Here’s a multiple choice question that might provide insight on the current capitalism versus socialism debate:
A) Maximizing value for shareholders;
B) Charging what the market will bear;
C) Exploiting the perception of
competition and regulatory forbearance; or
D) Treating subscribers with contempt.
Yet
another distasteful interaction with Comcast’s cable television/broadband
subsidiary confirms an all of the above answer for me. Here’s how.
Basic Cable subscribers have to pay Xfinity $851.16 annually for the privilege of receiving broadcast signals that are free for the taking if—and this can be a big if in rural locales like mine—one can erect a receiving antenna. In urban and suburban locations, a simple “rabbit ear” antenna would work. In State College, I needed to install an outdoor antenna 15 feet above ground to receive all broadcast network channels.
Okay. Hat’s off to Comcast for extracting a remarkable profit margin by retransmitting broadcast signals to consumers unable or unwilling to engage in self-help. Of course, the Digital Natives of the nation have little interest in broadcast programming except for live sporting events. Comcast cannot expect the broadcast signal retransmission gravy train to continue as more subscribers churn out of a cable subscription, leaving Digital Immigrants and rural resident behind.
B) Comcast has anticipated cable television churn, but that does not mean the company will lose all lucrative revenue streams. The company provides broadband access to the Internet and content substitutes for linear, live television.
Given the dearth of broadband options in my locale, discussed below, Xfinity changes a minimum monthly rate of $45.90 for 300 megabits per second service, rising to more than $82 after a 5 year lock-in. Faster bitrates exceed $100 monthly.
Comcast charges well above rates available from the 3 facilities-based wireless carriers. It is possible that a wireless subscriber could install a home-based “hot spot” that would use Wi-Fi or Bluetooth to connect a computer to the broadband service provided by AT&T, T-Mobile, or Verizon. Of course, not everyone has the technical competency to try this option, and the wireless carriers now impose a surcharge on those that do.
Simply put, broadband rates in the U.S. have some of the highest Average Revenue Per User margins in the world. On the other hand, I acknowledge that the carriers offer a quite high, but not unlimited data allowance, so bandwidth intensive users get a bargain.
Telecommunications is a lucrative and profitable undertaking: no ifs, ands, or buts.
C) Notwithstanding all the verbiage about how competitive the telecommunications market has become, there are plenty of countervailing, inconvenient facts. Pertinent to our conversation here is the reality that Xfinity still constitutes the only real broadband provider in places like rural, central Pennsylvania where I live. Wireless options, via satellite or terrestrial towers either do not exist, or offer spotty and high-cost options. No carriers offer a fiber optic service option.
In the vernacular of economics, Comcast can exploit inelastic demand. That’s how it gets away with charging $71 a month for retransmitting content otherwise free to anyone able to install Over the Air Reception antennas and $46-82 a month for rather slow 300 Mbps service.
D) This option gets personal for me and the motivation for writing this lengthy piece. Xfinity has willfully violated the spirit and intent of Truth in Billing, Broadband Labeling, and consumer protection laws, regulations, and policies, with three business practices that misrepresent the actual broadband bit rates the company delivers to me.
One page of my online account summary shows service at 20 Mbps, while another page shows me receiving Internet Essentials 100 Mbps service, for which I do not qualify. My actual delivered bit rate does not exceed 3 Mbps. Additionally, the company had reneged on its offer of free Peacock Premium service as a reward for 24 years of continuous subscribership.
Nowhere in the company’s terms and conditions did Xfinity state that the reward was conditioned on a specific level of service, or rate. In fact, the upselling referred to an existing, term limited broadband service at no discount. The representative also misstated that he was offering the cheapest and slowest bit rate currently available: 300 megabits per second, with a 5 year lock-in, at $50 monthly. The Xfinity web site offers a 30 Mbps rate at $30 a month.
The representative also informed me incorrectly that my Docsis 3.0 cable modem/router would soon be disqualified from accessing any Xfinity broadband service. Additionally, he notified me that my existing Commission certified Netgear device cannot process the bit rates of the Xfinity replacement service he offered.
It’s my fault that Xfinity cannot honor its Peacock offer. To take the bait I have to make a minimum $20 a month switch for a service tier that will surely increase after the 5 year lock-in.
The rep discounted the two bitrate misrepresentations as my fault as well. Because I have an obsolete service, the company does not have to properly identify the service I receive! In Comcast’s convenient reading of FCC regulations, the company has no obligation to meet Truth in Billing requirements and specification of actual commercial terms and conditions, because the company no longer offers the service . . . except to a few grandfathered subscribers.
How convenient and surely not in the spirit of the public interest motivations behind the FCC’s requirements that even largely deregulated telecommunications service providers have to deal honestly and transparently with all their customers in every instance where it provides service. The applicable FCC orders do not exempt any company from transparency and full disclosure whenever a service is grandfathered but not available to new subscribers.
I feel demoralized and dissed . . . exactly the way the rep wanted me to feel. The Comcast Customer is always wrong.
