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The Legality of Bundling
Comcast's bundling plan and anti-trust laws
(old news - 01:02PM Thursday Apr 17 2003)
tags: Op/Ed · cable
According to anti-trust laws, an unlawful tying agreement is defined as the "conditioning of the sale of one product on the buyer's purchase of another product". So why is Comcast's recent decision to raise rates 33% for non-cable TV broadband customers getting so little legal resistance? This Op/Ed piece over at ZDNet takes a crack at that question, and suggests that because Comcast isn't forcing customers to take both products or nothing at all, they're not violating anti-trust guidelines. The article's author, Randolph J. May of the Progress and Freedom Foundation, calls inquiries into the practice by consumer rights groups and Senator Barbara Boxer "half-cocked requests asking the government to initiate half-baked investigations".

Related:
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  2. Real Consumer Group Takes Aim At Fake Ones
  3. Comcast 'Honors' FCC Authority On Neutrality
  4. What Network Neutrality Is REALLY About
  5. Cable Industry: Shucks, Guess Nobody Wants CableCARDs
  6. Comcast Slammed For Non-Existent Throttling Changes
  7. There's Still No Evidence That Metered Billing Is Necessary
  8. Time Warner Cable Fires Broadside At Broadcasters
Forums » The Legality of Bundling
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mig288
Premium
join:2002-07-13
Merchantville, NJ

Well

"Comcast isn't forcing customers to take both products or nothing at all, they're not violating anti-trust guidelines."
Well ..They aren't forcing BUT..Aren't they the only ones that the people can turn to in MOST cases?!? I hope comcast truly goes under i can't stand them!
mattmhk

join:2003-02-06
Eugene, OR

Re: Well

"conditioning of the sale of one product on the buyer's purchase of another product". Their "conditioning"(ex. $40 for Internet w/ Cable TV or $55 w/o Cable TV) put on their Internet service really does all depend on whether or not you have cable TV or not, which many people choose not to for various reasons. I'm under the Comcast umbrella, and I'm sure a lot of people such as myself dont watch TV and have no need for digital cable or directv. Is it fair to charge someone $15 a month more because they do not wish to watch TV?
comcasttech0

join:2002-03-06
Edmonton, AB

Re: Well

How can you say that comcast isn't forcing their customers to take the bundled packages???

Lets look at the math... if you have cable TV services with comcast, your monthly HSD service will be from $42.95-45.95/mo, not bad
Now if we get rid of their TV services, then that goes up a whopping $57.95-60.95???

What do you do now?? Essentially they're making the customers take the bundled package... and get them to spend more of their money... but it makes the consumer think they're saving a bundle for internet services...

It's a total joke!

anyways, that's my rant!

cheers,

cctech0
dtiernan

join:2002-01-27
Fillmore, CA

Re: Well

Which explains, why after 4 years, I am bailing on the cable modem and going dsl. I was an early @home customer here then ATTBI and now comcast. As soon as the dsl is up and solid....I dish goes on the roof.

dt

TheMadSwede
Premium
join:2001-01-30
Holland, MI
·Charter Pipeline

said by mattmhk See Profile:
Is it fair to charge someone $15 a month more because they do not wish to watch TV?
I agree with you 100% (because I'm in the same situation), but fair and legal are 2 different things -- whether they should be or not (unfortunately). Since it is legal, the only thing that folks in our situation can hope for is that since the fairness of this practice looks questionable, it will be a bad PR move, which will drive change at Comast.

But speaking of PR, we have to remember that high speed internet, while becoming more and more popular, still doesn't exactly have a huge voice in American society. And when the voice is occasionally loud enough to be heard, it's generally only complaining and whining. I'm not saying the complaining and whining are not justified, just that broadband users can seem like a pretty tough bunch to please.

If you owned a cable co and had to make a choice to annoy your TV people or your HSI people, you'd choose the internet ones because there are fewer of them and even fewer within that group that have no TV, just internet.

I love BBR, but us users do often suffer from groupthink in regards to broadband and many of the issues around it. Just because we wear our broadband hearts on our broadband sleeves around here, doesn't mean that the "general public" does the same...or even knows or cares what's going on.

All in all, I guess we can only speak our minds, then wait and see how it pans out.
--
Welp -- finally trying this cable thing out.
medici

join:2001-02-22
Shohola, PA

They're not forcing anyone to subscribe to cable tv. They are discounting Internet Access for customers that also subscribe to Cable TV.

Let's face it, there's a fixed cost associated with providing copper (or, if you're lucky, fiber) to each household. This cost doesn't really change if your using just cable TV, just Internet, or both.

There are also fixed costs associated with providing the infrastructure to provide Internet access, as well as for various tiers of TV programming. And, of course, Comcast needs to make a profit to justify its operations and keep its stockholders happy, and to fund future improvements.

Let's say that the fixed cost of maintaining the cable infrastructure is $15 per month. (While this seems high to me, I don't have any basis to dispute any particular amount.) So when I subscribe to basic CableTV, $15 of the $45/month I spend is apportioned to maintaining the cable infrastructure, and $30 goes to programming (downlinks, equipment, franchise/network fees, etc...). Of course there's a profitable mark-up calculated on both components.

Likewise, if I subscribe to Cable Internet, $15 of the $55/month I spend is apportioned to maintaining the cable infrastructure, and the remaining $40 goes to back-end equipment and bandwidth (plus, of course, profit).

However, if I subscribe to BOTH CableTV and Cable Internet, I don't want to be charged twice for the one connection to my house. Since I'm already paying the $15/month to maintain the cable infrastructure as part of my CableTV subscription, Comcast can discount Cable Internet as an add-on to my service.

So I don't view this as a surcharge for customers who choose Internet -only service, I view it as a discount for customers who use BOTH Internet and TV service, as well it should be.

I think a more appropriate issue is whether Comcast (or whoever) is abusing its monopoly powers where it is the only terrestrial-based high-speed Internet provider. (I think that terrestrial-based is an important distinction -- both for TV and Internet, but particularly for Internet -- because satellite-based systems just don't provide the bandwidth, latency and reliability necessary to be considered true competition to anything but dial-up access.) If Comcast charges higher prices where there's no competition from DSL, then an argument can be made about abuse of monopoly power. Aside from this, there's nothing illegal or unethical about Comcast's pricing.

That doesn't mean I'm a fan of Comcast or any Cable TV provider. First of all, it's been a while since I lived in a market served by Comcast, but most of the Cable TV providers I've dealt with are similar. Their technical support is horrible. Their terms-of-service are draconian. They really don't understand what Internet access is all about. They don't listen to or understand their customers, and don't spend any effort or money on customer satisfaction or loyalty (why should they, they don't have any competition). And they seem to be uniformly cheap as dirt when it comes to expanding programming or adding features, unless they either see increased revenues or are at risk of losing marketplace.

If you're lucky enough to have a choice between xDSL and Cable Internet, then you can choose the best bang for your buck. If you really think you're being overcharged, then cancel your account. No ISP is going to LOWER PRICES unless they start losing market share.
seriousfun

join:2003-02-27
Los Angeles, CA
·Comcast
·Verizon FIOS


Re: Well

said by medici See Profile:
They're not forcing anyone to subscribe to cable tv. They are discounting Internet Access for customers that also subscribe to Cable TV.

...
Comcast, specifically in this example, is not trying to sell this as a discount, but a requirement to get a service at a price. Their marketing gaffe is that they didn't analyze their inheritable customers' services and expectations, and IMO it wouldn't have taken genius to do so.

Bundling can be an effective marketing tool when there is a clear-cut set of needs by a class of customers in a market, but internet service and cable TV are not the same water, just because they come down the same pipe. Bundling would involve a choice of adding faster DL with existing UL speeds, or a higher newsgroup DL limit with your existing service, and giving a price break for the bundle; with cable it would be for example an ala-carte choice of channels or a fixed number of PPV events for a fixed price, smaller than ordering them individually. Bundling just doesn't apply here in the classic sense.

Bundling as a marketing tool can make sense when it makes your bundle a more compelling value than your competitor's; monopoly or not, none of us can switch to a competitive cable internet provider (Earthlink reselling notwithstanding).

I am certainly evaluating alternatives to Comcast with the switchover from ATTBI, and I certainly would have had no specific motivation to do so without being faced with this bumbling, possible mean-spirited, non-bundle being shoved down my throat.
[text was edited by author 2003-04-17 18:53:29]

Kaltes
Premium
join:2002-12-04
Los Angeles, CA

Re: Well

seriousfun, do what I did: immediately purchase basic cable for $9.95, which will mitigate your loss by saving you the full $15 hike, cutting it to $10.

additionally, if you calmly and respectfully express your frustration with Comcast to the salesperson, and inform them that you really think paying even $10 more a month in too much. Also say that you have seriously been considering switching to DSL, you just havent made up your mind yet for sure.

If the Comcast salesperson does not offer you a promotion for $5.95 a month with free installation, claim your friend told you he signed up under that promotion (I actually did sign up about 2 weeks ago under that promotion) and that if you got that deal, you'd stay with Comcast for sure.

*OR*

SBC is offering a deal for $35/month so you can just switch to DSL.

YuriLuzr

join:2002-08-14
San Jose, CA

I don't think Comcast would get such a negative response if they just left the price for HSI @ $42.95, then if you also subscribe to TV then reduce that price to $39.95 or so. The problem is they are raising the rate for HSI for no real reason other than calling it a bundling hike.
--
YuriLuzr "Master of all, ruler of none."
jungleman406

join:2003-04-22
Highland Park, MI
Hey guy tell the truth you work for Comcast don't you!!!!

insomniac84

join:2002-01-03
Schererville, IN

Maybe 5 years ago

In the begining if they had charge 60 a month for internet then they would be justified in charging it now, but instead the price increase is just a penalty for not subscribing to cable. It just doesn't make sense that the price keeps going up.

Speedy8
Premium
join:2002-08-22
Alliance, OH
clubs:

Re: Maybe 5 years ago

Yes, my roadrunner used to be $40 a month, but they raised it to $45. There is also an extra $10 a month charge if you don't have cable TV access.
thegoldwater
Thegoldwater

join:2002-03-10
Parkton, MD

Don't Like Comcast-- Blame the RBOCs

If Comcast is your only choice for Broadband, it's not their fault. In many areas, the RBOCS openly refuse to provide DSL service. And most competitive cable companies don't have the resources to build out a secondary cable plant to compete against Comcast.

If Comcast is the only broadband choice, it's because the assumed the risk to build the business.
vic102482
Premium
join:2002-04-30
Upper Marlboro, MD

COMCAST SUXORS

ANGRY FACE ANDGRY FACE GRRRRRRRRR!!!!!!!!

Comcast sucks I gotta pat 59 99 for BS CRAPPY CABLE!!! Just because I have DISH I have topay your MORE :(:(:(:(:(:(:(:(:(

Too fustrated to sound mature!!!!
--
I tie a rope around my penis and jump from a tree, don't you wanna grow up to be just like me!!!!

nightdesigns
Gone missing, back soon
Premium
join:2002-05-31
AZ
·Cox HSI

Re: COMCAST SUXORS

said by vic102482 See Profile:
Just because I have DISH I have topay your MORE

Sounds about right to me. You went with their competor, therefore you are not deservent of a discount. Just order the damn cable and not use it, it's cheaper in the end. Such crybabies. If it's cheaper to get it with the cable, then get it, no one said you had to USE it!

-j

Kaltes
Premium
join:2002-12-04
Los Angeles, CA

Re: COMCAST SUXORS

Next time gas prices go through the roof and you complain, remember what a hypocrite you are for calling someone else a 'crybaby' because they are upset at getting gouged.

nightdesigns
Gone missing, back soon
Premium
join:2002-05-31
AZ
·Cox HSI

Re: COMCAST SUXORS

I'm not complaining about gas prices, then again i don't drive a SUV. I just deal with it, along with everything else. And if there was a deal where i'd get 50 cents less per gallon if i got a tire rotoation along with it (bundling), then i'd get the tire change as well. I don't see what everyone's complain is when there is a way to get around it. Yes if there was no alternative, then i'd be a bit annoyed. Don't forget, there's always DSL.

Kaltes
Premium
join:2002-12-04
Los Angeles, CA

Re: COMCAST SUXORS

I don't think you understand the gravity of the precedent that this price hike is creating. If consumers let this slide, where will we draw the line?

Besides, your example was about a discount. Let me change the facts to mirror Comcast's facts: lets say you go to buy gas. You find the only gas station for 100 miles in every direction. The gas station charges $2.00 for gas usually, but today they jack up the price to $2.66 per gallon, unless you also get your tires rotated.

Let's say you neither need nor want to have your tires rotated, so you stuck with a choice:

#1. Pay for something you do not want in order to get the usual price for gas.

#2. Pay a 33% higher price for gas.

As you can see, the END RESULT is a choice between an illegal tying arrangement, and a massive price hike which may itself be an abuse of market power and trigger anti-trust action. Comcast is really violating anti-trust laws in 2 seperate ways, and claiming that because it is only violating 50% on each it should not be held to account.

If you read the threads on this, you see pro-Comcast people claiming this is not a price hike because you can accept the tying (they call it a 'bundle'), and you see people claim it is not an illegal tying arrangement because you can pay the higher price!

nightdesigns
Gone missing, back soon
Premium
join:2002-05-31
AZ
·Cox HSI

Re: COMCAST SUXORS

said by Kaltes See Profile:

Let's say you neither need nor want to have your tires rotated, so you stuck with a choice:

#1. Pay for something you do not want in order to get the usual price for gas.

#2. Pay a 33% higher price for gas.

You forgot the third option, the option i'm pointing out.
Use option #1, and tell the guy not to rotate them (purcahse and not use). That's what i'm saying to do with crapcast. Order the cable, but you don't have to use it. Just saves you $$ which everyone likes.

Kaltes
Premium
join:2002-12-04
Los Angeles, CA

Re: COMCAST SUXORS

Yes I know but you still have to PAY for that rotation even if you do not use it.

Furthermore, I tried to do exactly what you are saying. I told Comcast that I didnt even own a television and that the only reason I wanted basic cable was to avoid the even higher price hike.

BUT

The Comcast salesperson checked with her boss, and it turns out they MUST come and perform and install (which I would have to pay for) anyway.

So I had to borrow a television from one of my friends so that the Comcast people could put a splitter on the line and then plug the line into the TV.

But it didnt work......

So they blamed my tv (being a BBR reader Im not that stupid, It was obvious that Comcast had not taken the filter off my line, so I wasnt getting a tv signal).

So we sat around for over an hour, then they installed a cable box (which they shouldnt have done for basic cable) and told me that I had to have a box or the service wouldnt work, because something was wrong with my TV. The box comes with a nifty $3 rental charge, and the hassle of equipment return.

So even over my objection they assured me it had to be this way. Once they left I pulled the cable out of the box and plugged it into my TV, and WOULD YOU BELIEVE, it worked.

So I called up Comcast and told them to pick up the box immediately. They did, but didnt give me a reciept and didnt confirm the pickup, so I had to sit on the phone to make sure that Comcast put a not on my account that they picked it up, because what WOULD HAPPEN is that Comcast would say I still had the box, and charge me like $400 if I didnt return it (which I couldnt do bc I wouldnt have had it).

So then I unhooked the TV and returned it to my friends place.

So now I am paying for a service I dont use and pay $53 a month, because if I did nothing I would have had to pay $60 a month.

The end .
vic102482
Premium
join:2002-04-30
Upper Marlboro, MD


said by nightdesigns See Profile:
said by vic102482 See Profile:
Just because I have DISH I have topay your MORE

Sounds about right to me. You went with their competor, therefore you are not deservent of a discount. Just order the damn cable and not use it, it's cheaper in the end. Such crybabies. If it's cheaper to get it with the cable, then get it, no one said you had to USE it!

-j
Well why dont you move to China you seem to support their beiliefs on speech.

This is the US I have a right to complain and damnit I am going to exersise it!!

I want Dish cable around here sucks I cant even get tech tv, wtf is up with that. Comcast is the only service provider here and its not a DISCOUNT its a FEE.

3 months ago I got it for 39.99 NOW I pay 59.99 what discount?
--
I tie a rope around my penis and jump from a tree, don't you wanna grow up to be just like me!!!!

[text was edited by author 2003-04-17 19:53:04]

stet
Volitar Prime

join:2002-03-08
Warren, MI

They are forcing people to pay for both.

Even if they aren't forcing people to subscribe to both services if they want internet service, they are forcing internet subscribers to pay for both services regardless if they get both or not.
--
Hey everyone! I'm a WEB HOG!
thegoldwater
Thegoldwater

join:2002-03-10
Parkton, MD

Re: They are forcing people to pay for both.

Actually, they aren't "forcing" you to do ANYTHING. If you don't like their pricing, you are free not to purchase it.

stet
Volitar Prime

join:2002-03-08
Warren, MI

Re: They are forcing people to pay for both.

Which is the choice I made. But if you want to subscribe to their internet service, they are forcing you to pay for both it and the TV service even if you don't get the TV service.
--
Hey everyone! I'm a WEB HOG!
thegoldwater
Thegoldwater

join:2002-03-10
Parkton, MD

Re: They are forcing people to pay for both.

No, they aren't forcing you to do anything. You have a choice
You can purchase Internet service separately from TV.

They are simply rewarding what they consider loyal customers. THIS IS THE WAY CAPITALISM WORKS. Perhaps you should focus on eating more "brain" food, and less granola, and you would understand this.

stet
Volitar Prime

join:2002-03-08
Warren, MI

Re: They are forcing people to pay for both.

If you want to use their internet service, they force you to pay for the TV service even if you don't have it. Their new price for internet service alone is the same as their price for internet and TV service combined. You are just as well off subscribing to both even if you never plug a TV in. And they are better off because they can claim you as a TV subscriber (even though you don't use it).
--
Hey everyone! I'm a WEB HOG!

J D McDorce
Premium
join:2001-12-29
Westland, MI

I might buy into the rewarding loyal customers argument if it wasn't for the fact that many of the customers currently being effected by the non-CATV rate increase are customers that have maintained continuous cable internet connections through @Home, ATTBI, and now Comcast. Are you inferring that someone who has been paying for the same cable internet connection for 3+ years is not a loyal customer? Or is subscribing to CATV service a requirement for entry into the Comcast Loyal Customer Club?
mjcrocket
Mjc

join:2000-12-02
Abingdon, MD

Re: They are forcing people to pay for both.

said by J D McDorce See Profile:
Or is subscribing to CATV service a requirement for entry into the Comcast Loyal Customer Club?
Yes

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD
·Comcast


said by thegoldwater See Profile:
If you don't like their pricing, you are free not to purchase it.
Yea... unless Comcast is holding loaded guns to peoples' heads and threatening to pull the trigger if they don't cough up the cash, then they aren't forcing anyone to buy anything at all. You make more of a statement of disapproval towards Comcast if you refuse to part with any of your money for their services. They don't give a rat's ass if you complain, all they care about is their monthly check. By continuing to pay for their service when you don't like it, you don't encourage them to make changes to their policies.
--
Pissed off at traitorous, ungrateful musicians? Don't just boycott them! Trade their MP3s and really screw them over!

[text was edited by author 2003-04-17 15:09:44]
mglunt

join:2001-09-10
Fredericksburg, VA
·Verizon FIOS

Re: They are forcing people to pay for both.

They aren't holding a gun to your head, BUT...

The problem is that for many people, if they want HSI, they only have one place to shop. ...and there are a lot of people who rely on HSI.

I used to get Cable and HSI from Comcast. I was paying $35+$5 modem. I got DirecTV, and paid a $5 "fee" for not having their cable TV... so $45. Then they raised it to $55+modem. I started having big time problems that did not get resolved for over 2 months, so I switched to DSL for $60 even though I had just bought a cable modem. If I had been paying $45 like I was, I probably would have stuck with Comcast a little longer to see if they finally upgraded my node.

It wasn't the price that made me switch, it was the problems coupled with the price.
mjcrocket
Mjc

join:2000-12-02
Abingdon, MD

Isn't it just possible that they just do not want customers who take just the HSI service? When a company raises rates for its service they know that a certain percentage of customers will quit! What better way to control growth & expenses. The more services a customer purchases from a single provider (not just cable companies) the more cost effective it is for that company to service that customer. (Economics 101) It is your choice on how to purchase various services and / or packages of services. It is your responsibility to evaluate the total end price of the various options when purchasing services, and decide which is the best option for your given situation. I'm talking about all services you might wish to buy, not just Cable TV, HSI, or phone service!
IAmTheEvilest
There Is Nothing Like A Restart

join:2001-01-03
Santa Barbara, CA
clubs:

Small, competitive providers do bundling too!

Bundling is an attempt at cable companies to make them your one-stop shop for your entertainment and communication needs. Look, in some areas, they are offering phone, telephone, and television services.

Look at the Bells, they are doing the same thing. SBC is doing their "Total Connections" thing where they sell a variety of different services, from phone to internet to cellular services. In some areas, they have teamed up with Dish Network to provide TV.

Everyone is doing the bundling now. And you are just bawking at the cable monopolies. A small cable company in my area, Starstream Communications also charges more for cable internet if you don't have cable TV. Everyone is doing it now. Probably a sign of the future
--
The two biggest things: the universe & human stupidity --Albert Einstein

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD
·Comcast

Re: Small, competitive providers do bundling too!

said by IAmTheEvilest See Profile:
Everyone is doing the bundling now.
At least Comcast isn't reclassifying residential customers as business customers and charging more, like this company does.
--
Pissed off at traitorous, ungrateful musicians? Don't just boycott them! Trade their MP3s and really screw them over!
thegoldwater
Thegoldwater

join:2002-03-10
Parkton, MD

Re: Small, competitive providers do bundling too!

You should read the entire thread... that was a mistake that Vonage made on one customer.

Facts please, Rummy would not be pleased with you.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD
·Comcast

Re: Small, competitive providers do bundling too!

said by thegoldwater See Profile:
You should read the entire thread... that was a mistake that Vonage made on one customer.
There actually 2 customers in that thread who had that problem. I wouldn't be surprised if there were more among people who don't post to this site, and I wouldn't be surprised either if none of them bothered to go through all the hoops to get Vonage to fix the problem like that one customer did. Anyway, this is gonna get way off topic quick so I'll drop it from here.
--
Pissed off at traitorous, ungrateful musicians? Don't just boycott them! Trade their MP3s and really screw them over!

morbo
Complete Your Transaction

join:2002-01-22
00000
clubs:
·Charter Pipeline
·AT&T Southwest

said by thegoldwater See Profile:

Facts please, Rummy would not be pleased with you.
actually, that's about right. ... but also put one thumb up your butt and go to sleep at night dreaming about killing. that's more like it
--
We'll be incredibly lucky to make it out of this decade without an attack that dwarfs 9/11 due to the current U.S. led war.
nasadude

join:2001-10-05
Rockville, MD
·Comcast

they are a monopoly to me

"....while leading the race to provide broadband Internet access, they by no means enjoy a monopoly in that business, either."

Comcast is sure as hell a monopoly in my area - they are my ONLY choice for broadband. If I had a choice of broadband providers, I would let comcast know what I felt of this practice by taking my business elsewhere. In my area and in many others across the country, comcast is abusing their monopoly power to extort another $15 or so out of their HSI customers that don't want comcast's TV service.
thegoldwater
Thegoldwater

join:2002-03-10
Parkton, MD

Re: they are a monopoly to me

They are only a monopoly because their potential competitors refuse to compete. This isn't US Steel or Standard Oil here, folks.

You can't hold Comcast liable for being the only company willing to undertake the business risk in an area.
Chateau1

join:2003-04-10
Berkeley, CA

Not to be a yes-man, but to nasadude's post I reply with an enthusiastic "yes!"

This issue has already been discussed thoroughly in many news threads, and it's overwhelmingly clear that Comcast isn't fooling anyone.

They take over AT&T Broadband in my area (thank you for "choosing" Comcast), and within the month (they could have at least had the decency to wait a few months so it wouldn't be so offensively obvious!) they raised my bill 15 bucks in return for a spiel about their "commitment" to me and their "improvement of my broadband access" (how do you improve upon AT&T's 1750 Kbps?).

Of course, if I were a subscriber to their cable this price increase would not exist.

Thus I am paying the same price for Broadband as I would be paying for Broadband AND Cable. So I am dammed if I do (I pay for their shoddy Cable) and I am dammed if I don't (I still pay for their Cable even if I don't want it). If this pay increase is for better service, why don't they raise their Cable subscribers' prices by $15 as well, huh??

Comcast is abusing their monopoly, period. Even if the law has a loophole they can squirm through, I still say Shame on them!

Chateau

Kaltes
Premium
join:2002-12-04
Los Angeles, CA

Stupid

(fake example :P)
Ok folks, you can download and install "Windows NewPee 2005 OS" for $100 if you also install "MS-can-violate-my-privacy spyware manager 2005"!

However!

Buying just NewPee 2005 alone will cost you ONE MILLION DOLLARS.

THIS IS NOT ANTI-TRUST TYING FOLKS, BECAUSE YOU CAN STILL BUY THE NEW WINDOWS WITHOUT THE BUNDLED ELEMENT. The fact that buying it alone will cost you one million dollars, even though this effectively forces you to take the other product, is TECHNICALLY perfectly ok! So lets get off of Comcasts back guys, because it is totally legal for them to do this, after all their lawyers said so! (sarcasm)

Form over substance, people. Letter of the law over spirit of the law. The fact is that Comcasts new pricing arrangement has the effect of forcing customers to take something they do not want, or they must pay a substantial penalty. If Comcast gets away with this, a MASSIVE loophole will open in anti-trust law, allowing companies to engage in tying routinely through coercive pricing schemes instead of outright forcing you to take 2 products.
thegoldwater
Thegoldwater

join:2002-03-10
Parkton, MD

Re: Stupid

No, you are wrong, and you are stupid. Your absurd example is patently stupid. I see you live in California, so I don't need to belabor the point.

Anti-trust law does not exist to give you the price you want for a product. It exists to ensure market access and market availability of products. Bundling products together is as old as Moses, my friend.

Every heard of the Happy Meal? Value meal? "The Special"? How about "Blue Plate Special" for you diner lovers out there...

Businesses -- just like individuals -- are entitle to sell their products at the price the market will bear, and with the features they choose. If they decide to reward their "loyal customers" who buy more of their services (and hence, lower the cost of their doing business, believe it or not) that is their choice. They are making decisions based on economy of scale, which is their right.

If you don't like, don't buy their product.

rstrandb
Premium
join:2003-04-17
Albany, GA
·Mediacom

Re: Stupid

You are absolutely correct, bundling of products and services is as old as business itself. If you don't like the price you're paying disconnect the service. After all, paying for high speed internet is completely voluntary. You could always vote with your wallet and go back to dialup, you can get your price break there.
Chateau1

join:2003-04-10
Berkeley, CA

Re: Stupid

Yes, of course bundling is fine! But not when it is shoved down your throat, not when there are no alternatives, and not when before there was none!

If Comcast wants to increase my rate, fine, let them do it. But cloaking their Cable services in this increase is what is really offensive. This is an insult to the customer--what, we're supposed to feel smart paying the same price for Broadband as we'd pay for both Broadband and Cable?

It's unfairly penalizing the consumer who isn't interested in Comcast's shoddy Cable service. It may be legal, but that doesn't mean it's right.

Chateau

Kaltes
Premium
join:2002-12-04
Los Angeles, CA

I'm going to ignore the blatant trolling of thegoldwater, and address what rstrandb said.

What comcast is doing is not really bundling. Classic bundling is supposed to pass on a small savings in cost to the consumer, because that consumer gets all his/her services from 1 source.

In Comcast's case, this is not what is going on. They implemented a massive selectively-targetted price hike because they sought to leverage their broadband supremacy against superior satt tv service.

Furthermore, even though you think HSI is a luxury, many people rely on it both for entertainment and business. If you were upset with cable TV and it was the only available option, how would you like being told "Hey, vote with your wallet and go back to free antenna TV"? The consumer should not have to pay the price for the bad faith of the companies.
ggtaylor
Michigeezer

join:2001-04-02
Saginaw, MI
clubs:
·Charter Pipeline

The missing argument.

I don't want to defend Comcast, but isn't there a rationale for higher cost without cable TV. I mean, if you have cable TV and HS internet - it's coming into the house on one cable from the pole. The "cost" of the line is shared between the two services. If you don't get cable TV, the internet package has to "pay" for the cable and maintenance. I won't defend the amount Comcast is charging, but it isn't an anti-trust issue. My past experience with "cost accounting" (aka creative accounting) includes situations such as not being able to cost-justify a manufacturing change adding a simple drill press until the equipment was physically moved from a "high-overhead" area across an aisle into an area with a much lower overhead "cost". As much as it feels like Comcast is wrong, all they "appear" to be doing is allocating the cost of running and maintaining their cable to your house. They aren't "conditioning the sale of one product on the purchase of another" they are simple giving you a discount if you get both products.

See 6 replies to this post
ATTGUY2

join:2002-06-02
Fremont, CA

Mattmhk You Are So Right

Mattmhk...You said it brother. Why should Comcast be able to charge more for internet access because some people just don't watch TV. It's extortion, that's what it is.

Is it fair to the busy executive who travels frequently but needs high speed access to send large reports to his work place or to other exec's around the world? How about the Christian family who just doesn't want TV. I know one family that has a large screen TV with a VCR and DVD player. They watch videos and educational programs.

The bible talks about the "beast rising out of the east". Well it's here folks.

rstrandb
Premium
join:2003-04-17
Albany, GA
·Mediacom

Re: Mattmhk You Are So Right

Again.....noone is putting a gun to your head to keep your internet service. The internet is not a given right, you have the choice to NOT use it. If comcast chooses to charge you more for the service, you have the right to not use the service. If you don't like a particular brand of car you don't keep buying that brand do you? Same principle applies here, you can always go back to dialup if you want to save money.

Kaltes
Premium
join:2002-12-04
Los Angeles, CA


Re: Mattmhk You Are So Right

I think rstrandb works for Comcast, lol.

You make an analogy with cars, then you claim that broadband users can go back to dialup? Yes we can, and you can ditch your car and go back to riding a bike or walking.

You see, Comcast is a monopoly in most of the areas they serve. Some consumers can ditch Comcast and get DSL or some other alternative, but many consumers do NOT have a choice.

You other point, that broadband is not a 'right,' is equally ludicrous. Food is not a 'right' either. If you think it is, go to your local supermarket and try to take some free food and see what happens.

I think what underlies this argument is that broadband is not important enough for the public good to be threatened when some company like Comcast abuses its power. You are wrong.

If broadband was some trinket without any significant social importance, I fail to see why so many people would pay $40+ to begin with.

Broadband is not a luxury like jewelry, expensive clothing, or fancy cars and yachts. It is an integral part of the lives of millions of Americans.
[text was edited by author 2003-04-17 22:20:39]
Chateau1

join:2003-04-10
Berkeley, CA

The Internet is used by over 50% of our society. Sure, you can disconnect your phone if you don't want to pay for it (to use your argument--no one is holding a gun to your head to own a phone), but where does that leave you? Try doing business (or living a normal life) without a phone! The same is true of the 'Net. Even the IRS has gone Online!! Very quickly the Internet is becoming an integral part of our society, and though access is not (yet) a right, it is rapidly becoming a necessity. Therefore, not having a choice in providers of standard HSI service leads to monopolistic abuse.

Go back to dialup? Come on...That's like saying "cancel your phone line and start shouting!!"

Again...Comcast abuse of monopoly. Raising fees because they feel like it, and want us to watch their Cable.

Chateau
pigglywiggly

join:2003-01-29
Corning, NY

said by ATTGUY2 See Profile:

Is it fair to the busy executive who travels frequently but needs high speed access to send large reports to his work place or to other exec's around the world? How about the Christian family who just doesn't want TV. I know one family that has a large screen TV with a VCR and DVD player. They watch videos and educational programs.


Good point. And how about the bread buyer who doesn't like crust? Why should he pay for it? Extortion, I tell you.

Actually, it's called capitalism.

J D McDorce
Premium
join:2001-12-29
Westland, MI

Re: Mattmhk You Are So Right

said by pigglywiggly See Profile:
Actually, it's called capitalism.
said by »www.m-w.com/cgi-bin/dictionary:
capitalism
an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market
In this case, prices are largely determined by lack of competition

ken512



Anti-Trust

Why isn't SBC or others violating anti-trust laws when they won't let you have DSL without having a land line phone like me? I am stuck with Comcast because my only other option is to pay $30 more a month for a phone to get DSL, or pay $15 more a month to stay with Comcast. Or of course I could get rid of broadband altogether, but I can't go back to dial up, because I don't have a land line phone. There's always satelite, but that would cost more than Comcast. I realize that companies raise their rates, it happens all the time. The problem here is Comcast says we are raising your rates because you don't use one of our other services. Well legal or not that sucks.

See 7 replies to this post

murfster
Under Siege
Premium
join:2001-03-04
Mcdonough, GA
clubs:

You guys are surprised?

Charter Communications has been doing this for years ... this is how they run business. Essentially, if you don't order the "Expanded Basic" you cannot get "High Speed Access".

...so if I ordered just "Basic", I'm screwed from getting "HSA"... joy.
--
GMC Forums
CSGamerZ

WhyADuck
Premium
join:2003-03-05

Consider the source - a libertarian think tank!

Folks, I wouldn't get too upset about this article until you consider the source. The Progress and Freedom Foundation (which in my opinion doesn't fully believe in either) is a libertarian think tank. The only reason anyone listens to them at all is because they say things that pro-business Republicans want to hear (sometimes), so they are always good for a quote when they say the right things. But in another sense, they are like Jesse Jackson - they have a lot to say and they know how to get quoted in the press, but privately most representatives in Washington have little respect for their utterances, except when it's convenient to use one of their quotes in a press release or constituent mailing (particularly in the case of the P&FF, since libertarians can't be counted on to fully support either major party's agenda).

The P&FF is one of those organization that can be counted on to support big business no matter what (their belief is that the government should take a completely hands-off approach to business, and that the marketplace can punish any wrongdoing by corporations. Obviously they've never quite figured out the lessons of the railroad monopolies, Standard Oil, AT&T, etc). I'm pretty sure that if it were up to them, antitrust laws wouldn't exist. In my opinion, they are to political advocacy what Jerry Falwell is to Christianity, if you catch my meaning.
saltydan

join:2001-05-03
Knoxville, TN

idiots all of you.

As a comcast subscriber for both their cable tv and internet we pay ~$98 (includes tax and fees). The cable portion (~$42) pays for the channels and maintance of the cable line. The internet fee (43.00 + 3 for modem) pays for the internet only. As ggtaylor that 15 bucks you pay extra is used to maintain that line that comes into your house, i,e you cant get dsl with out a phone line, so there fore you cant get cable internet access with out a cable line.

Comcast is not a monopoly, mainly your city/county gov controls who has rights in there. I have two choices here in knox, knology or comcast. BTW knology had to fight our county gov and city gov to get rights to come in here.
mattmhk

join:2003-02-06
Eugene, OR

Re: idiots all of you.

$15 a month extra to maintain a line thats used for Internet? Im sorry, but isnt at least penny of the $40-45 a month going to pay for maintaining the single line strung from a pole to my roof? I tend to beleive if you have cable TV, you pay for service and the line going to the house, or if you have internet service you pay for the bandwith and the line going to the house. Really, its obvious what the $15 a month is for, and I doubt its for maintaining a line they string up once and leave for years.

Personally I dont think they're a monopoly. With the amount of money they spend upgrading and maintaining the lines they certainly should have some exclusive rights.

In the end I'll probably have to get Comcasts internet service, I found their node about 3/4 of a mile away and my 256/256 DSL gives me mediocre pings at best. $45 for 256/256 or $57 for 1800/256.. hmm I think ill take the latter =)

Kaltes
Premium
join:2002-12-04
Los Angeles, CA

Re: idiots all of you.

""$45 for 256/256 or $57 for 1800/256.. hmm I think ill take the latter =)""

That is called a price hike due to inadequate competition. In anti-trust it is called an abuse of market power.

Kaltes
Premium
join:2002-12-04
Los Angeles, CA

Considering that ATTBI was already profiting at its $35/month rate, which means after paying all costs it still had revenue left over, your argument makes no sense.

Let's say that it costs $15 to maintain my line. Good. That was already more than paid for with my original $35 a month. Then they upped the price to $43 for even more profit.

Now you claim that they need to raise the price to $60 to cover costs that were pre-existing and more than adequately paid for by the old subscription rates?

And you are calling us idiots?
jungleman406

join:2003-04-22
Highland Park, MI

Well I see that you don't know a lot about a monopoly, the state of Michigan and it's surrounding cities all protect Comcast from any cable competitors that want to sell in the state of Michigan. I was employed by them at one time I quit due to the fact that they use that as a leverage to do anything they want to their customers. Write or call your Senators or yet the Governor of your state and they will all give you the run-around because they know this to be true. So when you call us idiots stop, and take a good look at yourself....
saltydan

join:2001-05-03
Knoxville, TN

K maybe calling everyone idiots was not called for, and maybe every city policy with cable companies is different. Sorry for spouting out like that. The point I was trying to make was that that extra money you have to pay when you dont have a service with a company is uselly to used to maintan your line (connection). I will agree though it is rather high but the fact of the matter most companies charge this.

jungleman406, and as you said that your state/city gov control who sales the service so it seems more like your goverment is supporting the monopoly.

Sorry.
XknightHawkX

join:2003-02-13
Morton, IL
clubs:

Bundling isn't a problem

Bundling isn't a problem in most cases. THe problem before you is that they raise the price and said it would go back down if you bought the other service. if your paying 35 dollars for something and they tell you that now we have a new bundle that makes it cost 35 dollars but if you don't buy the bundle you have to pay 50 dollars now. Pretty much just told me if I want to keep it at the price of 35 dollars I have to pay another 35 to 40 dollars for another service that I didn't have and didn't want. Either way you still have to pay them more money. It's a losing situation for hsi only customers. When we first had cable modem in the area they told us that we could have hsi cheaper if we had cable but now that ihave been looking at this stuff I have been noticing that the hsi is costing us more now. Got looking at the site now for us to have the cheaper price we have to purchase a crappy digital service that is just that crappy. The bundling needs looked into. plain and simple. Ok, I'm done let the flamers in and start cutting my response into tiny pieces trying to make it into an invalid point.

anonymous009

@echostar.com

difference?

Would it be better and/or more acceptable if they started out with their programming service, then they started to offer internet service? How would it be different if they offered existing customers of programming service a lower price to also subscribe to internet service? Would it make anyone complain if they charged an internet only customer a higher price at that point? I would say most people complaining would not see it as badly as they are now. If you say this example is different, then you are being hypocritical about this bundling of services. Since many are arguing the legality of whether or not a company can charge differently for bundled service and single service. Is it legal for a fastfood place to charge different for cost of drink with food then just the drink? All that was done wrong is the reversal of services being offered.

Kaltes
Premium
join:2002-12-04
Los Angeles, CA

Price Hike, Tying, or both?

All Comcast HSI subscribers who did not already subscribe to TV service were recently faced with a choice:

#1. Pay for something they do not want in order to keep their usual price for broadband.

#2. Simply accept a 33% price hike in their broadband service.

If you picked choice #1 (which is what I ended up picking), you have fallen victim to what was effectively an illegal tying arrangement. Comcast supporters have claimed it was not tying because you could have simply chosen to pay more (option #2).

If you picked #2, depending on the level of competition in your geographic area, Comcast has abused its market power to raise prices, which is also a potential anti-trust violation. Comcast supporters have claimed this is not a price hike, because you could avoided it by paying for cable tv service (option #1).

But the truth is, that consumers were forced to select either #1 or #2. Clearly, taking these issues on individually just allows Comcast supporters to dodge one issue by hiding behind the other.

This action by Comcast affected all Comcast HSI subscribers who did not already subscribe to TV service by forcing them into either a tying arrangement or a price hike.

Kaltes
Premium
join:2002-12-04
Los Angeles, CA

Re: Price Hike, Tying, or both?

I would like to see any of the Comcast supporters offer up some kind of defense to this. I doubt they could come up with anything compelling but I would like to see how they try to get around taking on both issues at once.

redstepchild
Premium
join:2002-01-04
Birmingham, AL

ALL CABLE COMPANIES ARE DOING THIS.

This Bundled option has been what so many consumers have been requesting.
"I have both services.. I want a discount"

Granted the other side of the silver spoon is crafty. The bundled option is a great way for cable companies to increase the # of basic subsscribers which make the financial reports look good to the stockholders.
And financial institutions.

With standardized reporting in the cable industry coming along.. it is all about how many Basic cable, Digital cable and High Speed Internet customers you have.

Cable companies deperately need this financial footing in order to stay afloat. It is not personal, It is just business.
--
RedStepChild@dslr.net
joseph_chapman

join:2001-08-16
Skokie, IL

Rate hikes -- what are we paying for?

I read just about the whole thread. I wanted to ping in about the monopoly thing and add something different but I think it's all been hit.

I say they are a monopoly as well. Atleast in the sense that MS is a monopoly. In certain segments of MS's market (based on who you are and what you do) you don't have a choice and have to use their products. Likewise, in certain segments of Comcast's market you don't have a choice. But I guess it depends on how you define 'monopoly.' MS was found to be a monopoly and the finding has yet to be reveresed. Penalties are a different story.

I've got a different angle on the fees.
I had Ameritech, which was then acquired by SBC and raised my rates. So I switched to ATTBI, which was then acquired by Comcast and I'm waiting for them to raise my rate (Chicago area).

If you watch your neighborhood and see how often they have to do work on 'lines' you can see that line maintenance is extremely cheap. Most 'truck rolls' are to service existing physical infrastructure that has been 'deactivated' with some type of filter (or logical disconnect in the case of telephone companies) and it's a 10 minute job to turn it on.

By its nature, telephone infrastructure is more costly to maintain so I'd believe that arguement for them first (and I still don't).

So what really drives the cost increases for both cable and telephone?

Look at this:

Mar 12, 2003
Comcast Announces Successful Completion of Continental Cablevision Bondholder Consent Solicitation

Mar 3, 2003
Comcast Announces Liberty Media Corporation Triggers Exit Rights Process For QVC, Inc.

Oct 31, 2001
Comcast Completes Acquisition Of Outdoor Life Network

Yet they are rolling in money:
Comcast Reports Record Revenue Of $9.7 Billion And Operating Cash Flow Of $2.7 Billion For 2001

Comcast Full Year And Fourth Quarter Results Meet Or Exceed All Operating And Financial Goals
Early Integration Success Sets Base for 2003 Growth
Company Targets Significant Debt Reduction During 2003

Your monthly fees have been and will continue to line the pockets of lawyers and C_Os (CEO, CIO, CCO, CFO, etc) as these companies buy and sell each other back and forth providing no real benefit to the end consumer. Unfortunately it's the law that allows it. Written by lawyers and, ultimately, paid for by consumers.

The stock price increases and makes stockholders happy. The investor market is who companies of this size are playing to. If we could eliminate the games the stockmarket allows that might improve things a little and maybe refocus their attention on what matters; quality products and services at competitive prices.

Go read some Ayn Rand (she can be a little harsh and brutal at times) and rethink your capitalism thoughts. Capitalism on it's own is nice. It does need some restriction by government so keep it from outright screwing people or the environment or whatever. But a lot of what it is allowed to do is because of some of the daffy laws we have. Comcast has grown to where it is through acquisition, not by providing better products. It also owns content and, just like MS, has been able to leverage revenue from those operations to front other activities (like acquisitions).

How convenient.

Of course that's just my opinion; I could be wrong.

Kaltes
Premium
join:2002-12-04
Los Angeles, CA

Re: Rate hikes -- what are we paying for?

Capitalism doesn't screw people, greedy individuals screw people if the market fails. If capitalism is working properly, then natural competition curbs and constrains human greed.

But sometimes, humans try to subvert capitalism, and restrain or prevent competition through various means. This is where the government must step in and say "Hey, play by the rules or we will take away your money and/or throw you in federal prison."

If the economy was a football game, the government should play the role of the referees. However, the government should be careful to NOT try to take on the role of the coaches.

The govt should tell us what we cant do (because it harms society) in the market, but should not tell us what to do (that would be socialism).

newview
Ex .. Ex .. Exactly
Premium
join:2001-10-01
Parsonsburg, MD

Just wait until YOUR price goes up . . .

By consistently referring to the $42.95 per month price as a discount, Comcast implies that actual price is $57.95 a month, and can "discontinue" the discount at any time, and everyone's price goes up. The very word discount implies a reduction from the full or standard amount of a price. Those of you who are currently paying the $42.95 per month price are living on borrowed time and at the whim of Comcast for a dramatic price increase once Comcast determines they've brought enough satellite defectors "back into the fold".

By asking the FCC & the FTC to investigate their pricing policy, as Senator Barbara Boxer (D-CA) has done, and with the harsh light of the Consumers Union on them, Comcast may ultimately be forced to set the $42.95 price as standard pricing for ALL Comcast customers . . . not just the ones who subscribe to both. Raising the price NOW to the $57.95 price point would CERTAINLY draw undesired media and possibly Federal attention on Comcast.
--
The Rules of Spam | Maryland's New Anti-Spam Law
Where are we going? And what's with the hand basket?
vic102482
Premium
join:2002-04-30
Upper Marlboro, MD

Re: Just wait until YOUR price goes up . . .

YES thank you!!!

I dont get it 6 months ago NO CABLE only interent I was payin 39.99 then I started payign 42.99 NOW 57.99 what discount??????

Thats a fee for going with a competetor not a discount.
--
I tie a rope around my penis and jump from a tree, don't you wanna grow up to be just like me!!!!

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

Re: Just wait until YOUR price goes up . . .

Exactly! You are being charged a PENALTY for using the competition, *NOT* being given a discount for adding Cable TV.

It's a TOTAL RIP OFF.
Nagrom Nniuq

join:2002-11-19
Springfield, OR

Re: Just wait until YOUR price goes up . . .

Hey I don't even use TV period. I don't want TV period. So now I get a price increase because I don't want TV???!! WTH is going on? I for one am going to check into a lawsuit on this. I'm sure many people are doing this.
Forums » The Legality of Bundlingpage: 1 · 2


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