Why Your Internet Bill Keeps Growing
By Karla Bowsher
You may have heard about the multibillion-dollar deal that Charter Communications (CHTR) made last week.
Time Warner Cable (TWC), as well as a smaller cable provider, Bright House Networks, will essentially be merged into Charter.
It remains to be seen whether this will be good news for consumers. The Washington Post reports that the merger of the fourth- and second-largest cable providers will create a new contender for the likes of large providers like Comcast (CMCSK).
On the other hand, the proposed merger consolidates three providers into one. And as CBS News points out, consolidation ultimately decreases the total number of telecom companies from which consumers have to choose.
Consolidation also usually requires merging companies to spend money, which pushes them to charge consumers more, CBS reports.
CBS has outlined several reasons why Internet service is getting increasingly expensive. Consumers have little control over some of these factors.
For example, Wall Street is pushing Internet service providers to increase profits. Companies like Charter and Time Warner are publicly traded, and thus accountable to stock-holding investors.
In addition, demand for Internet services from cable companies is increasing as demand for TV services from cable companies is decreasing.
In 2014, more Americans paid for cable Internet than cable TV, the first time that has happened, according to an analysis by Quartz, on online business news publication.
These trends give companies leeway to raise Internet prices.
Quartz reports that over the past two years, Time Warner's residential customers have seen their average monthly TV costs increase less than 2 percent, while their Internet costs have increased 21 percent.
Although Internet prices are rising, you can still keep a lid on costs. Two ways to keep costs low are:
- Refusing to be upsold. Upselling is a tactic used by companies like telecommunications providers to sell consumers on pricier packages. Unless you really need all the bells and whistles, avoid purchasing the most expensive packages, especially if your Internet use is mostly limited to casual surfing and using email.
- Cutting the cable cord. Cord-cutters ditch cable TV for Internet-streamed video. While dropping cable won't lower your Internet bill, it will trim your overall costs.
If you simply can't bear the idea of dropping cable altogether, check out the following: "Lower Your Cable Bill With Techniques A Hostage Negotiator Uses."
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