Cable's Solution to Cord Cutting? Broadband Price Hikes Cable providers and Wall Street continue to believe that the best response to cord cutting isn't offering cheaper, better television bundles -- but raising already expensive broadband prices even further. Wall Street has been pressuring cable operators for months to raise broadband rates, insisting that standalone broadband prices specifically should be nudged closer to $90 per month. Combined with usage caps and overage fees, cable providers hope these price hikes help counter the losses they're expecting as competition in the streaming video market heats up.

research note from Morgan Stanley this week indicated that those price hikes are already well underway. The firm's data indicates that cable TV companies hiked broadband prices by 12% to $66 monthly year over year customers that buy only high-speed internet and not a TV package. "As video revenue growth is increasingly pressured, leaning on data pricing is tempting to sustain earnings," noted the firm in a report. None of this is particularly surprising. A lack of competition in the broadband space means few if any repercussions for imposing new hikes on broadband. And cable providers have spent years trying to convince customers that usage caps and overage fees are technical necessities, despite being little more than glorified rate hikes designed to both thwart -- and profit from -- the rise of cord cutting. And with many telcos giving up on residential broadband and refusing to upgrade their networks, cable's enjoying a growing monopoly in many broadband markets -- making these price hikes easier than ever. As an added bonus, the current FCC is run by former Verizon lawyer Ajit Pai, who has made it abundantly clear that standing up for consumers simply isn't part of his over-arching plan. In a competitive broadband market, cable operators would be forced to acknowledge that the only way to compete with the rise of streaming operators is to offer better, cheaper TV services and better customer service. But the broken broadband market and the lack of competition in that space allows them to simply seek their pound of flesh in other, more creative ways -- without seriously addressing why so many users are hanging up on traditional cable in the first place. In a competitive broadband market, cable operators would be forced to acknowledge that the only way to compete with the rise of streaming operators is to offer better, cheaper TV services and. But the broken broadband market and the lack of competition inspace allows them to simply seek their pound of flesh in other, more creative ways -- without seriously addressing why so many users are hanging up on traditional cable in the first place.







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Most recommended from 118 comments

Tchaika

join:2017-03-20

New Orleans, LA 27 recommendations Tchaika Member Cable Company "Customer Service" Has Changed... They've gone from "Just the tip" to "Bite the pillow, we're going in dry." keason

Premium Member

join:2002-05-02

Ann Arbor, MI 16 recommendations keason Premium Member Comcast is paving the way for more competition At $90 per month there is plenty of room for an all fiber competitor to come in and take most of the business. The only thing preventing it are laws restricting muni-fiber and pole access. Corporate

join:2014-10-04 9 recommendations Corporate Member Staying with Verizon In this area, Comcast wants 74.95/month for just internet, and no landline. They don't even offer an option for internet/phone double-play. Without landline, there's no value, and I'm not interested in cable.



With "offers" like this, I'll be se staying with DSL for the near-future, much to Verizon's dismay.

cb14

join:2013-02-04

Miami Beach, FL ·Localphone

·Zadarma

·Verizon Wireless

·callwithus

·T-Mobile

·AT&T U-Verse

·Callcentric

9 recommendations cb14 Member What the wingnuts do not realize is how much this is hurting this country. This is not just about the rich getting richer. It's about decreasing American competitiveness in the global economy. And this is and will stay a global economy, no matter how many walls Red Baboon builds. Anyone who really thinks that this country can survive if broadband becomes a privilege for the top 25% of the urban dwellers is just not getting it.

buddahbless

join:2005-03-21

Premium 9 recommendations buddahbless Member What are the cable and Satellite companies doing... Forcing consumers to draw a line in the sand and say enough! Time to go and actually try to put up that digital antenna to receive OTA tv and only have a cellular phone plan with unlimited data streaming ( t-mobile / sprint) sign up for A services such as netflix and stream it to my device and then screen mirror it to my tv. Essentially Cutting out all the middle men.

CosmicDebri

Still looking for intelligent life

join:2001-09-01

Lake City, FL 7 recommendations CosmicDebri Member This is a surprise? They are going to get their money one way or another. We as consumers have no choice. They sell our information without our consent, when we get our 'entertainment' from the internet instead of their tv packages, up goes the internet price, as well as the tv packages. They've been doing this ever since cord cutting started all the while saying it wasn't happening and they weren't worried.



Well hard to say cord cutting is not happening, but they still aren't worried. Got to get your internet from someone, and in too many cases, it's the same cable company who owns the content you are watching, as well as being the only internet provider in your area. remusrm

join:2003-04-07

Frazier Park, CA ·Frontier Communi..

6 recommendations remusrm Member the higher the better I love this kind of hikes. It seems the American public is a wuss that needs to feel the knife to the bone before they rise up against this kind of crap. Its insane how most allow the big corps to milk them for their hard earned cash. I for one will drop everything if it gets past 65. Prices should drop not increase. Tech is cheaper than ever yet, you have to shell out much more for it. ENOUGH!

buzz_4_20

join:2003-09-20

Biddeford, ME 5 recommendations buzz_4_20 Member It's Really easy To crank up the prices when there's no competition... JChris

join:2015-11-19

Raleigh, NC 5 recommendations JChris Member Price hikes will just push more people away. More people will find ways to reduce their cable bills. Drop home phone service, reduce or eliminate their TV package, and eventually just go all wireless for their internet.