Cox Communications, a major U.S. cable operator, is informing many customers of its high-speed Internet access service that their monthly fee will increase by $5 per month, company representatives confirmed Friday.
The higher rates, which will affect more than half of Cox's 587,000 broadband Net customers, are expected in individual cities over the next few months. The company is giving consumers 30 days' notice in most cases via e-mail. Cox also has posted information online.
"We're not increasing the price in every market," said Cox spokeswoman Amy Cohn. "Most rate increases will take place between now and early fall, like early September."
Some of Cox's largest cable TV markets will see rate increases. Among them, Connecticut, Rhode Island, San Diego, Phoenix, and Orange County, Calif., will face higher prices, Cohn said.
Although pricing varies by city, on average most customers will soon pay $44.95 per month, up from $39.95 per month. If customers own their own cable modem, rather than leasing one from Cox, they generally will now pay $34.95 per month, up from $29.95 per month.
With the rate increase, Cox becomes the latest broadband provider to raise its rates. AT&T Broadband, Ma Bell's cable unit, increased its cable modem fee by $6 per month earlier this month. EarthLink and SBC Communications also increased their rates for competing DSL (digital subscriber line) technology earlier this year.
For some broadband providers, profit margins were too slim on lower $40-per-month rates. Some analysts have suggested that the bankruptcies and closures in the fizzling DSL industry have emboldened the cable operators to raise their own rates without fear of competition. For its part, Cox says its costs have increased in recent years.
"It's really the result of increasing costs," Cohn said of the reason behind the increase. "We've not ever raised rates before and we first launched the service in 1996. As you know, inflation and the costs of doing business have gone up.
"We're confident that the service is the best around and that we'll not lose customers as a result," she said.