Cable War Fails To Lower Rates

The Washington Post has an interesting article about Montgomery County, MD, the county that fined Comcast for its crap customer service. Despite allowing Verizon into its market (as competition from Comcast), the rates for the county’s cable subscribers keep going up:

Bills for thousands of Montgomery County cable viewers will increase by 4 percent starting March 1, when Comcast Corp., suburban Maryland’s largest cable television provider, raises rates throughout the Washington region.

Montgomery leaders had hoped that competition from a new provider, Verizon Communications Inc., would help lower prices. But Comcast said recently that cable bills would climb in line with increases for subscribers throughout Maryland, the District and Northern Virginia.

And its not just Comcast customers feeling the pinch, Verizon raised its rates as well

:

The Montgomery and Prince George’s county councils signed off in November on agreements to allow Verizon to begin offering fiber-optic television service. Company officials hailed the “benefits of choice” for customers, including less expensive service.

Verizon has since raised its rates for new customers by 7.6 percent. And RCN, the third company that offers cable television service in Montgomery, raised its base price last month by 15 percent.

… So much for the idea that “competition will bring down rates,” said Montgomery County Council President Marilyn Praisner (D-Eastern County), who has long clashed with the industry over regulation. “That clearly hasn’t happened.”

Have your cable rates gone down due to competition? .—MEGHANN MARCO

Cable War Fails to Offer Rate Relief in Montgomery [Washington Post]
(Photo: Matt Garland)

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  1. Outtacontext says:

    I live in Montgomery County and read that WashPo article. Ironically, I had just been able to “renegotiate” our Comcast cable bill when I told them I was thinking of moving over to Verizon’s FIOS system. They immediately reduced my bill by 26%.

  2. Dont Know Me? You Are Me. says:

    Tacit collusion is very easy when there are only two players in a market. This is precisely why municipal wireless/FTTH networks are good for consumers even though they are quite a bit more risky than your average muni project.

  3. byronhulcher says:

    I’m also a MoCo resident, and I’ve gotta say that comcast has been good to me. They’re the cheapest cable I’ve been offered, and as long as you shy away from digital cable (who needs G4 and B-movies on demand anyway?) you can’t find a much cheaper price for the level of quality I’ve received in service.

  4. tadowguy says:

    My rates went down when I switched to Dish.

  5. zentec says:

    Part of the problem is the huge fees charged to cable operators by the networks. ESPN pays huge amounts of money for the rights to sporting events and some of that cost is pushed right onto the backs of cable customers whether they want ESPN or not. And as far as the cable operators are concerned, if they want ESPN, they have to take Disney too. Want Discovery? Oh, well that comes with the Travel Channel and TLC.

    While it’s all fine that this arrangement supports networks with a smaller audience making “diversity in programming” a reality, the truth is that if we’re going to bypass the free-market, then pricing controls need to be employed. But don’t hold your breath for relief, the parties against changing this gravy train are powerful communications companies, powerful entertainment corporations and their well-paid lobbyists.

  6. I’m in Howard County and Verizon is going through the area and putting in FiOS, while competition doesn’t mean automatic rate drops, the cancel/renegotiate-your-deal ninjas are going to be able to play the companies against one another to keep your business. As it stands, with only Comcast you have the choice of Comcast or no cable – after a promo rate, you can threaten to cancel but they’ll know you can’t go anywhere else. At least with Verizon, the “I want to cancel” threat isn’t met with automatic “hahaha, you’re addicted to tv, shut up and pay the damned bill.”

  7. Kangarara says:

    Well, duh.

    Can you say ‘oligopoly’, kids?

    (seriously, it’s kinda hard to say)

  8. mathew says:

    I don’t buy the crap about the current bundling schemes encouraging diversity in programming. If you look at DirecTV, until recently the niche channels (particular the science channel, the LGBT channel, and almost all the foreign language channels) were left to fend for themselves, while the ultra-mainstream Disney channels were in every bundle.

    In addition, I would subscribe to Showtime and HBO to get their “edgier” programming–except I’m already paying too much for all the news and sports channels that I literally *never* watch. So how does that support diversity?

    I’ve worked out I’d actually save money if I canceled DirecTV and bought all my TV from the iTunes store. I may do that if Apple TV gets good reviews and the show selection is adequate.

  9. Outtacontext says:

    …they’ll know you can’t go anywhere else. At least with Verizon, the “I want to cancel” threat isn’t met with automatic “hahaha…

    @pfblueprint: that’s exactly what I did. But may I add, what I’d really like is to order just the channels I want, not the prescribed bundles each company makes you order. I don’t watch 3/4 of them.

  10. thesuperlative says:

    I live in Montgomery County and the reason Comcast may not be feeling the heat is that VERIZON IS JUST AS BAD.

    I ordered DSL self-install from Verizon over a month ago. Weeks passed and they never set a service activation date and didn’t send my install kit. After no less than four calls to Customer Service, I finally got a rep who sent me to technical support. Two reps previously had said they would call me back and never did. The guy in technical support was helpful and put me in touch with someone in the Retention Department.

    The lady in the Retention Department seemed very helpful and said the online ordering system screwed up and that she’d reorder for me and try to get it sped along. She didn’t give me a number to reach her at, but told me she’d call me for my credit card information when she needed it. It has been four business days and still no call.

    I am convinced that they do not actually want my business. Maybe that is why Comcast is comfortable raising prices – Verizon can’t actually complete an order!!!

  11. sleepydumbdude says:

    I dropped my digital because the price was too expensive. I had showtime and HBO but in order for me to get premium channels my cable company made me order some crappy other package for 12 bucks with 100 extra channels but only one I every watched then made me subscribe to that box.

    I wish I didn’t have to go with bundled packages. Only reason i keep cable because it comes in better than any antenna I can get here. Only channels I watch on it is network tv and comedy central and FX and reruns of king of queens on tbs.

  12. buccaneerdude says:

    For all of you who think that Verizon coming to town will lower your TV bill, you are living a pipe dream. The cost of running fiber optic cable to your home is astronomical. Expect the fees to be passed along to you eventually. You may get a good introductory rate, but expect the rates to raise annually. The battle is being waged to get subscribers to carry ALL THREE products. That is the only price point that makes sense for an operator, be it Verizon, Comcast, Time Warner or whomever. 3 product subscribers at any of the providers should expect a similar rate due to bundling. Go with the company that treats you the best and gives you the channels or programming that you want and not the other 300 channels that you could give a crap about.

  13. sudlow says:

    Google “Tier Buy Through”

    Once you buy the most basic cable package, you can buy any other package the cable company offers. Comcast won’t tell you about it. You have to ask.

    Here in MA I pay $12 for the local broadcast stations and $16 more to add the first two digital packages including all of the on-demand content. What I don’t pay for is that $40 “standard cable” bundle of crap channels.

  14. zl9600 says:

    Pricing regulation is scary socialist crap, that much I know.

    But zentec does speak the truth about bundling. And un-bundling has some traction in Congress and the FCC.

    But queue the lobbyists. Again zentec is correct.

  15. suckonthat says:

    I don’t know exactly about this, but as to what zentec said, ESPN price gouges as far as I’m concerned. I live in university housing (with a couple thousand other grad & undergrad students) that does not get ESPN because we were given the option of living without it, or paying $10 per month per person. The cost of adding Comedy Central or pretty much any other non-premium (HBO, etc) channel? 50 cents to a dollar.

    Screw you ESPN! I am not paying $120 a year just to watch Monday night football.

  16. clbarrientos says:

    In CA we are truly tired of cable prices, dish etc. I watch mostly news and sports highlights online IE. espn.com, cnn.com, and cbs5.com. When I canceled my cable bill I said to myself “Watch it online” I have even discovered bit torrents in order to watch anything you want for free on your tv. Sometimes when people have no other option you get creative.

  17. hop says:

    we dropped the cable and got direct tv…we pick up hbo when the sopranos returns….we drop it when the season ends….i go between starz and showtime for movies….keep one a couple of months, then switch to the other…they even show a new movie once in awhile….i’m on the eastern shore of md. and the local channels are terrible…we are stuck with either cable or direct …..

  18. Foxtrot-Yankee says:

    Lower prices aren’t the only benefit of competition. In every area (that I know of) where Verizon has launched FIOS, Comcast has boosted their cable modem speeds to remain competitive.

    Is competition successful if it doesn’t cause a price drop but does force companies to offer a better product?

  19. MoCo says:

    Remember “free” broadcast TV? It’s still available.

    Best solution is to just quit watching TV.

  20. if only the day will come when cable companies will allow its customers to only pay for the channels you watch…that will be the day lower rates arrive