Cable Companies Reject Tiered Pricing Model

The Lynxpro submits this Investor's Business Daily article carried on Yahoo!, writing "It details how the Cable Companies are resisting a pricing this competition with DSL providers by resisting tiered pricing models. The article highlights how Time Warner Cable and Comcast are both bringing access speeds back to 3Mbps without any price increases. What the article fails to mention is that is the very speed rate @Home offered before going into bankruptcy. The cable companies formerly partnered with @Home reduced access speeds when they resumed their own services in the wake of the @Home implosion." I wonder if (low-speed) Internet access will ever be just another basic-cable feature.

Comments

Basic Internet w/cable?

[Renraku]

That's a pretty good idea.

Make basic cable come with a username/password and leave support at that. No tech support, no customer service, just a low speed (100k down, 30k up or something) thing for users of whatever cable service. If you want tech/CS/more speed, you'll pay the premium!

Nice non-sequitur

[Distan]

Didja notice at the end of the article:

The Recording Industry Association of America (news - web sites) has asked broadband service providers to crack down on subscribers that illegally share music over the Internet.

Other than the tenuous link to upload speeds, that had nothing to do with the rest of the news story. It may just as well ended with:

Many broadband subscribers use their connection to view pornography. The Pope, who once watched cable television, is opposed to pornography.

Competition

[BWJones]

Hrmmm. I really like the idea of basic cable coming with internet access. This sort of thing was what deregulation was supposed to be about. More products for cheaper given the open competition. Rather what has happened ever since cable deregulation has been a steady increase in the price of cable (from $9.00 to almost $50.00). And while the number of channels has increased, I am still getting the same channels I always watched, but my cable company has bundled in lots of shopping channels I don't want and I don't want to pay for. How difficult is it to simply give me the products I want to pay for? Give me 1) Broadband internet access 2) the History channel 3) the Learning channel 4) Discovery 5) CNN's 6)CSPAN 7)FoodTV 8) Speedvision 9) ESPN and perhaps a few others. The rest is just noise that I don't want to pay for and never watch.

So, at most 15 channels plus broadband should run what $25-30? They can have the other 70 channels.

Re:Competition

[guacamolefoo]

How difficult is it to simply give me the products I want to pay for? Give me 1) Broadband internet access 2) the History channel 3) the Learning channel 4) Discovery 5) CNN's 6)CSPAN 7)FoodTV 8) Speedvision 9) ESPN and perhaps a few others. The rest is just noise that I don't want to pay for and never watch.

So, at most 15 channels plus broadband should run what $25-30? They can have the other 70 channels.

Something that you may not be aware of is that many channels are part of package deals with cable companies. If you want CNN, you have to carry TBS. If you want ESPN, you have to carry ESPN2, ABC's family channel thingy, etc.

Also, the prices charged for individual channels, such as ESPN, are quite high per cable subscriber. You aren't just paying for access to cable -- you are paying for the content as well even if you are just getting basic (since this usually is more than just local channels and shopping channels). Other than the local channels (which must be carried) and the shopping channels (which pay your cable company to be on their system), each channel has a cost to the system that carries it. Not surprisingly, ESPN and CNN are among the most-expensive cable channels because everyone wants them. Throw in the package deals and the cost of the cable plant, and the "basic" cable cost soon gets fairly high.

Your cable bill can be viewed as several separate and discrete components: cost recovery for the cable plant, overhead (ads, customer services, truck rolls, etc.), profit margin, content costs, and premium content costs (which are recovered by higher charges for premium packages). Municipalities also get money from the deals that they cut from the cable companies to provide service in your area (franchise feess/taxes).

If you want internet access or better basic cable options, a good idea is to mobilize people significantly in advance of the time that a franchise agreement for your municipality is about to expire. Let your local elected officials know what you think is important and organize a group of people so it's not just one person nagging. More often than you might suspect, the local board in charge of such things will consider your input.

The local chamber of commerce is a good place to start rallying the troops as well -- many local chambers are in favor of the idea of expanding broadband access, as it helps businesses as well as consumers. They might be willing to agitate with you or at least at the same time as you. If a local board sees people coming out of the woodwork on an issue, they are less likely to rubber stamp whatever is dumped into their laps by the cable company.

Someone with a better knowledge of the cable industry can fill in the details on component costs better than I can, but this is my general understanding of how things work with cable price policies.

GF.

Frustrating...

[Short Circuit]

As someone who doesn't have or want cable for television, I find it constantly frustrating that internet access is being bundled with it, and can't be had without at least "basic cable"

For the record, our TV hooks up to our DVD player and VCR. Just starting on season 6 of STTNG this week. Hope to get DS9 soon.

Bandwidth has NEVER been cheaper

[Bodysurf]

"What the article fails to mention is that is the very speed rate @Home offered before going into bankruptcy. "

That was years ago. Bandwidth has gotten a hell of a lot cheaper, dirt cheap. In fact, pumping photons around the Internet has never been cheaper. Pesos on the dollar to what it used to be.

DSL is kicking cable's butt, and this is what cable had to do to be competitive. No big surprise here.

Negativism

[Reckless Visionary]

Congratulations, you found a way to complain about the fact that Comcast is increasing bandwidth at no extra cost. Anyone here think that's a little negative? What happened to the headline "Comcast Reverses Reduction in Bandwidth"? I'm not some pro-big-business-fuck-the-hackers economist or anything, but isn't that a "good thing"? Competition leading to better service at the same price?

Back in the day....

[macshune]

Right when cable came to my neighborhood about 4 year ago, there wasn't an upstream cap (or a tv cable block, either:). No one else on my node had @home, so it was the de-facto way to send & receive files between my roommates computers (why we just didn't use the local network is beyond me).

Later on when I worked for @Home/AT&T Broadband, I almost got my access shut off because I'd uploaded 3 gigs of mp3s to my girlfriend's iMac. But since I worked there, they let it slide.

I think the fastest connection we ever observed installing those modems was 8mbps.

You'll have better luck...

[justMichael]

If you look for those answers on Broadband Reports

Re:3mbps is still better

[wfberg]

Cable modems can go 10Mb/sec upstream and downstream. The capping is artificial, but does reflect real concerns about bandwidth management on a large shared network - obviously they can't give everyone 10Mb up and down.

Actually, the rate for downstream is more in the general area of 54Mbps per television channel sacrificed for internettraffic. Unfortunately the upstream is more limited; the cable networks were designed to broadcast, and even when they did conceive interactivity, the amount of bandwidth (in terms of Mhz ranges) set aside for the return-channel was rather limited; and there's obviously a limit to how many times you can 'split up' a neighborhood in 'subnets' that have a separate head-end each.

The whole 'cable is shared bandwidth' is somewhat of a thing of the past given that pretty much every one is using (euro)DOCSIS these days, which actually does TDMA - but the availability of upstream bandwidth can still be a bottleneck.

Really fast ;-)

[leighklotz]

Last weekend I got a call from Comcast offering me Cable Internet service for an introductory rate of $21.95/mo. I asked how fast and the telecaller said, "Six hundred and thirty five gigabytes." I said, "Per month? Per hour? Per second?" She said, "Per second, sir."

I asked, "Can I run servers?"
She said, "Yes sir!"
I said, "On port 80 and port 25?"
She said, "On all ports, sir."

I said, "Before I sign up I'd like to speak to your supervisor to confirm this great deal."

Sadly, the deal evaporated when I got to speak the the sympathiser, but she was interested in what I wanted. I told her I had 1Mb/1Mb symmetric access and static 8 IP addresses, and she asked what they could do to get me to move to Comcast Cable Internet service. I suggested perhaps symmetric service 1.5Mb/1.5Mb would be nice, or perhaps 3Mb down and a portable Class C netblock to do multi-homing with my current 1Mb SDSL uplink. She wrote it all down and said she'd pass my request along.

I'm still smarting at the lose of the 635GB/sec downlink for $21.95/mo though!

Impending Broadband Slowdown?

[Mr. Ophidian Jones]

Better would be to focus on the slowdown of American broadband. When it was first rolled out there were no caps whatsoever and it was generally allowed to run at the speed that the equipment could handle. So the average DSL user ran over 3mbit in some cases if they had good lines. Uncapped both directions.

Then came the abusers and greed of the communications companies and today you see the extreme chokehold on the broadband today. SBC's base package for DSL is 384/128k dn/up compared to Verizon's 768k-1.544M/128k and the cable companies provide service comparable to Verizon.

New trends are starting to take hold in some areas with Verizon Wireless rolling out EvDO 3G which can run upwards of 2.3M and Verizon Landline (Seperate companies) is testing 2M+ speeds in certain (Lucky) markets with future plans to turn up the dial on broadband.

While those trends are nice to see you still have many who still have dialup due to cost and some worse off areas still cannot get a better connection than 26600kbps!

Interestingly people have pointed out monopolies. There is basically 1 telepone company in South Korea. Korean Telecom and a handfull of offshots after other companies were allowed to spring up but I'd say 90% of that country is serviced by KT and TMK there is only one cable company there. So it's questionable if more competition really is the answer (Korea may regulate, the us de-regulates)

I'm not sure what goes on in Japan but I would suspect nearly the same situation there also but you'll have to understand both countries until very recently had complete conglomerates (Sp?) of many things from electronics to communications systems. Now there is free market competition but not in the manner of how the US Govt mandated AT&T split up those companies were just forced to allow competition to "try" to work their way into a established system. Which probably will work becuase the exec's of those companies realize given choice people will pick the better company that provides them value.

Re:Prices...

[scovetta]

I noticed that too, sorry, I'm normally hungrier at this hour, and my stapler is broken.