Time Warner Cable customers have been seeing their bills climbing at a pretty steady clip over the past few years. For all that TWC might complain about needing more negotiating power with content companies, though, the cable half of the equation isn’t the problem. Instead, all that nickel-and-diming comes right from the cord most consumers won’t be able to cut: broadband access.
The folks over at Quartz dove into Comcast’s and Time Warner Cable’s quarterly reports to see just where all those earnings come from. They found that for TWC subscribers in particular, television isn’t really more expensive than it used to be, but the price of internet access just keeps going up and up.
Quartz found that over the past two years alone, TWC’s broadband subscribers have seen their bills go up by 20% — and that’s broadband specifically. Despite the FCC’s findings earlier this year that basic cable rates are increasing at four times the rate of inflation, TV isn’t real the driver behind TWC subscribers’ painful bills. Aside from a small uptick in TV costs this past quarter, the actual cable part of a Time Warner Cable bill has remained relatively flat.
Comcast’s report doesn’t separate out subscriber revenue from broadband vs. phone or TV service in quite the same way, but in a general sense their customers have seen about the same price hike as TWC’s have. Other, smaller providers may not be much better; a large consumer survey earlier this year found that TV and broadband bills for everyone have drastically outpaced the rate of inflation.
Financially, it makes perfect sense that companies would be charging internet subscribers as much as they can. Cable television subscriber numbers, especially with TWC, have been plummeting for quite some time. Broadband subscriptions, on the other hand, continue to increase. The future of both companies — and the core of their merger plan — is all about broadband connections.
Modern Americans need useful internet connections, not just for entertainment but also for work, education, commerce, and social connections. And since competition doesn’t exist in many markets, there simply may not be anywhere else for a dissatisfied TWC or Comcast consumer to go. That’s the perfect recipe for consumers to keep being squeezed by bills that go nowhere but up.
The incredible rising internet bill [Quartz]