Cox will raise standard cable rate 6 percent next year.

Byline: Carolyn Shapiro

Nov. 14--Cox Communications Inc. plans to raise the monthly cost of its most-popular cable television package by 6 percent next year -- the steepest increase in four years. The price of the "standard" cable package, which includes 69 channels with the combined "limited" and "expanded" tiers of service, will climb to $46 a month from $43.35 starting Jan. 1. The majority of Cox's more than 415,000 TV customers subscribe to the standard package, company officials said. Cox plans to add another channel to the expanded tier's lineup in Hampton Roads. Starting in April, the $46 service will include Mid-Atlantic Sports Network, which shows Baltimore Orioles and Washington Nationals baseball games. If two games are scheduled at the same time, Cox will use another channel so viewers can see both, said Thom Prevette, a Cox spokesman at the company's Chesapeake office. "It doesn't come without a cost," Prevette said of carrying the new channel. Each network typically charges the cable provider a fee per subscriber to carry its programs. Cox attributes the bulk of its rate increase to such programming fees, including those of the popular ESPN sports network, which calls for average annual increases of 7 to 9 percent in its five-year contract with Cox, Prevette said. Cable company Charter Communications Inc. raised the price of its digital service "slightly" in July, said Lizz Walker, a spokeswoman for the company at its regional office in South Carolina. She did not respond to requests for additional information. Charter serves about 55,000 customers in Suffolk, in Isle of Wight and Southampton counties, on Virginia's Eastern Shore, and on North Carolina's Outer Banks. Cox and Charter now monopolize cable service in their respective territories with satellite providers representing the only TV competition. One satellite competitor, Dish Network, owned by EchoStar Communications Corp., has locked in its $29.99 monthly rate for its America's Top 60 package until 2008, said Heather Black, a spokeswoman for the Colorado-based company. The price for the package, with more than 80 channels, went up 4 percent in February, she said.

The region's other satellite provider, DirecTV Inc., has yet to make a decision about its next rate increase, spokeswoman Jade Ekstedt said. The company, based in California, has raised its rates annually for the past four years, usually in the first quarter of the year, she said. When Cox's new rate begins, the cost of its standard package will have climbed 35 percent since 2000. Cox also plans to reduce the monthly fee of set-top boxes customers need for high-definition program reception. Those boxes will drop to $5.50 from $9.95, the same price as the analog and digital converter boxes. High-definition service itself carries no additional fee but requires that subscribers have digital cable. Cox's digital service prices remain the same. To get digital service, customers must subscribe to at least the limited tier, made up mostly of major broadcast affiliates, government access channels, home-shopping programs and a few other cable networks.

In the four Hampton Roads municipalities that regulate the limited tier service -- Norfolk, Hampton, Newport News and Williamsburg -- those basic rates will remain the same while the cost for the expanded service tier increases by $2.65.. Norfolk residents still will pay $9.31 for the limited service tier. In other local communities, the cost of the limited tier will go up by $2.65 to $13.65. As competition in paid TV services develops, particularly with phone giant Verizon Communications Inc. entering the video arena in other states and parts of Virginia, such local regulation of even the limited-tier rates should be re-examined, Prevette said. "In the best of worlds, we should begin having conversations with these four communities," he said. Bob Tucker, a Cox customer in Virginia Beach, said he cannot wait for the day that such competition begins. He has grown tired of Cox's annual rate increases, he said. "I don't know of anything that's gone up 35 percent, with the exception of my real estate taxes," he said Monday upon hearing of the latest increase. Cox also plans to boost the monthly rates of each of its high-speed Internet services by $2. The cost of the preferred-tier service, with possible download speeds of 5 megabits per second, will climb to $41.95 per month. The company's Internet pricing hasn't changed since it launched the service five years ago, Prevette said. When Hampton Roads customers receive their bills after Jan. 1, they might actually see total charges dropping. Telecommunications tax reform legislation, passed by the General Assembly this year, also goes into effect Jan. 1 and replaces a myriad of state taxes and surcharges with a single 5 percent tax. On the cable bill, the 5 percent tax takes the place of cable franchise fees, local utility taxes that some municipalities apply, fees for emergency response programs, the Virginia Relay Center fee and the state gross receipts tax on companies' revenues. Whether individuals see higher or lower bills as a result of the tax change -- and whether any decrease in taxes will offset Cox's rate increase -- depends on where they live and the types of services they have. -- Reach Carolyn Shapiro at (757) 446-2270 or carolyn.shapiro@pilotonline.com.

Copyright (c) 2006, The Virginian-Pilot, Norfolk, Va.

Distributed by McClatchy-Tribune Business

News.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

TICKER SYMBOL(S): NASDAQ-NMS:CHTR, NASDAQ-NMS:DISH, NYSE:DTV, NYSE:VZ