New Jersey Investigating Comcast’s Use Of HD Fee To Raise Basic Cable Rates

As we recently showed in our line-by-line breakdowns of cable and satellite bills, Comcast and other pay-TV providers are using a variety of fees to effectively raise customers’ rates without actually increasing the advertised price. Now comes news that New Jersey utility regulators are looking into Comcast’s use of one particular fee on the company’s most basic tier of TV service.

TAP Into Somerville reports that the New Jersey Board of Public Utilities is investigating whether or not Comcast should have notified the regular before tacking on a $9.95/month “High Definition Technology Fee” for subscribers to the company’s “Limited Basic” service.

That tier of service is advertised at $21.90 a month in much of New Jersey, meaning a $9.95 monthly increase has the effect of raising the total payment due by nearly 50%.

Aside from those few communities that have rate-regulation authority, Comcast and other pay-TV providers can set the price however they choose. However, in New Jersey Comcast must give the BPU a 30-day heads-up regarding any rate hikes.

What’s particularly galling about this fee to customers of the Limited Basic tier is that fewer than half of the channels included in the lineup are in HD, and most of those are stations that are freely available over-the-air in HD. Interestingly, neither Comcast’s flagship affiliate WNBC nor its basic cable TCN station are offered in HD to these subscribers.

Some customers who complained have been able to have the fee removed from their bills, and Comcast has said it is looking into the billing for Limited Basic customers.

Ultimately, the question is whether or not these fees count as rate hikes — not just for customers with the lowest-cost tiers, but for all pay-TV subscribers. Comcast maintains that the HD Tech Fee is simply a surcharge for customers who “possess High Definition equipment to enable access to high definition service.”

Almost all cable channels now readily available in HD; manufacturers aren’t really making standard-definition TV sets or anymore, and you don’t see set-top box makers pumping out brand new SD receivers. Critics of HD service fees have argued that HD is no longer really an option that should be charged separately, and that it would be more honest for pay-TV providers to include HD service in their advertised rates.

This may not be an issue that has to be resolved by the FCC or state regulators. Competition from increasingly popular streaming options may force Comcast and others to be more transparent about their charges.

Dish’s Sling TV and Sony’s PlayStation Vue offer a variety of cable alternatives to cord-cutters at flat monthly rates with no fees for boxes, remote controls, or flimsy “Regulatory Recovery” fees. AT&T is expected to join the fray later this year with the launch of an online-only DirecTV service that is separate from that provider’s satellite TV business.

We’ve reached out to Comcast for comment on the BPU investigation and will update if we hear back.

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