Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, June 26, 1995 TAG: 9506260042
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
DATELINE: LENGTH: Medium
Even though Cox Cable Roanoke won't take full advantage of the new option, the company planned to begin notifying customers today that rates will rise about 4.4 percent starting Aug. 1. A similar hike is possible next year, the company said.
A typical Roanoke household, which now pays $23.04 a month to receive 41 television channels, will pay $24.07 after the latest adjustment. Roanoke subscribers who have only basic service - 14 channels - will see their rate rise from $8.04 to $8.49.
Similar increases will also apply to subscribers in parts of Roanoke County and Vinton, although rates differ because they are based on incomes in each locality.
In April, Salem Cable TV, which serves Salem and western Roanoke County, raised its basic rate nearly 2 percent and its expanded-service rate nearly 11 percent and added five channels to its expanded lineup, said General Manager Jim Matthews.
The Federal Communications Commission in February decided that cable rates should be allowed to rise if cable companies faced higher costs because of inflation. During the last quarter of 1992 and all of 1993 and 1994, inflation had been eliminated as a justification for rate hikes for most companies. Now, the companies can recover those costs retroactively.
Inflation was about 5 percent during the period, and the rate hike is an attempt to recover a portion of what those price increases took from the company.
Rates last went up in February by 7 percent, as Cox expanded its preferred service to include the Disney Channel and three other channels devoted to sports, religion and home improvement.
"We recognize this can be very confusing for customers," Cox General Manager Gretchen Shine said. As a result, Cox is mailing customers a notice explaining the increase.
The notice says that a small fraction of the rate hike relates to higher programming costs and fees charged by the federal government to oversee the cable industry.
Recent FCC rulings have allowed many of the nation's cable companies to charge higher fees, but they must do so within closely monitored guidelines designed to protect consumers, said Raymond Katz, a cable industry analyst at Bear, Stearns & Co. in New York.
"They are tied to a strict formula," Katz said. Rate hikes are being pursued by "every last one of them,'' he said of cable companies. "Wouldn't you?"
Memo: ***CORRECTION***