Verizon's Take On Broadband Caps: A Sign Of Competitive Market?

from the hmm...-not-quite dept

Thu, Apr 23rd 2009 2:28pm — Mike Masnick

Of the broadband providers out there, Verizon has certainly been better than others in terms of actually trying to create a much better product, rather than focusing on ways to just squeeze more for less out of their customers. I've always thought that Verizon made the right move six or seven years ago, when it decided to invest heavily in providing fiber to the home, while other providers said it was too costly. While it was costly, at some point (say: now) it would give Verizon a real leg up on the competition in offering a much better service. While I have plenty of disagreements about some of Verizon's other positions, the company has at least focused on providing value.

So, I was hopeful that when Verizon weighed in on the whole "broadband cap" debate, it would take a much stronger position than simply claiming that broadband caps are a sign of "highly competitive markets with companies trying to come up with more value, innovation and differentiated offerings to help them attract customers." While the discussion does make it clear that Verizon is focused on investing in adding more value, it's a bit disingenuous to claim that the caps are somehow a sign of a competitive market. If anything it's the opposite. The public reaction to the caps shows that the problem is the lack of competition, allowing these providers to move forward with such plans, knowing customers in many cases can't switch to a competitor. Also, it's difficult to see how providing less service for more money is "coming up with more value [and] innovation."

So, Verizon is right to point out (as it does), that it's more focused on providing higher quality service, rather than caps, but it's not being entirely honest in saying that this is a sign of competition. It's not.

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Filed Under: broadband caps, competition
Companies: verizon

15 Comments

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Tgeigs, 23 Apr 2009 @ 2:35pm

Par for the course
-Mr. Democrat/Republican, why is it you mostly resemble the other side, and when you do differ in opinion, you often do so in a way that is vastly on opposite sides of the spectrum, making you seem like complete and total nutjob?

-Well, Mr. Voter, that's because there is a competitive market for voters in the political system. We have all these people competing for votes, and trying to offer citizens more.

-Uh, but you don't. You just act like tools.

-Yes, but I'm the lesser of the tools. Thanks for your vote.
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some old guy, 23 Apr 2009 @ 3:38pm

Up is down!
Black is white!
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Anonymous Coward, 23 Apr 2009 @ 3:42pm

It is a sign of competition - it gives Verizon a chance to beat the figurative crap out of the competition (in the two places in America where you can get more than one cableco and one telco, that is...)
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DJ, 23 Apr 2009 @ 3:55pm

Re: Up is down!
You misquoted Family Guy:
"Black is East, Up is white."
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DJ, 23 Apr 2009 @ 3:57pm

Re: Par for the course
'Nuff said.
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ScaredOfTheMan, 23 Apr 2009 @ 6:39pm

Reading this made me throw up a bit in my mouth...

"...trying to come up with more value, innovation and differentiated offerings to help them attract customers"

Honestly though...

Public outrage should not be the only (last) line of defense we have!!
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Carl, 23 Apr 2009 @ 6:51pm

Verizon
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Carl, 23 Apr 2009 @ 6:55pm

Verizon
FIOS is the best ISP/TV. I have had them for 2 years and never had a Internet outage. I love the TV use their wireless all on a single very expensive bill. But does it work. The Plano weather never knocks it down. Texas weather is tough the rest of the pack were always down.

It's too expensive, needs more speed and channels but the rest of the pack just can't compete with FIOS.

No, I don't work for them, they actually earn my good attitued through excellent customer service and products.

Carl
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Rob Friedman, 23 Apr 2009 @ 8:51pm

Fiber > Cable
$VZ is just flaunting the fact that back when Cable companies were starting to do Cable modems, they were busily upgrading their networks with Fiber capacity to provide Fiber to peoples home. There is a place for Cable but really Fiber is king.
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Guy One, 23 Apr 2009 @ 11:14pm

loves verizon.... landlines
dislike the wireless verizon, but i will use no other ISP for home internet than VERIZON. FIOS is fast, the fastest, the most consistent speeds, the most reliable, and verizon wont just hand over your name and addy to the MPAA or RIAA,,,, Cant say enough good things about verizon as an ISP. I recomend verizon basic DSL and Direct TV, combo over any cable companies service.
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Sarah, 24 Apr 2009 @ 6:18am

caps schmaps
I was hoping to get Verizon's elbow out of my back while I'm trying to enjoy being online....................
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OldGeek, 24 Apr 2009 @ 7:50am

Hurry
Here in San Antonio, TWC is the only service that you can get south of downtown. This is due to when Paragon first came to town they got contracts with the city to plant cables and bar competition using the beautify our city program we have here. What that does is prevent competitors from laying any new lines, thus keeping this area just for TWC. Thanks to SWB (now AT&T) and TWC we can't even get a DSL connection in our part of town. The only and I mean only services you can get here is AT&T for phone and TWC for internet!
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Anonymous Coward, 24 Apr 2009 @ 11:49am

Maybe I'm giving Verizon too much credit, but perhaps they're deciding to support TimeWarner's efforts to dig their own grave?
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Derek Kerton (profile), 24 Apr 2009 @ 3:37pm

Here I Go Again
I do not agree with Verizon's logical assertion that caps are [must be] a sign of "highly competitive markets with companies trying to come up with more value, innovation and differentiated offerings to help them attract customers." I would restate that as caps "can be" a sign of...

However, I absolutely DO think that in a highly competitive market for broadband (so, not the USA), caps and tiers WOULD be a sign of "...companies trying to come up with more value, innovation and differentiated offerings to help them attract customers."

For example:
1 Company A offers unlimited Broadband for $30/mo.

2 Company B enters the market, and wants to compete. They offer a limited 2GB plan for $15/mo and an unlimited plan for $35/mo.

3 By offering less for less, company B is able to differentiate their product from Company A but still contain costs. They offer more value to light-use subscribers, and by innovating a new price plan, will attract customers.

4 Company A is very likely to respond with a entry-level tier. This is an absolutely obvious response to price competition from B.

So you see, caps and tiers CAN BE a sign of one of two things:
A) an uncompetitive market, such as the USA, where carriers are trying to extract more money
or
B) a competitive market, where carriers seek to differentiate, compete, and offer customers the service bundles that fit their needs.

Can anyone here agree with me that the caps and tiers are not evil? They are just tools of business, which can be used for evil or good.
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Rick Chou, 24 Apr 2009 @ 6:58pm

enough to make me switch
I heard enough to make me switch to Verizon from Time Warner when I heard they wanted to try capping. Called verizon and account set up within a week. Also ended up saving close to $100 a month for business television and internet. Thanks for the info Lifehacker....
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