Comcast Still Makes A Killing, Even When You Cut The Cord
from the damned-if-you-do dept
While the rate of cord cutting is expected to double for Comcast this year, the phenomenon isn't having as dire an impact on the company's bottom line as you might expect. That's thanks to Comcast's growing monopoly over broadband in countless markets where the nation's phone companies are simply refusing to upgrade their networks at any real scale. That lack of competition lets the company not only jack up the standalone price of broadband (starting at $75 in many markets), but it allows the company to implement punitive and unnecessary usage caps and overage fees to drive up your bill should you embrace streaming alternatives.
Speaking at a telecom conference in New York this week, Comcast cable CEO Dave Watson very quietly acknowledged the fact that when a customer cuts the cord, the fact that Comcast doesn't have to pay content licensing costs for that user -- combined with the fact that they simply drive up the cost of broadband for that user -- means that the company comes out ahead anyway:
"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.
"It’s actually accretive when that happens,” Watson said. “It’s a manageable transition."
Of course that wouldn't be the case if Comcast actually had to compete on the broadband front, a problem we don't seem particularly intent on solving anytime soon. Wall Street of course knows this and is very excited about the prospect, with many analysts cheering Comcast toward boosting the cost of standalone broadband from $75 (after a recent hike) upwards of $90 per month or higher:
"We have argued that broadband is underpriced, given that pricing has barely increased over the past decade while broadband utility has exploded,” New Street said. “Our analysis suggested a ‘utility-adjusted’ ARPU target of ~$90. Comcast recently increased standalone broadband to $90 (including modem), paving the way for faster ARPU growth as the mix shifts in favor of broadband-only households. Charter will likely follow, once they are through the integration of Time Warner Cable."
New Street added that “broadband pricing could double from current levels."
How exciting. Of course while this firm tries to argue that broadband pricing has "barely increased" over the last decade, it's important to understand he's talking about the advertised price. Comcast has provided a master class in the tactic of using hidden, sneaky, and/or entirely bogus fees to covertly jack up the cost of service post sale, something both Comcast and Charter are facing numerous lawsuits for. Then there's Comcast usage caps and overage fees, which Comcast can also slowly but surely squeeze with zero organic market or (for now) regulatory repercussions.
Of course Comcast still values the cash cow that is traditional television, and in an added wrinkle has started only doling out the latest speed upgrades to users that bundle television. But thanks to our refusal to actually address limited competition in the broadband space, Comcast will manage to grab its pound of flesh -- one way or another. That's why a growing number of towns and cities see building their own broadband networks as the only path forward out of this cycle of monopoly dysfunction.
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Filed Under: competition, cord cutting, fees, price hikes, usage caps
Companies: comcast
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At the very least the morons who support the dismantling of NN protections and aren't Ajit Pai (ie: have neither money nor power) will be suffering with double the cost as well, no?
Of course NN alone won't save a good chunk of America from hideous prices but it will at the very least make you hit the cap with their products or with the competition. Yay.
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What is dumber? The morons trying to do the same thing we have been doing for the past few decades while expecting different results?
At least the "morons" want to try something different instead of asking the regulators to "regulate harder".
You are going to lose, you have been losing, I have only been telling you that you are going to get fucked, have been getting fucked, and seem to be enjoying getting fucked for several years now.
All scientific evidence points to the fact that you like to get fucked. How about you stop advancing your shit laden idea when it comes to regulations... you obvious don't understand jack or shit!
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Yes, most humans do enjoy sexual intercourse and I'm very happy to learn that I will continue to copulate in the future!
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You got any better ideas, son?
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We have been trying it "your way" for a long time and it still does not work. How much longer do we need to keep trying it your "failed" way before you get a clue?
Sure, a miracle might happen and all these corrupt politicians might be kicked out of office but based on you geniuses... I don't think you know which ones need to be booted.
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What, then, do you suggest other than the intentionally broad suggestion of “whatever you are doing or have done”? Detailed answers get better results than broad ones that do not require any deep thinking.
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This is why you are getting fucked over. Someone has made you think freedom is slavery.
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We have not been "doing it my way" - ever. Why would you think that I agree with any of the shit storm that is going on today?
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get rid of the stupidity of NN it is a wasted effort.
Take the faux "natural monopolies" away from the ISP's and have government regulate them like highways. Anyone can get on them and no one can block others. all the businesses share the cost of capacity based on how much their consumers use. Another business separate from the ISP's manage the wires, poles, and conduits and will be contracted to carry out maintenance and upgrades as per regulations.
If you move data, you are not allowed to own data removing conflicts of interest. Example, Comcast cannot own a streaming service as well as the lines content is streamed over.
Those two right there would cause a lot of free-market potential to allow new startups to seriously challenge the incumbents.
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You clearly do not understand what NN is.
>Take the faux "natural monopolies" away from the ISP's and have government regulate them like highways. Anyone can get on them and no one can block others. all the businesses share the cost of capacity based on how much their consumers use.
THIS IS NET NEUTRALITY you idiot. This is exactly what NN is. Please fuck off now.
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NN has been around since 2015, do you notice how all the ISP's still have all those monopolies?
No wait... a knob like yourself is too busy polishing them instead of searching for a fucking clue!
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You... do realise that those things have nothing to do with each other, right? That the only thing NN does is prevent those monopolies from abusing their power, not break them up? That this would require other, completely different types of regulation that are unrelated to NN?
Perhaps that's why your angry screeds are so idiotic - you've completely misunderstood the very basics of the subject.
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This is essentially Network Neutrality. You just said we should get rid of the very thing you suggest be done to curb the power of incumbent ISPs. So which one do you want: “get rid of Network Neutrality” or “enforce Network Neutrality”?
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A world where people like you are not so stupid. That is what I want.
NN does NOTHING to block the monopolies. The only thing it does is try to prevent the monopolies from creating fast lanes and trying to come up with creatitve ways to charge you more for what you are already paying for.
It will not stop existing or prevent new ISP monopolies from becoming the ONLY broadband in town or on your block.
If NN was that, then there would be no monopolies because it has been active for 3 fuckin years. But it's not like you silly fucking knobs can figure out basic fucking details. You can only regurgitate what your told to barf up when someone comes along and challenges your little follower mentalities.
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…and this is a problem, how, exactly?
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So glad you finally caught up to the rest of us. We knew that years ago, this is old news. Net neutrality needs to be a thing whether monopolies get broken up or not.
Net neutrality is under attack right now and the 2015 NN order keeps it safe so that we CAN focus on breaking up ISP monopolies. If monopolies get broken up, that doesn't automatically invalidate NN rules, they should still be on the books.
But congratulations in finally catching up to what all the rest of us knew a long time ago. There is hope for you yet!
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In fact, it's *more* important, not less, when there are actually monopolies. There's a reason why NN is only such a hot issue in the US with its defacto regional monopolies, and not so much in Europe where effective regulation forced competition a long time ago.
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From what I can see, the problem in the US is not regulation, but the way that the regulatory agencies have been set up so those in charge are short termer's with an eye out for their next jobs.
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Based on what you are saying I would likely favor your solution more than the ones these clowns are peddling.
"From what I can see, the problem in the US is not regulation, but the way that the regulatory agencies have been set up so those in charge are short termer's with an eye out for their next jobs."
yes, this is a big problem, all of it caused by apathetic voters that have bene successfully fooled. They refuse to hold their congress critters responsible so it's pretty much open season on regulator capture here.
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The government appointees can lose their extra status and pay when cabinets are reshuffled, or the another party wins an election.but they are still paid as MPS, or Lords, unless as an MP they lose an election. This largely eliminate the regulatory capture problem.
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If the voters really cared what the appointees do, then they would vote out the politician that let these agencies do what they want unchecked.
You see, this is the classic misdirection trick politicians like to play. They like to create agencies and say... hey we solved the problem if you have a gripe, go and gripe at the agencies that you have no say over.
See how that works? People are stupid enough to buy it. Those agencies were given power by the legislature and the legislature can take it away. The problem is that people will not hold the correct group of people responsible. In fact Americans love corruption because as long as the corruption benefits them locally they don't care what it does collectively at the national level. If you can promise 10k new jobs, you have a blank check to give the ISP's all of these beneficial regulations to rape consumers with. These regulations occur at multiple levels.
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Because you prefer to remain ignorant. I've told you many times that we do, and provided lots of examples and evidence. Your reaction is to either accuse me of lying or to rant like a moron about it can't possibly be due to effective regulation. You are wilfully blind to the reality we experience, and the role that effective regulation had to play in that.
"They refuse to hold their congress critters responsible so it's pretty much open season on regulator capture here"
So, once again, the solution is to fix that, not to scream about how regulation itself is the problem. Places with effective, controlled regulation are doing fine.
Your problem is that while attacking people for using realistic examples of effective regulation as models, you demand a solution that will only cement the problems you claim to be fighting against. Those of us not effected by the idiocy happening over there can only laugh at you as you rail against the very solution for your problems.
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This from the guy who doesn't actually understand what NN is.
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From Ars Technica: "Comcast charges $90 install fee at homes that already have Comcast installed"
"$90 fee may be required even if you buy your own modem and plug it in yourself."
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You say that like people really do believe net neutrality is a cure-all for telecom monopolies. Unlike you, everyone who knows about it understands that net neutrality is protection against ISPs from nickel-and-diming customers based on the sites they visit and the services they use. Only the ignorant and the foolish believe that net neutrality will either break down telecoms or somehow make the Internet worse. Right now, my ISP doesn't charge me to use Twitter or visit Techdirt; I'd like things to stay that way.
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As a trend: this type of blatant, visible, apparently legal fraud is so common that we only sometimes consider it unacceptable.
IMHO, "Free Market Economy" is an unreasonable way to summarize today's economic reality. The term (I made up) "Fraud Based Economy" seems more reasonable and more supportable by available evidence.
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Canadian ISPs do this too. Even if I buy from a third party, I'll need to take time off work to let in the incumbent's tech, who will simply watch me plug the existing wire into my own modem and open a web browser. (Sometimes they have to connect a wire outside, in which case a small fee makes sense. I don't need to be present for that. Then there are the totally bogus fees the government lets them charge, like "speed change fee"—my modem tells me the maximum attainable speed before I place the order, so I know there's no work to be done.)
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I'm aware of no way for a third-party to order service from the incumbents without setting up a (paid) service call. People bitch about it online too and have not figured out how to avoid it. (Except by going with dialup or mobile internet, neither of which is practical as a main connection.) Some third-partys will refund the charges, and sometimes evening/weekend appointments are possible, but you'll still need to book a several-hour period and wait at home.
Until the CRTC knocks some sense into the incumbents (or imposes functional separation) they're going to keep doing this. The only workaround would be to order service from a third-party ISP with its own infrastructure. If you live within a few hundred meters of a CO, you might find a third-party ISP with its own DSLAM (no third-parties run remote DSLAMs, so it has to be a CO). If they're running fiber, it's unlikely to already come into your house, so you'll need a service call anyway.
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that's provided the likes of Comcast are unsuccessful in their law suits trying to stop towns and cities from doing this. given the way members of congress, courts and everyone else of any consequence seem to want to ensure that this 'building their own broadband networks' is stopped and a new law will undoubtedly be introduced by one (at least) of the greedy, bought and paid for politicians to ensure it is stopped, the various companies will be able to carry on screwing the customers by the prevention of competition officially!!
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If you are voting R or D then you are only perpetuating the problem. Before we can see relief entire groups of people need to change how they are doing this and that is not likely going to happen, but that requirement will not go away.
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How do you get broadband competition?
I mean, there are basically only two ways to get an Internet signal into a building: satellite, or landline. Cable is by definition landline. So how do you have multiple competing cable-broadband systems? Do you allow each competitor to set up its own lines? Three or five or ten cables coming into a building where today there's only one?
OK, that's obviously not practical, so maybe you have one physical cable, but any "competing" broadband provider can use it? Well then, who's responsible for paying for the cable, switching stations, etc.? If one company handles all operating and maintenance costs, then how does it pay for all that? Can it charge some sort of traffic fee to other broadband providers? How much? How much is reasonable and how much is too much? If the company can't make money off the operations-and-maintenance work, then why bother? You'll wind up with a company that has no incentive to keep the network going... and so it won't.
In short: "competition in broadband" raises lots of questions. Perhaps these questions sound like "Comcast propaganda" to some, but to me they're serious questions and deserve serious answers.
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Re: How do you get broadband competition?
Your dialup service used a phone call to another service (AOL, Juno, etc), and was two computers talking together and passing information. Your phone company didn't care because you were paying for the phone call, not the internet service.
Now, that doesn't happen. Instead of using the physical medium to reach a third party service, your physical medium is your service. Net Neutrality is an attempt to enforce play nice on the owner of your physical medium, because that owner has all the reasons in the world to make you play by their rules.
The real answer is to divest ownership of the physical medium (fiber, cable, whatever) from the ownership of the services that ride on it. That is not likely to happen after the companies that were your phone provider saw what happened to all that fun revenue they weren't getting on dial up.
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https://www.techdirt.com/articles/20161205/06032836189/fcc-warns-att-verizon-theyre-violati ng-net-neutrality-with-zero-rating-schemes.shtml
"he FCC's net neutrality rules don't specifically ban zero rating, but the agency had said it would act on a "case by case basis" should the practice be used anti-competitively. But a year came and went, and the FCC consistently failed to act as ISPs from Comcast to Verizon began giving their own content an unfair leg up in the market. "
Read that again...
"and the FCC consistently failed to act"
Go ahead... keep asking for a known corrupt element to save you. It's been working like a fucking charm!
And these are not in my words, but TD's words! Go ahead bitch about them!
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Apparently you missed the part where the FCC declared them in violation of NN and began to take action against them? It only stopped because a certain someone was appointed the new FCC chairman and immediately dropped the whole thing.
Given that that element is also responsible for giving us NN rules in the first place as well as beginning to take action against zero rating, the organization can't be wholly corrupt. More likely the organizational and regulatory structure is neutral and certain people within the organization are the ones who are actually corrupt.
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That's not true. One of the BBS Documentary interviewees (sorry, don't remember which) worked for the phone company, and said they did have to rearchitect their networks when ISPs became popular (not so much for BBSes). Local switching stations were not designed for weeks-long phonecalls. And customers were not paying for the phone calls, because except in the earliest days they were always local; they were just paying for a normal flat-rate line.
So the telcos cared, they just couldn't do anything about it. There were persistent myths of extra phone charges for modem users around that time; some companies were trying to require BBS operators to use business lines, and they must have raised the idea of time-based ISP charging, but nothing much came of this. There was never an actual FCC proposal.
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Citation is Eric Greene, tape 3 of 3, ~30:00, "the hold time ate us alive". (archive summary page)
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Nailed connections were charged more.
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Charged to whom? Is "nailed" a term of art? I had many multi-hundred-hour phonecalls without ever seeing extra charges from my phone company or dialup ISP. In my pre-internet days, I might be on a private BBS (i.e., the operator was paying residential rates) for hours at a time, not hundreds. Granted it was in Canada, but I understood Americans had the same arrangement of flat-rate local calling. I never saw any evidence that the telco even tracked local calls.
A common theme in those interview videos is that BBS users would get a multi-hundred-dollar phone bill (once), usually because they were young and didn't know how much long-distance cost or which numbers were long-distance. Nobody mentioned anything about extra charges for local calls, even when their lines were busy (incoming or outgoing) "all the time".
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Conversely, if the company wants to maintain its monopoly and keep its service private, then it must remove all lines running through city owned property.
And while that might seem like an easy solution, any town that dares to pass such a law can expect an expensive lawsuit in retaliation. Of course, it's unlikely to ever happen because most city councils and mayors are basically bought off by special interests far worse than state and national officials, as voter apathy has resulted in a situation in which elected city officials are typically lawyers who end up in a position overseeing the same companies that used to be their legal clients -- and will be again once they leave office.
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Perversely, the incumbents already put their lines under title II regulations when it helps them. They just manage to do it without extending those protections all the way to your house.
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1. The Cable TV line discussed here.
2. The old analog phone line, that in many cases is no longer used (but still there).
3. New Fiber-to-the-Home runs. This is rarer, but it's growing.
Right now, for most of America, #1 is the only real option. The phone line is lower-quality and hasn't been able to keep up with cable TV, and so many phone companies aren't even trying any more. And Fiber is just not available yet for a lot of people.
But we can do better.
While the traditional phone line can't provide the same service as a DOCSIS 3.1 cable service, it can be made to do much better than the old crappy 6Mbps DSL service, and if the cable price goes much higher suddenly phone companies will have room to compete again.
Additionally, what really protects a lot of cable monopolies are city- or county- level franchises. If end users complain loudly enough, municipalities can revoke those franchises to allow more meaningful competition.
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That's debatable, depending on what you mean by line. An existing line might be miles long, and we're not going to get Gigabit service over that. We can stick a DSLAM on every block, and re-route your house's wire to that, but is that the same line? And is that cheaper than running fiber into the house? (A single-mode fiber can go 50 miles at ten-gigabit speed.)
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You're right, it is a problem.
I used to work for a locally-owned ISP. We sold DSL internet service, on Qwest's backbone. (Qwest is now CenturyLink.)
The problem is exactly as you say: Qwest was making money selling access to the lines, and was also a competing ISP.
Upshot: Qwest could offer nearly-free Internet service for a customer's first year or two, only charge customers for the infrastructure access, and still turn a profit. We, obviously, couldn't.
And that was back when DSL providers were obligated to share their lines with competitors; they're not anymore.
I think the only solution is that infrastructure providers should be prohibited from selling internet service.
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That's what the UK did, calling it "functional separation". Search for "Openreach functional separation" and you'll find various studies and policy papers.
It also worked for banking in the USA.
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Re: How do you get broadband competition?
Your questions are reasonable, but not novel. They've been solved to some degree all over the world, including the USA—phone companies were required to share their lines with third parties until 2005. They argued it was unfair because cable companies didn't have to do it; many other countries tried to level the field by forcing cablecos to share, rather than removing the telco sharing rules.
Typical ideas:
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#4 has the advantage that it can work without any real government regulation. All the city has to do is run some glass/plastic from each house to some building they own, and let ISPs rent space there. The ISPs provide all the equipment (and can upgrade whenever they like), pay for electricity, and figure out how to get the traffic from these neighborhood buildings elsewhere.
It does mean some significant capital costs for the ISPs, meaning (in the short term) it's unlikely to result in the most competition. But it might be an easier sell politically, and housing developers can do it right now: in a new housing development, build an interconnection shed and run fiber there from each house.
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Those spaces would be easily accessible by conduit, overhead lines, or dark fiber, such that any ISP could connect the spaces to a local IXP. From there, backbone connections would be about the same as today, and they seem to be mostly unproblematic.
I'm not saying "don't regulate, ever"; if a harmful monopoly does form, we'll need to fix it. Regulation and antitrust suits would be options.
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The general public has not seen an increase in their net disposable income in decades and yet somehow increasing their utility bills will end up creating a huge boon to the broadband providers.
This makes no sense, but then Wall Street is not known for its intelligence.
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Choices
Food or cable?
Clothing or cable?
Shelter or cable?
Transportation or cable?
Vacation or cable?
Hmm...
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I'm shocked .. and dismayed.
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Basically, several years ago, naked DSL finally came to my market. I signed up, got a $5.00 charge for going naked (yep, really), then over the next several years my service went up $5 each year until I was paying exactly what I was paying prior to dropping the landline.
Anyone who thinks this isn't going to happen in exactly the same way here is delusional.
I switched to Comcast roughly 2-years ago on a 12-month entry program. The rate went up to normal after 12 months plus an increase to the normal rate from when I signed up. I just received a notice that it's going up again. Oh, and I now have usage caps too. I'm sure in a few years my rate will be around $100/mo.
Nothing I can do, it's either ATT DSL or Comcast where I live.
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The problem is that most of these idiots are not able to think at that level. Sure they spend a lot of time bitching about it, but they still have no fundamental clue. Any effort to change these things will be met with more than sufficient resistance to quell such efforts.
The American people have become their own greatest obstacles and all in the name of "government come save me" regulatory efforts and pie in the sky wishing wells.
The same people they appeal to for relief are the very same people fucking them. They don't want a solution, they just want to be told how to live while also bitching about how they are told to live it!
"America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves."
~Abraham Lincoln
All the pro NN fucks up in this place are THAT CAUSE! Which sadly is actually the majority of America right now.
I has to get worse before it can get better, because they are too stupid to see it coming even when it right in their fucking faces!
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I has to get worse before it can get better, because they are too stupid to see it coming even when it right in their fucking faces!"
If you're trying to make people contemplate a felony against your person, then, good form.
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You cannot and will change minds and ways of thinking by insulting people into it. If you have a message for Americans, stop delivering it with so much verbal anthrax and maybe people would listen.
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I'd say by this point it's become crystal clear that they have no interest whatsoever in convincing anyone of anything, and their only interests in posting here is in bragging about how awesomely smart they are and how stupid everyone else is in comparison.
Funnily enough if they were actually interested in changing minds their very methods to do so would display how incredibly foolish they were, as it should be clear to anyone who has engaged in any amount of conversation that insults and arrogance are great way to ensure that it doesn't matter what you say or how right you are, people are going to ignore it regardless.
They're either honestly trying to convince people of their position and utterly lacking in self-control and/or not nearly as smart as they'd like people to think they are, or dishonestly commenting simply to troll and stroke their ego.
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Every time the stock market dips, Trump's representatives suddenly remember that the stock market isn't a good indicator for the overall health of the economy, and make sure to say so loudly and often.
It doesn't seem to have made them any more motivated to deal with broadband pricing issues.
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If this is true...
This has *especially* interesting implications for CableTV channels like TNT, ESPN, Discovery, etc. They need to get online *fast* or get left behind.
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Charge what the market will bear, but realize you could destroy the market you are abusing. Self restraint? What's that?
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SO all this years you've been gleeful about "losses", actually Comcast is winning?
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Have a SESTA vote.
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Really?
Well...duh.
Company A needs competition on a local (maybe even municipal) level in order for prices to go down.
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