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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.
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.
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!
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.
Lots of petrified grits