If you're an existing Verizon (NYSE: VZ) FiOS customer that resides in an area of Indiana, Oregon, or Washington State that was part of Frontier's (NYSE: FTR) 14-state line acquisition, you're going to be in for a unwelcome surprise as the ILEC plans to raise the rates on FiOS TV.
As reported in The Oregonian, Frontier plans a 46 percent rate or higher on standard FiOS TV plans. Frontier argues that the rate increases conducted by the two region's cable operators.
Although subscribers that have set pricing FiOS TV contracts won't see an increase, customers that don't currently have a contract or are about to expire, the increased rates could be very high.
The monthly cost of Frontier's standard 220-channel package will increase 46 percent from $65 to $95 a month. Frontier started implementing the rates on Monday for new customers, while existing customers without a contract will see their rates rise on Feb. 18.
But if you don't want to pay the new rates, Frontier is happy to switch customers over to DirecTV satellite service for free throughout 2011 and then $63 a month after the period ends.
Of course, there are a number of questions that arise from the rate hikes around Frontier's ability to properly support a video service.
Prior to approving Frontier's acquisition of Verizon's lines, local regulators questioned the smaller operator's ability to strike deals with major content providers. At that time, Frontier's CEO and Chairman Maggie Wilderotter that they could provide a competitively priced video choice to the area's cable giant Comcast. Frontier's rate increases are significantly higher than Comcast's recent 5 percent rate increase on its basic video package, which now costs $63 a month.
- The Oregonian has this article
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