antenna.
--
Unicorns! Show ponies! Where's the beef?!
Mr Matt

join:2008-01-29
Eustis, FL
kudos:1

Re: Broadcast fees

said by biochemistry:

Sadly many people don't realize that broadcast HD can be picked up via an antenna.

The cable leaches are up their old tricks adding additional fees with no benefit to their customers for those fees. Unless you live in an area like Port Jervis, New York or Melbourne, Florida, or other cities, where there is no OTA signal there is no option, to install an antenna for consumers. When most TV stations moved to the UHF band they severely limited their signal range.

Cable systems were constructed in cities where OTA signals were not available to allow homeowners to watch broadcast television. Allowing OTA stations to charge retransmission fees is outrageous. Broadcasters should be happy when a cable systems carry their signal because they get more eyeballs to view their sponsors advertisements. TV Stations have already been given a license to operate on an assigned frequency at no charge. If retransmissions fees are allowed, why not charge homeowners an antenna fee or a license fee per TV like they do in the U.K.

Super Marcel

@responsys.com

My retrans fee is $0

thanks to the two antennas on top of my roof. And I got better signal as well. Paid for itself and the Tivo premiere in a matter of months.

Until people vote with their wallets and cut the cord, nothing will change.

Broadcaxt

@verizon.net

Cable companies have to offer broadcast channels

I hate this fee just as much as anyone. I hate that Verizon has added a Regional Sports Fee to my monthly bill that I can't opt out of too.

But so we're all on the same page here, Cable companies are required by law to offer all broadcast channels, both those that elect must carry, and those that come to an agreement with the distributor for retransmission fees.

Comcast's fee is dirty, especially considering they own 10 NBC affiliates and 17 Telemundo affiliates that charge retrans fees (in addition to all their terrible cable networks we all have to pay for in order to get the dozen or so channels we actually want). But instead of slapping on this fee (which won't help raise awareness of who is to blame), since they're raising your bill by doing it, they should just report the terms of their retrans arrangements, and tell customers clearly that the law requires them to sell you these channels as a part of any cable package.

Senators McCain and Blumenthal have a bill that will fix this. Senator Rockefeller has an even further-reaching bill that will break the market wide open. Call your Senator and tell them to fix this mess.