Cable Competition: Where Up is Down and More is Less Posted by Bob at 05/23/07 12:33 PM

For some time now big telecom companies such as Verizon and AT&T have been telling state and local officials that allowing them to offer cable television service in their communities will benefit consumers by spurring new competition, driving down prices and improving service.

Being skeptical types, we here at Now Hear This never placed much faith in such sunny promises, particularly when they come from former monopolies that had to be broken up by the government. So suffice it to say we have chosen to judge Verizon by its deeds rather than their words. And it's fair to say that Verizon's deeds in the cable television business so far have fallen far short of their promises.

For example, Verizon hiked the price of its FiOS Premier service, its most popular subscriber package, from $39.95 to $42.99 at the beginning of the year. That is a 7.6 percent jump. The monthly rates for add-ons such as HBO and sports channels also rose by $1 or $2 each. For a complete breakdown of Verizon's rate hikes, click here.

Now comes word Verizon is jacking up the monthly fee for its high-definition digital video recorder service from $12.99 to $15.99 -- which works out to a 23 percent increase, by our calculations.

In a remarkable coincidence, Verizon's new price is just a few cents less than the fee its chief competitor Cablevision charges for its HD-DVR service. Go figure.

And it gets worse, according to Multichannel News.

Verizon is also informing its new FiOS customers they will be charged a fee of $74.99 if they decide to discontinue their service and a technician has to come out and pull the plug. Departing FiOS customers can avoid the fee if they disconnect their equipment themselves and return it to their local Verizon office. Or they can wrap it up and drop it off at a United Parcel Service location using a Verizon prepaid label.

Hmmm. That must be some of that improved customer service that Verizon's entry into the cable market is supposed to be spurring.

comments (2)

1 Posted by Nathan Prather at 05/24/07 01:44 PM

Beautiful.

Hopefully things will get better soon.
I'm spending $100 a month for cable with
Internet.

There is no competition in my neighborhood.

2 Posted by Jonathan Salem Baskin at 09/04/07 07:01 AM

Interesting idea...the cable industry is now advertising that it all but invented the idea of competition. How could a branding strategy be so far removed from reality, and not laughed off the air (or off the wires, or whatever)? For that matter, the telecoms pushing for 'cable competition' legislation aren't any better; all of these services rely on locking consumers into onerous, long-term deals that have putative punishment for leaving (multi-year contracts, investments in equipment). And, once won, these services generally treat consumers much as monopolies once did...so where's the 'choice' other than that one moment when consumers can choose to give up their subsequent freedom? I've written a bit about this branding challenge at DIM BULB, at http://dimbulb.typepad.com, if you'd like to check it out.