Why is Cable Service in the US Overpriced?

I understand, I understand, I look at my cable bill every month and ask myself how come it was so big. You’re not imagining things. Average American households currently spend more than one thousand and two hundred dollars annually on cable and internet and in certain cities, it goes close to 2,000.

Why is then cable service in the US expensive? Let me break it down.

The Real Issue: There is no Competition.

The point is that in the majority of cases, we do not have the real options. More than 200 million Americans reside in localities where a single or two internet providers serve the regions. With no competition, companies do not have to be nice in terms of pricing.

I have personally experienced this: in the places where fiber or 5G Fixed Wireless Access is available, cable rates are falling rapidly. Where it doesn’t? They are priced wherever they wish.

Hidden Fees Are Killing Your Budget

Your $83 monthly cable plan? That is only the tip of the iceberg. On top of the equipment rental (5-15 dollars an box) and DVR service (10- 20 dollars an box) and then, local broadcasting fees (10- 20 dollars an box) and sports regional costs, taxes and installation charges– you have a bill of 150+. These are not the stuff of options, but rather built in to the system.

The worst part? You are paying 10-20 a month of so-called free local channels. Cable companies pay broadcasters retransmission fees on channels that are available on the air using an antenna. Such charges have gone up more than three hundred percent since 1992, and who do the paying?

Why Prices Keep Climbing

Networks such as ESPN and Disney are successful in pushing cable operators up in increased charges, an average of 5-8 percent each year. However, there is a catch to it, they give you all the pennies. And then there is this cartel-style arrangement where the providers are required to include the channels that have no interest to the consumer so as to receive the one they are interested in such that, you have 200+ channels that you are paying but never even get.

Since 1995 to 2013 Cable prices increased at a dismal 6.1 per cent/year, which is far in excess of inflation. In 2024, costs rose nearly 5%. In 2025? Another 6%. This is not showing any signs of slowing down.

What’s Changing (Finally)

There’s some good news. The T-Mobile, Verizon, and AT&T Fixed Wireless Access cost approximately half as much as cable internet. These carriers also gained 3.7 million customers in 2024 and cable companies lost more than 900,000. Competition works.

The new FCC all-in pricing regulations (introduced in the end of 2024) now also mandate that providers disclose the overall costs at first glance, no longer have surprise charges hidden in the small print. Besides, the federal BEAD program has provided 42.45 billion dollars to increase coverage of broadband by 2030, and this is likely to increase competition in minuscule locations.

What You Can Do About It

Don’t just accept the bill. (Request extreme deals with your provider) Inquire about the deals at your place by mentioning your competitors. Eliminate idle premium channels and additional boxes. Incidents, preferably, find out whether FWA or fiber is within your premises. Most individuals migrated to the streaming services as well as cheap internet and save 30-50 dollars each month.

Cable is being overcharged because, companies are able to get away with it. And still, alternatives increase, and you have greater strength than you can imagine. Use it.

FAQs

Q: Why am I paying for local channels if they’re free over-the-air?

A: Local channels cable companies pay broadcasters retransmission fees which have soared as a law in 1992 gave broadcasters power to negotiate. You are paying $1020 a month in channels that you can get and spend 20 an antenna. Frustrating though it was that is the way the system works.

Q: Can I actually save money by switching to streaming?

A: It depends on your setup. Provided that you pay more than 150 on cable, then you can save $30 to 50/month by switching to 2-3 streaming services (10-15/month) and internet (50-75/month). Only be careful, streaming expenses get quickly when you wish to have sports, news, and better content.

Q: What’s the fastest way to lower my cable bill without switching providers?

A: Call the customer service and request, specifically, a discount. Bring up other competing services in your neighborhood (FWA, fiber, streaming). Cut unnecessary cable boxes, DVR service and premium channels that you do not view.

The majority of the providers are providing you with the discounts of 15-30 a month to make you stay.

Read:

How to Renew Your GSA Government Contract and not go mad.