US probes cable pricing ahead of switch to digital
By Kim Dixon
WASHINGTON, Nov 5 (Reuters) - Federal regulators have launched a probe into whether cable companies are raising prices as consumers prepare to switch to digital television.
The U.S. Federal Communications Commission said on Wednesday it had sent letters to 12 companies after receiving complaints that some are ratcheting up prices for programming packages ahead of the change.
Television broadcast signals will switch to digital from analog signals on Feb. 17 under a congressionally mandated order to free up airwaves for emergency and other uses.
FCC Chairman Kevin Martin and consumer groups have long complained about rising cable prices, especially when rates for other technologies, such as cellphones, have fallen.
Now, critics say cable companies may be using the digital switch as an excuse to reset rates for packages.
"We are asking why some companies have taken steps to require customers to pay higher cable prices after the digital switch for the same channels that they received through analog signals previously," Martin told reporters on Tuesday on the sidelines of an FCC meeting on unrelated matters.
Prices for cable television nearly doubled in the decade ended in 2005, according to the FCC.
Last month, Consumers Union wrote to lawmakers questioning whether Comcast Corp (CMCSA.O) and other cable companies were fueling growth by "reaching into the pockets of their subscribers."
The consumer group cited Comcast's 38 percent growth in third-quarter profits and rising prices.
The FCC letters went to Comcast, Time Warner Cable Inc (TWC.N), Bend Cable Communications, Brighthouse Networks, Cablevision Systems Corp (CVC.N), Charter Communications CHTR.O, Cox Communications [COXC.UL], GCI Co, Harron Entertainment Co, RCN Corp (RCNI.O) and Suddenlink Communications.
Verizon Communications Inc (VZ.N), a telephone company that provides services that compete with cable TV, also received a letter. (Reporting by Kim Dixon, editing by John Wallace)
