Americans have long paid far more money for cable television and internet services than people in other advanced economies and the situation is only going to get worse. Subscription television and internet services in the United States not only cost more than they do in most European countries, but consumers receive less for their hard-earned money. It is no wonder that cable companies are ranked among the least liked companies in the United States and recent developments in the business climate surrounding these media companies will only make the situation worse. Here are the three major reasons that your cable and internet bills will continue to rise.
The announcement of the possible merger between Comcast and Time Warner Cable sent ripples through the subscription TV and internet industry, ripples that caused analysts to predict a trend toward even more consolidation of the industry’s providers. As AT&T announced its plans to buy Direct TV, it became clear that there was going to be a paradigm shift in the marketplace, a shift that could potentially have long-lasting effects on subscription TV and internet buyers. The Telecommunications Act of 1996 opened the door for these mergers and as they become more frequent and involve even bigger players, cable, internet, and telephone bills will continue their steady rise.
The End of Net Neutrality
Net neutrality is the idea that independent service providers, or the company you pay for your internet service, should treat all data equally, not charging websites for access to faster internet connections. The spring of 2014 marked a significant blow against net neutrality and now the doors are opened for your cable and internet company to charge companies like Netflix and Hulu for so-called “fast lanes” on the information superhighway. If cable and internet companies begin doing this, costs will rise for your favorite movie streaming services, taking more money out of your pocket and making the internet company’s cable TV services more enticing. It’s a slippery slope that could lead the American consumer down a dangerous and costly downward spiral of higher costs for media consumption.
Lucrative Sports Broadcasting Contracts
Have you ever wondered just how those NFL, NBA, and MLB players can earn so much money? Broadcasting rights for these sporting events are not cheap and ESPN charges the highest carriage fee of any cable television channel. As more and more sports channels pop up on your channel list, these exorbitant transmission fees add up and hit you in the pocketbook. Specialty sports networks like the SEC Network are only exacerbating the problem. Cable channel bundling means non-sports fans often have to purchase a cable package that includes expensive channels like ESPN and other costly sports programming even if they just want channels with lower carriage fees that actually suit their interests.
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