Tuesday, December 29, 2015

Did Comcast’s Local Broadcast Retransmission Costs Rise 65% Last Year?

            Leave to Comcast management to convert a cost of doing business into a profit center.  Cable television operators have to negotiate “retransmission fees” with local broadcasters who do not elect the option of compulsory, “must carriage.”  These fees have risen significantly (but not 65% in one year) largely resulting from increased costs to broadcast networks for “must see” content such as NFL football.

            Comcast could treat retransmission fees as a cost of doing business and absorb them, or pass them through as a line item on the bill.  The company opted to create a line item, but one having no relationship to actual costs incurred.  Comcast uses a standard price for its Broadcast TV Fee meaning that the charge to subscribers has no relationship to the actual cost incurred by the company and the number of stations carried in any specific locality. 

            In a matter of a two years Comcast has converted a minor, symbolic reminder to subscribers of rising carriage costs, to a major cash cow.  Comcast started with $1.50, but now raised the rate  by 65% from the $3 to $5. 

            Very clever Comcast.  I’m sure senior management thinks most consumers are too stupid, or lazy to know that retransmission carriage rates have not risen 65% in a year.

            The only way to respond to such greed and cavalier attitude is to cut the cord.  Broadcast signals cost nothing to receive off air other than your tolerance for advertising.  Of course Comcast  penalizes cord cutters who still need its broadband service.  So called naked broadband costs more than when it’s bundled with a cable television tier.  Very clever Comcast.

Capitalism at it best!

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