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Cable pricing policies probed

Customers are paying more, getting less amid confusing changes, the FCC chairman says.

November 05, 2008|The Associated Press

PHILADELPHIA — The Federal Communications Commission has opened an investigation into the pricing policies of major cable operators and Verizon Communications Inc.

The agency wants to ensure the companies' customers are being treated fairly, FCC Chairman Kevin J. Martin said Tuesday.

"I'm certainly concerned with the increasing cable prices that consumers are facing," Martin said. "They are getting less and being charged the same or more."

The FCC wrote Thursday to cable operators, including Comcast Corp., Time Warner Cable Inc., Cox Communications Inc., Charter Communications Inc., Cablevision Systems Corp., Bright House Networks, Suddenlink Communications, Bend Cable Communications, GCI Company, Harron Entertainment and RCN Corp.

Verizon, which offers pay-TV services with its FiOS system, also was included in the probe.

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 providers are in a race with satellite TV and phone companies to offer the most high-definition channels. About half the nation's 65 million cable households buy only the analog basic or "enhanced basic" tiers.

Most cable customers are analog customers, and those who do not wish to upgrade to digital cannot watch the channels that are 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.

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