Broadband pricing holds steady, as TV rates inch up
Consumers are benefiting from competition between phone companies and cable operators when it comes to broadband pricing, but the same can't be said for pricing on TV services.
A report published by market research firm Pike & Fischer earlier this month notes that cable broadband prices have remained steady even though operators have been increasing speeds. The firm attributes this trend to more competition from Verizon's all-fiber network, Fios, which offers superfast broadband at competitive prices.
Average prices for cable modem service have remained steady at about $40 to $45 a month, the firm said. That's even as standard cable modem speeds have climbed from an average of 3 megabits per second in 2004 to between 10 Mbps and 15 Mbps today. Some markets are even able to get 50 Mbps.
"As Verizon has rolled out Fios Internet and TV services in more and more communities, the market has seen an increasing variety of prices and data rates, as cable operators respond to FiOS launches (and to a lesser extent similar services from AT&T and Qwest Communications) on an increasingly market-by-market basis," Mitchell Shapiro, a contributing analyst for Pike & Fischer said in a statement.
Meanwhile, consumers don't appear to be getting the same pricing benefits from competition when it comes to their TV service. Cable TV prices continue to rise. For example, Time Warner plans to increase its Triple Play Starter Pak to $116.95 from $114.95, while its standard service will go from $43.25 to $46.30 in most areas, according to a rate card distributed to customers. Some promotional prices are lower for new customers.
A Time Warner spokeswoman told the Times Herald-Record, a newspaper serving New York's Hudson Valley, that the price hikes were due to rising programming and operating costs. Cablevision will also be raising its cable television prices by an average of 3.5 percent, the Times Herald-Record also reported.
AT&T and Verizon, which offer TV service in some areas to compete with cable, have also been increasing rates and are expected to raise them again in early 2009. In October, AT&T increased the price for three new high-definition channels by $5 a month. And now some customers are receiving e-mails informing them that beginning February 1, 2009, the monthly rates for a few services will be increased, according to Engadget. For example, non-DVR set top boxes will cost $7 per month instead of $5 per month. And the price of the Movie Package will increase from $15 to $20 a month. And the Paquete Espanol package will increase from $10 to $15 a month.
Verizon's plans for rate hikes haven't been announced, but they're likely coming. Last February, Verizon raised the price of its Fios TV Premier tier by 12 percent. And word on the street is that the company will likely raise rates again in early 2009.
The Federal Communications Commission has been looking into the rising price of cable services for some time. But nothing has been done to curb the price hikes.
Of course, consumers could look for alternatives. As more Americans are hit by the economic downturn, some are turning toward the Internet and over-the-air TV as free alternatives. But broadband providers may soon put a kibosh on these free alternatives, as they impose service limitations like bandwidth caps and overage charges.
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie. 
Come on.....geez!
The telcos and cable operators DONT want you to get 24x7 streamed (or downloaded) content from Hulu or NBC or CNN or HBO (regardless of standard or high def), because then you wouldn't need their TV service. So they want to limit your monthly bandwidth to 250GB....sounds like a lot but that's less than 2 hours of streamed/downloaded HD programming per household per day - forcing you to still pay for "Basic" cable.
This is why network neutrality is important which means No bandwidth caps, no packet filtering/fast lanes disctated by operators. Unfettered access to content on the Internet is a matter of national, economic security. Obama needs to make sure clear and open Internet is part of our national security policy.
The problem being that most high-speed internet is controlled by the same companies which provide paid television. We should all band together and just invest in T1 landlines per ever 5 households. Sure, we get faster speeds through DSL and Cable, but at what cost? Television companies need to be put on a leash and by using the alternatives, we could do it ourselves. Even with a larger investment up front, a T1 line for every 5 households would make a much more cost effective strategy at allowing broadband internet for all with the added bonus of not having to deal with price hikes. Additionally, we could create jobs and save money at the same time. Maintenance will have to be done and someone will have to fill that void. The best way to change the way a service is handled is by not using that service anymore, but that doesn't mean we'd have to stop having broadband internet.
How would it be possible for broadband providers to 'put a kibosh' on over-the-air free TV, which is received without the use of any broadband provider whatsoever? You neglected to say.
I think if I could get just the channels I like to watch and even pay for them on some kind of per-use basis, I might reconsider my self-imposed ban on cable. I've enjoyed having really low bills from the cable company for just the internet though.
The same thing happened last year to my cable modem: I was blankly told I needed a new one, but Cox was quite willing to charge me for broadband service on the one I bought from them years ago. I need broadband and Qwest is even more awful and have refused to offer me DSL in my apartment even though I have tried for years and it is available everywhere around me.
We have to deal with Qwest DSL at work, but have increasingly moved to Sprint Mobile Broadband since again, Qwest is incompentent or not interested to service some of our office locations where we need internet. But mobile broadband is limited to 5GB/month at Sprint or Verizon and is much slower than cable broadband. It is also more expensive although usable in many locations. Sprint is OK for our business use, but I download Linux distros and Windows betas myself.
Hopefully WiMax will be a success and soon in AZ. The cost is more, but at least the speed will be finally usable. Some type of mobile broadband is the future, especially with Android devices.
Right now, I just could no longer justify even $45 for cable TV. I kept the cable broadband. Netflix has offered me an easy way of getting exactly what I want to watch and the service has been very good. I got my DTV box for over the air reception and a USB stick for TV on my laptop. Gone are the cable TV boxes so I can save nearly $50/ month and see more of what I want by increasing my Netflix subcription.
Cox does not offer a la carte service so I pay to get TV that is mostly commercials, infomercials and reruns. Programming is getting worse and worse; Cox and the other cable companies should demand a discount from the content provides instead of charging unsatisfied customers. Maybe some one will see the opertunity of over the air broadcasts with some interesting content using ad financing without the cable or satetlite service costs. TV on the internet will take a while and may need to become a different paradigma to be widely successful.
I think the idea about sharing a T1 is not a bad idea. We are already seeing plug in VOIP and server appliances as well as Apple TVs and Roku boxes for home, why not media streaming appliance plugged into a T1 providing internet and more to share among a group through WiFi.
The cable / satelite / TV networks / content providers are charging a lot since they do not have real competition and are not doing there jobs. Time to create some competition.
- by KathyRay42 January 5, 2009 11:40 AM PST
- I'm going to start "shopping" around... The selection has got Poorer & Poorer.. I'm with DIRECT-TV &
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(13 Comments)there are 1/2 dozen slots disgnated for their "Game Lounge" (thats extra $). There are +10 given for
what amounts to Infomercials.. Then there is the Spanish speaking channels.... OH, Don't get me started on the "Reality Shows"..
It has gotten WORSE instead of better... They should have to "CUT" the price