Time Warner Cable: We Raise Broadband Rates Because We Can
And they can because competition in their markets often stinks…
by Karl Bode
Speaking at an investor conference in San Francisco this week, Time Warner Cable chief operating officer Landel Hobbs told attendees that the carrier raises broadband prices not because they have to — but because they can. “Consumers like it so much that we have the ability to increase pricing around high-speed data,” noted Hobbs. You might recall Mr. Hobbs from the Time Warner Cable metered billing fiasco, when he tried to convince consumers that they wanted low caps and high per gigabyte overages. Not only did Hobbs think low caps and $2 per GB overages were “only fair,” he tried to argue that they’d “actually encourage more use of broadband overall.” Consumers didn’t agree.
-Time Warner Cable COO Landel Hobbs |
So what allows Mr. Hobbs to ignore reality, his customers, and raise prices without worrying about consumers running to other carriers or an overall negative consumer brand reputation? Competition, or more accurately, a lack thereof.
Limited competition means Time Warner Cable also hasn’t had to rush toward DOCSIS 3.0 upgrades. Comcast, the nation’s largest carrier, is quickly approaching 90% DOCSIS 3.0 coverage across its larger footprint. Even smaller, less profitable carriers like Suddenlink and Mediacom have been working at a faster pace than Time Warner Cable. According to recent cable industry data, DOCSIS 3.0 upgrades now read 43% of the nation’s 120 million homes served by cable. Time Warner Cable? 2,000 users in select portions of one market.
Verizon FiOS is available in roughly only 10% of Time Warner Cable’s overall markets, and Time Warner Cable doesn’t have to try very hard to lure subscribers that have grown tired of sluggish DSL and high landline prices. Time Warner Cable’s also helped by the fact that Verizon’s all but giving up on rural DSL service, either selling or simply ignoring many of these Time Warner Cable markets. In many instances the companies that are buying them take on so much Verizon debt, they can’t afford to upgrade.




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