Rate Hikes Come In Around 5.5%

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Cablevision Systems Corp. is raising its rates by an average of 5.5 percent, beginning in January or February — an increase that appears to be the norm for big cable operators.

The MSO said the rate hike reflects increased programming and operating costs, inflation and investments in network upgrades and customer service. The hikes will affect about 3 million Cablevision subscribers in New York, New Jersey and Connecticut.

Last January, Cablevision raised rates for its New York-area subscribers by an average of 7 percent.

Word of Cablevision's impending rate increase came two weeks after AT&T Broadband announced a rate hike for 2002. AT&T plans to raise rates for all of its combined programming packages, including digital cable, by 5.5 percent. The increase for its basic and enhanced basic package will be 7.4 percent.

Cablevision's rate hike is more than twice the U.S. inflation rate of 2.6 percent. But with most MSOs facing double-digit programming cost increases, such rate hikes are to be expected, said National Cable & Telecommunications Association vice president David Beckwith.

"We've always urged operators to keep rates down as much as possible, consistent with their business plan," Beckwith said. "And if 5.5 percent is the [Cablevision] number, that's within the range of what's happening this year."

Some other major MSOs said last week that they're finalizing rate hikes for 2002. Time Warner Cable — which raised its rates by about 5 percent at the beginning of the year — will implement another hike next year "in the same ballpark for basic and expanded basic combined," spokesman Mike Luftman said.

Time Warner is beginning to notify customers, he added.

Cox Communications Inc. will raise its rates by an average of 5.6 percent next year, spokeswoman Ellen East said. Systems will hike rates at varying times throughout the year, she added.

Charter Communications Inc. won't finalize its rate hikes until it completes its 2002 budget, which should be done by the end of next month, spokesman Andy Morgan said. But some Charter systems have begun to notify local franchise authorities of impending price increases, Morgan added.

Comcast Corp. handles its rate hikes on a system-by-system basis, and doesn't plan to announce an aggregate rate hike for 2002, spokeswoman Jenni Moyer said.

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