US federal regulators are investigating whether cable companies are exploiting broadcast television's transition to digital by overcharging subscribers. The agency wants to ensure the companies' customers are treated fairly, Federal Communications Commission (FCC) Chairman Kevin Martin said.
"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 to Verizon and 11 cable companies last month about their practice of moving analog channels into digital tiers to free up bandwidth for other uses, such as high-definition channels.
The FCC's letter of 30 October went to 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, a unit of Harron Communications, RCN Corp. and Verizon. The FCC has asked companies being probed to submit information about their pricing and channel switching practices within two weeks.
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 obtain a digital set-top box from the operator or buy the digital TV tier to watch those channels. 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 FCC will investigate whether providers are misleading customers into thinking that when analog television channels move to the digital tier of service the shift is related to the federal government's mandate that all broadcasts be digital by February, Martin said. The two moves are unrelated. Linking the two in customers' minds could prompt more people to opt for digital video services.
The FCC's letter was sent out a day after Consumers Union asked the Senate Committee on Commerce, Science and Transportation to look 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 consumer advocacy group.