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Old 02-19-2014, 08:21 AM   #18
Atlanta Dan
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Default Re: Comcast buys Time Warner Cable for $45 billion

Originally Posted by MasterOfPuppets View Post
i don't know what i'm missing here but the logic is lost on me....
ok i'm paying $70 a month for basic cable , and $40 a month for their internet.... soooo if i can watch everything thats on cable , on the internet , why do i need to keep paying the $70 for cable instead of just the $40 for the internet ? you don't have to have both...
Well for starters you cannot watch everything online without a cable package

Want to download HBO Go and watch HBO online - you need a cable or satellite subscription for that

Even though many of us would buy a standalone, broadband-only version of the HBO Go app, HBO has good reasons for not offering this. HBO’s existing business is a really good business. Its $4.9 billion in revenue last year was only slightly higher than Netflix’s $4.37 billion, but in terms of operating income, HBO blows Netflix out of the water: $1.7 billion to $228 million.

With those fat, cable-derived profits on the line, HBO can’t afford to just worry about losing customers to competitors. If it launched a cord-cutting product, it would have to worry about losing customers to itself—replacing its current, high-margin customers with lower, Netflix-style margins.

How about ESPN sports programming - need a cable or satellite subscription for that too - and ESPN is charging the satellite or cable provider a fee to permit its customers to gain access to that programming - think the cable or satellite provider is going to eat those fees rather than pass them along

ESPN's Internet Rollout Tests Television Cash Cow
Sports Channel Seeks to Profit From Demand for Online Video Without Pushing Away Pay-TV Customers

ESPN's strategy is to allow only pay-television subscribers to stream games that air on ESPN TV channels.

The sports network has devised a complex business model. Although the app is delivered over the Internet, ESPN collects money for the app from pay-TV providers such as cable companies, which pay for the right to offer it to their customers. For ESPN, a second revenue stream comes from advertising on the app.

And as far as the cost of a broadband connection alone being less than broadband bundled with a cable subscription the price of broadband alone is artificially high. It is similar to back in the day when the AT&T monopoly controlled local and long distance service, with long distance subsidizing local service. I suppose we should have been grateful AT&T was only charging 25 cents rather than a dollar a minute for long distance, but once AT&T was broken up and the cross subsidies disappeared the price of long distance fell off a cliff

Comcast’s deal this week to acquire Time Warner Cable highlights the pickle that cord cutters may soon find themselves in. The acquisition rests on the assumption that as people cut back on their monthly TV plans, the cable lines coming into their homes won’t lose their value. Instead, the more we imbibe of all the glories available on streaming services, the more we’ll need to shell out for high-speed broadband service...

“Comcast and the new, giant Comcast are going to do as much as they can to stop you from unbundling,” said Craig Aaron, president of Free Press, a consumer advocacy group. “In order for you to get content you like, you’re going to be pushed to pay the cable bill, too.”

You can get a hint of such a future in Comcast’s current price structure. Today, its cheapest Internet service — a plan that a cord-cutting household might select — goes for $40 a month for the first year. It offers download speeds of up to 25 Mbps, which means it’s fast enough to stream two or three videos simultaneously — say, a FaceTime video chat in the teenager’s room, an episode of “Scandal” in the living room and “Adult Swim” in the man cave.

Here’s the twist: Comcast’s cheapest TV-and-Internet plan goes for $50 a month for the first year, or just $10 a month more than the cord cutter’s plan. Subscribers to the bundle get the same streaming speed as the Internet-only plan, as well as basic TV service that offers a handful of local channels. Comcast also throws in its service for watching TV shows on your mobile devices. More enticingly, the plan includes access to HBO and its streaming service, HBO Go, which — unlike Netflix and Hulu — isn’t available to cord cutters who lack a cable TV subscription. ...

Americans pay far more for broadband and TV service than people in most other industrialized nations. According to data collected by the New America Foundation, in Los Angeles, the cheapest monthly television, phone and Internet service costs about $80. In Paris, a similar bundle sells for $32, and in Seoul, it goes for $15.

Broadband markets in most other countries generally operate under tighter rules than those in the United States. Nonetheless, the F.C.C. has attributed those high prices to a lack of competition in local broadband markets. Most American households are served by only two high-speed Internet providers, and some have only one or none. Even in markets with two providers — usually a phone company and a cable company — prices tend to rise.

According to a report by the research firm SNL Kagan, Comcast’s price for its basic Internet tier in Philadelphia and Atlanta rose more than 50 percent from 2009 to 2013. In each of these markets, Comcast faced competition from phone companies — but those high-speed providers raised their prices more than 30 percent over the same period.

The steady price increases in broadband rates cast a pall over any cord cutter’s dreams. It’s possible that you might still save money now by cutting off your cable. But if you plan to watch a lot of TV over the Internet, don’t expect to save money forever.

And do not expect to the cable/broadband companies to roll over and let streaming services like Netflix and amazon Prime eat their lunch

Netflix-Traffic Feud Leads to Video Slowdown

Netflix Inc. subscribers have seen a lot more spinning wheels lately as they wait for videos to load, thanks to a standoff deep in the Internet.

The online-video service has been at odds with Verizon Communications Inc. and other broadband providers for months over how much Netflix streaming content they will carry without being paid additional fees.....

Last month, a court ruled in favor of Verizon's suit to block the Federal Communications Commission's "net neutrality" rules.

While the business disputes between Verizon and Netflix at the heart of the Internet aren't governed by those rules, which require equal treatment of traffic flowing along the "last mile" to customers, the ruling made clear carriers like Verizon face few limits on the terms they can seek at the negotiating table.

Netflix is already eyeing the coming federal review of Comcast's acquisition of Time Warner Cable as an opportunity to push for new requirements on traffic-swapping deals, people familiar with the matter have said.

Regardless of which side gives in, "it's going to cost people money," said Sandvine's Mr. Bowman. "They're just waiting to see who blinks first."

Cable and broadband connectivity is a public good in private hands, and how it evolves is a significant issue for American businesses and consumers. By asserting so confidently that its acquisition is lawful, fair and all but a foregone conclusion, Comcast has cocked the gun. Its answer to those who believe it should not acquire such a big footprint is clear: Well, we just did, so let’s start from there.

In other words, the U.S. telecommunications system screws the customers
“For every complex problem there is an answer that is clear, simple, and wrong.” - H.L. Mencken
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