Why does the cable company do this?

[C.Ann]

Received my cable bill today and it's that time of year when they tuck in their "terms of service" notice.. I was sitting here reading it (I currently have the "Standard Service") and I've been toying around with dropping it down to the "Basic Service" when I come back here next spring - based on how much the Standard goes up..

So I'm reading their list of various fees for this and that and I see that there is a $29.99 one-time fee if you upgrade to the next level of service beyond Standard - but there is also a $29.99 one-time fee if you downgrade to a lower service - such as the Basic..

Why? No matter if I upgrade or downgrade, it doesn't require someone to actually come out - they don't have to come here - nor do they have to come to the pole on my road..

Every year when I leave here and have it turned off, they don't charge a fee to turn it back on in the spring (they just flip a switch at the main office to turn it off and on) - and during the months that I'm not here, I only pay $9.95 a month..

Being charged to downgrade just doesn't make any sense to me..

 

[runwad]

Probably because they're losing subscribers because people are watching on the internet or streaming net flix. But really you only pay 9.95/mo for standard? Wow that is cheap? What all does that include? And geez how much lower is basic and what is that? I thought our cable was cheap. Our town has it's own cable that is in direct competition with Time Warner so we only pay 25.99/mo. I don't know what the package is?? We get like 70 channels (no movie channels). Basic would only be 15 channels and costs 15 bucks/mo here.

 

[C.Ann]

Probably because they're losing subscribers because people are watching on the internet or streaming net flix. But really you only pay 9.95/mo for standard? Wow that is cheap? What all does that include? And geez how much lower is basic and what is that? I thought our cable was cheap. Our town has it's own cable that is in direct competition with Time Warner so we only pay 25.99/mo. I don't know what the package is?? We get like 70 channels (no movie channels). Basic would only be 15 channels and costs 15 bucks/mo here.

Wait - don't get all excited - LOL.. I'm at the lake - when I leave I'm paying $9.95 for the months that I'm not here.. It's not "on" - both the cable and internet are shut off for that time period.. It's just a monthly fee so I don't have to pay a disconnect and reconnect every year (which would be quite a chunk of change - much more than the $9.95 a month for roughly 4 to 5 months.. (This is basically a seasonal area, so that's why they have that available..)

When I'm living here - 8 months out of the year - my Standard cable and internet is $80+ dollars.. It was supposed to be $107, but when I called in the spring before I came up (to tell them turn it back on), I insisted that they give me a rate lower than that and hinted that if they didn't, I would just go without.. They fiddled around on the computer, "No - can't find anything" - I kept insisting - and eventually they magically found a "customer loyalty appreciation discount" for me.. LOL..

I would love to have your $29.95 a month!! I would be on .. It's really getting ridiculous (especially when they keep raising the rates while at the same time taking away channels) and I don't know if I'm going to be able to wrangle the lower rate out of them next year or not.. That's why I was toying with dropping down to the Basic - but couldn't believe it when I saw that I would have to pay to downgrade..

Granted, it would only be a one-time deal if I did it, but they're already charging "more for less", so I'm not real happy about this..

 

[dakcp2001]

They are a "for profit" company and will fee us as much as they can get away with, the extra fees are sometimes waived if you upgrade, never for a downgrade. They usually only do this in areas where people have very few options to switch to. Do you have other providers avail or do they have you over a barrel?

 

[C.Ann]

They are a "for profit" company and will fee us as much as they can get away with, the extra fees are sometimes waived if you upgrade, never for a downgrade. They usually only do this in areas where people have very few options to switch to. Do you have other providers avail or do they have you over a barrel?

Sooooooooo "over the barrel"... Zip..

 

[RachaelA]

You have to pay even if you aren't using it for some months?

My parents have satellite in their summer lake house and they just call the company and they put their contract on hold for October-April. So yeah their 2 year contract actually is more like 3 or 4 years after its up, but still I can't imagine paying when its not even in use!

 

[bicker]

As with most things, you're seeing value-based pricing. "Only suckers, losers, and non-profits price things based on their cost." They're in business to make profit, and so they spend money to make money.

If it wasn't worth the price they were charging, then people would do without their service.

Remember you do have choices. Federal law prohibits anyone except buildings on the National Register of Historic Places from banning satellite dishes.

 

[NHdisneylover]

We used to have a neighbor (10 or so years ago) who would upgrade to a package that included lots of sports coverage for just certain games and then downgrade again a couple of days alter--and pay only prorated for the part of a month he had "upgraded." He would do that 4 or 5 times a year, rather than just pay for the package that had all the sports programming year round. I remember it because he bragged about it and seemed so proud of how he had figured out to "stick it to them." I always thought he was abusing the system--I wonder if lots of people tried this stuff so they added the fees to keep people from switching things around willy-nilly on a regular basis.

 

[bicker]

The service providers have become a lot smarter. Another example of this is promotional pricing, which is intended as a loss-leader, attracting customers (or convincing them to stay) but profitability for offering the promotional pricing predicated on the customer paying full price after the promotional period. Service providers used to grant promotional pricing to anyone who asked, in the interest of keeping customers. Then they learned that customers were using this as a tactic. Now, increasingly, service providers are detecting these less profitable and unprofitable customers, and cutting off the promotional pricing. That often leads the customer to switch providers, but looking at the big picture it is a win for the service provider: Only a percentage of customers who switch, while the rest stay and pay the regular price, and those that do go to the competition actually end up being a drain on the competition, not a boost, since they are with the competition only due to the promotional, loss-leader pricing.

 

[HeatherC]

I would probably just cancel it. They will be begging you to sign up again in the spring with some new promotion. They are such a scam.

 

[HeatherC]

I would probably just cancel it. They will be begging you to sign up again in the spring with some new promotion. They are such a scam.

 

[Kies99]

Actually, if you upgrade or downgrade someone MIGHT have to come out. You may never actually see the person and they may not need to come into your house.

Our cable has a "box" on the power line outside the house on the street. If we change up there are certain "filters" that they have to switch in that box. They'll be out there for 15-20 minutes and then move on. That MIGHT be what the charge is for.

I learned this from the cable guy who hooked up my in-laws recently. They couldn't be there so I met the cable guy. The guy hooked everything up and then told me they'd get a few extra channels as he didn't have the correct "filter" for the box and couldn't take the time to head back to the "office" to get the correct one.

 

[bicker]

What Kies99 described is always the case if you're switching to or from a tier with unencrypted channels. Until the last couple of years, generally the first two or three tiers of service (with names like "Basic", "Standard", "Advanced", "Expanded") were all unencrypted, and service was secured with physical band-pass filters. Every time you switched between one of those services and another, up or down, or switched to or from digital services, someone would have to come out to your home and either install, change or remove the band-pass filter. These are generally union electricians, so that's not cheap! The average is about $18 per switch, I believe.

Increasingly, that will not be the case. More and more service providers will encrypt everything above the first tier of service ("basic" - just your local over-the-air channels and maybe some shopping channels). However, you'll need a box (or CableCARD) for every television once that happens, if you have anything higher than the first tier of service.

In this "encrypt everything" approach, they're taking advantage of some sophisticated digital technology, the cost for the development of which needs to be amortized through fees. So again, you'll be paying a fee, though not as high as before, but still in the $8 range on average (some places more, some places less; perhaps even a lot more or less), to cover the added costs of the technology that obviates the need to change out the filters. Also note that the conversion to "encrypt everything" itself has a cost that needs to be amortized into fees.

And as long as the service is worth what they're charging, including these fees, they're going to charge those fees.

So anyway, if you aren't required to have a box on every television, then rest assured that if you switch your level of service, up or down, a high-paid American worker is doing some physical work to make that switch happen.

 

[C.Ann]

Guess I'll make my decision come next spring - when I have it turned back on again.. If they can't find a rate for the Standard that's acceptable to me, I'll just pay the one-time fee and drop it down to Basic - even though I'll lose the Weather Channel..

Thanks for the responses..