Here’s
a multiple choice question that might provide insight on the current capitalism
versus socialism debate:
Comcast
excels at:
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.
A) Xfinity currently charges $70.93 for
delivering 10 over-the-air broadcast television signals and a few cable
television channels few consumers eagerly seek.
The company includes as “taxes and fees” an estimate of the per subscriber
copyright payment to broadcasters for carriage of their programming.
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.
What
ticked me off big time is Xfinity blames me for its inability to make good on
its Peacock offer. A representative of
Xfinity’s “Executive Customer Relations” notified me that the company has
“software problems” that prevent it from offering the reward to me because I
have an “unsupported” broadband service, not too slow, just not included in the
offer.
The
company simply does not want to make the necessary software modification.
Adding
to the insult, the company has engaged in a classic “bait and switch” tactic by
conditioning successful access to Peacock of if I agree to incur a 70% increase
in my broadband subscription.
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.
The
discussion with another Xfinity representative got nasty, condescending, and
contemptuous. The rep basically framed
the inability of the company to make good on its off as the result of my
ongoing subscription of a slow and inexpensive broadband service rate no longer
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.