Tuesday, April 23, 2013

ISP Tactics

I live in a sort of gray area when it comes to Internet service. I can get service from Comcast as fast as I want it. But they charge very high rates because they know that Centurylink, the other carrier in my neighborhood, can only provide 7mbs.

To appease customers, Comcast has a set of promotions to keep their customers in line. I have the Performance Internet Plan bundled with phone service. This plan provides speeds up to 20mbs down and 4mbs up. The cost of my internet service at the start of the promotion was $59.99. Now it is $74.99. For customers who are adding this service to their homes, the rate for the first six months is $19.99. The fine print reveals the following:

"After first 6 months, monthly service charge goes to $34.99 for months 7-12. After 12 months, or if any service is cancelled or downgraded, regular charges apply. Comcast’s current monthly service charge for Performance ranges from $42.95 to $62.95..."

Notice that they don't even quote a definite rate after the promotion has expired. Why not? Do they really want to keep the customer ignorant of the true costs? Maybe they're hoping that the customer doesn't read the invoice and simply rests assured that a set amount will be deducted from his bank account at regular intervals.

As you can see, Comcast doesn't really care about their loyal customers. New customers get better rates. New customers get the red carpet. Old customers? Pfff! They're charging me $74 just for internet and phone service with the promotion. According to the CSR I spoke with, if standard rates were applied, I'd be paying well over $110 a month for both phone and internet service.

I could drop down to the lowest rate and save some money. What's there? For $29.99, I get 3mbs down and 768kbs up. Nice. The lowest tier doesn't even qualify as broadband these days and guarantees that anyone who wants to stream movies on Netflix will up the plan to a much higher rate.

There is more to the strategy than meets the eye. A review of the plans offered by Centurylink illustrate an interesting dovetail. Centurylink offers 7mbs at my address for a very reasonable rate. But there is nothing higher. It's like there is a tacit agreement between Comcast and Centurylink to not compete across established territories. Perhaps the return of the ISP mafia is at hand.

That isn't the kicker, though. UTOPIA, a municipal broadband consortium, had just stopped building a block and a half away from my house before I moved in - dashing any hopes of getting connected. They might have built more had it not been for a a lawsuit filed by Qwest (now Centurylink) to stop UTOPIA from hanging their fiber on the telephone poles. That was an expensive lawsuit designed to stall UTOPIA long enough for the local incumbents to assess and control the situation.

I no longer wish to reward Comcast or Centurylink for their monopolistic behavior. Yes I would like the faster speeds, but as of tomorrow, I'm going to be hooking up to Centurylink. In a free market, I wouldn't have to choose between two monopolists, but who said the Internet service market is free?

We could have a free market if any company that owns the wires is designated as a common carrier and must resell use of their pipes at wholesale to competitors. That's why I say that net neutrality is a ruse.
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