Charter surcharge opens a can of worms as subs break down cable costs

A new $1.12 surcharge for increased retransmission costs has caused some Charter Communications (Nasdaq: CHTR) subscribers to rethink--or perhaps think about for the first time--what they pay for cable. No doubt helped along by a local TV station (which, not at all ironically is part of the reason for the surcharge), Charter subscribers in the North Carolina/South Carolina markets were not as sympathetic or understanding as Charter might have imagined when it decided to explain why cable costs more.

"Why gouge the customers when you are the only game in town for most of us?" asked Cathy Bader during a segment called 7 on Your Side presented by WSPA-TV Channel 7. Especially irksome, Baker told the news station, is the fact that Charter charges $25 for a basic cable package of local channels.

Charter, in response to the station, explained that the basic cable includes "overall operating costs of providing video services to our customers" and is competitive with other nearby operators. Rather than satisfying Bader, though, this only led to questions of how much Charter pays to retransmit other cable channels, such as ESPN, so that her monthly bill is $111.

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