The primary reason that satellite and cable rates go up each year, is the carriage rates they pay to the program providers that increase each year. Even the multi-year agreements typically contain annual increases. When the sat or cable companies take a hard line on a contract negotiation to try to control costs, and those channels go dark for a time, the customer outcry limits how long the companies can hold out. Local channels are particularly problematic, since the sat and cable companies are not allowed by FCC regs to supply an alternate channel from another market. As for unbundling, those same program providers control much of that as well, by negotiating placement in particular tiers as a part of the carriage contract, and requiring that all of their various channels be carried, regardless of a channel's popularity. The sat and cable companies also have overhead costs that escalate just as other costs do for all of us, and of course the stockholders expect a decent return on their investments.
