With 12% Of Comcast Customers Now Broadband Capped, Comcast Declares It's Simply Spreading 'Fairness'

from the not-really-helping dept

Comcast continues to expand its usage cap "trial" into the company's less competitive markets, hitting these lucky customers with a 300 GB monthly usage cap. These users also now face a $10 per 50 GB overage fee should they cross this arbitrary limit, and in a new wrinkle -- have the luxury option of paying a $30 premium should they prefer to dodge these usage allotments altogether. To the non-lobotomized among us, Comcast's intention is obvious: drive up the cost of broadband to help counter the inevitable loss of TV revenues caused by Internet video.

With Comcast's usage cap "trial" slowly creeping past around 12% of the company's customer base, Comcast's slow stranglehold over the uncompetitive U.S. broadband market appears to have finally gotten the attention of outlets like the Associated Press. Having been forced to give up the bogus claim that usage caps are necessary due to congestion years ago, Comcast can only try and defend the practice to the AP by insisting it's an issue of "fairness":

"About 8 percent of all Comcast customers go over 300 GB, the company says. Data caps really amount to a mechanism "that would introduce some more fairness into this," says Comcast spokesman Charlie Douglas."

Except there's nothing fair about it. A tiny fraction of Comcast customers are absolute gluttons (we're talking dozens of terabytes), and Comcast could easily nudge those users toward business-class lines without imposing an entirely new pricing structure. Instead, Comcast customers who used to enjoy pricey but unlimited data are suddenly facing usage restrictions and significant additional fees. And indeed, judging from some of the customers the AP spoke to, most users can see through Comcast's bullshit justification:

"Matthew Pulsipher, 23, lives in the Atlanta metropolitan area and decided to pay Comcast's extra fee for unlimited data to support his family's streaming of shows from Netflix and Amazon Prime Video. But he's not happy about it. "I think the idea of limiting your usage is absolutely insane," Pulsipher said. "It would make sense if the cap was 2 terabytes, but 300 is just low enough to punish streaming."

All Comcast's doing here is taking advantage of a lack of broadband competition to price gouge a captive audience. And while only 8% may cross the cap now, Comcast clearly hopes to have usage caps in place before Internet video (and 4KTV, and virtual reality cloud-driven gaming) hit critical mass. It just hopes if it moves really really slowly -- and pretends it's an agent of altruism -- most people will be too stupid to notice what's happening.

Filed Under: broadband caps, data caps, fairness, price discrimination
Companies: comcast

Australian Government Committee Suggests Circumventing Geo-blocking To Combat High Software Prices

from the a-premium-on-ones-and-zeroes dept

Living in Australia means paying more for many things, most specifically software and digital goods. It's common enough that it's known colloquially as the "Australian Tax," an informal system where one country's citizens are asked to pay more -- around 50% more for software from companies like Microsoft and Adobe. This pricing disparity extends to purely digital products, like iTunes downloads and ebooks as well.

In order to prevent Australians from bypassing the high prices by purchasing from another country, software companies have implemented geo-blocking. The normal justifications are in place for utilizing these restrictions in order to maintain the higher prices.

Among the reasons given by company managers to the inquiry to explain price differences were: relative market size, exchange rates, wages, freight charges, local sales taxes, levies, import duties and the need to maintain separate websites and servers for Australian customers.

They also said they were charged higher costs by the entertainment industry for content destined for the Australian market.

While these may all factor into the pricing, Australians have had their doubts for years as to whether these justify such extreme price hikes. And if all of this supports price bumps that double the price of software, you'd think Microsoft, Apple and Adobe would have made more of an effort to attend the parliamentary inquiry into their prices. But this wasn't the case.

Just getting three of the tech industry's heavyweights to the parliamentary inquiry was a feat in itself. Adobe, Apple and Microsoft were all invited to attend the inquiry's earlier public hearings voluntarily. In the end it took a summons to compel the companies to appear. Each had a different reason to explain the pricing disparities.

Adobe said it offered a specialised "bespoke" experience for Australian customers.

Apple blamed local copyright holders for higher prices on its local iTunes store.

Microsoft said its prices were set and customers could vote with their wallets.

Except customers couldn't exactly do that because of geo-blocking.

So, even the companies who feel the price hikes are justified can't agree on their justifications. With nothing further to go on, there's a strong feeling that these companies are happy with the larger profit margin and uninterested in seeing that diminished. Normally, this would have left Australians at an impasse, but this time a government committee took a decidedly pro-consumer stance with its recommendations (following closely with consumer advocate recommendations on IP spoofing from late last year).

"Particularly when it comes to digitally delivered content, the committee concluded that many IT products are more expensive in Australia because of regional pricing strategies implemented by major vendors and copyright holders," said the report by committee chair and Labor MP for Wakefield, Nick Champion.

"While the committee acknowledges that in some cases, geo-blocking is a necessary business practice, it also notes that many IT vendors appear to use geo-blocking as a means to raise prices by restricting consumers' ability to access the global marketplace," the report said.

"The committee considers this form of geo-blocking to be a significant constraint on consumer choice.

The report advised that the Australian government amend the Copyright Act's anti-circumvention provisions to "clarify and secure consumers' rights to circumvent technological protection measures that control geographic market segmentation".

The report also suggests that the government should begin looking at options to educate its citizens on circumventing geoblocking and inform them on how "their rights under Australian Consumer Law may be affected by such actions." Another proposal suggested voiding contracts or terms of service that include geoblocking.

Actually implementing these suggestions would require a rewrite of some areas of Australian copyright laws, which would be no small feat. This may also encourage the affected companies to take more drastic actions to preserve their pricing structures, including the possibility of refusing to provide support to the Australian market. Whether these recommendations will ever go into effect is still doubtful, but at minimum, it forces the issue. Microsoft suggested Australians could vote with their wallets and now it appears the government is moving towards granting permission to its citizens to do exactly that. We'll have to see how these "justified" prices fluctuate in response to Australians "exiting" the market by routing around geo-blocking.

[H/T to velox, who was the first of many to send this news in.]

Filed Under: australia, copyright, digital goods, geo blocking, price discrimination, region locking, software prices

DailyDirt: Pricing Ain't Easy

from the urls-we-dig-up dept

Sometimes the prices of products are mysterious -- or just don't make much sense. Why is gasoline sold per gallon to nine-tenths of a cent? How can rare artwork really be worth millions of dollars? Sometimes, pricing puzzles can stump economists, but more often than not, there's a well-known economic explanation that's just not very intuitive. The invisible hand works in strange ways, and here are a few examples.

• JC Penny may be learning a tough economic lesson from its fair and square pricing strategy -- "shrouding" prices is a deeply-ingrained retail practice and consumers have adapted to it. Getting out of the brutal commodity clothing market is a hard, uphill battle... especially if you can't/don't offer customers truly unique products or services. [url]
• Orbitz is admitting to sending Mac users to more expensive hotels (maybe not against their will). It's part of a pricing experiment based on data mining consumer behavior online -- Apple computer users tend to pay more for hotels, so why not show them the pricier hotels they're already looking for? [url]
• An everyday example of price discrimination can be seen in a vending machine. When the cheap snacks sell out, people may pay more for late night victuals. [url]
• The list price of college has been rising incredibly over the last decade, but not everyone pays full price. There's a growing gap between what the average student actually pays for college and what universities say tuition is. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post.

Filed Under: college, economics, price discrimination, pricing, shrouding, tuition
Companies: apple, jcpenny, orbitz