Cable television companies, unshackled from government regulation barely a month ago, have wasted no time raising rates for basic service and repackaging the product they deliver to 42 million American homes.
Free now to set their own rates, cable operators across the country are trying a variety of strategies that generally include higher prices for the limited basic service, lower rates for premium channels like Home Box Office and the Disney Channel, and elimination of charges for such things as second-set hookups.
The net effect in many systems will be higher prices for customers receiving the lowest range of services and sometimes lower prices for top-of-the-line customers, cable operators say.
The increases and programming changes that dropped some channels and replaced others were an unwelcome surprise to many subscribers, who have passed their complaints along to the Federal Communications Commission, consumer protection commissions and city councils.
"We are seeing a number of complaints right now," as many subscribers find higher charges in their January cable bills, said Stephen Ross, chief of the FCC's cable TV section, which will monitor the post-deregulation changes in the industry.
Though the changes appear abrupt to some subscribers, cable operators say their plans have been in the works for many months in anticipation of the Jan. 1 deregulation.
"This has been in the offing for two years," having been written into the 1984 Cable Communications Policy Act, said James P. Mooney, president of the National Cable Television Assn.
"I think most of the operators have paid attention to what is the price tolerance for the service, and as of now it doesn't look like there's been any increase in the normal number of disconnects."
Until this year, state and local governments set rates for basic cable service, which many cable operators complained were unrealistically low. To compensate, the operators usually inflated their rates for the unregulated premium channels and charged extra for services such as second-set hookups and remote-control devices.
"We took deregulation as an opportunity to get our prices in line," said Stephen Kniffin, president of Mile Hi Cablevision in Denver.