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Time Warner Deal Is How Comcast Will Fight Cord Cutters
An anonymous reader writes "This NY Times articles makes the case that Comcast's planned acquisition of Time Warner Cable is part of a strategy to fight back against the millions of people ditching cable subscriptions. 'The acquisition rests on the assumption that as people cut back on their monthly TV plans, the cable lines coming into their homes won't lose their value.' The idea is that switching away from cable TV will simply make consumers more beholden to their internet connections, and removing (i.e. acquiring) the competition will let Comcast raise rates without losing customers. The article concludes, 'The steady price increases in broadband rates cast a pall over any cord cutter's dreams. It's possible that you might still save money now by cutting off your cable. But if you plan to watch a lot of TV over the Internet, don't expect to save money forever.'"
What up to now has been unlimited data for one price over cable will become a set of plans with different rates for different data caps. For those who have been screaming about a la carte channels on cable, you'll effectively get them - you'll only pay for what you watch. But it will be on a GB basis, not a channel basis.
It's the shitty content. I got rid of cable because I don't actually watch TV any more. Call me a Luddite but I actually read books more then ever. I guess they better start investing in firemen and flame-throwers.
I wish they would stop misusing the term "cord cutting" for not subscribing to television while still getting Internet via cable, as it is confusing and stupid. The term originally came about as people stopped paying for land-lines and used their cell phones exclusively instead, and there it made sense.
In this case, as the article points out, "In most American households, the cable cord is the fastest conduit for broadband service. This suggests the canny strategy by which those once-inescapable cable providers might combat the rise of cord cutters: The cable giants will simply become even-more-inescapable Internet giants."
Well duh, it's been that way for a long time. You aren't "cutting the cord" by saving a few bucks by not paying for television but still getting Internet over cable. Even 10 year ago, it was like a $10 difference to not get basic cable. Where cable is losing the big money is on all the premium bundles.
Is not be messing with the price all the time.
Somehow, mysteriously, the price changes slightly every month and it's always up.
Once the promotions are gone, it creeps up a bit every month. (The promotion ending for '1 year sign up price" is a big jump.)
Eventually, people start looking at the bill trying to figure out how to reduce it. That act, is what kills them. You don't want people thinking about the bill, you want them to just pay it.
I'll be dropping the TV / Movie portion of my cable in a month or two (summer means outside, and moving to a single abode again). But I wouldn't if it wasn't $45 a month more than it was when I moved in.
"and removing (i.e. acquiring) the competition will let Comcast raise rates without losing customers."
Nobody in America currently has a choice between Comcast and Time Warner. I hope the DOJ rejects the merger because the resulting company is too big. But the amount of competition in the cable internet market would not change at all.
the reason cable bills go up and no one has a choice of channels is because Disney, Discovery, Viacom and everyone else constantly raise prices and only offer their channels in one big bundle. and always add more channels.
when a channel is blacked out on their TV people always blame comcast or direct TV. they should be blaming the channel owner for wanting too much money and not giving any choice of channels.
comcast might not be a saint, but a bigger comcast will mean that any time a channel owner wants a price increase they risk losing more than half their revenue during the blackout. in the past they would pick a small carrier for the price raise since the effect on revenues was pennies
It wouldn't surprise me if these parasites quietly call cord-cutters "deadbeats", just as credit-card companies call customers who pay their bills every month "deadbeats". It'd jive with their big-business culture of greed and entitlement.
What happened to US antitrust law, anyway?
and costs are increasing with salary raises
Citation please. If anything salaries have been broadly flat. I don't know maybe salary growth has exceeded averages among cable providers, possible. As you say those not as many new customers, and more customers who already have cable tv don't need cables run and being more internet savy than 10 years ago do self installs. They should if anything be able cut staff. Both on the installer side and on the back office support provisioning end.
Upstream and transport network bandwidth is getting cheaper. So that cost should be going down for them too. I don't see much evidence to support them doing any cable plant upgrades to offer more bandwidth to the home. Most of them have little or no competition so they are content to make 50Mbps down / 15 up their max offerings most places and not splitting the segments up and doing more fiber home runs to enable them to offer more. The lack of incentives to continue investment in enhanced cable plant should also if anything be lowering their costs.
Looking forward if they need more IP bandwidth they can just start scaling back the television offerings that apparently fewer and fewer customers want. Again I don't see their costs going up.
Frankly this merger if allowed looks more like an opportunity for gouging than anything else. Normally I am laissez-faire type when it comes to markets. I'd say let them merge; but this is a case where these companies only are able to operate in the first place because of government granted rights of way. Either the rights of way ought to be reconsidered and property owners allowed to charge them rent, or we should just start regulating them like public utilities.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
The only way I've been willing to deal with a price increase is when they offer me a stupid amount of extra bandwidth. Oh you want to give me 25/10 service for $5 more? Sure. Oh you want to give me 25/25 service for $1 more a month. Heck yeh! You are offering 100/65 for $35 more a month......FUCK YEH!!!!
Comcast's idea: we are raising your rates by $5 this year and we are throttling your connect to 7/1. Me: Go fuck yourself and cancel my account. Comcast: wait?! what?!
Just the past amount of bad blood I've had with cable companies would keep me from doing business with one again. When I bought my house, my real-estate lady thought I was nuts, I checked out all the houses she was going to show me to see if they had cable or FIOS for service (the area around Tampa is broken up into little monopoly zones with either one or the other) and refused to go look at houses that only had access to cable.
As far as having to "pay" things are moving so fast that in 10 years most of the new shows are going to come from any of the old broadcasters. Comcast doesn't represent so much as a horse buggy whip factory, but a store that specialized in selling and delivery horse buggy whips.
If the government is going to allow for basically a single regulated entity to control the majority of cable and internet service in the US, maybe they should just nationalize it and cut out the middle man. After all, what is the difference between a single provider that the government says what it can and cannot do and the government just doing it? Didn't the US learn enough with the "too big to fail" model? This merger has disaster written all over it. If anything, instead of consolidations, they should be breaking up these megacorporations to have more competition, not less.
very little new customers out there.
The customers are all 3 inches tall, or what?
Whence comes this bizarre aversion which Americans seem to have developed to the words "few" and "fewer" recently?
Il n'y a pas de Planet B.
When you get Hulu to replace it, you will notice it has the same amount of commercials. So I just torrent all my TV shows. better quality, no "buffering" and no commercials. I would pay Hulu 2X their subscription rate if they removed the commercials for me. But they have no plans on going commercial free for any reason.
Do not look at laser with remaining good eye.
Here in Germany, I pay for 100Mbps/20Mbps (Down-/Upstream) EUR 25 per month (at current exchange rate around 34 USD/month).
Well, at least the company selling the service offers the product as "100Mbps/20Mbps", but in fact when the technician came and connected it, we saw sync-speed of 100Mbps/31Mbps and his comment: "Yeah, we actually sell only what we can guarantee".
I have measured it many times, and it is really effectively 100Mbps/30 Mbps
While I was in the US from 2009 onward, I had the feeling that the US has the worst internet connection (to homes) of all the countries I spent time in (except emerging markets). And it was the most expensive I have seen so far.
What you guys need is something akin to what happened with BT here in the UK - Arms-length separation of the infrastructure and the service. Sure, you may only be able to have one cable provider in the city, but if they have to sell non-discriminatory access to other ISPs at the same rates as their own consumer division, then you get the healthy kind of competition. There's a thriving ISP market in the UK, only downside is the big boys keep hoovering up the smaller ones that do too well, meaning if you want to stay away from the big boys you have to keep finding and migrating to a new small one every few years. :(
BT has these rules because of its ex-monopoly status, but personally I think it'd make perfect sense to apply the same rules universally. BT Retail should be able to provide service over Virgin Media's cable infrastructure in an area if that's the most cost effective way of doing it - don't limit my service options to the infrastructure provider's.
Boo.
Verizon is spending tons of money upgrading last mile to optic fiber. AT&T is already pitching cell tower to home connections. Companies who would be adversely affected if cable companies get too powerful in controlling the distribution channels will fund competitors.
But, in the end, instead of a monopoly we might end up with a duopoly or at the most three choices for home to internet connections. Still I hope this merger does not go through. Cable monopolies could do plenty of damage before viable competition emerges.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
As a so called cord cutter they way I see it is the cable companies are leveraging their cable TV monopolies to dominate the ISP/Telecom markets. The real anti-trust push should not be to stop the merger of comcast and time warner but to require separation of services in an area where a company has a monopoly. That is to say make them spin off their core networking and content distribution services into a separate company/corporation.
"I myself am made entirely of flaws, stitched together with good intentions."
and have 2 rate increases on internet services in the same year with no additional speed increase.
Bring back the old version of slashdot.
Future cost of cable will be this:
$150 per month for cable TV + internet
$140 per month for internet only
Enjoy your options.
As president of my HOA, I allowed Verizon to install FIOS capability to every unit in my complex, for free.
Now, we are not as a community beholden to Time-Warner, but can switch to Verizon as a provider of all things digital (internet, TV, and phone).
Both are desperate to sell you "packages" of services, rather than just internet. Screw them. I call once a year and threaten to ditch them for their competitor. The result is a rate reduced by about 40%.
I do not own a television, nor do I use a land-line phone. I just want internet. Well, that sort of logic falls short with their telephone salespeople. The only threat that works is, "I will totally cancel service from you and will go to your competitor."
The problem is the cable is not going to be the only fast route into your home forever. Some people with good coverage are already using a home-based LTE router as their only internet connection. As this becomes more widespread and 5G starts rolling out, the cable companies will have another contender to deal with besides FTTH offerings. The nice thing about wireless as well is typicallty a region is served by more wireless providers than cable companies, so more competition will help keep prices low.
I didn't stop getting cable because of the price, it was mainly due to being sick of commercials and the fact that the little programming I enjoy is all online now. Money just wasn't ever a factor for me when doing this is my point.
What he said. The truth is, I never had cable TV for those reasons, and this: Remember, the deal was commercials = free TV. Cable started out with no commercials (yes, it did - except for the network channels), but they slowly began adding them in, until now, where there are more commercials on cable channels than on network television. Of course, TV watchers are a docile group to begin with...
-- sudon't
Air-ride Equipped
How about Municipalities or States laying publicly owned fiber next to the publicly owned roads and then having private companies deliver services over those cables so we eliminate the natural monopoly?
We can run fiber to any number of "central offices" where private companies install their gear to deliver voice, video, data...etc.
Installing multiple cables to deliver the exact same service seems like a waste of resources.
If Comcast is paying $1B to cover a region, and another $100M a year to maintain it, it'll pay that regardless of whether it keeps or loses 50% of its customers. And likewise a competitor will pay exactly the same.
The cost structure you assume is exactly the opposite of what actually happened when phone service was deregulated to allow competition. http://en.wikipedia.org/wiki/Competitive_local_exchange_carrier Costs to maintain the shared wiring infrastructure were split amongst each operator (ILEC, CLEC) rather than multiplied by each additional operator as you suggest.
So, I attended the Streaming Media West conference last month, and one of the things I came away with was how the existing players (Hollywood, cable companies, etc.) are adamant about ensuring an "orderly transition to IP-based delivery." That is an exact quote from one of the over-the-top (OTT) sessions I went to, where over-the-top refers to content delivered over IP directly to the user from someone other than the broadband provider (e.g., watching a movie from Netflix instead of from your cable company's video-on-demand service).
This is very much the point of the "TV Everywhere" systems by which you login with your cable or satellite credentials in order to watch cable/satellite content on a mobile device or set-top box (iPad, Roku, etc.). It's basically a rear-guard action against the cord-cutters: we'll let you watch the same content on any device, provided you pay the same price for it. Keep paying your cable bill, even if you don't watch cable.
I wrote a long blog about the show here. But taking it back to the Comcast / Time Warner deal, the competitive issue is not in individual markets (where, indeed, there's usually only one cable company), but in the power of a combined Comcast / Time Warner to keep creatives in the old system, by using caps, throttling, predatory pricing, and other dirty tricks to hamper genuine Internet TV.
Presumably, once the Justice Department comes to understand the antitrust implications of this deal, they'll immediately launch an investigation. Of Apple.
What salary raises? Unless you're in the 10% salaries have been dropping for 30 years, just not as fast as the value of the dollar.
If my salary last year was $60k, and inflation dropped the value of the dollar by 5% while I get a 4% "raise" then I haven't actually gotten a raise at all, I've had my salary cut by 1%.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
very little new customers out there.
The customers are all 3 inches tall, or what?
Whence comes this bizarre aversion which Americans seem to have developed to the words "few" and "fewer" recently?
It's like the people who write "loose" when they really meant "lose", or the ones who can't distinguish among "their", "they're", and "there".
It does serve one useful purpose. It immediately indicates whether you are dealing with one of the sheople. If you are, they will thoughtlessly and unconsciously make the same error because so many others are making that error. Such errors suddenly become more and less trendy in a very observable manner. That is, after all, what makes them sheople: they are unable to be very aware of their actions and decisions, preferring to operate in a sort of zombie autopilot state of consciousness. Thus, almost overnight, you see these errors everywhere despite no central authority coordinating everyone involved.
If you try to correct them, they will resent the implication that they should be asked to think. They will focus on the lack of damage from such grammatical errors, calling you "grammar nazi", and miss the actual point. The actual point is about mindlessly going through the motions with no real awareness, something that causes real damage in the world (consider how many car accidents could be avoided if people routinely considered what they were doing prior to acting, how much propaganda would not be believed, how many elections could have ended differently).
They have about 2.9m cable, 6.2m total subscribers, so we are still less than 15% of the population of the US. Cablevision about 3m and the rest are all about 4m, add them up and we are at about 52m subscribers, or about 16.6% of the population. With 83% not subscribing my point still stands, there are anything but a few customers to tap into.
None of that matters if potential new customers aren't interested.
This is like the fact that the vast majority of adult Americans do not currently smoke cigarettes. You might say that's some serious growth area for the cigarette companies, right? Except, that vast majority doesn't want to smoke.
It probably doesn't help that Comcast has such a bad reputation in terms of customer service and in terms of throttling and otherwise manipulating traffic. It only encourages people to do without if they can.
It is a miracle that curiosity survives formal education. - Einstein
No. In California we live in a giant suburb that contains everything from 50 miles north of LA to the Mexican border and about 20-30 miles inland all that way. In that area, the only "cities" in a European sense are LA, maybe Irvine and San Diego. So, no, we don't live in cities. There is no empty space. There are endless blocks of residential neighborhoods for miles in any direction.
Peter predicted that you would "deliberately forget" creation 2000 years ago...
Why is a company 'fighting' its customers desires? It would be one thing if the idea of reduced cost internet service was financially impossible to support, but that just is not the case. Witness the comparison to broadband pricing in other countries. To make things truly silly on that front there is a lot of talk about the service providers double charging bandwidth... that is charging the consumer for access and the content creator for delivery. Absolute madness in terms of what a healthy market for cable and/or broadband service should be. Also, I have never quite understood the cord cutting phrase for internet service. It makes sense when cutting landline phone service in favor of cellular but not with regards to internet service and it never has. LTE is the first wireless technology that might be a viable alternative but it really doesn't have the capacity to absorb a mass migration. Serious population level uses of bandwidth is still entirely reliant on landline connections. Instead of cord cutting I'd say it is more about rejecting the entire TV model of content consumption in favor of a more customer oriented experience. The scheduled commercial broadcast model made sense prior to the advent of the internet. Now there is a much better solution and the old way really needs to adapt to the new realities of technology. Instead of fighting services like Areo, Netflix etc... these companies should be embracing them. They will win eventually.
As for the issue of Comcast or Verizon choking services like Netflix, The FCC needs to get off its keister and fix the debacle it made of net neutrality. There are some days I really wish Google/Apple etc... would band together for a hostile takeover of the last mile trolls and reduce them to dumb pipe service providers to lower the access bar for all the content they aggregate. For them a low margin dumb pipe ISP environment would seriously pump up their content distribution capabilities because more folks could afford more access. It seems pretty obvious the telecom industry still holds to much sway over the congress critters to think government will ever roll back their current 'entitled' last mile troll position on its own. In fact they will likely end up being a puppet used by telecom to fight tooth and nail against any such attempt... witness the growing body of legislation directly hindering google FIOS efforts. Someone seriouly want to defend those actions as being 'in the publics best interest'?
Unsurprisingly, I am one of the folks that ditched cable TV. Even when I realized it was an insignificant price drop I still insisted on internet only service. I believe cable TV is broken and has been since they introduced commercials on top of paid subscription. Even so I got a cable subscription once I started living on my own pretty much because it was what you did. Then I realized at one point I hadn't turned on the TV in several months (Everquest) and when I did it was almost painful to try and sit through a typical broadcast. It became absolutely galling to me to pay 90+ dollars a month to be bombarded by advertisements. Even premium channels like HBO now bombard you with a significant percentage of advertisement (of their own materials, but advertisement no less). Back when they started you paid your fee to have movies movies movies and more movies. These days any given channel is dishing out something like 20% advertisements and that is if you do not consider the product placement sequences that are now common and unavoidable through any medium. An example of that method is on Bones when Booth and Bones talking about features in Ford vehicles while they 'drive' to or from something on the show. In and of itself I have little problem with that. But when they then break to a ford commercial it is enough to make me want to put a fist through my TV. Arrrrggghhhh.... Charge me, use commercials, or do product placement. Pick ONE. Using all three is just greedy.... worse than that it is a deal breaker. It made it such that it was no longer something I wante
I don't ask you to be me. I only ask you not expect me to be you.
You don't need any in-depth analysis to figure out what's going to change.
Look at Time Warner's internet service prices:
http://www.timewarnercable.com...
$15/mo for 2Mbps.
Then look at Comcast's internet service prices:
http://www.comcast.com/interne...
$40/mo for 3Mbps.
MORE THAN DOUBLE THE MONTHLY PRICE, FOR JUST ENTRY-LEVEL INTERNET SERVICE.
The competition between cable and DSL has kept prices down for years. But now, with Verizon switching to FIOS with even more astronomical entry-level internet prices, you will have NO CHOICE in the matter, but to pay much more than you do now, for slower service. How many people are going to just go without internet, when they only occasionally browse the web, and their cheapest option is $40+? Comcast is trying to rape my mother...
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
The obvious solution to that is regulation that alows for CLECs in cable and Internet just they way they were allowed for in phone service. This whole stupid mess is just the result of a bunch of Ayn Rand cultists thinking that the market would magically sort itself out if we let all of the jack*ss corporations run amok.
Los Angeles had multiple competitive DSL providers 15 years ago and it's WAY more spread out than New York City.
A Pirate and a Puritan look the same on a balance sheet.
The whole thesis is a remarkably stupid idea. Time Warner and Comcast are NOT direct competitors. They are MONOPOLIES in differet markets. They already have the ability to screw with you if you are trying to cut the cord. You probably have no where to go.
PERHAPS you can flee from your local cable monopoly to your local phone monopoly. MAYBE.
All this does is increase the number of cities where Comcast has a monopoly. Ultimately, the real impact of this will likely be with negotating with content providers. Comcast might be able to go all Walmart on Disney.
A Pirate and a Puritan look the same on a balance sheet.
No, the solution is to invalidate all the exclusivity agreements and allow anyone with a sound business plan to get a permit to run their own fiber/coax/copper/whatever (including municipal governments). The reason the market isn't sorting itself out is *because* of regulation.
You're certainly right about DSL and it's providers. However, DSL does have one "physics" limitation and that is the limited distance a single line can cover which is about 3 miles or about 4.8 km. Coax and fiber has much greater distances particularly with repeaters. Where I live the local Telco called a few years ago and asked if I wanted DSL then looked up my address and said I was 300 feet too far from the connection to get it. Since then they've improved their coverage but throughput is very low and not at all competitive with coax cable.
More about the situation in Iowa: my wife's cousins who live on farms can get DSL. One of them gets about 1.0 Mbit/s and the other gets about 0.70 Mbit/s. Their parents who live a couple of hundred yards down the road can't get DSL or any other wired connection because they're too far away from the connection point. Their only option is dial up. I suppose they could get satellite Internet, but it's very expensive, slow and very low daily caps. The local high school gives every student a lap top computer but I'm guessing when some of them get home they can't get connected. Something's got to be done, not only for city dwellers but particularly in rural areas to make affordable connection to high speed Internet available.
In a time of universal deceit, telling the truth is a revolutionary act. George Orwell