Time Warner Cable's price increases don't even make sense

Happy holidays. Your cable rates are going up. Again.

In its most Grinch-like fashion, Time Warner Cable, the dominant cable company in Southern California, is alerting customers that rates for nearly all its services will increase as of the next bill.

Some rates will be significantly higher, such as a 27.4% increase to $17 from $13.34 just to receive local broadcast channels.

Others will be modestly higher, such as a 9.5% increase to $69 from $63 for broadcast plus basic cable channels, or a 7.3% increase to $58.99 from $54.99 for the digital video package.

Compare that with a 3.5% annual inflation rate as of October.

"The cable industry maintains a near-monopoly over television services," said Doug Heller, executive director of Consumer Watchdog, a Santa Monica advocacy group. "Their prices are completely disconnected from the real lives of their customers."

Brian Bentley, 48, of Hollywood has been a Time Warner customer for more than a decade. He gets basic cable service plus HBO, some sports channels, a digital video recorder and a couple of boxes for his two TVs.

All that now runs about $100 a month. With the latest price hikes, Bentley figures his monthly bill will come to about $125 — a 25% increase.

More cruelly, he estimates that he watches about 20 hours of TV per month. That'll translate, as of his next bill, to $6.25 an hour.

In other words, that would be $6.25 for an episode of "The Real Housewives of Orange County." Or $6.25 for an installment of "Celebrity Apprentice." Or $6.25 for some life-affirming time with Snooki and the rest of the "Jersey Shore" gang.

"Aside from certain sports events, I can't imagine anything on TV that's worth $6.25 an hour," Bentley said.

Jim Gordon, a spokesman for Time Warner, laid blame for the latest rate increase on higher fees charged by broadcasting companies for access to popular channels such as ESPN and Fox Sports.

"There's never a good time to raise rates," he said. "We continue to see exorbitant increases in the cost of programming."

Cable TV networks spent a total of $20 billion on programming last year, according to market researcher SNL Kagan. Programming expenses for cable channels have increased at an annual rate of nearly 9% over the last five years.

But that doesn't mean cable and satellite companies are raising prices across the board. A spokesman for Comcast, the heavyweight cable provider in Northern California, said the company has no rate hike planned for the immediate future.

A DirecTV spokesman said its prices went up an average of 4% earlier this year, roughly in line with the inflation rate. "We anticipate a similar nominal increase next year," he said.

Some of the biggest jumps in Time Warner's rates will be seen on the installation front. The cost of wiring your home for video, Internet or phone service will soar 51.5% to $49.99 from $32.99. Installing Time Warner's Wi-Fi service will jump 40% to $69.99 from $49.99.

Time Warner's Gordon said that these are just the "rack rates" and that most customers will pay less for installation after cutting a deal for their programming package.

But if that's the case, why not list the actual rate rather than a bogus inflated rate? And why on Earth would Time Warner's rack rate for installation go up more than 50% in a single year?