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DirecTV to Hike Rates 4.5% in 2013

Satellite Operator Claims Programming Costs Will Rise 8% Next Year 12/27/2012 5:41 AM Eastern

DirecTV will ring in 2013 with a price hike that will increase customer bills an average of 4.5%, while the No. 1 satellite operator claimed the fees it pays broadcasters and cable networks will rise by about 8% next year.

The new prices take effect Feb. 7, 2013. In a message sent to DirecTV customers, senior vice president of customer service Ellen Filipiak said “almost all programmers who provide channels to the DirecTV platform are increasing their rates at a level we've never seen before.”

DirecTV’s Xtra package -- currently called Choice Xtra, which the operator says is its most popular package -- will go up $2 monthly, from $68.99 $70.99. The Choice tier will increase by $1 monthly, from $63.99 to $64.99 per month, while the top-end Premier package will rise $5 per month, from $119.99 to $124.99.

Separately, rival satellite TV operator Dish Network also plans a price hike in the new year. Dish, after not raising rates for two years, plans to increase the price of its core TV bundles between 7% and 20% effective January 2013, with most packages rising $5 per month.

DirecTV also is raising other rates: HBO will increase by $2 per month (except for Premier customers) and the operator is levying a $2 per month regional sports fee “in select ZIP codes where DirecTV is contractually obligated to distribute multiple Regional Sports Networks,” the company said.

On the equipment front, DirecTV is raising the price of its Advanced Receiver Service -- for multiroom DVR -- by $3 per month, to $23 monthly. The Advanced Receiver DVR fee will rise by $2 per month, from $8 to $10 monthly.

The letter from DirecTV’s Filipiak referred to “negotiations of new and existing channel contracts” that show “we are doing all we can to make sure you do not suffer unfair price increases as a result of unreasonable demands in these disputes.”

In 2012, DirecTV’s public contract disputes included a standoff with Viacom this summer, during which 26 of the media company’s networks went dark for nine days. “By holding firm, we've held our annual price increases on average below those of cable competitors,” Filipiak wrote in the customer letter.

DirecTV provides more detailed information on the rate hikes here: http://www.directv.com/businesspackages/feb/2013_Price%20Increase_RSN.pdf.

DirecTV cited recent enhancements and additional programming in the letter announcing the 2013 price increases.

New standard-definition and HD channels it has added include BBC America, Disney Junior, DIY, E!, Nat Geo WILD, truTV, Turner Classic Movies, beIN Sport, Time Warner Cable SportsNet and TWC Deportes. DirecTV also touted the expansion of its TV Everywhere service, which provides content from more than 30 networks at no extra charge.

September