AOL/TW Plans for $230 Monthly Cable Bill

Jonathan Campbell writes: "According to the article, subscribers will get over the sticker shock preferring convenience over price." Yay, it'll be so convenient having one company control my television, internet access and phone service. I can hardly wait.

Comments

Current Phone Bell

[rogerl]

Well, I guess it is possible. My current Cincinnati Bell phone bell runs about 200 per month, but that includes two phone lines (one with all of the calling services), two cell phones, ISP, ADSL, and long distance. Time Warner AOHell is going to to have to offer more than just cable and ISP / Cable Modem to get me to pay that much.

$230

[stinkydog]

$230-$80(Cable Basic&2 premium)-$50(DSL)-$30(local phone)=$70

What additional services will they provide for $70?

A pay-per-view p0rn0 and a hooker?

AOL is smoking crack. Provide reliable desirable services first, then decide what you are able to charge for each one.

Re:$230

[Sandlund]

Not to mention that:

a) the phone company will cut the price of DSL to retain customers and

b) the phone company will cut the price of local phone service even more aggressively to retain its cash cow customers.

Competition is a wonderful thing. The local phone companies have a lot of room to make pricing changes as they've mostly amoritized the cost of most of their infrastructure. Wonder how Wall Street will react to AOL/TW's moves after the first Verizon price cut in Manhattan? Or the first complaints about AOL/TW's local phone service?

Re:$230

[funkman]

The final $70 can easily be made up by extras to phone service like voice mail, caller id, etc. Add in long distance and you can make up the final $70 dollars easy.

Where the real money will come from is by attempting to replace Blockbuster or your local video rental store. If they can charge $5 dollars per movie and the average family views 5 moview per month - there is an easy $25 dollars. Not much money - but over thousands of households - not hard to ignore.

Re:$230

[JLouder]

What additional services will they provide for $70?

Maybe they'll stop blocking inbound port 80 on my RoadRunner connection.

Seriously, if I'm going to pay that kind of money, I'd expect unrestricted Internet access.

Re:$230

[Sgs-Cruz]

Jeez, that's the monopoly fee, didn't you know? They landed on DSL Service, Local Phone Service, and Cable Service, and have now appeared to have built hotels on all...

Re:$230

[Jimmy_B]

It's very interesting how you came to that $2K/month number. In fact, looking over the components of that, I object to *every* number you put into that.

I'd expect 24/7 pay-per-view access $10 and up per pay-per-view item... probably $200-$300 worth of use.

He didn't say "24/7 FREE pay-per-view access", and neither did he say he would be using it 40-60 hours/month, as your number implies.

24/7 porno
A few nights a week at $8 per movie - another $100 or more.

Where'd that $8/movie number come from? And how is this hypothetical buyer possibly going to have free time for this *and* 50 hours per month of pay-per-view?

any On-Demand movie I want for free
Another $100 or more...

For $100/month, you could go to a theater every time you felt like watching a movie, and watch it on much better equipment. Off by a factor of 3 or 4.

and every single channel they can cram in the cable band.
Licensing and fees to the subscription channel providers = perhaps $200 or more depending on your market.

Off by a factor of five or more. Current cable providers fill the cable as it is already; you don't see them getting away with $200/month, do you?

I also expect an unrestricted U/L and D/L line on my Internet connection
UUNET/Sprint T1 = $800/month...

Everyone knows that T1 prices are a joke. Also, the price you're quoting includes business-class service (which you added MORE cost on for later), non-trivial installation, and 100% bandwidth use (which no home user reaches), and is rediculous anyways. Compare against business-class uncapped DSL to be more reasonable.

the ability to put up a server See above (included)

"Ability to put up a server" and "ability to put up a 5-million-hit-a-day web server" are completely different things. Many DSL providers give you this privelege, so long as you don't abuse it, and you certainly don't need a T1 for it.

tech support for any computer problem I have
Reasonable rate of $65/hour, assuming you're calling only during office hours. Reasonable estimate of 5 hours/month = around $250...

The only reason for 5 hours/month is if either (a) 4 of them are on hold, (b) the support is extremely incompetent, or (c) the service gives you too many problems in need of supporting. Either way, that's completely unacceptable for $65/hour, so your "reasonable estimate" of 5 hours/month is completely unreasonable.

and a 99.9% guaranteed uptime on the line
SLA for UUNET/Sprint. See above. Definitely business grade T1 service.

Three-nines uptime is "business grade T1 service"? Add one more nine to that, maybe two for a higher price. 43 minutes downtime per month would be consumer-level standard if the DSL providers weren't so blatantly incompetent.

And I want caller ID, call waiting, every single other feature on my phone, the ability to block business (telemarketer) calls, and the best voicemail system known to man. At least another $100.

Actually, this is more like $0/month, plus a one-time bill for a fancy phone with an LCD. None of these actually cost the provider any substantial amount, and they're certainly not worth $100/month.

TOTAL BILL: $2,000+ / month

You added another $250 in rounding - and, of course, all the numbers you used to get there were bogus anyways.

And you want this for $200? What the hell are you paying with, Flooz? You'll probably have similar results...

$200 is low, but it's in the right ballpark. Your figure is rediculous; why it's at +5 is beyond me.

Betting?

[Nidhogg]

1. The cable company is betting consumers will see the value of one-stop shopping. But first Time Warner Cable will have get customers past the sticker shock of seeing $230 on their bill.

Isn't that the same bet that fired off the dot com craze?

And we all know how well that worked out.

Damn Right!

[UsonianAutomatic]

All this time, I've been using three first-class stamps to mail my ISP, cable, and phone bills. $230 will be a small price to pay for the "convenience" of only having to use one!

Seriously, I would say I currently pay about $130/month total for cable modem/cable television (Adelphia, formerly @Home/Adelphia) and phone service... I can't think of *anything* that would justify my paying another $70-100 a month for the services I currently receive.

well at least they have there priorities straight

[Anonymous Coward]

"Squeezing more profits from Time Warner Cable is a top priority for AOL Time Warner, which is under pressure to please Wall Street."

I KNOW customer service, and QOS are towards the bottom of there list. I guess to eyes of this monolithic bastard they think they are the only company providing the things people want on there t.v. and computers. Well what can you expect from the guy who decided that colorized black and white movies were better somehow...

The only benefit I get from these people is a $10 a month discount in my r.r. bill because I am a student at USF (but in exchange they leach of off USF's network and not there own).

NTL

[Fembot]

Here in the UK we allready have that. NTL offers cable modems, cable tv, cheap phone lines all down the same wire all with one bill. $200+ sounds excessive though. They even have pay per view films.

One company to rule them all

[NachtVorst]

"Yay, it'll be so convenient having one company control my television, internet access and phone service. I can hardly wait."
Don't forget that they also provide a lot of the contents on both TV and the Net.

One of the first things I was taught during my classes in mass-communication was to keep content-makers, content-owners, network-owners, network programmers and network-gatekeepers as separate as possible...

I think you can figure out yourself what happens if all those functions are in the hands of one MegaCorp.

Wrong tactics

[peripatetic_bum]

I think AOL/TW may have made a tactical mistake.

It seems that if you nickel&dime people, they will pay because the pain of each payment is little. But when you see a big nu mber like $230 dollars, that pain is much much greater than the individual smallers pains. And the individial smaller pains if you add them all up, wont feel like a $230 pain, if you get my meaning.

As many have already pointed out, this is great for competition,
and it may be a shock to the cable tv industry if large numbers of people balk at the large price increases.

Also, as many have noted before, we are at logger heads here, As computer tech gets cheaper and chearper, we get used to it, but the cable tv industry doesnt think like that, they beleive in always increases the price and this just might be the thing to shock them into dropping their prices.

anyway thanks

Re:Hmm...

[AntiNorm]

So you get all your information from the same AOL/TW source, delivered by the same company... can you say "Vertical Integration" children? I knew you could...

The problem with this isn't just that the company can charge whatever it wants...the problem is that it can report what it wants to report and ignore what it wants to ignore. IOW, don't be surprised if the news coming out of the member companies -- CNN for instance -- starts to become blatantly biased.

Incidentally, when the hell is the FTC going to wake up and start giving a damn about anti-trust and consumer protection once again? First, you have AOLTW. Next, you have oil companies merging left and right to eventually form the next Standard Oil. (Were the companies that are merging -- Phillips/Conoco and Texaco/Chevron -- formed as a result of the Standard Oil breakup? If so, then there is NO WAY they should be allowed to merge. That would be just like allowing the broken-up pieces of Microsoft to merge back together should that breakup happen, which I unfortunately doubt it will.)

What I'd pay $230 for

[TomatoMan]

If they're going to charge me $230/mo, this is the level of service I'd expect:

1.5mb down / 640k up, or thereabouts, with no usage caps
4-8 static IPs
a kick-ass news server
all ports open, no service-sniffing
the right to run servers and do whatever the hell I want with my bandwidth
priority tech support numbers to people who actually know what they're talking about
pricing refunds for downtime

ok, and throw in the basic cable and local phone. That's about what I'd expect for $230.

Even with all that, I don't think I'd ever trust a "provider" like AOL enough to put all my eggs in their basket.

AOL is going to lose out on this one

[Sycraft-fu]

Not because people will be against having a sinlge company provide all their services (in fact I'm sure many want it), but because the price is outrageous. Let's take pricing on some local (Tucson) services:

Analogue phone line: $16/month
Basic Digital Cable: $45/month
Consumer grade DSL or CM: $50/month

All tolled that gives us about $111 per month, and yes I factored taxes in that. That makes the AOL package over twice as expensive. Now just for the sake of argument, let's assume they give you more than just basic service. In all reality we know that won't happen, but hey, we'll assume they give you something comparable to what I have:

Analogue phone line: $16/month
Extended Digital Cable: $60/month
Professional grade SDSL: $120/month

That's still only $196. To match the AOL price, I'd have to buy 3 premium networks per month (and with digital cable, that gives me about 10 channels per network). Plus, I really doubt they'll offer anything more than basic digital service and just normal CM service, making the first comparison more likely.

Personally, I think the idea of all-in-one providers is a good idea, provided there are several to choose from. However the reason it would be cool is that in theory it should save you money. Companies should be willing to charge you less overall in return for the fact that you buy more services form them. Cox already does this. You get a discount if you get both a cable modem and digital cable. It's been effective too, it encourages digital cable subscribers to get a CM instead of DSL, and encourages people with CMs and cable to upgrade to digital cable.

AOL is full of it if they think people are going to pay that much more for one provider service, espically since for most people it is probably going to be double the cost. If they want people to go for this they are going to need to make ti at the very least comparable and probably cheaper than getting all the services seperatly.

Re:AOL is going to lose out on this one

[Sycraft-fu]

Ya, but somehow I get the feeling they aren't going to do this. If the deal was that great, it probably would have been mentioned in the article. You'll get a phone line, perhaps some nice features like call wating and so on, digital cable service of some kind, and cable modem type internet access. I really don't think they'll offer more than that, this is AOL we are talking about here.

You actually pay THAT much?

[Wire Tap]

Cable Internet (AT&T) - $50
Local telephone (with all the services but voicemail - Verizon) - $60
Long distance (AT&T) - $50
Cable television (AT&T - local channels only) $14)
Alarm monitoring (ADT) $26

I pay $30 a month for my cable modem.
Local telephone service? I certianly don't pay $60 every month for it. Try $30, if that.
Long distance - are we talking about your calls, or the provider? I don't know of a provider on the planet that charges $50 just for their service - that's because they would be out of business so fast they would never be IN business.
Cable TV... wait... you said local? If You want local channels only (which defeats the primary purpose of cable television), I'd suggest you use an antenna. And that comes down to a cost of $0 per month.
As for the alarm monitoring, I have no idea, so I'l stick with your pricing on that. $26 per month.

If we add all that up, I only come up with a fine little sum of $86. Now, that's more like it. If you actually _NEED_ all that crap on your phone bill (460 way calling, or whatever it is now) then you can't possibly expect that everyone affected by this pricing scheme feels the same way. It's absurd to even assume a faction of that. Regardless, if people don't like the fees, they should learn to live with less - OR, get an organized complaint together and tell this monopolistic corporation to take a look at their business practices. I would NEVER commit to paying $230 per month for all that trash. I don't need half of it, and I sure would not want it from them.