Monday, October 29, 2007

Comcast: Our 3% price increase is actually 40%

Comcast took over the ground cable business in Houston, Texas. The transition was relatively smooth, with a low percentage of outages and complaints - despite many people with proprietary email addresses being forced to change names. For many people, like myself, there was little difference except the name on the bill.

That of course lasted only a little while. This is a cable company, after all. Soon after they were firmly in place, they began changing their channel lineups and increasing prices. I could care less about TV, as I only have them for my Internet, but my wife likes to watch television sometimes on the weekends so we have basic cable. For about 5 years, we've had the same package - broadband Internet and basic cable which included all local and regular cable channels (CNN, SciFi, History, etc).

Comcast came in and claimed that they were just shifting things around and adding more channels, as an excuse for the slight 1-6% increase in price, but very little else would change. Was this true? Well, this is a cable company after all. Here's what they really did.

They increased the prices of all their services by 1% to 6%. They then began adding High-Definition channels - channels that they already had in standard definition, but apparently that counts as "adding" a channel. Then they cut out several channels completely. Then they did something very clever, they completely gutted the basic service channel lineup, reducing it essentially to local (and HD local) channels. What did this do? It eliminated the basic cable service entirely, because you get very little from it that you don't get from regular terrestrial broadcasts.

This service is now $17 (up from $15)...paying for cable that gets you nothing. Their next up service package, which includes all of the cable channels we already had before the switch, is around $40/mo. That's a 38% increase in the cost of same-service cable, not the 3% increase they notified us of for our basic service in our last bill.

Very clever indeed. This does a few good things for Comcast. For customers like me, they collect slightly more money while providing vastly reduced services, thus encouraging an upgrade to give them nearly 40% more each month for exactly what I had already been getting. For customers without Internet, it encourages them to either upgrade or ditch cable entirely, since it probably isn't cost effective to provide technical and service support to a customer paying only $17/mo. It also encourages people to look more closely at their bundled packages, which would effectively ensnare consumers into having cable/Internet/phone with a single company - not, in my opinion, a smart move.

So my wife and I are considering hooking up the big antenna in our attic and just getting broadcast TV for nothing, cancel Comcast entirely and switch to AT&T (who we already have a landline phone with). This would cut our current bill in half (their best DSL speed - 6.0mbps download is only $35/mo compared to the $70/mo we now pay for Internet/cable).

We'd already discussed this before, but my wife didn't want to cancel the cable. Now that Comcast has effectively canceled it for her already, she is starting to lean towards getting rid of them and accepting local channels. Maybe it's not so bad that Comcast is so bad.

7 comments:

Mrs. Micah said...

When you cancel, be sure to give your reason as "Oh, you weren't offering anything better in your basic cable than we could already pick up with an antenna." That way they know that their practices are hurting business.

Beyond the Consumer said...

That's a great reason to give them, but to be honest I'm not quite sure if that wasn't their strategy. Dump the low-end customers in favor of those purchasing the costly bundles and services.

Jim said...

I've dealt with both and found that if you get high speed internet through Comcast, they give you the extended basic channels on top of it. Maybe this was a fluke, but that's what I did for awhile until they jacked my rates for cable internet to more than double the price. I ended up switching to DSL. Also AT&T has been consistent with the pricing in that unlike Comcast, there aren’t these teaser rates that jump on you after awhile. Good luck with that.

Beyond the Consumer said...

Jim, that could very well be what Time Warner had been doing for us - giving us extended for the price of basic because we had Internet through them. It seems that Comcast is not doing that. I suppose it would not hurt to give them a call and ask - I just need to find a good 40 minutes to spare to navigate their phone tree and muddle through their sales pitches to ask them such a simple question.

Nivek said...

When Time Warner sold their local franchise to Comcast, Comcast raised our monthly bill by $15.00.

Anonymous said...

Easy Earning money in online never been this easy and transparent. You would find great tips on how to make that dream amount every Day.Sitting in the home earn around $100 perday. So go ahead and click here for more details and open floodgates to your online income. All the best.

Thanks.

Anonymous said...

Easy Earning money in online never been this easy and transparent. You would find great tips on how to make that dream amount every Day.Sitting in the home earn around $100 perday. So go ahead and click here for more details and open floodgates to your online income. All the best.

Thanks.