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."

[sharktrager]

Where I live, no basic cable, no internet.

Hence, I have no choice.

[Chad Fairbanks]

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

No, no one is FORCING you to do anything.

"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."

Well, if they can't AFFORD it, they shouldn't get it. Pretty simple, really. What next? Ya want the rest of us should subsidize your Broadband connection as a matter of 'fairness'?

[DannyTN]

I won't use comcast for internet because they won't charge me just for the connection. They want to charge me for every computer I have that I connect to my home network.
It's the same mentality of when cable companies used to charge you for every TV in the home.

[The Hon. Galahad Threepwood]

Murray said the bundle could be considered anti-consumer.

So they're going to whine and complain until Comcast raises my rates. Lousy bastards.

[Pro-Bush]

Are you saying you can get cable internet but not video service? Who is your provider?

[1Old Pro]

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 won't be long until we'll have broadband satellite internet options which will provide ample competition to the high priced cable services. My satellite TV bill is half what the cable would be for the same, if not better, services.

[Pro-Bush]

Chad, quit yelling. I am perfectly happy with Comcast...much better service once they converted from AT&T Broadband I have both data & video service.

[glorgau]

I have ATT broadband - soon to be Comcast - and last year it was somebody else. They just changed the rates. It was an extra $10 if I didn't use a cable package, and it was $15 a month for basic cable. I look at it as getting basic cable for $5 a month.

[Pro-Bush]

I look at it as getting basic cable for $5 a month.

That's positive thinking. Your glass must half full, as opposed to half empty.

[technochick99]

I won't use comcast for internet because they won't charge me just for the connection. They want to charge me for every computer I have that I connect to my home network.

Really? I have comcast and they have the same bundling price structure here (IL). But I don't recall them wanting to charge per computer. I use a firewalled router to have several connections to it. Are you sure they don't want to charge extra per cable opening? It seems the same to me as having a single phone unit on one line with more than one wireless phone connected to it.

I can certainly see your point.

[sharktrager]

No, I can't get internet without using them for cable TV. At all. By the time you added in that little nugget, or replacing it with DSL, they made it so sattelite with cable internet was more than just cable and internet. If It wasn't for the basic cable thing, I would have Dish Network again.

[jlogajan]

So they're going to whine and complain until Comcast raises my rates. Lousy bastards.

Yeah, I had to doubletake on that -- consumer groups want me to pay more????

[MineralMan]

"Are you saying you can get cable internet but not video service? Who is your provider?"

I have just cable internet at my offices, from Charter. It's a business account, and they charge $99/mo. for it. Figuring everything in, I save almost $250/mo. over my previous methods, since dial-up cost me $.01/minute from the phone company. I disconnected three phone lines at my office, and canceled all my ISP accounts.

It's great, and a real bargain.

[w_over_w]

They want to charge me for every computer I have that I connect to my home network.

LOL! I guess it depends on who your installer is . . . my guy not only spliced our upstairs cable (so we could get regular cable TV and broadband internet) but also told me best deals on a router for our home LAN. I only pay for one! Hey don't tell the Feds . . .

[1stFreedom]

Get a router that uses NAT.

This makes it look like all the traffic is coming from the same single pc.

Cablevision tries to charge per connection but I ony have one connnection to their system. I connect a cable router to their modem and I have four PCs running in this configuration.

[Pro-Bush]

No, I can't get internet without using them for cable TV

That sucks.

[jlogajan]

I won't use comcast for internet because they won't charge me just for the connection. They want to charge me for every computer I have that I connect to my home network. It's the same mentality of when cable companies used to charge you for every TV in the home.

You can avoid both charges. Get a router for your internal network and get a splitter or amplifier+splitter for your TV.

IP addresses are a limited resource, so they can charge for each one. Charging for multiple TV's is simply a tax on stupidity.

[Pro-Bush]

Aaah! a business account. Sure beats paying a metered rate on a POTS line for dial up!

[j_tull]

If you use their home network "solution" (which is simply a hub) they must provide a seperate IP addy for each connected computer, which is what they're charging you for. Use a router, they can't tell from the server side.