Comcast Says It Will Respond To Cord Cutting In 2020 With…More Price Hikes

from the that's-not-how-this-works dept

Cord cutting continued to set records in 2019 despite years of cable and broadcast executives trying to claim the trend wasn’t actually happening. Now that they’re finally acknowledging the threat is real, many of these same executives are doubling down on the kind of behavior that brought them to this point in the first place.

For example, Comcast’s Q4 earnings report released this week shows the company saw a 3.2% drop in traditional cable TV subscribers in 2019, double the 1.6% loss rate the company saw 2018. How does the company plan to tackle the customer exodus driven by ramped up streaming competition from the likes of Disney, Apple, and others in 2020? Why even more price hikes, of course:

Keep in mind, US consumers already pay some of the highest rates for fixed and mobile broadband in the developed world. These latest price hikes are occurring the same time Comcast’s cable division CAPEX dropped 10.5% in 2019. You know, the exact opposite of what the Ajit Pai FCC promised when it obliterated FCC authority over telecom providers at lobbyist behest.

This isn’t the first time Comcast has made it clear that its strategy to tackle the rise in streaming competition and fleeing users is to just double down on price hikes. Company executives have noted several times that any money they lose on television, they simply make up for on the broadband side:

“Watson added that while Comcast tries to keep customers through a variety of programming and broadband packages, but added that when a customer leaves as a result of price, the impact is actually favorable to the company. ?We segment the marketplace,? Watson said, adding that when a low-end customer drops video service over price, but keeps their broadband service ? at a higher monthly charge ? the company makes out better.

Oddly the reason this is possible is something most analysts and trade magazines don’t much like to talk about for whatever reason: Comcast’s growing monopoly over broadband and its stranglehold over state and federal regulators and lawmakers.

As US telcos give up on residential broadband, they’re giving giants like Comcast and Spectrum an even greater monopoly over faster broadband across massive swaths of the country. So when users in those markets cut the TV cord and move to streaming, Comcast’s free to sock them with rate hikes, nonsensical fees, and bogus usage caps and overage surcharges. Because there’s no competition and currently no federal regulators looking out for consumers, there’s no penalty for this behavior. The telecom lobby has even tried to ban states from stepping in to fill this vacuum and protect users from monopoly harm.

While 5G is often bandied about as a free market panacea for what ails the US telecom sector (ie “we don’t need to fix this problem because amazing wireless will soon arrive to save the day”), many of these same problems plague wireless as well (regulatory capture, competition eroding consolidation, regional fiber/backhaul monopolies, etc.). In short, without healthy competition or functioning regulatory oversight you shouldn’t put too much stock in giants like Comcast being forced to give much of a damn anytime soon.

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Comments on “Comcast Says It Will Respond To Cord Cutting In 2020 With…More Price Hikes”

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Anonymous Coward says:

Comcast’s note to investors:
Dear people who gave us money,
We intend to charge people more for the same service. Expect some of them
to realize that this is all bullshit and walk away to streaming "competitors".
Don’t worry, we’ll end up charging them more because we own the pipes and
they don’t have other options. This plan is Comcastic!

ThatDevilTech (profile) says:

Seriously though...

WHAT is it going to take for these companies to get broken up? I know it’s not a "true" monopoly because there are "competitors" (ie other companies doing the same thing) around the country, but the regional monopolies that exist now should be considered in the same light as the old Ma Bell setup.

I guess it will never happen with the current crop of idiots in government. Nobody wants to do anything while they’re getting handed money by the companies.

Anonymous Coward says:

Re: Re: Seriously though...

A cashier at Walmart who was visibly ill coughed all over my change of about $6.50. I told her to keep it. I know this is a bit off topic, but the same parody is there. The last time a male cashier coughed all over my lotto scratchoff tickets, I got deathly ill for 48 hours just a day later. Learned my lesson well.

Anonymous Coward says:

Re: Re: Re: Seriously though...

I talked to a person at Walmart Corporate office who said the employees don’t get sick leave. I said Walmart is raking in obscene profits and should be more concerned with human health and sanitarily handling money. Especially now with deadly viruses floating around in the air, its more important to set these healthy policies in motion.

Anonymous Coward says:

Re: Re: Re:2 Seriously though...

About a week has gone by since I first heard of the coronavirus. Eighty are now dead. 2744 more people are infected. With an incubation period in humans of up to two weeks, meaning people are contageous before they are even symptomatic, I am just amazed not one word from the Airline Industry and not so much as even the mention of the ‘word,’ "disinfectant!" Unbelievable.

rangda (profile) says:

Re: Seriously though...

"WHAT is it going to take for these companies to get broken up"

Well the problem is that as things stand now these companies are free to buy the votes they need to get the laws they want. So you’d need that situation to change.

  • A sufficient number of people are voted into office that have a strong moral compass and don’t act like puppets.
  • The cable company financials drop to the point where they cannot spend as much on lobbying^H^H^H^H^H^H^H^H bribes.
  • A revolution occurs and the new government is more resistant to legalized bribery.

I’ll leave it to you to determine how likely any of those choices are.

This comment has been deemed insightful by the community.
James Burkhardt (profile) says:

Re: The Baby Bells were just comcast 20 years earlier

WHAT is it going to take for these companies to get broken up?

We broke up ma bell. The Baby bells were…regional monopolies. Thats the diry secret of monopoly breaking anti-trust in the US. It doesn’t actually resolve the core monopoly issue, it just makes it a regional one. Its why regulation has been the anti-trust weapon of choice when dealing with infrastructure monopolies in the last few decades. Regulation attempts to mitigate market harms rather than break the monopolies down into smaller monopolies. Local Loop Unbundling took time to get right, but it saw success. I was a kid in the late 80s early 90s when 4 companies were very vocally fighting for business, causing the infamous MCI 10 cent/minute long distance rate commercial with a dime bouncing on a flat surface to become strange as the rate move to 9 cents, 8, 7, 6, cents. I watched competition kill long distance fees via commercials. but DSL and Fiber Broadband required new, expensive infrastructure buildouts, and regulatory capture struck, the FCC neutered itself by classifying broadband as outside the reach of Local Loop Unbundling laws.

You can’t break up comcast in any meaningful way, you just create more local monopolies. You have to eliminate the source of the monopoly, which is the high cost of market entry. Regulation can do that, breaking up comcast doesn’t.

This comment has been deemed insightful by the community.
Anonymous Coward says:

Re: Seriously though...

Breaking up the monopolies into local monopolies for different market segments will not solve the problems. Removing the political patronage from regulatory agencies stands a chance of solving the problems. In the rest of the world, telecoms are regulated monopolies, with a different way of setting up regulatory agencies, which allow them to be effective.

Anonymous Coward says:

Re: Seriously though...

WHAT is it going to take for these companies to get broken up?

Someone walking into their head offices / homes with a shotgun…..

What? You were expecting a /snark? Sorry buddy, but until you fix the government’s corruption, that’s about the only real option we have.

Before anyone here whines "Go without!" as a "solution", I would like to remind them of the difficulties of not having broadband internet service in the current age:

IRS filling? Better pay someone else to do it then. Or you’ll be waiting until December for filling upload to complete. (Assuming your session doesn’t just time out waiting for a response due to the time it took to send you the next page to fill out….)

Credit notifications? Forget those. Paper mail is dead here and all of those graphs and pretty site designs will take forever to load.

Utility bills? Some places won’t allow you to get a mailed statement anymore. Autopay is the only option. You better hope those fees don’t get too ridiculous because the same applies to…..

Bank statements? Better figure out where the form is for it, assuming your bank still permits mailed statements.

Shopping? Many places have fallen to the Amazon juggernaut. Better hope you have what you need at a local brick and mortar, or that they will provide you a shipping & shopping service.

Employment? Most employers won’t even bother if they can’t get a hold of you at the drop of a hat to come in on your time off. No broadband or cell service makes that difficult. Let alone keeping your social media accounts active enough to get passed the HR bot. Assuming you can even apply in the first place given that most places expect all applications and training to occur online.

56k warning: No site practices those anymore. Hope you got a good ad / script blocker too, or just loading google’s homepage is going to take a cup of coffee. Let alone anything else you need to do. Of course just doing that little requires a…..

Phone modem? Assuming you can still get it in your area. Remember, landlines are dying, and you can’t pay for cell service without paying these idiots.

Alternatively you could try to steal wifi from a neighbor / McDonnalds. Assuming that A. They don’t fall for your plan too, and B. That you are completely OK admitting that your "solution" is a complete surrender to the very enemy you were attempting to avoid. A.K.A. Not a solution.

nerdrage (profile) says:

Re: Seriously though...

They seem to be doing a good job of breaking themselves up. Comcast will lose out on the whole streaming-wars content production race and then 5G will hit its ISP business. By then, NBCUniversal will probably be bought by Apple. So it’s not so much these companies get broken up, rather they get eaten up by bigger, smarter companies.

This comment has been deemed insightful by the community.
rangda (profile) says:

I’ve been saying this for a while, and it’s the elephant in the room that everyone has been ignoring. In the US your cable provider is generally your internet provider, they are going to get their ~$250 / month out of you no matter what it takes. If everyone drops cable, then they just jack up the internet access fees so you’re still paying them $250 / month. And as they point out, this works out better for them since they then won’t have to pay fees to the channels.

And since many cable providers are also content creators, they will get to double dip and charge you to stream their content as well.

Tmc says:

What will happen:

Increase internet price (doesn’t work).

Decrease new cable subscribers (doesn’t work, cord-cutters stay cut, it seems).

Throw up hands after several years of their ad-based model further atrophying, resign themselves to providing cable for free, with the internet price being the bundle price.

Realize their internet service is so shit that everyone has switched over to satellite broadband. They now own/are liable for an XX billion dollar communication infrastructure a large percentage of the consumers of which are no longer interested in their product.

Pivot to meager federal dollars for economy residential hookups if they can compete with broadband at the ultralowcost tier (those phase array transceivers could be pricey!).

Gradually let network erode because frankly it can no longer afford upkeep.

Federal or state bailout, probably in the form of the bailing out entity receiving the property they own.

Anonymous Coward says:

the only way any of this will change is to get Congress members on board. the chance of that happening, given the contributions taken from these companies by Congress members, will be harder than finding a chicken with teeth! that means voting with your feet, people! give someone else a chance and see if they lie as easily and as much as the old elected official! see if someone new will actually represent ‘the people’, instead of the companies giving the greatest coffer fillings!!

Rocky says:

Shortsighted idiots...

It’s amazing how shortsighted they are, because when a disruptive technology arrives which give people options they are going notice a loss of customers that will drive them into the ground financially.

If Starlink works as promised, that will disrupt the whole broadband industry and especially for the companies that have continuously bilked their customers while delivering less and less.

Anonymous Coward says:

So when users in those markets cut the TV cord and move to streaming, you’re free to sock them with rate hikes, nonsensical fees, and bogus usage caps and overage surcharges. Because there’s no other broadband option, there’s no penalty (you know, the way monopolies work).

So what happens if they cut cable and put an OTA antenna back up?

Anonymous Coward says:

When Comcast called me about why I cancelled my cable TV, I was up front that paying around $130 a month wasn’t worth it. And as we get more streaming services, it made no sense to still be spending that much money on something that only was 5% of the television I watched.

And here’s the thing, I like the service I get through Comcast, even if there is no viable alternative. When I cancelled my Cable TV I actually increased the speed on my internet to their gigabit service.

This comment has been deemed insightful by the community.
urza9814 (profile) says:

Re: Re:

"And here’s the thing, I like the service I get through Comcast, even if there is no viable alternative. When I cancelled my Cable TV I actually increased the speed on my internet to their gigabit service."

They’re fine, as long as it works. When something breaks, they won’t do a thing for you though. My parents had Comcast a few years ago before they moved. One day, the internet went out. Called support, they said they didn’t see any problems, and a few hours later the connection came back. The next day…the same thing happened. Day after day, for months on end, around 5pm the internet went down, and around 9pm it came back on. Finally after dozens of calls to tech support, months of back and forth with them insisting there was no issue, we finally get a tech who decides to do his freakin’ job — he looks up some log file, and says "Oh yeah, I can see in the logs that you’re dropping off the network at almost the exact same time every day. That’s pretty odd." Eventually scheduled a service visit to replace the modem and everything was fine. Took three months before we could convince them to actually do that though. When the tech arrived he told us that this was apparently a class of issue that was well known — they claimed a neighbor was likely stealing cable, and the unsupported equipment was causing the signal strength to drop below what the original modem could use whenever the neighbor turned their TV on. But it literally took MONTHS to convince them that we weren’t lying about the connection dying EVERY. SINGLE. DAY. and for them to just check their own logs to confirm it. And of course we got no compensation at all for the service being down during prime hours every day for months. Still had to pay full price for that garbage.

Anonymous Coward says:

Soon I imagine they will be pushing internet bundles, to save you money of course. With bundling, you will be allowed to upgrade your standard service to include categories like search, news, sports, gaming,banking, investing, healthcare. I guess that periodically there will be outages of certain websites due to price negotiations, so if you need to access your bank to pay a bill I guess yer screwed. Makes one think twice before using those pay online services that they charge you extra for.

Anonymous Coward says:

The price isn't necessarily the problem

I don’t think cable tv customers are all that price sensitive. At the very least there’s a pretty large core group that isn’t.

I subscribe to cable TV but rarely watch it because of the commercials. At my house we subscribe to DirectTV, Hulu, Netflix, HBO, MLB, AppleTV+, and Disney+.

The cable TV providers aren’t losing out because of the price, it’s just a terrible experience overall. Their DVRs are shitty and slow, the programming is filled with commercials, their video on demand offerings are crippled (ffwd disabled), and the video quality is low (over compressed).

All of those problems could be fixed except for the programming filled with commercials. In the end it’s an inferior product and even though on paper it should be good ($100 / month for hundreds of channels and lots of on-demand programming), the experience blows.

urza9814 (profile) says:

Re: Re: The price isn't necessarily the problem

"you think cord cutting is due to a bad experience?"
You don’t have cable – right?

It’s absolutely about the experience. Getting buried in boxes (each with its own rental fee!) when all you want to watch are the local channels; equipment failures every few months because when they replace a defective device for one customer, they just shuffle it to another; indecipherable bills with fees on top of fees on top of fees; spending hours and hours on hold, day after day, week after week, just to get the service you’re paying for; having to cancel and resubscribe every few years or your bill goes through the roof….even when it’s about price, it’s as much about the pricing tactics as it is about the actual dollar amount.

I have heard people talking about cutting the cord say some variation of the phrase "I don’t mind paying for it, but I just don’t want to deal with them anymore" nearly every time.

Anonymous Coward says:

Re: Re: Re:2 The price isn't necessarily the problem

Even if cable TV were free, I would still be subscribed to Netflix et al just because those services are better. Cost isn’t the issue.

Even simple things don’t work right on cable tv. For example, I can switch to a different movie on Netflix faster than I can change channels on my cable box. Every part of the cable tv experience is bad and getting worse. I wouldn’t care if they raised prices if they were also trying to make it better.

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