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Watch for State Tax Increase on TV Bills

Posted on: Wednesday, 7 December 2005, 21:00 CST

By Andrew Shain, The Charlotte Observer, N.C.

Dec. 7--Time Warner cable bills are rising again.

Starting next month, most customers will pay 2 percent more each month for a new N.C. state tax on cable television service.

Over a year, subscribers to expanded cable TV service will pay an extra $11, while customers who get digital cable TV, Internet and phone service will pay an extra $34.

Meanwhile, about a third of Time Warner's 395,000 customers in the Charlotte region will also pay $2 more a month for expanded cable TV service starting next year. Time Warner is raising rates by about 4 percent for some customers outside Mecklenburg County so subscribers across the region pay the same for cable. The new rates that start next month are for subscribers in Union, Gaston, Cleveland, Anson, Rockingham and York counties.

No other rate or billing changes were announced Tuesday.

Time Warner has raised rates across the region by 3.5 percent to 11 percent each year over the past decade to cover rising programming and operations costs. The cable company has no plans to boost customer rates to cover these costs in 2006. Instead, Time Warner hopes subscribers will spend more by adding services, including phone and Internet.

Time Warner last raised rates in November 2004, two months earlier than usual, because of rising fuel costs and upgrades to offer phone service. Rates for expanded cable, the most popular TV service, have risen by 35 percent since 2000.

"Maybe (Time Warner) realized their rates were out of line and they could skip a year of hikes" this year, said Kenneth DeGraff, a policy analyst with Consumers Union.

A Time Warner official said the company is keeping rates in check for most customers despite increases in operational and programming costs.

Satellite TV providers have not announced any rate changes for next year, though they raised prices 5 percent to 7.5 percent for 2005. N.C. state taxes for satellite service rise next month to 7 percent, from 5 percent, which will add about $10 a year on basic packages.

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Copyright (c) 2005, The Charlotte Observer, N.C.

Distributed by Knight Ridder/Tribune Business News.

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TWX,

Source: The Charlotte Observer (Charlotte, N.C.)

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