Is It Legal for Cable Companies to Charge Extra for Digital TV?
- Because more HDTV TV sets have been sold in the past few years due to the decrease of the retail price of individual HDTV units, the demand for high-definition cable channels has grown dramatically. Knowing this, cable companies have added a lot of high-definition channels to their programming base.
- Cable companies in the early 2000s started developing fiber optic cable technology that would allow high-definition channels to be transmitted to their vast subscriber base. Because it was never deemed illegal to increase subscription fees to their subscribers due to their need to implement new and more expensive technologies, the higher fees associated with receiving high-definition programming rose exponentially.
- Due to increased overhead, rising competition from satellite cable companies such as DIRECTV and Dish Network, cable companies were allowed to legally charge a big fee increase for all their subscribers that wanted the option of renting a digital converter box for their high-definition TV viewing. And the FCC has agreed to this arrangement thus far, allowing almost no limit to how much cable companies charge their subscribers.
- Some consumer advocacy groups would like to instigate an "a la carte" pricing structure instead, whereupon an individual would only pay for those digital channels he really wanted. But most critics agree that the "a la carte" pricing plan would push individual channel prices such as HBO and Showtime through the roof, so no cable company has installed this pricing structure in their subscriber payment plans.
- There is no reason to believe that cable companies will ever stop raising their fees due to the higher cost associated with digital channel programming in the near future. It is perfectly legal, after all, and with 3-D technology hitting the digital TV landscape in the summer of 2010, the TV consumer should look for even higher cable subscription rates very soon.
