Washington Post Unimpressed by Comcast 'Monopoly' Pricing When I was discussing Comcast's new 505 Mbps tier a few weeks ago, Comcast reminded me that the company has increased speeds twelve times in the last eleven years, a talking point I've seen used by the company several times since then (with charts, included below). Comcast certainly has been more aggressive with DOCSIS 3.0 upgrades than many cable companies (like Time Warner Cable). However, in a piece over at the Washington Post, Timothy Lee points out that limited competition has allowed Comcast to benefit from price discrimination, with no incentive to cut the price of its highest speed tiers or raise the speed of the company's cheapest offerings: quote:
The last five years have seen an extreme divergence between Comcast's low-end and high-end speeds. Today, Comcast's Performance tier gives you a 20 Mbps connection, only 66 percent higher than the 2008 speed. The Blast tier is 50 Mbps, more than three times the 2008 speed. And Comcast has introduced a new top tier that is 505 Mbps. That's more than 30 times the fastest speed offered to residential customers in 2008.
Most users simply can't afford the Comcast tiers that are seeing the biggest speed improvements. That 505 Mbps tier, for example, runs users $300 a month, but that doesn't include a $1,000 ETF, a $250 installation fee, and a $250 activation fee. As noted previously, fixed-line broadband competition is about to get worse with AT&T and Verizon backing away from many DSL markets they don't want to upgrade, leaving cable operators increasingly the only real game in town for many users.
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  newviewEx .. Ex .. ExactlyPremium
join:2001-10-01
Parsonsburg, MD
kudos:1
2 recommendations | More Comcast Lies quote:
Comcast reminded me that the company has increased speeds twelve times in the last eleven years
This is pure bullshit.
It took at least 4 speed upgrades just to get back to the speeds I was actually receiving during the @Home days after they bought them and significantly dropped speeds for everyone. | |
|  |  NightfallMy Goal Is To Deny YoursPremium,MVM
join:2001-08-03
Grand Rapids, MI
 ·Comcast
 ·ooma
·Callcentric
 ·Site5.com
1 recommendation | Re: More Comcast Lies said by newview: quote:
Comcast reminded me that the company has increased speeds twelve times in the last eleven years
This is pure bullshit. It took at least 4 speed upgrades just to get back to the speeds I was actually receiving during the @Home days after they bought them and significantly dropped speeds for everyone. Which is why @Home went out of business in the first place.
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My domain - Nightfall.net | |
| | | newviewEx .. Ex .. ExactlyPremium
join:2001-10-01
Parsonsburg, MD
kudos:1 | Re: More Comcast Lies said by Nightfall:Which is why @Home went out of business in the first place.
@Home went out of business due to AT&T withdrawing their $300 million bid for their broadband business, leaving them high & dry. It had absolutely NOTHING to do with them offering higher than usual speeds | |
| | | | NightfallMy Goal Is To Deny YoursPremium,MVM
join:2001-08-03
Grand Rapids, MI Reviews:
·Comcast
·ooma
·Callcentric
·Site5.com
1 recommendation | Re: More Comcast Lies said by newview:said by Nightfall:Which is why @Home went out of business in the first place.
@Home went out of business due to AT&T withdrawing their $300 million bid for their broadband business, leaving them high & dry. It had absolutely NOTHING to do with them offering higher than usual speeds It also had to do with spending a ton of cash on their infrastructure and bandwidth. AT&T withdrew their bid because that kind of ISP wasn't sustainable. I was a consultant at @Home way back in the day, and they were the only ISP that overpaid for expensive Cisco switches for small notes. I am not saying that an ISP shouldn't have top notch equipment, but when you spend $100k on a core switch to support 50 homes, there is a big problem.
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My domain - Nightfall.net | |
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1 recommendation | Re: More Comcast Lies @Home was just like any other dotbomb of the day. They were spending money 4 times as fast as suckers gave it to them. @Home's model could not support it's self. I had to have new investors dumping in money to survive. Once that stopped they stopped.
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I do not, have not, and will not work for AT&T/Comcast/Verizon/Charter or similar sized company. | |
| | | | | | NightfallMy Goal Is To Deny YoursPremium,MVM
join:2001-08-03
Grand Rapids, MI Reviews:
·Comcast
·ooma
·Callcentric
·Site5.com
1 recommendation | Re: More Comcast Lies said by battleop:@Home was just like any other dotbomb of the day. They were spending money 4 times as fast as suckers gave it to them. @Home's model could not support it's self. I had to have new investors dumping in money to survive. Once that stopped they stopped.
This is correct. As I said before, @Home was spending money rampantly on network improvements that didn't need to be made. As a consultant, you wouldn't believe the amount of wasted money that I saw there before I moved to my next job. It was just insane. They spent money 4 times as fast because they were being heavily invested in. Its amazing what happens when the money stops flowing in. I was not surprised in the least when AT&T pulled out and let @Home die. I wasn't happy when my ISP died, but I expected it was going to happen.
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My domain - Nightfall.net | |
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| | | rody_44Premium
join:2004-02-20
Quakertown, PA Reviews:
·Comcast
| LOL, do you actually remember what @home advertised there service at. Sure you got more than what they advertised but the fact is @home was a best case scenario. When i started working for @home speeds were great. Not so great at the end of @home tho. It was advertised at the end as 1500 down 750 up. At the same tier comcast started at. @home went out of business simply because comcast decided to pull out of @home. not many companies can afford to lose over 40 percent of there customers and remain. @home started with a whole two nodes in the whole headend. Sure when 19 people were signed up they got great speeds. When a few thousand signed up they didnt get shit. | |
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|  dvd536as Mr. Pink as they comePremium
join:2001-04-27
Phoenix, AZ
kudos:4 | and hiked rates 22 times during said time period!
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Despises any post with strings. | |
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| |  batterupI Can Not Tell A Lie.Premium
join:2003-02-06
Netcong, NJ | Re: From duopoly to monopoly said by cb14: Broadband has to be properly regulated as utility.
Brilliant; "one system, it works".
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Reviews:
 ·Verizon FiOS
·voip.ms
1 recommendation | The reporters should go to b-school Sadly, a 'top" paper can't discern pricing strategies between a "monopoly" which Comcast is not and an oligopoly which Comcast is a member of.
The pricing strategies on the low end are typical and maximized where MR ~ MC, however if you think about networking the marginal cost to add another subscriber is dependent upon the backhaul capacity and the threshold of over-subscription.
So take an example 20 a s performance, blast is 50 which is 2.5 theoretical more bandwidth. In fios you have 15/5 to 50/25 with only a $10 delta in cost.
You also have the fact that the performance tier (15-25 dl) will suffice a large portion of the population, so upselling to higher tiers is elastic in the fact that a majority of the people choose the B tier, the lowest tier is usually some 3-5 mbits for $5-$10 less and also competitive-wise they are in mostly DSL areas which can almost on a good day only GET to the performance tier.
So the point is why offer much more than 20 when you would have additional marginal cost and need to expand the network to do so...Well they don't.
As for areas where fibre is, well they need to compete because fibre is superior to cable, unlike DSL and they can easily surpass.
The top tier (300, 500, etc) is having direct equipment costs (MC) impacts so they need to charge accordingly. In the case of Comcast, it's an entirely new deployment (FTTH, Metro-E).
Long story short, Comcast and CV are well ahead of Time Warner who continues to live in 2005 speeds and charges 2013 rates.
However, the fact that they are old and love to give dividends (TWC for instance gives on average $20 per month PER customer) over to dividends just means they are fat dumb and happy. If some new capitalized competitor comes in (Goog) they have to adjust, otherwise why rock the boat.
There is no technical analysis against average internet speeds, because frankly due to fios and google, speed is now outstripping demand which is good and the cost of internet is more reasonable than TV which is the real problem here.
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| | ssavoyPremium
join:2007-08-16
Dallas, PA Reviews:
·Anveo
| Re: The reporters should go to b-school They only compete with DSL and *maybe* FiOS. If anything, they're part of a duopoly. And in most places if you want a usable internet connection, they're the only option. I have to give them credit, my connection almost never goes out and speeds are consistent. On the other hand, my bill has gone up $5 since we got internet-only in 2010.
Frontier has been losing customers in droves and offers 24/2 over copper for $49.99 standalone to counteract Comcast defections. Comcast is $64.95 for the same thing. | |
| | | Reviews:
·Verizon FiOS
·voip.ms
| Re: The reporters should go to b-school It's not that simple. There is various competition on the entire 3 play and the players are different.
For instance my parents are in UNY where the only broadband option is TWC, or WISP (which isn't bad BTW). Verizon just stopped offering DSL, and so why they even continue w/ POTS is only because of some legacy franchise requirements.
However for TV, TWC sucks and they went w/ Dish. For phone VOIP galore, Anveo. In fact, I signed them up for Earthlink (which is TWC) for $15 a month less.
The issue is that the "dry" internet cost is high, they drive you to bundle, especially w/ cable. You will see that change though, because internet is vastly more profitable than CTV. In fact even voice is more profitable. Cable is no longer the anchor product, it's the bottom biatch. | |
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| | Give no competition most areas, Comcast doing well Given that Comcast has no real viable competition from telcos in many areas, their rolling out high speeds is commendable. In my area, Verizon tops out at 3mbps down and is the only real competitor. But Blast at 50/20 Mbps and a 105/xx offering is widely available at $50 and $100 price points. Good for them. | |
| | | I'm even more unimpressed by their TV pricing $25 for over the AIR channels and without HD unless you want to pay $5 per tv for HD. Damn, I'm admiring those TV prices. | |
| batterupI Can Not Tell A Lie.Premium
join:2003-02-06
Netcong, NJ | It is called "puffing". No one wants to sell these plans, they just want to flash a big number. Big number (fastest internet) and unlimited must be a major selling points to the nescient. | |
| | Reviews:
·Verizon FiOS
·voip.ms
| Re: It is called "puffing". It's worth noting that those tiers were originally targeted for business services. So if they could monetize the metro/E equipment in house with a few dozen 505 residential customers AND have bragging rights, it's a win win. Same can be said for Verizon.
In fact now that they have shored up their backend, these guys are going aggressively toward business services, and that is where the obscene profits are.
Just the other day, Verizon said they had 2 MILLION ONT's sitting idle. That is a pile of ca$h they are loosing from a capital perspective. Business services they can charge more, and the turnover is much less, making it a superior investment.
In fact, DSL and POTS may sink Verizon proper, because those are loosing money like they are going out of style. Verizon probably can't sell off their legacy after they already bankrupt two companies, so their only option would be to jettison the whole thing and with one fell swoop they can be free of the nightmare and the unions. They would keep their backend, so then they could just walk back in and start wiring up business and dump the residential and make $$$. In addition they need backhaul for wireless, and outsourcing that is sketchy at best considering they already have the infrastructure.
They will always need business, because that is where the $$$ is. | |
| | | batterupI Can Not Tell A Lie.Premium
join:2003-02-06
Netcong, NJ | Re: It is called "puffing". said by elefante72:It's worth noting that those tiers were originally targeted for business services.
For mom & pop businesses not enterprise; enterprise has had FTTP long before FiOS was a gleam in Seidenberg's eye. Cablevision (Lightpath), like Verizon, has an enterprise division that operates quite differently than the residential division. Cost is secondary to reliability and security both of which coax lacks. | |
| | | | | Obscene profits are right being that it cost pennies to serve someone 505Mbps over someone with 5Mbps on the same node once the equipment is in place. | |
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 GlennAllenSunny with highs in the 80sPremium
join:2002-11-17
Richmond, VA | Prices keep going up, and speeds keep going up--even though there's nothing that 99.999% of customers ever need those higher speeds for. | |
| | | | Re: Prices keep going up, Except for netflix, youtube, and to downloading anything. | |
| | | GlennAllenSunny with highs in the 80sPremium
join:2002-11-17
Richmond, VA Reviews:
·Verizon FiOS
| Re: Prices keep going up, The average video stream from anywhere takes less than 10mbps (by a lot); HD could still be closer to 5mbps than 10. As far as downloading goes--assuming the site doesn't restrict your download speed (which if it does isn't at all rare), I really don't care if my "extremely large" download takes 30 seconds instead of 5; if it's under a minute, then I barely notice. | |
| | | | Bengie25
join:2010-04-22
Wisconsin Rapids, WI Reviews:
·Solarus
1 edit | Re: Prices keep going up, I was trying to watch a YouTube 4k video last night and my 50mb connection was trying to keep up with a 47mb 4k stream, while my wife was watching Netflix.
My connection was maxed and I had periodic buffering. It was more like stuttering I guess because it was so close to keeping up, it only took about 1-2 seconds to start playing again.
I stopped watching the stream after a few minutes of maxing my connection so I could get back to gaming. I can tell when my connection is maxed because my pings to YouTube spikes to 18ms+.
So YouTube can handle a 50mb stream at 9pm, I wonder if I had a 100mb connection, how high YouTube would send to me.
Anyone got a 75mb+ connection that they can see how fast YouTube sends them a 4k video? | |
| | | | | GlennAllenSunny with highs in the 80sPremium
join:2002-11-17
Richmond, VA
1 recommendation | Re: Prices keep going up, Right, 'cause everyone's doing that. Welcome to the 1% club. | |
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| | |  McShakenPremium
join:2006-02-20
Olympia, WA | Speaking for yourself is great. However, claiming that "99.999%" of all customers fall within your standards of never needing those higher speeds isn't accurate. There are many households that may have multiple streams going on at the same time, along with a gamer or two playing the latest online game. Faster speeds mean more breathing room for families taking advantage of online media. I'm also guessing that you're not much of a gamer. Some of these games are huge, taking hours to download (even with a decent connection). Some of the patches are rather large as well, so when you sit down to play your favorite game, the last thing you want to do is wait 20 minutes for the latest patch to download.
TLDR - Your post is fine as long as you're only speaking for yourself.  | |
| | | | | GlennAllenSunny with highs in the 80sPremium
join:2002-11-17
Richmond, VA
1 recommendation | Re: Prices keep going up, Thanks, but I'm speaking for the huge majority of customers. Feel free to not agree. | |
| | | | | | Bengie25
join:2010-04-22
Wisconsin Rapids, WI Reviews:
·Solarus
1 recommendation | Re: Prices keep going up, People don't need cars, horse-back is just fine, you just need to be more patient.
Sorry to say, but I can't currently think of any technology every created that was about being more patient. Usually technology is about being faster or more efficient.
Your attitude would bring about a dark-age. We need to push technology to it's limits, not be conservative and treat it like some scares resource. | |
| | | | | | | GlennAllenSunny with highs in the 80sPremium
join:2002-11-17
Richmond, VA | Re: Prices keep going up, You mistake my "attitude" entirely--not that I care. | |
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| | | | | kitsune
join:2001-11-26
Sacramento, CA | glenallen: "Thanks, but I'm speaking for the huge majority of customers. Feel free to not agree."
Unless you can provide something to back up your claim please refrain from making sweeping statements like that. It's just empty rhetoric and worthless. | |
| | | | | | | GlennAllenSunny with highs in the 80sPremium
join:2002-11-17
Richmond, VA Reviews:
·Verizon FiOS
| Re: Prices keep going up, Facts are still facts--so, no, I'm not going to refrain from stating them when it's appropriate to do so just because someone else finds them to be confusing. You either understand how much network capacity a particular type of network traffic uses, or you don't. | |
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| | | | | And the average video stream looks compressed and full of artifacts.
So instead of coming here spouting off your nonsense about "nobody needs that speed", why dont you be forward thinking about what can and will happen when people are given more speed then they may need today.
Give people the speed so businesses and consumers can find a way to use it. | |
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•••
| elray
join:2000-12-16
Santa Monica, CA Reviews:
 ·EarthLink
1 recommendation | Washington Post: Unimpressive Lee should observe that Comcast has competed with telco broadband for long over a decade, and has won the battle for the consumer's heart - it isn't their fault that telco fails to keep up.
Lee might also want to investigate why there is no third player in most markets, if the profits are so magnificent. It isn't a legal barrier, but simple economics. In most settings, there simply aren't enough subscribers willing to pay the higher rates necessary to support additional wired sellers. | |
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••• |  sbrookPremium,Mod
join:2001-12-14
Ottawa
kudos:11
 ·WIND Mobile
·TekSavvy Cable
| The Standard Service has definitely gone up in price. The standard service 6 years ago was about 3 Mbps and the higher tier was 5.
The standard tier today is about 25 Mbps and the higher tier about 35.
The point is that it costs no more to deliver 25 Mbps today than it did to deliver 3 Mbps 6 years ago, and yet, even accounting for inflation, we're still paying significantly more.
In some areas the basic high speed service wasa about 256K or maybe 512k ... today that's closer to 6 Mbps ... the cost has nearly doubled from $20 per month!
Add to that the monetization of nearly everything with increases on mandatory options like the modem rental, and the data above your plans limits.
It's all about profit. Star Trek's Ferengi would love this business! | |
| | brad
join:2007-09-06
Etobicoke, ON | Re: The Standard Service has definitely gone up in price. Also most providers have caps that did not exist back then either; which there is no justification for either. It's just an additional revenue source. | |
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