Pricing Policies

FCC probes cable companies pricing practices

Cable companies, including Cablevision Systems Corp. and Verizon Communications, are under investigation by the Federal Communications Commission over their pricing policies.

The FCC announced Tuesday that it has directed 13 companies to answer questions about their process of dropping analog channels as they move to digital programming, agency spokesman Robert Kenny said.

The Consumers Union, a nonprofit consumer advocacy group based in Yonkers, complained to the FCC in a letter Oct. 29 that some cable operators have forced customers who want to keep certain channels to pay for a digital set-top box or a more expensive package.

"Ever-increasing cable prices is one of the most significant issues consumers face today," said commission chairman Kevin Martin. "They are getting less and being charged the same or more," he told reporters Tuesday at the agency's monthly meeting in Washington.

In response, Bethpage-based Cablevision said in a statement, "Digital delivers better service, clearer pictures and additional choices, which is why more than 89 percent of our cable customers receive iO TV."

The company announced last week that it will raise its average cable TV rate 3.5 percent next year, but keep prices for its high-speed Internet service and digital phone service the same for the sixth year in a row.

Cablevision, which owns Newsday, has 3.1 million cable customers and about 60 analog channels. The company has been getting rid of some of its analog channels, seeking to "recapture the analog spectrum" for digital services, executives have said.

It dropped nine analog channels from its family package in May, angering some customers who had to use a digital set-top box and pay a digital navigation fee to continue receiving the channels. The company provides the setup free for the first year, but it costs $11.45 a month after that. Alternatively, customers could upgrade to a digital package for $10.99 a month.

Verizon sells fiber-optic FiOS television service that competes with cable operators on Long Island and in New York City. But Verizon spokesman John Bonomo said Tuesday that the FCC probe doesn't apply to its service because its programming is all digital.

The companies have until next week to respond to the FCC.

(Published by Newsday - November 5, 2008)