How Comcast's Growing Broadband Monopoly Is Helping It Temporarily Fend Off The TV Cord Cutting Threat

from the innovation-through-monopoly dept

Comcast’s earnings report this week indicated that the company managed to add 80,000 basic video subscribers during the fourth quarter, and 161,000 net video customers for the full year. And while news outlets were quick to proclaim that Comcast had magically bucked the cord cutting trend, you’d be hard pressed to find a single outlet that could be bothered to actually explain how. When an explanation is given, it’s usually just regurgitation of Comcast’s claim that the cable giant’s fending off cord cutting thanks to the company’s incredible innovation in the set top box market:

“The turnaround in the cable business helped Comcast beat profit estimates for the fourth quarter. Executives attribute the momentum in their cable-TV business largely to their new video platform, called X1, which makes it easier to search for shows and movies on TV and on Netflix from their cable set-top box.”

Except it’s not cable box innovation that’s helping Comcast fend off cord cutting, it’s the company’s growing monopoly over the broadband last mile.

In countless markets Comcast competes solely with AT&T and Verizon, who have made it abundantly clear they’re no longer interested in the fixed-line residential broadband business. Both companies have made slinging ads and content at Millennials their primary focus, as evident by Verizon’s acquisition of AOL and Yahoo and focus on creative new snoopvertising technologies. As a result, these telcos are quite literally trying to drive many of these customers away with a combination of apathy and price hikes. If these users want broadband connections any faster than 3-6 Mbps, their only option is, increasingly, Comcast.

When these users arrive at the nation’s biggest cable giant, they discover that signing up for TV and broadband is notably cheaper than just signing up for broadband alone. The problem is: while many have claimed that Comcast’s “bucking cord cutting,” there’s no evidence that many of these users are even watching the cable connections they pay for, nor that they’ll stick around as a traditional television viewer long term. Many just signed up because having television was actually less expensive than getting rid of it.

But should they try and get rid of it Comcast’s got that angle covered too: the company’s growing monopoly means less broadband competition than ever in many of its markets, allowing it to impose draconian and unnecessary usage caps on the company’s customers. Caps that apply to competing streaming services, but not Comcast’s own content. All told, between bundling and usage caps, Comcast’s broadband monopoly means it simply doesn’t feel the pain a company would feel in the face of real competition, which is why it has little to no incentive to fix its historically bad customer service.

Often Comcast obfuscates its growing monopoly over broadband and its ham-fisted implementation of usage caps with creative claims of incredible new innovation that gets gobbled up by the press. Like the company’s announcement this week that it will soon be letting customers watch Comcast cable TV on Roku devices. This new beta is Comcast’s attempt to quiet criticism that emerged during the FCC’s failed attempt to bring competition to the monopolized cable box. And, in obedient fashion, the press was quick to highlight the partnership as a surefire example of Comcast’s incredible innovation.

But upon closer inspection the service comes with a number of caveats, including the fact that users must subscribe to Comcast cable TV and Comcast broadband, and must pay Comcast an extra fee just to use Roku hardware they already own. Also buried in the FAQ for Comcast’s new Roku beta is the proclamation that this service also won’t count against Comcast’s usage caps:

Will the XFINITY TV Beta app use data from my XFINITY Internet Data Usage Plan?

No. The XFINITY TV service delivered through the XFINITY TV Beta app is not an Internet service and does not touch or use the Internet. Rather, it is a Title VI cable service delivered solely over Comcast’s private, managed cable network, so it will not count toward your XFINITY Internet Data Usage Plan. Usage of any other apps on Roku devices, including any TV Everywhere apps accessible with your XFINITY TV credentials, do use the Internet and will count against your XFINITY Internet Data Usage Plan.

Comcast is effectively arguing that this isn’t a net neutrality violation (for whatever that’s worth with the rules about to be deep sixed by a duopoly-adoring Congress) because the data doesn’t travel over the common internet. Still, the function of these added restrictions cumulatively remains the same: to tilt the playing field and keep customers in house and away from competing services. With a growing cable monopoly and the rise of rubber-stamping regulators under Trump, Comcast will soon face less pressure than ever before to shore up its miserable customer service or to lower prices.

That’s great news if you’re a Comcast executive or investor, but less stellar if you’re one of the countless millions of consumers or competitors already bored to tears by several decades of Comcast’s anti-competitive behavior and overall dysfunction.

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Companies: comcast

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Comments on “How Comcast's Growing Broadband Monopoly Is Helping It Temporarily Fend Off The TV Cord Cutting Threat”

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Michael (profile) says:

“Executives attribute the momentum in their cable-TV business largely to their new video platform, called X1, which makes it easier to search for shows and movies on TV and on Netflix from their cable set-top box.”

So all of the customers that were previously abandoning their services just needed a better way to search for a TV show?

People wanted the content, but searching for the content (the only think Comcast really added beyond actual delivery) was so horrific that people were abandoning the service for the past decade.

I almost have to believe this. Simply because it is such an embarrassing thing for them to admin you sort of have to believe they would not be saying it unless they had to.

Anonymous Coward says:

Re: Re:

Radio based services have limited bandwidth per transmitter, and the need for adjacent transmitters not to interfere with each other. With WiFi the limited power, and hence basically avoid this interference, and this applies even more to bluetooth which has an even more limited range
Mobile phone system solve their problems by having a cell targeted at a limited number of users, and spacing the cells, and managing frequencies so that they get enough transmitters in an area to serve their users. This means that a super WiFi only partly solve the final mile problem, by eliminating the link from the tower to the user, but there will still be quite a high density of infrastructure to install to service all the cells needed.

Matthew A. Sawtell (profile) says:

Anyone have the metrics for 'lowest tier of subscriber'?

I have to ask if any agency has the metrics from Comcast, Time Warner, etc. for the number of ‘lowest tier of subscriber’ (i.e., say less than $50 a month. I would hazard a theory that ‘cable trimming’ (versus the term ‘cord cutting’) is really more a driving force.

DannyB (profile) says:

Re: Anyone have the metrics for 'lowest tier of subscriber'?

I’m not sure what you’re asking for.

A few years ago, we went in to cut our cable off completely because we were already on the lowest tier. They said that there was an even lower tier that they didn’t advertise. So we got that for a couple years. Eventually we cut even that off. We discovered that all we really watched on cable was the evening news ABC / NBC / CBS. Everything else was Netflix, Hulu, Amazon, Starz, HBO, PBS, YouTube.

Although my cable market area is not afflicted with Comcast, I would say: go ahead Comcast, but it’s too late. I already cut the cord.

AngelQC (profile) says:

You can't have it both ways

This app over a Roku is what we could call the first step toward CableBox replacement, is it not?

This is at least how I read the new when I saw it on Slashdot.

I am not so sure here about the analysis. CableBox competition is what is asked, and what is delivered. What’s the bid deal?

How did you think it would happen? Over-the-air? Of COURSE it will be on a network cable — Fiber already does that btw, at least Bell here in Canada.

This is not a circumvention of the Net Neutrality rule but a translation of service from a method to another — over the same damn cable! A cable client just now use another method for receiving the same content. I don’t read anything regarding prioritizing COMCAST-generated content over, say, HBO, FOX or other channels. The same content is delivered to a third party decoder, which is was has been asked and demanded for a time now. Hopefully, the app, or variants of, will be usable by other boxes after further tests on the Roku box.

It’s sad, in some way, that it had to come from COMCAST, but that’s a huge step toward the phasing out of the classic decoder. That’s an app, that’s the point which seems to be missing its spotlight in this analysis.

Anonymous Coward says:

When I called Comcast to find a cheaper plan, after I had they 105Mbps Internet only service for 1 year. I really only planned on getting the 50Mbps plan, but for $5 more they jumped it up. So I went for it. It was pretty good. $45 a month for that plan, then it jumped up after the year.

So I called back to get another deal, lower me speed. I wanted to drop my speed down and lower my cost down. It ended up being cheaper to get this dumb bundle thing of 75Mbps Internet with basic, Local channels and this cheap Cable Box, which I don’t even have hooked up, it’s still in it’s box. Plus either HBO or Showtime, so I got HBO. I use the HBOGo App for that. I rarely watch it. I don’t have enough time to watch it. Yet it was cheaper to get this stuff I didn’t want, then just Internet ONLY which is really all I wanted.

Even though I have this lamo cable box, which doesn’t have a monthly fee on it and I get the channels, I still use my Antenna to get my channels along with my TIVO DVR. I’m still paying more money and on top of it, I now have this dumb 1TB Cap now, which I’ve been over a few times. 1TB really isnt much, but I would have to pay another $50 to get Unlimited which I had before they screwed me over.

ECA (profile) says:

Economics 101

There has always been a CAP on how much a company cann sell, to cover a market.
NOW days they just KEEP raising perpetual prices…

This is like Many products you Cant or WONT do without..they JUST raise prices..and Someone along the way MAKES more money…
THERE is no cap in Perpetual services..
Even looking AROUND for alternatives, is a REAL PAIN..There is NO competition..and in LARGE CITIES there are NO SMALL companies to fight it..

Cody Rowland (profile) says:

Comcast's Roku Beta App

I’m one of the Comcast subscribers this article refers to — I have the TV service, but my cable box isn’t even hooked up. It was cheaper to get the TV service and I knew it would allow me to stream from various content providers by logging in to my Xfinity account.

I was stoked to see the Xfinity Roku app finally get released, but, unfortunately, it’s almost unusable at the moment because the audio is horribly out of sync with the video. We’re not talking about being slightly out of sync here either — there’s a multi-second delay between what’s on the screen and when the audio plays — it’s truly awful in its current state. It’s beta, I get it, but disappointing nonetheless.

Their Live TV website works much better so I expect they’ll get the kinks worked out eventually, but fair warning to anyone thinking about making a purchase decision based on the Roku app — it’s not ready for primetime yet!

Diannea says:

This is going on in Central, Wisconsin, area
It was heard but still checking this out!
A friend had a computer stolen for I.P. number… plus some internal components hacking that stored personal information, And now the burglar is using the components and information with untrue accusations to make fake actor with faked wigged and video to ruin true owner’s with mock up look a like fakery and then putting this in computer or threatening to..!) .. to make owner look like offender or a criminal and with fake investigator or paid investigation reworked false witness account, trying to force false witness scenario for the friends set up arrest as a way for mostly a revenge tactic and maybe Gang related set up saying ..going to a nut house set up scenario!!

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