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Press Realizes Carriers Jack Up Price of Stand Alone Broadband
So You're Less Likely to Ditch TV, Phone Services
by Karl Bode 04:34PM Tuesday Nov 13 2012 Tipped by Dominokat See Profile
The Wall Street Journal has realized that ISPs jack up the cost of standalone Internet so users are less likely to ditch bundled television or phone services. This is something most of you have known for years of course, with many carriers charging more for just broadband than they often do for promotional bundles. Customers who bundle multiple services also find it more of a pain to switch carriers, so many just don't. Bundles and promotional deals have the added benefit of making it impossible to compare service prices directly.

Click for full size
For example, Verizon makes getting a standalone FiOS connection prohibitively expensive. After a suite of constant rate hikes in recent years, Verizon's cheapest FiOS offering is 15 Mbps for $70 a month, while offering broadband, voice and TV in a promotional bundle for $85 a month. On the DSL front, Verizon recently made getting a new standalone DSL line utterly impossible, with users once again required to also get an aging copper voice line.

The Journal employs the help of telecom industry quote machine Sanford Bernstein analyst Craig Moffett, who succinctly breaks down the industry's logic:
quote:
Cable operators "recognize that their most advantaged product is broadband," said Craig Moffett, analyst at Sanford C. Bernstein. "They don't want to sacrifice that advantage by giving the opportunity for customers to cherry pick their best product at a low price and take the rest of your services from somebody else. In effect, they are pricing the broadband at a price that discourages you from taking broadband only."
In other words, they don't want to compete with other providers who could be offering individual services at a lower price. The entire telecom pricing and promotion landscape of course is designed to minimize competition and diminish the impact of Internet video wherever and however possible. In addition to jacking up the price of standalone broadband to unreasonable levels, more and more ISPs are imposing low caps and steep overages on connections and Internet video, giving consumers yet another reason to stick with traditional television. You can imagine that cord cutting numbers would look drastically different were these competitive firewalls not in place.

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gatorkram
Need for Speed
Premium
join:2002-07-22
Winterville, NC
kudos:3
Reviews:
·Suddenlink

Not about us..

Sadly, none of the pricing is about us, it's all about what makes them the most money for the least effort.

I understand they have to make a profit, but I think it's fair to say most of the providers we talk about make a healthy profit, and overpay the top execs to boot.
--
What the heck is a GatorKram? »www.gatorkram.com

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

Re: Not about us..

said by gatorkram:

Sadly, none of the pricing is about us, it's all about what makes them the most money for the least effort.

Unfortunately, the USSC has refused to review rulings by lower Federal courts that said bundling of services by cable companies isn't an anti-trust violation. So don't expect any changes anytime soon.
--
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury.

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:4
Reviews:
·Comcast

What business does..

Do you local supermarkets each advertize some on sale item each week, hoping the majority of shoppers coming in for the discount steak will fill alot of their cart with normal priced higher profit items?

Virtually every business will give a discount when you buy multiple items, expecting them to make the single "best " item the loss leader is silly.

Corehhi

join:2002-01-28
Bluffton, SC
Reviews:
·Hargray Cable

1 recommendation

Re: What business does..

said by tshirt:

Do you local supermarkets each advertize some on sale item each week, hoping the majority of shoppers coming in for the discount steak will fill alot of their cart with normal priced higher profit items?

Virtually every business will give a discount when you buy multiple items, expecting them to make the single "best " item the loss leader is silly.

My cable/phone/ISP works like this. First off I have no other choice but Sat for internet and cable. Their bundle deal last I saw was 1.5 meg down internet, digital channels but they are in 4 by 3 and basic phone service for $99. For 5 meg and HDTV package it costs about $70 more a month. There is no price advantage with bundling in fact they make the bundle crap so you will up grade. Don't have a bundle like myself and they simply charge more for stand alone services. BTW they don't offer 1.5 meg internet service as a stand alone 5 meg is the lowest tier. Tell me they aren't trying to get people to upgrade to more expensive packages. Sat internet is not an option but that would be the only other we have. Anyone else have digital channels but everyone is in 4 by 3???? You know how crappy that looks when everything is cut off???

nononnaa

@184.94.231.x

Move on Nothing to see here

Slow news day. Hell fill up with gas and get a free Ice scrapper. Buy the whole month of Lunch tickets for your kid and get a deal. WTF Nothing new here

dnoyeB
Ferrous Phallus

join:2000-10-09
Southfield, MI
Reviews:
·Comcast

Comcast

Comcast does this but I always thought it was because they could not stop basic cable once the modem was active. Once they go digital I suppose they will be able to stop it.

I was always after a dry DSL line with ATT but their service to my house sucked. At my new place I expected to be able to get DSL but it seems they can't provide DSL but they can provide UVerse!? Oh well. Ill stick with Comcast...

--
dnoyeB

"Then said I, Wisdom [is] better than strength: nevertheless the poor
man's wisdom [is] despised, and his words are not heard. " Ecclesiastes
9:16

NormanS
I gave her time to steal my mind away
Premium,MVM
join:2001-02-14
San Jose, CA
kudos:11
Reviews:
·SONIC.NET
·Pacific Bell - SBC

Re: Comcast

said by dnoyeB:

At my new place I expected to be able to get DSL but it seems they can't provide DSL but they can provide UVerse!?

Eh? U-verse is DSL!
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum

antdude
A Ninja Ant
Premium,VIP
join:2001-03-25
United State
kudos:4
Reviews:
·Time Warner Cable

Re: Comcast

said by NormanS:

said by dnoyeB:

At my new place I expected to be able to get DSL but it seems they can't provide DSL but they can provide UVerse!?

Eh? U-verse is DSL!

I thought they have fiber?
34764170

join:2007-09-06
Etobicoke, ON

Re: Comcast

For that 1% or less of their customer base. The other 99% are on DSL.

antdude
A Ninja Ant
Premium,VIP
join:2001-03-25
United State
kudos:4
Reviews:
·Time Warner Cable

Re: Comcast

said by 34764170:

For that 1% or less of their customer base. The other 99% are on DSL.

Wow, I thought they were trying to get rid of DSL/copper lines.
34764170

join:2007-09-06
Etobicoke, ON

Re: Comcast

said by antdude:

said by 34764170:

For that 1% or less of their customer base. The other 99% are on DSL.

Wow, I thought they were trying to get rid of DSL/copper lines.

When they say DSL they're referring to users on 1.5 / 3 Mbps connections, but U-Verse is still DSL. They're also rolling out new IP-DSLAMs in many areas. So contrary to what they might say DSL isn't going away anytime soon.

antdude
A Ninja Ant
Premium,VIP
join:2001-03-25
United State
kudos:4
Reviews:
·Time Warner Cable

Re: Comcast

said by 34764170:

said by antdude:

said by 34764170:

For that 1% or less of their customer base. The other 99% are on DSL.

Wow, I thought they were trying to get rid of DSL/copper lines.

When they say DSL they're referring to users on 1.5 / 3 Mbps connections, but U-Verse is still DSL. They're also rolling out new IP-DSLAMs in many areas. So contrary to what they might say DSL isn't going away anytime soon.

I wished Verizon did that or better spread FIOS.

NormanS
I gave her time to steal my mind away
Premium,MVM
join:2001-02-14
San Jose, CA
kudos:11
Reviews:
·SONIC.NET
·Pacific Bell - SBC

1 recommendation

said by antdude:

said by 34764170:

For that 1% or less of their customer base. The other 99% are on DSL.

Wow, I thought they were trying to get rid of DSL/copper lines.

They have FTTN for the most part; fiber to a neighborhood "node", similar to the MSOs; except their "nodes" are powered cabinets which contain remote DSLAMs. FTTP only in "greenfield communities", and very few of those.

They have an "Internet-only U-verse" service they call, "IPDSLAM". It is mostly ADSL2+ from the CO, though there is some VDSL from VRADs (the powered neighborhood cabinets). They are trying to move their ADSL (non-U-verse) customers over to IPDSLAM service. And they would like to sell off the copper plant where they would rather not try to service with any form of DSL. If the loop length is greater than 15,000 feet, or so, servicing with DSL faster than 1.5 Mbs becomes seriously problematic; so they would prefer to sell than to expend capital on additional remote DSLAMs.

I don't know the actual percent of the plant which is all fiber, but I doubt that it is as high as 2.5%. The rest is a hybrid plant; fiber to the neighborhood (node), copper to the premises.

I hate that! I meant, "FTTN", but managed to type, "FTTH"!
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum
cramer
Premium
join:2007-04-10
Raleigh, NC
kudos:8
They can, and they do. They install a trap to block anything below a certain frequency -- somewhere around ch.68 here. They petitioned the FCC to drop the "no encryption" rule for broadcast channels so they don't have to install those anymore -- translation, they only ever need roll a truck *once* to plug up cable; they can enable and disable service at the push of button from then on.
bemis

join:2008-07-18
Reading, MA
Reviews:
·Comcast
In my area Comcast is actually the best choice...

Comcast will give you their "16/2" service for $29.99/mo for 6 months, then $42.95/mo for 6 months and then $62.95/mo ... but as we know they will typically discount back to at least $42.95/mo on a regular basis.

FIOS has no new subscriber discounts, cheapest I can get it for is $69.99/mo.

I cannot get DSL because when I did have FIOS they clipped my copper and will not re-install it.

Wireless is prohibitively expensive when you consider caps. If were faced with only a $69.99/mo FIOS or $62.95/mo for Comcast choice I probably would switch over to wireless, just because it would probably work out to a lower overall cost to share my byte bucket between a smartphone and personal hot-spot (or maybe i'd just tether)

NormanS
I gave her time to steal my mind away
Premium,MVM
join:2001-02-14
San Jose, CA
kudos:11
Reviews:
·SONIC.NET
·Pacific Bell - SBC

Re: Comcast

said by bemis:

In my area Comcast is actually the best choice...

Obviously variable. Comcast won't give me a /32 static for any price, and charges a business premium for a /29 static.

I've got 15/.75 (could be 12/1 with Annex M in force), a DNS zone, a /32 static, all for $26.48.

But Comcast $62.95 is their unbundled price, yes?
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum

dnoyeB
Ferrous Phallus

join:2000-10-09
Southfield, MI
Reviews:
·Comcast
When I search for DSL on the ATT website it comes back saying 'DSL is not available in your area but go to this other page and see if you can get UVerse.'

My last house could not get UVerse but could get DSL. I don't get AT&T.
--
dnoyeB
"Then said I, Wisdom [is] better than strength: nevertheless the poor man's wisdom [is] despised, and his words are not heard. " Ecclesiastes 9:16

NormanS
I gave her time to steal my mind away
Premium,MVM
join:2001-02-14
San Jose, CA
kudos:11
Reviews:
·SONIC.NET
·Pacific Bell - SBC

Re: Comcast

said by dnoyeB:

When I search for DSL on the ATT website it comes back saying 'DSL is not available in your area but go to this other page and see if you can get UVerse.'

My last house could not get UVerse but could get DSL. I don't get AT&T.

It's ... complicated. But AT&T wants to decommission their older, ADSL equipment; I believe this is because it is harder to find vendors still making, or even supporting it. They are replacing it with newer, ADSL2+ equipment. Along with this they are replacing the older ATM network , and phasing out PPPoE authentication.

In addition, they can't deliver IPTV over copper loops in excess of about 3500 feet. So they are rolling out "IPDSLAM"; using PTM on the backhaul (instead of ATM), and 802.1x authentication (instead of PPPoE) for loops up to 12,000 feet (or so) ... and calling it, "U-verse HSI". This newer IPDSLAM service will use ADSL2+ (usually for CO connected residences), or VDSL.

So "U-verse" will not always include television service (IPTV). They also use it for marketing their newer, Internet-only IPDSLAM service. As they decommission ADSL equipment, they will no longer offer the older ADSL service.
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum

dnoyeB
Ferrous Phallus

join:2000-10-09
Southfield, MI
Reviews:
·Comcast

Re: Comcast

The problem is they want to charge me for that. I don't have any desire to pay more just because the choose to give the product a different name.

Comcast is giving me internet for about $25/month (+$15 w/o TV). AT&T is competitive with their DSL offering, but they are not with their UVerse offering. Basically they shrunk their portfolio and squeezed me out.
--
dnoyeB
"Then said I, Wisdom [is] better than strength: nevertheless the poor man's wisdom [is] despised, and his words are not heard. " Ecclesiastes 9:16

NormanS
I gave her time to steal my mind away
Premium,MVM
join:2001-02-14
San Jose, CA
kudos:11
Reviews:
·SONIC.NET
·Pacific Bell - SBC

1 edit

Re: Comcast

said by dnoyeB:

The problem is they want to charge me for that. I don't have any desire to pay more just because the choose to give the product a different name.

A different name? It is a different product!

Comcast is giving me internet for about $25/month (+$15 w/o TV). AT&T is competitive with their DSL offering, but they are not with their UVerse offering. Basically they shrunk their portfolio and squeezed me out.

Interesting. Looking at their availability page for a former residence ... 1 year promotion for $19.95 a month. Probably not a "dry loop", though, if that is what you are looking for. Same price given for "at&t Yahoo! HSI Pro" (the old ADSL package) and for "U-verse HSI Pro" (the newer IPDSLAM package.

P.S. Just received a postal offer. I went to the web site and entered the "invitation code". Here is the cheapest deal offered to me:

Postal offer ...


They can't offer a match for my current service; capability, or price.

--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum
Killersaurus

join:2012-09-17

1 recommendation

Internet Only Here

I'm one of those people paying for internet-only service from Time Warner. Sure, I could get cable and phone for "a little bit" more, but I don't want to pay more. I want to pay as little as possible.

ArrayList
netbus developer
Premium
join:2005-03-19
Evanston, IL

2 recommendations

Re: Internet Only Here

I just don't want those other services. They would go unused.

LadyL
Premium
join:2002-09-18
Lorain, OH
Reviews:
·Time Warner Cable

Re: Internet Only Here

Same here...I use my tv with a dvd player to watch 130 tv series and 3000+ movies in my collection . I rarely use my cellphone and very few landline calls are made. I won't give up my landline either. Bundling with TW is still more expensive than the 3 services I pay for separately with 3 different providers.
BTW, I haven't watched tv - regular or cable since 2006.
--
Lonnie
tkdslr

join:2004-04-24
Pompano Beach, FL
Reviews:
·T-Mobile US
·Speakeasy
Ditto here...

I've use minimal DVR'd SAT package plus OTA for my limited TV viewing.

My crappy AT&T POTS service, is gone for good.. Same goes their xDSL service..
I'm considering taking down the obsolete overhead wires connecting the pole to my house.
That service was replaced by cell phones and Blue tooth XLINK Bttn gateway.

Internet, tethered through cell phone. (Because of crippled xDSL, I never got into the habit of watching too much Youtube.)

Cut my monthly expenses by over 50%.

I'm NOT going back.
cramer
Premium
join:2007-04-10
Raleigh, NC
kudos:8
And that 'a little bit more' is on a promotional price. It goes WAY up after that. Have you looked how much those fools charge for voice? My AT&T landline has never even approached that much.

(If you make hundreds of hours of LD calls per month, it might make sense. But that's what VoIP plans, Skype, and *cell phones* are for. )
Madtown
Premium
join:2008-04-26
Madera, CA
Reviews:
·Comcast

Re: Internet Only Here

I have internet only from Comcast. I have Performance and that is all I need. I don't watch that much TV and when I do, it's Netflix instant streaming. I have tons of video sources I can use to past my time. YouTube, Justin, Twitch, Netflix, and whatever else is out there.
QLR

join:2009-06-23
Tallahassee, FL

I see that now...

Got a mailer from CenturyLink with that $29.99 Internet offer when you bundle. If I don't bundle Internet with a $40 + tax phone, andchoose Internet only, the cost is $76.10. No way that 1.5M DSL is worth $76 when I have a cable choice.

88615298
Premium
join:2004-07-28
West Tenness

And this is different than McDonald's how?

price a Big Mac, fries and a drink individually then price a value meal. A Big Mac by itself isn't much cheaper than just getting the value meal.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

Re: And this is different than McDonald's how?

said by 88615298:

price a Big Mac, fries and a drink individually then price a value meal. A Big Mac by itself isn't much cheaper than just getting the value meal.

first of all, no company makes public their actual costs.. as it is a trade secret.. whether it be McDonalds, Apple or Verizon.

at least with fast food places have "a-la carte value" menus (usually no more than $1.49).. there is very little of value when 15/5 megabits is being sold for $70 a month. that's like charging $2.99 for the big mac and $2.75 for the ordinary hamburger with 1/3rd the meat, fixins and everything else that makes it a value. Actual price range it SHOULD be.. $.79 - $1.29/// 15/5? no more than $39.99 these days.. and that's overly generous.

btw, if you want to live a long life.. eat as litte of the fast food stuff as you can.. you'd be better off licking the poles of a subway car at the end of the day compared with what the unskilled minimum wage labor does with your food before you get it.
CXM_Splicer
Looking at the bigger picture
Premium
join:2011-08-11
NYC
kudos:2

1 edit
"It's no big deal because McDonald's does it too" is not really a great justification for business behavior.

There is a difference between giving a discount for multiple items and deliberately pricing single items so high that people buy the package instead.

[edit]
Just to clarify, I wasn't saying that one gives a discount for multiple items and the other prices single items too high... I think they both price single items too high. What I am saying is that they are not giving anyone a 'discount'.

88615298
Premium
join:2004-07-28
West Tenness

Re: And this is different than McDonald's how?

said by CXM_Splicer:

"It's no big deal because McDonald's does it too" is not really a great justification for business behavior.

It's not justifying it. It's merely pointing out there isn't this huge outrage and "let's sue and let's get the government involved" mantra toward McDonald's. All I ask for is CONSISTANCY and no HYPOCRISY.
CXM_Splicer
Looking at the bigger picture
Premium
join:2011-08-11
NYC
kudos:2

Re: And this is different than McDonald's how?

I think the outrage is because people consider broadband service a necessary utility that should be regulated. McDonald's certainly is not necessary... and there are many more real options for food then there are for broadband. The options for broadband are not real options since 'they all do it'.

I agree with you on the consistency point though and would advocate stronger consumer protection laws in general.
Rrascal

join:2012-12-03
said by 88615298:

It's merely pointing out there isn't this huge outrage and "let's sue and let's get the government involved" mantra toward McDonald's. All I ask for is CONSISTANCY and no HYPOCRISY.

You are confused. No one is showing any hypocrisy. Your metaphor doesn't fit in a multitude of ways.
a) you imply that buying a coke in a McDonalds is at or near the same price as a burger, coke, fries meal combination. At my mcdonalds it is 1/4 the price of the combo.
b) broadband regulation is something routinely discussed in political discourse. While not strictly a utility in all aspects, it is effectively a monopoly or duopoly in many areas. It is absolutely valid to discuss or advocate getting the government involved.

It is your position that is hypocritical and inconsistent: These providers lobby the federal state and local in the billions to obtain government involvement laws and rulings in their favor (often creating anti competitive atmospheres) , yet your contention seems to be it is ok for the providers to lobby but not the customers???
GTFan

join:2004-12-03
said by 88615298:

price a Big Mac, fries and a drink individually then price a value meal. A Big Mac by itself isn't much cheaper than just getting the value meal.

Um, maybe because in my area if I want true HSI I get a choice of Comcast, and uh, Comcast?

That's what is different than McDonald's, there is little to no competition. But it's all good as long as you can be an FCC commish and then leave to be head of the NCTA, or a corporate shill for Comcast.

IowaCowboy
Iowa native
Premium
join:2010-10-16
Springfield, MA
Reviews:
·Verizon Broadban..
·Comcast

Bundling works for me

I prefer to receive cable television (since I watch a lot of TV) and I also have high speed Internet (a must have) and home phone (no dropped calls, superior call quality, and I have a burglar alarm that dials the central station). I remember the days when each item was billed separately and was much more costly than today's bundles from the cablecos.

Yes, I do have an iPhone but I prefer to use that on the go. I don't buy this Internet video theory. I prefer to watch live TV (such as Fox News, Weather Channel, and the local newscasts). Internet is self explanatory, my Internet addiction is as bad as my addiction to Diet Mountain Dew/soft drinks. I even pay $40 on top of my expensive bundle to get Extreme 105 on Comcast.

••••
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

another angle..

it also prevents them from subscribing in the first place... the sweet deals of 2010 being gone, there is verly little reason go back..

it's difficult to find the right expression on youtube... but here goes:

»www.youtube.com/watch?v=R-Q9DMCCI-8
serge87

join:2009-11-29

I am shocked...SHOCKED!

Well slap my ass and call me sally...who saw that coming!

NormanS
I gave her time to steal my mind away
Premium,MVM
join:2001-02-14
San Jose, CA
kudos:11

Re: I am shocked...SHOCKED!

Shirley you jest, Sally!
BiggA

join:2005-11-23
EARTH

Comcast does it

And they are anti-competitive about it, although they're not overly obnoxious about it, it's a $15/mo difference, or you can get the discounted rate with basic cable, which is usually about $15/mo.

ITALIAN926

join:2003-08-16
kudos:2

Re: Comcast does it

These are only promotional rates we're talking about here. Once the promotion are up, its a much larger difference.
BiggA

join:2005-11-23
EARTH

Re: Comcast does it

The difference on a permanent basis is $15/mo. The difference might actually be bigger during the promo period, as they usually only give the promos to customers who also get cable or phone service.

anon523

@comcast.net

Not mentioned

I'm surprised no one has mentioned the fact that when you bundle you are also reusing the same cabling to access the other portion. I would wager a decent chunk of the bill from a provider like Comcast goes into supporting the infrastructure, service calls, and truck rolls. If you have one service or three services the drops, splitter, poll agreements, etc are all the same. If a storm goes by and knocks out your tv it probably also knocked out your internet and phone as well.
Skippy25

join:2000-09-13
Hazelwood, MO

Re: Not mentioned

With your same logic of using the same line then shouldn't all of their stand alone services be outrageously priced if you get just one?

Internet $70
Phone $70
Basic Tv $70

However, the reality of it is that you dont pay those prices for the other stand alone services as you would get them from someone else when possible. However, being that internet is very monopolistic, duopolistic if you are lucky, they run it the way the do.

cork1958
Cork
Premium
join:2000-02-26

Just realized this, huh?

This is coming from one of the largest newspapers around?

Shows you how much the media knows about anything!
--
The Firefox alternative.
»www.mozilla.org/projects/seamonkey/