After the last few articles that I have written I thought that things couldn’t get much worse. I thought they would at least give it a couple weeks before taking another shot a stomping on consumer rights. Boy was I wrong.
Today we received news about a small town in North Carolina called Wilson. This town of about 47,000 residents had long complained about the price of cable TV, phone, and internet offered by Time Warner and Embarq. The only service providers in the little town. At first the town approached the providers about working with them on cutting the costs for residents. But the companies refused, unwilling to cut into their profit margins. So the resourceful city of Wilson took it upon themselves to find other solutions to their problem. In the end they found it cheaper to build their own provider network for the town and provide the services near cost to residents. This left residents paying about $99 a month for basic cable (81 channels), 10mbps broadband internet, and unlimited long distance to anywhere in the US and Canada. The city of Wilson also offered higher levels of service for considerably less than what either Time Warner or Embarq offered the same services at. They even offered a 20mbps premium service and a higher tier of 100mbps. Both of which are much higher than the top end 15mbps service offered by both companies.
After losing their business to the city, Time Warner and Embarq have now set themselves on a mission to prevent this from ever happening again. To accomplish this they have decided to lobby the state legislature of North Carolina to make it illegal for municipalities to setup their own telecommunications and content services. Not only that but they are also trying to make it impossible for such services to get funding from the broadband portion of the national Stimulus Act that was passed recently. Looks like companies and lobbyists are trying to write laws to help line their pockets.
Embarq shot back recently saying that it has the right to make money. They claim that they have to keep costs so high to ensure a better customer experience. Yet they completely ignore the fact that in the technology industry the costs of equipment keep going down while the performance, features, and quality keep going up. What this means is that while they do regular equipment replacements, the equipment they are installing is more powerful and can handle higher bandwidth needs all for less than the previous equipment cost. They are not running out of capacity, they don’t need more money to upgrade their equipment, they are just being greedy. Instead of trying to level the playing field and competing on equal ground with local service like a normal capitalistic environment would require, they have decided that they want to be the only one on the field. They want legally enforced monopolies (which, by legal definition, are illegal) where ever they setup shop.
This reminds me of the city-wide wireless internet service that Philadelphia tried to setup years ago. It too was lobbied against by cable and telecommunications companies and was just barely allowed to happen.
The news doesn’t stop with the city of Wilson today though. Another story came to light about a cable provider called RCN. RCN has decided to raise its rates AND forcefully “upgrade” all of its customers to a higher tier. Then they charge their customers a $5 downgrade fee to go back down to lower tiers of service. So either they trick you into paying more on a monthly basis or they charge you to restore your service to a lower tier. Nice, it is great to see how lack of competition is forcing cable companies across America to improve the customer experience. Now I have to ask, how terrible does your service have to be that you have to resort to trickery just to keep you profits on target? Maybe, just maybe you may want to consider offering… oh, I don’t know… BETTER service with more features that people WANT. How hard is it to keep improving with the pace of technology and the lowering costs of equipment? Is there such a thing as an altruistic for-profit cable company….
Nevermind, I shouldn’t have even asked. Back to Time Warner again… So now that the tiered and capped broadband has been shelved, for now, Time Warner has decided to rethink rolling out system upgrades in cities where it wanted to roll out bandwidth caps. Because they just couldn’t afford to install new equipment as part of a regular schedule that costs less than the previous generation but offers much better speeds unless they started charging their customers inordinate amounts for their internet service. Oh wait, they could, but instead they have decided to act like children and refuse to maintain their services while they don’t get what they want (a lot more money). Oh I am proud to be a part of a country where a software company can be fined for having an illegal monopoly (Microsoft), a telephone company (Southwestern Bell) can be halved for having an illegal monopoly, and cable companies are paid more for having an illegal monopoly. Makes perfect sense.
Tags: Broadband, cable companies, Cable Internet, Consumer Rights, the internet, Time Warner
