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Time Warner Offers 1, 2-Year Contracts
Up to 10% discount if customers promise to stick around...

One of the biggest changes in the broadband sector over the last few years is the emergence of long-term contracts, a frequent tool of wireless phone operators. Long-term contracts are designed to reduce "churn" (migration to other ISPs or VoIP providers) and usually lock customers in at a fixed price for one or two years.

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This week our users point out that Time Warner Cable is now offering discounts up to 10% off triple play bundles if customers sign one or two-year contracts. It looks like this is restricted to NYC area customers for now. Time Warner is actually late to the contract game.

In order to keep customers from defecting to Verizon FiOS, Comcast has been sending this letter to some customers offering them VoIP, 6Mbps broadband and standard digital cable for $99 for the term of the contract.

Our users noticed that these offerings began sometime around last December. The service features a $150 early termination fee if customers either cancel or downgrade their service during the two-year commitment. The deal is only offered in competitive markets.

Qwest last summer began offering new DSL customers a fixed price for life if they sign two-year contracts. Our users have noted that the deal doesn't always make sense, since bandwidth prices consistently drop, and you can frequently negotiate a new rate at the end of your one-year Qwest contract.

Verizon, too, for years has been offering lower prices to customers who sign one-year contracts. The company recently began a campaign that raises rates for Verizon customers on month-to-month plans in an effort to lock them into contracts.
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en102
Canadian, eh?
join:2001-01-26
Valencia, CA

en102

Member

competition... lock in your customers

Where there's competition, offer incentives to lock in your customers... it helps keep churn low, and investors like low churn/guaranteed customers.
Think wireless industry.
chemaupr
join:2005-06-06
Alexandria, VA

chemaupr

Member

feeling the pressure?

For me, this is a big change in their business practices. I guess they are finally "admitting" the FIOS threat.

Karl Bode
News Guy
join:2000-03-02

Karl Bode

News Guy

Re: feeling the pressure?

I think the scramble for the low hanging fruit has ended and they're just now interested in retaining the customers they already have....

djrobx
Premium Member
join:2000-05-31
Reno, NV

djrobx

Premium Member

Re: feeling the pressure?

quote:
I think the scramble for the low hanging fruit has ended
Don't know about that. I see contracts as a way for them to continue scrambling for that low hanging fruit without bleeding too badly when that fruit turns out to be rotten (unloyal, costly).

RadioDoc

join:2000-05-11
La Grange, IL

RadioDoc to Karl Bode

to Karl Bode
Funny thing that. AT&T (for example) no longer requires contracts to get the best pricing, while cable seems to be starting to require term agreements. Curiouser and curiouser.

Karl Bode
News Guy
join:2000-03-02

Karl Bode

News Guy

Re: feeling the pressure?

Yeah I found that interesting too recently. Verizon, Qwest, & Earthlink all require contracts for DSL discounts though, so it looks like it's industry wide as they focus more on retaining instead of nabbing grandmas...

djrobx
Premium Member
join:2000-05-31
Reno, NV

djrobx to chemaupr

Premium Member

to chemaupr
quote:
For me, this is a big change in their business practices.
I saw a Time Warner commercial on TV just thismorning, touting "NO long term contracts!" with a nice graphic of a contract going through a shredder.

Right now businesses seem to have the mentality that new customers are worth more than the loyal ones who are sticking with them. I don't think this is right. Rather than try and lock customers into contracts, how about rewarding existing customers for their loyalty?

As it stands customers who really want to keep their bills low have to do a "new customer promo" bunny hop from provider to provider. Providers then have to look to contracts to slow this sort of churn down. I don't find it too surprising that cable is looking into this because they're about the only ones NOT doing this.

All that said, I definitely like the option of committing to a contract in exchange for lower bills. Particularly if the contract gives a truly good value (as opposed to extortionate non-contract prices), and the ETF isn't too horrific.

en102
Canadian, eh?
join:2001-01-26
Valencia, CA

en102

Member

Re: feeling the pressure?

Yup... funny thing is that at&t supposedly doesn't have any required contracts with Uverse either.

The way I see it...

Contacts:
Free (or cheap) installation, and low(er) prices. ETF fees if you cancel. Sometimes this can result in lower quality service, as you're 'stuck' for a term of eat the ETF

No-Contracts:
Installation fees (typically), low service to start up, prices will typically increase after a couple of months (3-6 months).
raptor1418
Premium Member
join:2002-12-03
Denver, CO

raptor1418 to djrobx

Premium Member

to djrobx
Why would they do anything for us loyal customers. They already have us and don't worry about us until we want to cancel service.

I have experienced this personally with both my ISP and Sat provider. Both times (have done this twice with ISP and twice with Sat provider) I called and wanted to cancel and they dropped my rate or gave me a few months free to stay on.

So in the end I actually got what a new customer got and the best part of it all is I told my sat provider up front that I wanted to pay the ETF over the phone right than and there to cancel my service. That got the ball rolling with out me even having to say I would stay if they gave me a better deal. Too bad I am still going to probably cancel in a few months anyway.

en102
Canadian, eh?
join:2001-01-26
Valencia, CA

en102

Member

Re: feeling the pressure?

Right... you typically have to either threaten to leave, or have competition come by (Uverse?) before they'll react.

DirecTv offered my $10/month disount for 6 months if I kept a 1 year contract (no rate increases). Works for me...
I already have the service, and this brings the cost of my 3 sets on DTV to $50/month.

WiFiguru
To infinity... and beyond
Premium Member
join:2005-06-21
Seattle, WA

WiFiguru

Premium Member

Price on the move

The thing is, when you sign up, you get that price, but, when they want to up the price, your stuck in a contract, and you have to pay the ever increasing price.

Robert
Premium Member
join:2001-08-25
Miami, FL

1 edit

Robert

Premium Member

Re: Price on the move

said by WiFiguru:

The thing is, when you sign up, you get that price, but, when they want to up the price, your stuck in a contract, and you have to pay the ever increasing price.
Yep. But when they lower the price, chances are, you don't see a decrease in your monthly bill.

dvd536
as Mr. Pink as they come
Premium Member
join:2001-04-27
Phoenix, AZ

dvd536

Premium Member

Re: Price on the move

said by Robert:
said by WiFiguru:

The thing is, when you sign up, you get that price, but, when they want to up the price, your stuck in a contract, and you have to pay the ever increasing price.
Yep. But when they lower the price, changes are, you don't see a decrease in your monthly bill.
When was the last time anyones cable bill EVER went down without dropping services?

sivran
Vive Vivaldi
Premium Member
join:2003-09-15
Irving, TX

sivran

Premium Member

Re: Price on the move

Hmm. When I reported my packet loss issues, not only did TWC/RR credit me for the poor service, they noticed that I was still on a Comcast billing plan and bumped me into a proper RR plan. This had the effect of dropping my bill roughly eight dollars, and bumping my provisioned line speed *up* by ~20% (which I am now getting, now that the issues have been resolved). I actually figured they'd bump me into the Premium tier, which would've been roughly the same price, but they put me on the cheaper Standard plan.

All this done by the same rep who scheduled the tech visit *and* at midnight local time. Much better than Verizon, where if you want service credit or anything billing related, you have to call during the week during normal business hours, and tech support reps can't do jack as far as that's concerned.
Warez_Zealot
join:2006-04-19
Vancouver

Warez_Zealot to WiFiguru

Member

to WiFiguru
uhh, I'm pretty sure if there is any sort of price increase, you have the right to cancel your service if you wish..

I'm sure cable must follow the same rules as the wireless scum.

insomniac
Oh Yeah
Premium Member
join:2002-09-22
Naperville, IL

insomniac

Premium Member

Re: Price on the move

Yeah. Increasing the price without giving you the option to terminate would be called "breach of contract."

WiFiguru
To infinity... and beyond
Premium Member
join:2005-06-21
Seattle, WA

WiFiguru

Premium Member

Re: Price on the move

Not if you sign something in the contract saying that Road Runner can raise the price at any time.

nightdesigns
Gone missing, back soon
Premium Member
join:2002-05-31
AZ

nightdesigns

Premium Member

Price Changes

Does this contract also prevent TW from raising your rates during that contract too?

swintec
Premium Member
join:2003-12-19
Alfred, ME

swintec

Premium Member

Re: Price Changes

It does not look it, but is a good question. As the cable companies tend to have a yearly price increase. Maybe someone from new york could ask or look over the agreemant they sign.
caco
Premium Member
join:2005-03-10
Whittier, AK

caco

Premium Member

Re: Price Changes

The wording on TW page looks like you are locked into the discounted price for 1 or 2 years. Not a bad deal if you are happy with your service.

Titus
Mr Gradenko
join:2004-06-26

Titus

Member

The answer to competition

is to lock you in with a bundle? Whatever happened to the good old days of price wars? Think these guys get together and hash out (collude) ways to maintain price points?

A relative in an area with FIOS who has comcast got the hard sell through the retention dept months ago when comcast moved some popular channels to digital. They now have a box with a million channels, Internet and something that resembles phone service on a one year contract, mostly due to the 'seller' convincing them that the FIOS people would tear up their yard w/the install.
caco
Premium Member
join:2005-03-10
Whittier, AK

caco

Premium Member

Re: The answer to competition

Companies have learned from the airline industry that no one wins in a price war. RBOC and Cable will do everything possible to avoid price wars and will instead compete on perceived value of services. Ask yourself when was the last time you saw an advertised price war for any product?

Titus
Mr Gradenko
join:2004-06-26

Titus

Member

Re: The answer to competition

said by caco:

Ask yourself when was the last time you saw an advertised price war for any product?
Yeah, I know; that was the rhetorical question in my post
--
My iLife isn't in MyDocuments
Ahrenl
join:2004-10-26
North Andover, MA

Ahrenl to caco

Member

to caco
CPU's, on-going right now.

Airlines didn't go bankrupt from price wars, they went bankrupt because they operate in an extremely high fixed cost, high volatility cyclical business.

jgkolt
Premium Member
join:2004-02-21
Avon, OH

jgkolt

Premium Member

single service

How about they not charge extra if you order just internet. that would be nice. a 1 year contract to get the cheaper price would be nice also. And they do need to up their upload speeds, highest you can get is 768 with 15 down. If cox offered it they would give more upload speed. And for att 3 mbps down int he same place is 45 a month. Outstanding.
Prespd
join:2004-03-10
Wyoming, MI

Prespd

Member

Dear TWC

Dear TWC,

I am a loyal customer and happy with my service. I don't even cringe at my ~$150/month bill for cable/phone/internet (lots of extra channels and HD service). I don't want your 10% discount on price. I want a higher upload rate, say 1MBps. I'll sign a contract for a higher upload rate, but not to reduce my price for a fixed term at 1-2 years only to see the rates rise later. What say you?

djrobx
Premium Member
join:2000-05-31
Reno, NV

djrobx

Premium Member

Re: Dear TWC

quote:
Dear TWC,

I am a loyal customer and happy with my service. I don't even cringe at my ~$150/month bill for cable/phone/internet (lots of extra channels and HD service). I don't want your 10% discount on price. I want a higher upload rate, say 1MBps. I'll sign a contract for a higher upload rate, but not to reduce my price for a fixed term at 1-2 years only to see the rates rise later. What say you?
Ummm, if you got a 10% decrease in price of $15/month, you could use that to buy Road Runner Extreme, which should give you 1mbps uploads (judging from the SoCal upgrade thread they're upgrading SD). You'd even get an extra $5 out of the deal.

If they haven't upgraded your area yet that's a separate issue.
Prespd
join:2004-03-10
Wyoming, MI

Prespd

Member

Re: Dear TWC

Not upgraded here yet. No competition still. AT&T is moving in, but isn't available and between TWC and COX there isn't an ability to take advantage of either. My point was simply, saving dough on the price is of less importance to me and many others when upload speed increases should take priority.

I'll keep my eyes open for the extreme availability in SD

djrobx
Premium Member
join:2000-05-31
Reno, NV

djrobx

Premium Member

Re: Dear TWC

quote:
My point was simply, saving dough on the price is of less importance to me and many others when upload speed increases should take priority.
I concur that upload is very important. I wouldn't have considered switching to Road Runner from my 6/768 DSL were it not for the 10/1 internet (the 1mbps upload specifically).

Here is a link to a post from a fellow in San Diego with 10/1.

»Re: SoCal members... Speed increase yet ?

Note that TWC's sales department tends to be a bit behind the ball when it comes to these upgrades. I've had 10/1 for months but they still advertise it as 8m/512k. Bottom line, they're working on that.

-- Rob

TWc friend
@rr.com

TWc friend to Prespd

Anon

to Prespd
Don't worry,that is coming soon.We should be getting our standard @ 10down /1 up in a couple of months.Then our premium will be 15down / 2 up. That's coming real soon,guaranteed!! We have been doing what's called pricelocks in the Desert Cities for about 1 1/2.It locks the price in for 1-2 years,and after that the price does not go up to regular price.
thecalip
join:2002-08-22
New York, NY

thecalip

Member

1

Unless it's a must I won't sign any contract into this. Especially with TWC. When you have a connection problem, it will take them 5 days to come check your line. The first time they will send a junior tech to you whom has no clue what he is doing. You send him back asked for another one, and it will take another 5 days minimum to schedule a senior yet. As of this since, my internet is on and off for almost 3 weeks, and still not fix.

morbo
Complete Your Transaction
join:2002-01-22
00000

morbo

Member

contracts abound


I'm not a fan of contracts, but I am a fan of good deals.

I find it hilarious that I have seen 4 different prices for Charter triple play Charter in the past several months. There is the price on tv commercials (129.99), the price in the letter sent directly to me from Charter (89.99), the price on the blanket marketing campaign for the neighborhood (119.99), the price from the moving marketing campaign (99.99).

Healbot
Premium Member
join:2003-07-16
Vancouver, WA

Healbot

Premium Member

telcos

Telcos already pioneered this.

Anonymous88
Premium Member
join:2004-06-01
IA

Anonymous88

Premium Member

Good deal if...

1. You are a long time customer and you like the service
2. The price is locked too

Otherwise not worth it.
pilozm
join:2004-11-25
Forest Hills, NY

pilozm

Member

1 year at a time.

I am definitely going to look at the 1 year offering.
But ONLY, because I know that FIOS is at least 1 year out for me, so I am not giving up anything...yet.
I will bail out from TWC as soon as I can get FIOS.
I too, pay about $150/month for TV and Internet and I'll take any discount I can get.

I agree with a prior post. TWC should do something for long time, loyal customers. Something like:
customer for > 5 years: 5% off your bill
customer for > 10 years: 10% off your bill
customer for > 15 years: 15% off your bill
This might reduce churn.

MeInDallas
join:2001-08-17
Dallas, TX

2 edits

MeInDallas

Member

Not Enough To Make Me Switch

It just is not enough of a discount to make me switch over from the pricing they are showing there. If I'm going to sign a 1 or 2 year contract I wanna see a really deep discount on my bill so that when I see someone elses offer, I will be glad I signed up with Time Warner, not regret it.

I use AT&T by the way even though my profile dont say it, I updated it long time ago but still dont show the change yet.
----------
ltjordan
join:2001-12-02
Hyattsville, MD

ltjordan

Member

Re: Fee for downgrading service.

This is my favorite part:
"The service features a $150 early termination fee if customers either cancel or downgrade their service during the two-year commitment."

I can understand the fee for cancelling the contract but you get fined for downgrading service? WTF? Let's hope that no one that signs this contract gets laid off or has to reduce expenses for any reason. Two years is a long time. That's just crazy.
tmc8080
join:2004-04-24
Brooklyn, NY

tmc8080

Member

peanuts

Time Warner needs to GET REAL.. that's peanuts and hard to swallow given their reputation as one of the companies who still OVERLOADS cablemodem nodes, and packet-shapes traffic.
What about:
UPGRADING THE BANDWIDTH (6 megabits? Are you on DSL CRACK?!), UPGRADE NODES TOO, UNLEASH THE FIBER YOUR COMMERCIALS TOUT DUMMIES!!!!
STARTING OUT AT A LOWER PRICE (10% won't cut it even if it were month to month) TO GET CUSTOMER LOYALTY
GIVE MORE OPTIONS, CHARGE LE$$

This is one area where Verizon deserves EVERY CUSTOMER THEY GET until TW gets the message.

zethrus
@lhric.org

zethrus

Anon

Re: peanuts

I agree. Can anyone tell me why in my area Frontier (a small phone company in Orange County, NY) has an exclusive on phone/dsl service/sat tv service - and Verizon can't provide service of any type at all? Of course I have to go with TW but if I had the chance, I would go with Verizon's fios because then I would have cell, blazing internet speed, and lots of digital channels. Of course TW looks so good when it is one choice and the other choice is just a podunk phone company's "comprehensive package" - dsl and sat tv and flat rate POTS. The POTS thing is a bit attractive because of continued service in a power outage but as everyone in this thread has observed...the King of the Hill is Verizon. I have hard line trenched to my house but I'd rather have fiber optic. When I called TW and asked them where it was, they said fiber optic was not yet available in my area. So, TW has an exclusive because the phone company puts together a so-so package and there is no 3rd option service provider. BTW, the phone company used to rape us all with high charges and once they lost half their subscribers to voip, they put together a crap package. I wish somebody would fiber optic their network to our door...

cbyrd
Where's The Any Key?
join:2001-07-11
Murfreesboro, NC

cbyrd

Member

I have no loyalty

My bill has gone up 10% since TWC "officially" took over the Adelphia franchise here, and I only get a buck for owning my modem now instead of the previous 3 bucks credit.

So..I cancelled digital cable and HBO. As soon as the tree guys get finished I'm cancelling the rest. Dish and DSL here I come.

$120 / month for digital cable, HBO and cable modem (and I own the modem!).

Rob A
Adjusting
Premium Member
join:2005-01-17
Pompton Plains, NJ

Rob A

Premium Member

Although I usually hate cable companies...

This is a very good move. Discounts with contracts is a very smart strategy.

lrtc6
join:2004-06-05
Toronto

lrtc6

Member

Re: Although I usually hate cable companies...

I'm going to sign up
cowboys2000
join:2007-05-24
Cypress, TX

cowboys2000

Member

Lock into a contract with the cable co? NO WAY

While I like the idea of the discount, I haven't had cable since 1997. I had HSI from MediaOne/Comcast and often had outages that were blamed on the modem, late rto find out the whole grid on my block was out.

Anyway, I am looking to get Comcast in another city now (Houston) for HSI and possible the Digital phone service. I will consider 2 services to get a discount, But I'm not signing a 1,2,or 3 year contract. if I like the service, I will stay and pay the fees. But, if service blows, I'm not getting stuck with a contract because a company can't fulfill my service needs.