I checked the OptimumTV prices and they run about $47/mo for their full analog lineup (most other cable companies I've had, including the Comcast I currently have, run around $35 by comparison...) Cablevision (who runs OptimumOnline and OptimumTV) has 3.4 million cable customers. If you take the extra $12/mo they're charging those customers and multiply it by 3.4 mil, that's $40.8 mil in revenue. By contrast, they only have 500,000 OO customers. So, if they were to lower their cable rates to industry averages, they would have to raise their OO rates by $81.60 per customer per month simply to recover that loss. My guess to how they're offering so much for so little (besides gouging their TV customers) is that they purchased HUGE amounts of bandwidth from the get-go. As such, the expenses related to provisioning and turning up new circuits are nil until they run out, and thus don't reflect on the individual consumer. Until they reach a certain % capacity, they will offer the fat pipes. When they reach the point of starting to run out, I have a sinking feeling they will lower their bandwidth per capita before they add more bandwidth. With WOW, adding a higher speed tier would necessitate provisioning substantial amounts of additional bandwidth (which they seem to be running short of as is), which translates into substantial circuit turn-up costs...those costs have to be recovered, and thus the price of the service inflates.
I agree the price would increase, but not to $500 Im sure WoW could offer 5000/1000 plan for Under $150 a month. I already have dsl that gives me that same speed about (5000+/668) for $125 a month. The key is that there is a big enough market to off set the cost of the huge bandwidth. Besides remember that in denver CO wide open west offers 10mbit/10mbit for $65 . So there no reason why they cant offer that fast of service of the cable lines for a reasonable price.
