Companies' pricing policies under investigation
The Federal Communications Commission has opened an investigation into the pricing policies of major cable operators and Verizon Communications.
The agency wants to ensure the companies’ customers are getting treated fairly, FCC chairman Kevin Martin said.
“I’m certainly concerned with the increasing cable prices that consumers are facing,” Martin told the Associated Press. “They are getting less and being charged the same or more.”
The FCC wrote on Thursday to cable ops including Comcast, Time Warner Cable, Cox Communications, Charter Communications, Cablevision, Bright House Networks, Suddenlink Communications, Bend Cable Communications, GCI, Harron Entertainment and RCN.
Verizon, which offers pay TV services with FiOS, was included in the probe as well.
The agency’s letter questioned the companies’ practice of moving analog channels into digital tiers to free up bandwidth for other uses, such as high-definition channels. Analog customers will have to get a digital set-top box from the operator or buy the digital TV tier to watch those channels.
Cable is competing with satellite TV and phone companies.
Most cable customers are analog customers, and those who do not wish to upgrade to digital cannot watch channels moved to the digital tier.
The agency also will look into whether cable operators and Verizon are confusing customers by linking the shift of the analog channel to the digital tier to the nation’s transition to digital broadcasts, Martin said.
The two moves are unrelated.
Linking the two in customers’ minds could prompt more people to opt for digital video and cable services because the February digital TV transition is mandated by the federal government. The FCC has asked companies being probed to submit information about their pricing practices within two weeks.
Martin said it appears consumers weren’t given “appropriate notice” about the channel changes. He said the FCC has received a “significant” number of consumer complaints about the practice of moving analog channels to digital, which has accelerated this year.
The FCC’s letter was sent out a day after Consumers Union sent a letter to the Senate Committee on Commerce, Science and Transportation asking for an investigation into the practice of moving analog channels to the digital tier.
“Consumers are left paying the same monthly rate for significantly less service or must rent more expensive set-top boxes for each television set they own,” said Consumers Union, a nonprofit advocacy group.