Failures

by Karl Bode


Filed Under:
cable, competition, fcc, fees, internet access, price hikes

Companies:
comcast



Comcast & The Cable Industry Greets The New Year With A Flurry Of Price Increases

from the we-don't-have-to-compete,-we're-the-cable-and-broadband-industry dept

What do you do when you're faced by an existential, evolutionary shift that threatens your entire, overly-comfortable industry? Why you raise rates, of course! Comcast is one of six cable providers who have informed customers that they've raised the rates for the new year, despite the record-setting shift toward cord cutting during 2017. Everything Comcast offers is seeing price hikes of some kind, ranging from increases in the company's traditional channel bundles, a price increase for Comcast's standalone streaming platform, and even the fee charged for renting a modem (which is now $11 per month).

Comcast's even jacking up the obnoxious fees it's currently facing several lawsuits over. That includes the "Broadcast TV fee," which is simply a part of the cost of doing business (paying for content) buried below the line, letting Comcast advertise one rate -- then sock consumers with another price entirely once the bill comes due. That fee, which Comcast has insisted is just its way of "being transparent," was just $1.50 when introduced in 2013 -- and will be bumped to $8 per month in the new year:

With cord cutting setting records, why doesn't Comcast feel the need to actually adapt to changing markets? It doesn't have to. The company is securing a bigger monopoly over broadband in a growing number of markets thanks to telcos that no longer think it's worth it to upgrade aging DSL lines.

That means there are more markets than ever where if you want a decent broadband connection that meets the FCC's 25 Mbps definition of broadband, Comcast is your only option. As a result, Comcast knows that it can simply jack up the cost of broadband as well to counter any TV revenue losses without being punished by the pesky nuisance of competition. This, of course, includes Comcast's implementation of arbitrary and unnecessary usage caps and overage fees, which have proven a handy weapon in hamstringing streaming alternatives. It doesn't take an economics degree to know that when you're the only provider in a market for a product that many feel is a necessity, that prices will rise quickly.

Publicly, Comcast and other cable providers will lay the blame squarely at the feet of broadcasters, who consistently demand higher and higher rates for the same product. But that ignores the fact that Comcast is a broadcaster (NBC Universal, several regional sports networks), and is jacking up pricing on numerous services, hardware rental costs, and other products that have nothing to do with the cost of programming.

Granted, with the Trump administration laying the groundwork for gutting federal and state oversight of an already quite dysfunctional and broken cable and broadband market, you can expect a lot more where this came from over the next few years.


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  • identicon
    Iggy, 2 Jan 2018 @ 6:43am

    DSL would have to do quite an upgrade

    At this point, to stay competitive with cable, DSL providers would need to deploy technology capable of delivering at least 10MB per second. This is happening with VFast technology but costs money.

    reply to this | link to this | view in chronology ]

    • icon
      TheResidentSkeptic (profile), 2 Jan 2018 @ 7:07am

      Re: DSL would have to do quite an upgrade

      I live 20 miles outside of Tallahassee, and have bonded DSL at 20MB with static IP to my house from Centurylink. Some ISPs do still care about service to their customers.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Jan 2018 @ 8:09am

        Re: Re: DSL would have to do quite an upgrade

        No. I think you just got lucky. Centurylink in the county is almost as bad a dialup. They charge you for the 1.5Mbps plan but you are lucky if you get over 200kbps.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 2 Jan 2018 @ 11:32am

          Re: Re: Re: DSL would have to do quite an upgrade

          ??

          Go to their website. They're lowest plans start at 25 MB up to 1GB

          Of course that all depends on your area. I pay for the 25 service ($45) but only get 3MB because the lines are so old. But still have to pay their lowest rate plan as they do not offer a 3MB tier.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 2 Jan 2018 @ 12:35pm

            Re: Re: Re: Re: DSL would have to do quite an upgrade

            25 Mbps (the speed you pay for) is ~3 MB / sec

            so is that what you are getting or are you getting only 3 Mbps (366 KB/sec)


            so i just want to make sure your units are not being mixed up.

            reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Jan 2018 @ 6:50am

    Gotta love that DVR fee - charging $8/mo? for that tiny bit of info called a guide.

    reply to this | link to this | view in chronology ]

  • icon
    Lord Lidl of Cheem (profile), 2 Jan 2018 @ 6:56am

    They'll soon be charging you a fee for all the amazing lobbying they're doing on your behalf.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Jan 2018 @ 7:15am

      Re:

      Don't give them any more ideas.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Jan 2018 @ 8:03am

      Re:

      Signing out those costs would make for a more honest breakdown. Unless they are ridiculously overspending on it, those costs would also reduce the myths in the area and even be in line with the "transparency"-theme Pai is defending every action he takes with! Win-win for the responsible, but it will never happen...

      reply to this | link to this | view in chronology ]

  • icon
    JoeCool (profile), 2 Jan 2018 @ 7:04am

    Perfect timing

    I recently moved and now have Spectrum cable internet. As I mentioned elsewhere, they immediately tried to scare me into buying TV using the specter of no net neutrality. Well, Specturm is currently under a nationwide attack that is slowing downloads to a crawl. The attack started yesterday, and Spectrum has yet to deal with it, but they do say on their Twitter account that "some" customers may get credit on their bills because of it.

    One other funny thing - Spectrum cable modems are FREE! By that, they mean that they got tired of people using their own modem to avoid rental fees, so now it's baked into EVERYONE'S bill, whether you use it or not. How's that for customer service? :D

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Jan 2018 @ 7:16am

      Re: Perfect timing

      Baking cable modem costs into everyone's bill sounds like another way to screw everyone over. If you're one that gets your own modem, even better for them.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Jan 2018 @ 8:18am

        Re: Re: Perfect timing

        To some degree. Security-wise, easy ability to remotely push updates on modem-firmware and changing older flawed modems for newer models is a thing. Thus there is theoretically a security and an economic argument for doing it that way.

        That the model isn't sufficiently safe or economically better for the users to notice is tied to the upgrade-negligence that is making the economics of keeping worn, corroded copper lines in use the thing to do.

        Pirates and their burried copper-treasure...

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 2 Jan 2018 @ 8:59am

          Re: Re: Re: Perfect timing

          Lame excuse for their predatory behavior.

          reply to this | link to this | view in chronology ]

        • icon
          JoeCool (profile), 2 Jan 2018 @ 9:02am

          Re: Re: Re: Perfect timing

          I don't think Spectrum knows ANYTHING about security. The installer slapped a sticker on the wifi router (separate from the modem because they're both so old) with both the SSID and password on it. When I asked about changing the SSID and password, he said not to. The SSID is obvious, and the password pretty bad (not 12345 bad, but still pretty bad).

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 2 Jan 2018 @ 1:34pm

            Re: Re: Re: Re: Perfect timing

            and of course when (not if) someone guesses the pw correctly and does nefarious things, you will be blamed - because why not.

            reply to this | link to this | view in chronology ]

            • icon
              JoeCool (profile), 2 Jan 2018 @ 2:13pm

              Re: Re: Re: Re: Re: Perfect timing

              You don't even need to guess, just visit and make note of the sticker on the wifi router. At least he didn't put the sticker in a window. :D

              reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Jan 2018 @ 7:24am

      Re: Perfect timing

      >they immediately tried to scare me into buying TV using the specter of no net neutrality

      If the such threats fails to keep up their cable subscriptions, they will start bundling Internet services into their various cable TV packages. The more you want to stream, the bigger your cable subscription will need to be.

      reply to this | link to this | view in chronology ]

      • icon
        That One Guy (profile), 2 Jan 2018 @ 2:58pm

        Re: Re: Perfect timing

        Start? That's what caps are for.

        'Sure you can use those other, competing services, but keep in mind if you use them too much it's going to start costing you extra. On the other hand, our stuff is cap exempt, and as such you can watch it as much as you want without having to worry about adding to your bill. Just something to keep in mind...'

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 2 Jan 2018 @ 3:10pm

          Re: Re: Re: Perfect timing

          I am predicting them becoming more explicit, like if you want to watch Netflix and YouTube you meed our full fat cable package. Our basic package lets you use Facebook and twitter, along with email without any limits.

          reply to this | link to this | view in chronology ]

          • icon
            That One Guy (profile), 3 Jan 2018 @ 4:16am

            Re: Re: Re: Re: Perfect timing

            Possible, but I'd say not likely.

            As JoeCool mentioned they seem to be dropping subtlety, but by using caps to hamstring competition they can play the classic 'network congestion/protection from super-heavy users' card in defense, whereas blatantly requiring you pay to access those services would be more difficult to justify, and would involve one fee, rather than an every increasing one if people use them a lot(or more likely multiple people use them on the same connection).

            They're greedy enough to do it, but they probably won't as they can get the same result using tactics they already use.

            reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Jan 2018 @ 6:10pm

        Re: Re: Perfect timing

        My solution was to ask if a free TV came with the service, how big and what not, since I do not currently own one.

        reply to this | link to this | view in chronology ]

  • icon
    Stephen T. Stone (profile), 2 Jan 2018 @ 7:17am

    And to think, some people actually believe Comcast will not fuck with Internet traffic as soon as doing so is both legal and convenient.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Jan 2018 @ 7:32am

    cord cutter rate hikes to come?

    I would not be surprised that this year we see Comcast begin market testing (in uncompetitive markets where people have no choice) streaming or cord cutting price hikes. So anyone who does not have a double- or triple-play package with them sees a significant price increase.

    Also, have that paired with a requiement to rent a modem from them to use the internet. No more customer owned modems.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward Too, 2 Jan 2018 @ 11:42am

      Re: cord cutter rate hikes to come?

      It's already happened.

      Last year when I complained about that price increase, the Comcast rep told me that Internet only would cost me more than the double play. The double play package included HBO but dropping it would actually cost me more.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Jan 2018 @ 8:13am

    Don't worry be Happy
    Don't worry don't vote
    Don't worry be Happy
    Don't worry bout that additional fee
    Don't worry this is the land of the fee
    Don't worry be Happy

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Jan 2018 @ 8:45am

    flip side

    Comcast could make the claim, based on economically sound principles, that prices had to be raised to make up for the loss of revenue due to "cord cutting" customers. Monopolies such as any kind of hard-piped/wired utility services have an inherent economy of scale, as the considerable fixed costs of its infrastructure become more affordable when shared between a large number of high-density customers. It would be interesting to know what kind of "price elasticity" is exibited by cable customers, and if many Comcast customers will quit over this latest round of price increases.

    reply to this | link to this | view in chronology ]

    • icon
      Leigh Beadon (profile), 2 Jan 2018 @ 9:03am

      Re: flip side

      Comcast could make the claim, based on economically sound principles, that prices had to be raised to make up for the loss of revenue due to "cord cutting" customers.

      The words "downward spiral" come to mind...

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Jan 2018 @ 9:03am

      Re: flip side

      "economically sound principles"

      Not sure wtf that means, especially in todays world of total bullshit where some think they can just spew a mouth full and everyone will lap it up.

      I imagine that the world economic collapse following the Bush43 presidency was also due to economically sound principles or so they would have you believe because certainly they did nothing wrong.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Jan 2018 @ 10:49am

      Re: flip side

      They can claim whatever they want for whatever reasons they like. As they raise rates they'll push away more people. This will "force" them to raise rates again and push away more people. This has been going on for several years now and will only escalate.

      Sooner or later they'll either figure out how to operate in the modern economy or they'll fail so hard they have to be bailed out with taxpayer money, not because cable content is important but because the internet is. If we're lucky that will happen under a liberal government that isn't afraid to heavily regulate the provision of a service as important as internet (as it has with water, power and telephone).

      "The free market will fix all the things" is a wonderful sentiment but entirely inapplicable to the cable industry.

      reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 2 Jan 2018 @ 10:00am

    Sure, they may have the upper hand while "A Shit Pie" is in the FCC and Republicans control and destroy everything while at it. The topic is getting mainstream and it's clear that it has bipartisan support so this may come back to bite them in the ass sooner and harder than we expect. And I'm not even mentioning municipal broadband.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Jan 2018 @ 10:42am

    I think Comcast etc should raise prices by 250% PER MONTH every single month.

    Like ripping off a bandaid we might as well get this cord-cutting out of the way by making Comcast etc simply too physically expensive for 99.99999999999% of the population.

    Then we get the big Comcast Crash now instead of in 2019 or 2020 and as they burn screaming (and we roast marshmallows on it's financially ruined flaming corpse) we can get proper internet access that isn't spied on, censored or has adverts inserted/changed at a whim.

    reply to this | link to this | view in chronology ]

  • identicon
    Leon Field, 2 Jan 2018 @ 12:05pm

    Cord Cutting

    Will be interesting to see how many folks are smart enough to cut the cord. Reason they are raising prices, because they know you can’t live without 220 channels. I cut the cord, am actually living life again, listening to radio, and NOT MISSING TV at all.
    TRY IT...YOU WILL THANK YOURSELF, and spend the money on YOU!

    reply to this | link to this | view in chronology ]

  • icon
    Uriel-238 (profile), 2 Jan 2018 @ 1:15pm

    I live in a Comcast regional monopoly.

    I may end up having to switch to my phone's service and tether.

    reply to this | link to this | view in chronology ]

  • identicon
    Dan, 2 Jan 2018 @ 7:20pm

    I will drop xfinity and tether with my phone I’ve already looked into it and it will save me more than xfinity is worth being it on Comcast

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 4 Jan 2018 @ 2:50pm

    Don't buy their shit.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 5 Jan 2018 @ 5:57am

    Legal attack

    Let's kick them in the nxxts.

    How about passing a law that requires telecommunications companies to offer the same prices to existing customers as to new customers?

    Also, prohibit contracts with early termination fees. Make them month to month.

    Also, mandate that consumers can purchase their own equipment from any supplier rather than only from the cable company?

    Do these things and they will really have to compete on price.

    reply to this | link to this | view in chronology ]


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