In less than a week, officials at Time Warner Cable announced they were raising two separate fees.
The first hike involves what customers pay for their Internet service, which is going up by $3 a month. However, this will not affect people who are taking advantage of promotional deals; they wont see their costs increase until their limited contracts expire. So they get a reprieve for the time being.
But then on July 29, Time Warner Cable announced it would jack up the price of leasing an Internet modem. This expense is going up from $3.95 to $5.99 a month.
Its never a good time to increase prices as no one enjoys seeing his or her financial obligations go up. But the sluggish economy weve endured for the past five years has combined rising cost-of-living expenses with flat wages, so higher prices are a real drag.
However, Time Warner Cable has disclosed its latest fee and service hikes in the midst of a class-action lawsuit its now fighting. This legal action resulted from the modem lease fee the company imposed on customers late last year. The suit claims that Time Warner Cable violated its own customer contracts as well as consumer fraud laws in New York and New Jersey.
To summarize this public relations debacle:
In 2012, Time Warner Cable implemented a monthly modem lease fee of $3.95 to offset the costs of offering free repair service for customers who have Internet modems. Modems were previously provided to customers free of charge. This fee, by the way, brought $40 million a month more into the companys coffers.
And now, just days after announcing that Internet service is being hiked $3 a month, company officials claim they need even more money from modem leases. So theyre raising this monthly fee by about 50 percent.
The good news here is that there are alternatives to paying rising expenses to Time Warner Cable each month.
Customers may opt to buy their own Internet modems from a variety of sources. These modems can cost anywhere from about $50 to more than $100.
Yes, the initial outlay of money is pricey. This is especially true for customers who have already been paying the monthly modem lease fee.
But the new fee totals $71.88 a year, every year. Compare this with a one-time cost of $50 to $100 to buy your own modem, and this will become a cost-effective measure very soon.
Customers who choose this path will have to learn how to hook the modem up to their system on their own. But the modem should have instructions on how to do this, and Time Warner Cable also provides additional information on its website.
In reality, were not actually talking about a substantial increase. Many customers will grumble about the fee hikes but pay them anyway while continuing to use the service. Its human nature.
There is a principle here, though, that officials of Time Warner Cable dont seem to appreciate.
Their customers have been compelled to tighten their budgets with little relief. In contrast, Time Warner Cables profits rose by more than 29 percent in 2012 over the previous year and most of this came from the increased fees for Internet service.
Its almost enough to make you want to ditch home Internet service and spend more time at a local establishment offering Wi-Fi. You may still have to shell out additional money, but this at least will come with food.