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Comment by teeray | Hacker News Reader

Unfortunately, they will probably respond by raising rates to cover lost revenue from early termination fees and the loss of lock-in. This is arguably better though, since there is up-front pricing.

EDIT: Perhaps the only situation where it isn’t is where they are the only game in town and you intend to ride out the whole contract.

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> Perhaps the only situation where it isn’t is where they are the only game in town and you intend to ride out the whole contract.

They should use loyalty discounts then, or any other system where the business incentives align with the customer incentives. ETF's are the exact opposite of that.

Not necessarily and not straightforwardly. At least theoretically, the monthly fees are already at the maximum they an extract. Making them higher means less customers and that trade off did not changed.

Companies are not trying to earn enough to cover expenses. They are trying to earn maximum possible.

Will they raise rates, or just stop offering the discounts for contract?

Right now the way it typically works is they have some monthly rate for service without a contract, say $100/month, and a discount monthly rate if you are on a contract, say $80/month but with a termination fee if you cancel service before the end of the contact (unless you are moving to somewhere where their service is not available).

Wouldn't their response to this be to simply stop offering the $80/month with a contract option so everyone has to go for the $100/month month to month service?

Speaking of contracts, I've realized from other comments that there are actually at least two kinds of contracts ISPs are using.

Apparently at some ISPs your contract is for N years of a specific plan. If you want to change to a different plan at that ISP you have to break the contract and can get hit with the early termination fee.

At others, such as Comcast, the contract is that you will maintain Comcast service for N years, and that if you keep the specific plan you are on they will not raise your price for N years. Changing Comcast plans does not break the contract. You just lose your price guarantee on your original plan, so if you later change back to it you will pay whatever the current price is.

For example, I canceled my Comcast "triple play" internet/voice/TV plan and replaced it with an internet-only plan a year into a two year contract with no problem and no termination fee.

I'm curious which of these approaches is more common.

This will allow free market mechanics to kick in for competitors. Once nyc got more than 1 option at houses prices dropped.

Some ISPs make it really hard to know what the 'up-front' price is after all the bs fees and taxes that get added

The FTC (note: not FCC) is working on that one, along with other forms of "junk fees":

https://www.federalregister.gov/documents/2023/11/09/2023-24...

Not really no, ISPs charge as much as they can and already charge what the consumer base will pay, they aren't a company that's on the edge of profitability that needs to raise rates.

They might try to use it as a PR smokescreen but except for consumers that do not understand reality, this will not work.

The economics doesn’t fully allow for that, due to both visibility and time preferences

He said "probably".. rofl..

edit: I stand by it. I have fucking decades of history behind my statement so just enjoy being wholly inaccurate!

They're going to raise rates no matter what.

It's difficult to know how much this will impact what they raise rates by.

They will do what they've literally always done. Raise pricing, as much as possible. The reasons are usually meaningless excuses or genuine issues, but the prices will not drop after those issues pass, so still horse shit.

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