Comcast, what part of 'competition' don't you understand?
To: Brian Roberts, CEO, Comcast
From: Me
Re: What part of competition don't you understand
Dear Mr. Roberts,
I just received notification that the price of cable service in my home town of Hopkinton, Mass., is going up again. You are hiking the price of standard cable, as well as the cost of the digital service package (the exciting Digital Gold movie package) that I receive. I'm not the smartest guy in the room when it comes to math, but it appears I'm going to be paying $5.20 more each month - an increase of nearly 6% over my current astronomically high bill of more than $91. You talk about all the exciting investments you're making, but as far as I can tell, I'm getting the same lineup of channels and same programs, but I'm paying more.
Now, if this were just another price increase from Comcast I would simply gripe, toss your notification in the trash and gnash my teeth a bit. We're all accustomed to that. But this price increase fascinates me. Here's why.
As I've discussed with readers of this blog, I'm on the Cable Advisory Committee for this little town - which has gotten some national prominence of late owing to the murder of a young mother and her 9-month-old daughter, allegedly at the hands of her husband. Hopkinton made the cover of People magazine last week, a uniquely dubious achievement. In the past, the cable committee had been a bit of a governmental backwater. After negotiating a 10-year contract with Comcast (or one of its predecessors here), the committee barely had a reason to meet.
But we have a pretty good reason to meet these days. As detailed in a previous post, Verizon is applying to offer cable service over fiber lines here and we're working to hammer out an agreement with this new competitor. Verizon officials have told us that residents of Hopkinton can expect to pay eight to 15% less than what we're paying you for service! For me, that would equate to paying from $7.30 to $13.70 less for the same level of service. I like the sound of that. I'll bet even you would welcome a price reduction like that.
That's what makes your new price increase really fascinating. As the era of your monopoly control over cable service is coming to an end, as customers face the prospect of having a real choice for cable TV, you decide that the time is right to charge us more? I said I was no math expert and I am clearly no marketing expert. But I'm pretty sure that raising prices just before a new rival begins offering the same product for significantly less is not the smartest of moves. It just doesn't seem like a solid way to keep customers from wandering off the farm. It would seem to put customers in the right frame of mind for jumping ship, as it were.
There's one other thing. I'm currently paying $43 a month for high-speed Internet service, because I 'enjoy' the $15 discount as "multi-product" customer. DSL would be cheaper, but I can't get service from Verizon, so I'm stuck with you guys as my only alternative. But I will soon be able to get 5M bit/sec FiOS service from Verizon for three to eight bucks less than what I'm paying you, or 15M bit/sec FiOS for just about what I'm paying for your service, which is purportedly 6M bit/sec, although I've never been able to verify that on my own.
So, let's review. Major new rival coming to town. Lower prices on the way. Defying logic, Comcast increases prices for loyal customers.
I ask again, Mr. Roberts, what part of competition don't you understand?
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Comments
Comcast isn't the only cable company under the delusion that increasing prices without adding value won't drive their customers to look at their alternatives. Adelphia, Time Warner have also increased their prices recently without any additional services.
I left the cable industry behind 5 years ago, moving to DirecTV and I've never looked back! I have a Verizon Freedom Package for my phone, DSL and DirecTV that gives me a $20 overall discount on my services each month. I haven't had a single rate hike in 5 years and the customer service and additional services I've purchased such as Tivo have been just great.
Since Adelphia service in St. Albans, VT hiked their rates my younger sister has moved to the Verizon Freedom Package with DirecTV and loves it! She's paying less for the full digital package then she would have paid for Basic Cable with Adelphia! And she's paying $15 less for her DSL then she paid for her Cable Modem services. Plus she gets a $20 discount on her phone service!
In Watertown, NY my other 2 sisters whose families live in a duplex together, were looking at a rate hike from Time Warner Cable. They too switched to the Verizon Freedom package with DirecTV and get more children's programming for my two nephews then Time Warner offers. As well as Sporting events that their husbands love. Add in the savings each of them get up to $30/month! And the switch was well worth it.
Bonus for me is the $150 credit to my own account for referring both of them to the service.
Customer service, services, rates, options are all things more consumers will be looking at and I believe that they will make the switch to the services that give them value for their money.
Posted by: Chrystie Terry on February 16, 2006 09:01 AM
I am amazed by the level of pricing that you get over there. Indeed, here in France, we have strong competion between telcos for a triple-play package: for 30 Euros a month (around 40 US$), you can get routinely from several suppliers an ADSL connection with a bundled router, 8 Mbit/s Internet access, plus unlimited national calls to landlines and 100 television channels. Premium TV channels will cost you maybe 15 Euros more (20 dollars).
I wish you a bit more competition!
Posted by: Alberto on February 16, 2006 11:00 AM
Hi John,
It was good to see someone is taking comcast to task. I also got my new year surprise with a 5 dollar increase in my cable bill :( I live in Fremont, CA.
Yesterday I got AT&T's bundled package ad in my mail where they are offering internet, cable and phone service for about 90 dollars and comcast is charging almost 97 dollars just for cable and high speed internet. There claim is that they offer much higher speeds than DSL for internet but the price difference is much higher :-). And for cable only change I saw was the change in TV guide channel's interface other than that everything looks the same and I end up paying 5 dollars more a month. It just doesn't make sense.
Posted by: Manoj Guglani on February 16, 2006 01:22 PM
John:
Amen to all! You'd think that Comcast would be doing everything they could to ingratiate themselves to subscribers for a lot of reasons. Competition from Verizon et al for sure, but also given the IPTV handwriting on the wall, and the fact that they could be reduced to mere pipe any day now.
Maybe it's a "grab all you can while you can grab it" strategy...oh, but that would require strategy...
Ted
Posted by: Ted Doyle on February 16, 2006 02:31 PM
Recently, I moved from sunnyvale to Santa clara.
During move one of the agents promised me a deal internet for 24.95 for 3 months and cable 19.99 for 3 months and free installation.
After I moved, I got the bill of $227 that included cable and internet fully charged and installation cost.
When I called them, they refused to change it and asked me the name of person who promised that deal. Luckily, the technician who installed the modem gave me a copy which said "free installation". Now whenever I call comcast, I make a point to ask the name of agent and write it down. It seems they fail to keep record of that too.
Posted by: Amol Lele on February 16, 2006 05:09 PM
It's a market economy as far as I am concerned.
I moved outside philly last year to find out I can't get DSL. I didn't want to pay comcast high cable modem prices(with or without cable tv), so I bought NetZero HighSpeed dial up. 15$ a month is a good price for a good service. It wasn't what I wanted, but was what I needed. Just one drawback to my internet bill, VERIZON!!. To access dial-up, I obviously needed a landline phone. So being a first time "landline customer"(even though I have verizon wireless), I had to fax two forms of ID and a paystub to activate my landline. Not to mention the 40$ activation fee. I can go to any teenager at a kiosk in any mall and get free activation in minutes. I ordered the budget plan from Verizon. They would charge me by the call for any prefix in my area code. Thats what they told me until I recieved my first bill. They charged me for dialing other prefix. Which means I get zoning charges on my bill. So it turns out that even if I just use the landline for internet-only, I still get a 30-35$ bill, plus the 15$ netzero(not their fault, their a good service). 45$+, were talkin highspeed prices for dial-up internet. So I switched in a heartbeat, and I'm currently stuck with Comcast HighSpeed for now. Who do I blame? Comcast? Verizon? My point is, we have a choice weather we like those choices or not. As far as their annual price gouging people complain about, umm, it's nothing new. They been doing that since the 80's, and will continue doing so until people stop subscribing. I know I will piss people off in saying this, but 100$ for cable tv must be worth it if your still paying it. Get the dish, or get some rabbit ears(u can get somewhat of HD through them now), or wait for your savior verizon to come with their fiber-optics. Stop treating cable-tv like a public utility and pay and play. As far as 'competition', their a monopoly because they outperform others in their field. Look at it from the business perspective(since it's business). Would you sell your house for $200,000(what you paid for it) to someone who is a 'loyal', or sell it to someone who will pay double for it? I don't know what their stradegy is, or is going to become with verizon entering the tv market. Mabye they will keep getting their hands on more sports. Mabye I will switch back to verizon. Let me end this long blur by saying their definitly not going to disappear anytime soon, hell they just built a big building in downtown philly.
Posted by: Richard N. Shea on February 16, 2006 10:30 PM
Direct TV goes up every year, they just went up this year as well. Google it and you will see the cost has increased.
Also, FIOS will not be offering the "SAME" package for less money. They will be offering "A" package for less money and things that Comcast offers for free will caost with Verizon.
The grass is always greener :-) Until you see what you are missing!
Posted by: Brian on February 17, 2006 07:04 AM
I got my annual rate hike (actually it seems more often than that lately) for my high-speed cable and movie package (minimal) from Charter and I remember it's been a few months since I had a heart-to-heart with them via their call center. So I call up and "just for calling," they reduce my bill to less than $100/mo (I was paying $117 or so) for the next six months with more movie channel options. Just because I called and asked? Anyway, I put an appointment in my calendar for six months from now to call them again and see what rate I can negotiate down to.
Posted by: sgittlen on February 17, 2006 09:52 AM
Hi, John, Just dumped Cablevision Internet this week for Verizon FiOS. MUCH cheaper. Brings my cable bill down to about 12 bucks for broadcast basic. Who has time for TV? - Lisa
Posted by: Lisa Figlioli on February 17, 2006 01:26 PM
Bravo, John. I'm hoping Newton, Mass. will get some of what's coming to your town. I'll jump as soon as we can get another option. The days of Comcast's monopoly are numbered - at least in my household.
Posted by: Gillian on February 17, 2006 02:13 PM
Several years ago, Comcast sent me an offer for digital phone service for $24.99.
When I called to sign up, they said it would be $34.99 due to long distance, etc..
I had the offer in hand and politely reminded the sales rep (several times) that the offer was for local and that I didn't want long distance, voice mail, conference calling, etc.
They now offer it for $34.99 but supposedly include those features. Those features were shown in a handbook I got but they were all extra!
I'd trust Comcast as far as I could throw them!
Posted by: Comcasted on February 27, 2006 03:46 PM
I hate Comcast. They are blood sucking mf-ers.
Posted by: Mike on March 4, 2006 11:01 AM
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