Comcast's two-tier pricing angers broadband-only customers

Mercury news/Yahoo ^ | 6/11/03 | Michael Bazeley,

[Pro-Bush]

Comcast's two-tier pricing angers broadband-only customers

Bay Area Web surfers who use Comcast for their Internet connection are finding they have to pay a premium if they do not also take the company's cable-television service.

Internet-only customers have seen their monthly bills jump from $46 a month to $60 recently. By contrast, cable modem (news - web sites) users who also buy cable-television service pay just $43 a month for Internet access.

Comcast says it is simply rewarding customers who bundle services. But Internet-only customers say they are being punished for not wanting or needing cable television.

"I feel taken advantage of," said Jill Singleton of Fremont, whose family does not own a TV. "Being able to have broadband is important to us, and it's not like we really have another choice."

Comcast announced the rate increase in December, shortly after the Philadelphia company acquired AT&T Broadband. Company spokesman Andrew Johnson said the company gave its customers ample notice about the rate change.

The new prices began to appear in customers' bills April 1; the specific date varies with their billing cycle.

"We're rewarding people who take more services from us," Johnson said. "Just like other companies. It's a tried-and-true concept."

Johnson would not say how many Bay Area customers take only cable-modem service, but the number is "very, very, very small," he said.

Natalie Munn of Fremont said she never heard about the increase and did not notice any change until Comcast debited her checking account in May.

Happy with satellite

Munn said she switched from cable TV to satellite years ago because of problems with her former cable provider, Viacom. She is happy with the satellite service, she said, and has no plans to switch back to cable.

"It's blatantly unfair," Munn said. "They're using their monopoly position to force people to subscribe to cable."

Johnson said that even with the price increase, broadband-only customers are still getting a good deal. He said Comcast's pricing is competitive with the only broadband alternative, digital subscriber line, or DSL.

Comcast's $60 cable-modem service, with download speeds of up to 1.5 megabytes per second, is comparable with an SBC Yahoo DSL package offered at $59.95, Johnson said. Comcast customers can save $3 a month if they provide their own cable modem.

"We still believe we have a superior product in value," Johnson said.

The two-tier pricing structure, which Comcast uses nationwide, has attracted the ire of consumer groups.

Consumers Union and the Consumer Federation of America have asked the Federal Trade Commission to investigate what they called "anti-competitive" behavior. They are taking aim not at the higher-priced cable-modem service, but at the low-priced TV-Internet bundle.

Bundled pricing

The groups argue that Comcast's bundled pricing is so low -- less than $60 for both Internet access and basic cable TV -- that it amounts to giving away the cable-TV service for free. The goal, they said, is to "shrink the market" for DirecTV satellite television, Comcast's only real competitor in most markets.

"What they're doing, in my view, constitutes predatory pricing," said Chris Murray, legislative counsel for Consumers Union.

Murray said the bundle could be considered anti-consumer.

"If you're looking for a bundle, it's a great deal," he said. "But what about the person who only wants one service? For some people, this is the difference between being able to get broadband and not being able to get broadband."

[Pro-Bush]

Nice rant!

[dennisw]

My Comcast broadband service is worth $30 and not a penny more. So I will leave and they can get their money from others. With AT&T the prices were reasonable. No so with Comcast so goodbye!

[AFreeBird]

If you to telecommuting, and use a VPN, be sure that the router you have is compatible with the VPN. Most are NOT!

Well I think most you'd buy today are compatible with VPN, I know Linksys is, and I suspect D-Link and others are as well. The thing is, you have to go into the web admin for the router and configure it for IP Sec passthrough. It is usually not allowed by default, so if you need that functionality, you have to enable it.

[brianl703]

For those that do not support VPN, a firmware upgrade may be available which adds it.

[mhking]

Anything is possible. I do know that the county was responsible; and that both the developer AND a number of residents here (the oldest homes are about a year old) have contacted Comcast (and actually AT&T when this mess began), and gotten nowhere.

It wouldn't surprise me if the county pulled the plug on 'em - I'm sure the complaint file on the company (going back through the three prior owners of what is now Comcast) is pretty damn big.

Bottom line is that even though Comcast claims that they want to improve on the dismal customer service record that the metro Atlanta plant had previously, their actions say otherwise. When you add in the notion of charging significantly higher prices for high-speed internet service than they have for the past two-plus years, it looks like they figure that the locals here are mindless sheep.

And given all of that, I "fired" them as my company of choice. BellSouth was more than happy to provide me with DSL service, and my DirecTV works equally well. The only downside is that my kids don't have G4 to watch any more.

[brianl703]

The only thing I can suggest if your neighbors want the neighborhood wired for cable is to complain to Comcast's home office in Philadelphia (which probably isn't aware of the situation). Ask the local office for the number.

If this has already been done, then the County needs to excercise the power that the franchise agreement gives them...

[mhking]

I'll suggest it at next homeowners' association meeting. But as far as I'm concerned, they need to come to me on crawling on broken glass before I do business with them....