Broadband war gets bloodier

The broadband war between cable and phone companies could get bloodier as these companies aggressively try to steal customers from each other.

Comcast, the largest cable operator in the U.S., said Wednesday that it is still adding new subscribers for its high speed Internet and telephony services, but that growth is slowing as broadband penetration levels plateau and economic concerns ripple through its business.

Judging from the earnings announcements from Comcast, Verizon and AT&T, adding new broadband customers is getting more tough as many people already subscribe to either cable or DSL. As a result, cable operators and phone companies are battling each other head to head to steal customers from one another.

In the second quarter, Comcast may have edged out slightly ahead of its phone competitors. During the second quarter, Comcast added 278,000 high-speed Internet subscribers and 555,000 new phone customers. This is good news considering that Verizon only added 54,000 new DSL customers and AT&T added only 46,000 DSL subscribers.

Comcast officials said on the company's conference call that about two-thirds of its new broadband customers had switched from DSL. And about one-fifth of these customers are signing up for the triple play bundle.

But some of this good news is tainted by the fact that its adding fewer customers than it did a year ago. For example, in the second quarter Comcast added about 18 percent fewer broadband customers than it did a year ago. And it added 21 percent fewer telephony subscribers compared to year ago.

What's more, Verizon and AT&T are making headway with their TV services. Verizon reported it added 187,000 new Fios Internet customers in the second quarter and 176,000 Fios TV customers. AT&T added 170,000 U-Verse TV subscribers, but it didn't break out the number of U-Verse broadband additions.

Meanwhile, Comcast lost 138,000 basic video subscribers during the quarter. But it added 320,000 digital cable subscribers. So subtracting out the 138,000 basic video subscribers it lost, Comcast had a net video addition of 182,000 subscribers.

So it appears that Comcast is neck-in-neck with its telephone rivals when it comes to video. And Verizon appears to be making significant headway in the broadband market with its Fios service. But with the economy in trouble and 90 percent of active Internet users connecting via broadband, these companies are going to rely more heavily on promotional pricing to entice customers to switch.

As a consumer, this is great. We benefit from good deals offered by the different operators. But it's also frustrating. I recently asked representatives from Verizon to give me a sense of what I could expect if I signed up for the triple play Fios package in New York City after the $95 a month promotion ends in a year. Currently, I pay about $150 a month for Time Warner Cable TV and Internet service and Vonage voice service. And if the Verizon package jumps to the same price, I'd likely consider switching back to Time Warner if I could get a better deal.

But when I asked the Verizon representative about this, he was evasive in answering my question. I'm hoping that living in a competitive market like New York City will mean that prices from both cable and phone providers will continue to come down.

[Penguinisto]

Me, I prefer to wait until the contract period ends (like it did just recently in my case), then call the provider and let them know that I'm seriously considering a switch to their competitor. It's amazing how quickly they're willing to cough up a very nice deal these days... just be sure that they don't lock you into a long contract. ;)

...though to be honest, I wouldn't give up Vonage for a planet-load of money. $25/mo for unlimited local, national, and international calling to pretty much every First-World country. Comcast can't beat it (even at introductory rates), and Verizon damned sure can't beat it.

[zeroplane]

Comcast! It's Craptastic!

[v1m]

There's nothing remotely like a "free market" in broadband. Corporate scum rule the roost, charging us exorbitant sums in their entrenched, monopoly positions.

Calling what meager competition now exists "a bloodbath" when it is taking place between titans in a price-fixing war only supports the myth that we consumers have anything remotely like choice.

How about giving us something like what our corrupt politicians preach we have? How about a truly free market?

[surley_scott]

You want exorbitant...come to Australia.
I pay $60/month for 7GB combined upload/download,
$80/month for 50 channels of pay TV, 40 of which are crap.
$30/month for land line rental plus about $80/month for local and national phone calls and $80/month for my mobile phone.
All this is provided at a bundled 'discount' price....... A little sympathy please.....

[goober_nut]

It's actually kind of nice, at least in America. The consumer normally wins in this situation. Companies are willing to start dropping their prices to get more customers or start making their product better than the competition. All in all, let the big companies battle it out, we win. :-)

[bri0831]

I have Charter here in MA but only for TV and Internet (for now...) OTA HD & DirecTV will be it for me soon, but I keep Vonage for my phone. It's still better than Comcast or any CableCo VoIP because of the portability of it. I can move anywhere and still have my Vonage, not so with the other guys (CableCo's.)
What if you move to an area where they aren't, then you're porting numbers again...

[dngrant]

As far as I am concerned both Verizon and Comcast are full of crap. Neither company has taken an interest in "upgrading" areas in my community and have given the rural customer the finger. Millions of Americans are left to the whims of highly latent wireless and satelittle internet service providers while Verizon and Comcast "complain" of subscriber loss. Invest in rural America, or in my case suburbia (less than 30 miles outside of Richmond, VA).

[bsee08]

Yes $150 for cable internet and phone is just great. I have WOW with HD and a dvr with 4mbps internet and at&t for phone. I pay roughly $120. Comcast has never been the cheapest or the most reliable. Then again neither has WOW, but I'm sure we all have gripes about our own respective media providers.

[chili_dawg]

@ BRI0831

It is nice to take a number where you go. However, it's not just with the cable companies that you aren't able to take your number. This is actually true of any LEC/ILEC carrier (ie AT&T and the Bells/Comcast/Cox). The reason the numbers are truly "portable" is because these companies utilize Enhanced 911. The numbers are restricted to certain Rate Centers(boundaries) for 911 purposes.