Busting Comcast's $250 installation fee for 105 Mbps
comcastmyths.tumblr.com
comcastmyths.tumblr.com
I work for a telco and we recently upgraded our cable infrastructure to handle 100Mbit (previously 50Mbit was the fastest). All the customer needs is a DOCSIS 3.0 modem, we re-provision in our system and they'll get 100Mbit. They come into our store, swap modems, and they're done.
As for the hilarious/stupid/disappointing things OP was told by sales/tech support/whoever, I can also confirm that. Every day I have conversations with people all over the business who don't know the basics of our business like the difference between Megabit Megabyte, etc. etc.
Our company has also started ripping people off in similar ways (like a $50 fee to downgrade internet speed) and they'll even use the same lies and stupid answers when we as staff question this move. It's a money grab, plan and simple.
Explain why you feel that is a "rip off".
More specifically if this company came to you as an employee (I assume you are an employee) and they said "hey we aren't making money and we need to reduce your salary" how would that fly with you?
Anyway I'm asking a serious question. I'd like to know the exact metrics of how you have come to determine that the company charging $50 to downgrade internet speed is ripping people off. Is it because nobody else does that? Is it because it doesn't cost them anything but a button click to downgrade?
One is, as you mention, because it's nothing more than a button click to downgrade. Less than a 1 minute call with a CSR. How they can justify $50 for that is anyone's guess.
The second is they're saying things like "it's to cover the cost of having CSRs, printing bills, etc." But actually, the $110/mo charge covers that, and always has.
Third is because the company is making plenty of profit, but the parent company wants more, so they're pushing it to do stupid stuff like this.
A large percentage of employees are looking for work elsewhere, it's just unfortunate there are not many options where we live (quite remote)
They don't need to justify. The only reason they would even think about this is if the detriment didn't outweigh the benefit. If perhaps x% of people think that it's a ripoff and 90% don't or don't even know or think everything is a ripoff anyway then why not get the extra revenue?
My guess is that the amount of people that even have any understanding of what is involved is quite small.
"But actually, the $110/mo charge covers that, and always has."
What do you mean "and always has"? Are you saying because they consistently turn a profit then you have decided they have enough to cover their fixed expenses and they shouldn't try to add to the bottom line? Not to mention that off the top with a billion dollar corporation you really don't know what is going on there anyway.
"Third is because the company is making plenty of profit, but the parent company wants more, so they're pushing it to do stupid stuff like this"
In a capitalist system there is really no such thing as "plenty of profit". The mere fact that you feel like it's up to you (or anyone else who makes comments) to decide "ok that's enough" really does not make any sense. I mean you've never seen profitable companies go out of business or bankrupt that at any point in time someone would have said "they make plenty of profit". (We can start with General Motors, Chrysler etc.)
"A large percentage of employees are looking for work elsewhere, it's just unfortunate there are not many options"
I'm unclear what the amount of employees looking for work matters with respect to what they charge. Are you implying that things like this make employees want to leave? I somehow doubt that.
Actually it does. Consumers are allowed to make decisions about purchases on any grounds they choose, including whether they feel that a company is taking too much profit, or that the company is violating some ethical standard.
Consumers are also free to call for boycotts or otherwise persuade others to not purchase products. If we think that a company should be transparent and justify their pricing so that it's proportional to costs, then that's what we think. If we think that companies shouldn't exploit the technical ignorance of consumers, then that's what we think.
In a capitalist system, we're free to debate these questions, make purchasing decisions based on them and start competing companies to serve dissatisfied consumers. If we have more technical knowledge, preventing non-technical consumers from being exploited by sharing information with them is an ethical good. Most advocates of free markets argue that these capacities make the system work.
The only thing that wouldn't be permitted in a pure capitalist system is if these ethical claims translated into a demand for government intervention, which no one has done so far. Even so, it's easy to argue that these arbitrary fees are a market failure caused by information asymmetry between Comcast and consumers and could require government intervention. The issue is not the price. It's that Comcast is misrepresenting the charge as technically necessary, which could be seen as discouraging consumers from evaluating competitors (assuming they exist) by implying that there are technical rather than business decisions behind the charge.
I guess it just bothers me that the crowd of people who try and influence others (and yes you are correct that this is fully their right) either have no skin in the game (in other words they only have one interest in mind) and additionally may not really fully understand how business operates.
I guess I just react very viscerally to things being worded "ripoff" because it's so easy for people to throw that around and pass judgement.
To me "ripoff" means take advantage and you could argue that in business there is a fine line between what is acceptable in terms of "taking advantage" and what is not. And you know what each of us has a different line. (It's just like religion and cheating on your taxes. Anyone who does more is "really religious" anyone who steals more is "a big crook").
Everyone draws the line at a different place. There are many people who believe that YC takes advantage of young people. You know all those "should I go to Harvard or to YC" would be seen by many people as totally taking advantage of someone (and may or may not be depending on the circumstances of the particular individual and what the particular person with the opinion really knows about YC).
The telecommunications industry in the U.S. is anything but capitalist. Furthermore, people don't really have a choice regarding their internet service, so ripping them off for another $50 is pretty low.
http://finance.yahoo.com/q/ks?s=CMCSA+Key+Statistics
The serious answer to your question is that the price a consumer pays should reflect the value of the service they are receiving and should be proportional to the cost of providing this product/service. If the business is subsidizing loses in one area by overcharging in other areas, then the model is broken... especially if you are punishing your customers that are looking for better value and have no other options because you lack competition. That is the very reason that we have protections from price-fixing schemes. It's the same issue as the Banks' overdraft charges. They are making huge profit off the most vulnerable of their customers.
I'm sorry, but I can't agree with that as a general principle. In this specific instance, with Comcast et al who benefit from monopolies, sure. But as a general principle, the 'value' of a product or service is whatever people are willing to pay for it. If I buy widgets in Asia for $1 each, and Americans are willing to buy them for $1,000,000 each, than that's their value.
You can choose "value" as your strategy and sometimes that can work in your favor. But many times the public is easily duped by your competition and what they have advertised as "value" and it's not that simple.
Cases in point: Ponzi schemes, monopolies and cartels, price-fixing schemes, 'pump and dump' securities fraud, insider trading... need I go on? All of these things are illegal in the US--the supposed mecca of free market capitalism. Do you think these should be legal? Or you are simply arguing that everything that is legal is ethical? If you believe that, then I think you put too much faith in our legislature.
Edited to remove an inflammatory statement.
This does happen. And at that point, you get another job. Unfortunately, the analogy doesn't hold up with ISPs because there are many areas where there isn't another ISP.
But this rule completely breaks down when you're dealing with regional monopolies like Comcast. In that case, you do have to introduce the concept of pricing fairness to avoid someone abusing their monopoly - as Comcast appears to be doing in this case.
Called to complain / change it to 105 Mbps and had multiple customer service people try and tell me that we'd have to pay a $250 fee to have someone come out and make sure that we could handle 105 Mbps service, even though 36 hours earlier we had the faster service.
Finally managed to convince a service rep that we had it the day before so we obviously were equipped to handle it - only wasted ~3 hours of my life.
Basically you needed to have 20% better signal than was needed for the service so that you wouldn't fall off-line when something created a small amount of interference.
I suspect Comcast is doing something similar. Not really charging to do the "install" but charging to certify that you have enough signal for the service.
It can also be that they want to check if they need to pull a new cable to the edge of your house, or upgrade the Amplifier at the "block".
You probably can convince them to not do all of these things, but your service may suffer in the long run.
Back in the day we would do "no SLA" installs and if your cable went out it was yours to deal with. When your choice was that or a modem, lots of time you took that rather than having a 33.6k connection.
The modems are nowadays configured to only allow requests from certain ip space with certain passwords because you could actually accomplish a lot in the docsis 1.0 days by messing around with SNMP.
Disclaimer: The FBI was cracking down on people who were doing this.
If you call tech support they lose a lot of money, and people at the bleeding edge tend to be the ones who call the most and take the longest to trouble shoot.
Unless maybe you have a multi user household.
I pay $50 for 5mbps. It's highway robbery.
Me, years ago: What will I do with this massive 40 MB hard drive?
Me, years ago: What will I do with this massive 4 GB hard drive?
Me, fewer years ago: What will I do with this massive 40 GB hard drive?
Me, today: This 2 TB hard drive is almost full. How much are 4 TB drives going for?
Me, years ago: Wow! The Internet speeds at college are so fast.
Me, upon every Internet bandwidth increase: I don't need it to be this fast. . . but it sure is nice!
What will I do at 105 that can't do at 50? I don't know yet. That's the point. Almost no one does. 640 kb isn't enough for anybody.
Thinking more about this, I think I may need more bandwidth if I were consuming more real-time high volume data. May be the upcoming virtual reality apps (Occulus, etc.) will be the next jump in bandwidth requirements.
It's sad that things like speed or megapixels are a single easy to quote number because many people think more is better.
(I'd love a solid 7.5 Mbps and no caps.)
Between 5pm and 11pm, the whole network gets over-saturated, except for the 105's.
I wanted higher speeds. They couldn't get me close to the other deal, so I told them they had to compete on price. They offered $35 with a year contract.
I told them I was going to get service with the cable company and call back to cancel and they dropped my price to %50 off for six months with no strings attached.
So shop around and call them and negotiate.
Beyond that, look at Netflix's recommendations today:
https://support.netflix.com/en/node/306
To get 1080p streaming, you need 7 Mbps. To get 3D you need 12 Mbps. Now imagine you are streaming one 1080p show from Netflix, your wife is streaming another on a different device, your son's Minecraft server has 19 kids from school attached to it, your daughter is watching HD YouTube videos and your main computer is downloading Windows 8.1 updates.
That's why I have 75 M/bps downstream and 35 M/bps upstream through Verizon FIOS anyway. That and it was $74.99 per month including their Prime TV lineup and unlimited landline phone service.
I agree with your conclusion, but not necessarily your reasoning. By contrast, when I watch an actual DVD, it makes me wonder why we put up with the awful compression artifacts of most streaming video. Instead, I might argue that we need higher bandwidth just to get back to where we were, and then will need even more to get to the point where transmission speed is not the limiting factor.
and unlimited landline phone service
Again, the wonders of modern compression technology. It's amazing that "landline phone" is still considered a step up from VOIP, and yet it is!
On VoIP with a good low loss path you can get amazing quality too. Skype for example sounds even better than digital circuit switched telephony.
Don't feel too bad, I'm paying $32.99 for 1mbps cable. I can do just about everything I want, I just have to plan for it to take longer than I'd like.
Business doesn't work that way. You make hay when the sun shines.
And there are cases when you can't charge. Because of things your competitors are doing.
In a restaurant they don't charge you for napkins and water although they could. (Actually they do charge for premium water but that's a fairly recent invention).
The idea of business is to make money.
It's not up to anyone to decide how much profit is "enough" for comcast to make. If they could simply charge more per month without games they would.
Sometimes it's easy sometimes it's hard.
Take airlines. They would like to charge you more for a ticket but if they do you might not book the ticket. Better to be able to advertise a cheap price plus extras than an all inclusive price without extras. Why? Because people are not rational buyers (generally) who can figure in all the things and the "total cost of ownership" as they say with cars.
"doesn't that seem a little bit like they might be playing on peoples lac of knowledge of the systems involved?"
Well of course they are. But so what?
There are many times when companies take features out of a product just so they can make different tiers and charge premiums.
Take web hosting. Take companies who sell people extra disk space that they will never use and don't know they don't even need at all. There are many examples of this in business.
Shrink-wrapped software, for instance, has no value proposition from the original proprietor. Photoshop? Why should I trade with Adobe for a few hundred dollars when I can get the same from another user for no charge from him?
Someone like you opened my eyes to the false dichotomy. Businesses and consumers are not different. Each wants something that the other has. They want my money. I want their product. If they can get more money without changing the product, they will. If I can get more product without changing the money spent, I will.
The idea of a "fair deal" IS part of business, if customers decide it's part of business. Once you factor in our basic sense of ethics and fair dealing, it's clear that Comcast has none.
The problem here isn't that ethics aren't part of business, but rather, there is no competition. Customers have no choice, therefor, there's no reason for Comcast to behave in a way that better serves their customers.
Aren't you a domain squatter? That would explain a lot about your way of thinking.
Yes they do. They don't itemise the charge, but they charge for [ie taking account of the cost of] these items too.
If I went to a restaurant and they said "your meal is extra because you wore a brown shirt" then I'd know they were ripping me off and I'd declare it; of course they are within their right to do that if they notify the customer sufficiently of the charges. That wouldn't change the fact they're ripping people off.
I am not a fan of Comcast for many reasons. This fee isn't very consumer-friendly and it should be described more honestly as an "upgrade fee" or similar. But no, there's no reason it has to have anything to do with the "work" required to do the upgrade.
Is Adobe obligated to make the price of Photoshop commensurate to the cost of burning a DVD or downloading a file?
Of course people who have never run a business and don't understand the total cost of running a business will always relate "cost" to one thing what you pay for a particular item which when factoring a host of other things is either not relevant or not easily determined.
I just read where Tesla (an HN favorite) gets tax credits of something like $35k (tradeable to other mfgs) for each car they sell. Forgetting whether that number is right or not (maybe it's less/more who knows) does that mean that they should somehow in ratio reduce the price of their car? Of course not (unless they want to). Even though one could make an argument that it isn't fair that they don't. To me all this is nonsense. But fully understandable if someone has never operated a working business.
To be fair, how you run your business depends greatly on this. Other companies would distribute the profit from this tax credit to shareholders or executives; Tesla is using it to continue with R&D and to fund expansion.
Can you please stop with the flamebait? It's not conducive to productive discussion.
To address your point, not everything should (ethical judgment) be priced based on value. Do you not see the difference between a Tesla and internet service? What about electricity - should PG&E charge based on how much value they provide? Have you ever tried living without power? Because it's certainly worth more than the $50 a month I currently pay. What about medical treatment? What if the ER charged 10% of your lifetime future income for lifesaving treatment? That seems commensurate with the value provided, doesn't it?
Point taken. I guess things like this piss me off so I flew off the handle in that way. So I apologize.
"Do you not see the difference between a Tesla and internet service?"
Ok well with respect to that we are not talking about Internet service but a faster type of Internet service that is by no means essential in any way (such as your other examples electricity and medical treatment). You don't need 100meg service and for that matter you really don't even need to stream video. Essential internet (wouldn't you agree) is really basic things and the bandwidth to support email, going to the government website, shopping for a car, etc. I don't consider enough bandwidth so several members of one family can all stream Netflix at one time essential. And that is what I had in my mind as I was making my comment.
In that respect the faster internet service might be more like elective surgery (say plastic surgery but not reconstructive surgery) which is not the same as medical treatment in an ER.
Now of course you can charge what you like and price differentiation doesn't have to relate to actual costs at all, but lying to deceive the customer that the charge is paying for some direct action of employees necessary to enact the alteration is simply fraud.
Now there are of course costs, upstream bandwidth, data handling at intermediate routers and such. That's why it's entirely reasonable for them to charge more for a faster/broader data plan - http://www.comcast.com/internet-service.html it's already charged at more than twice the rate of the 50 Mbps plan (whilst I imagine the real _additional_ cost is probably maybe a few dollars); but that's fine as they're not pretending it costs more because they have to pay for faster electricity or something daft.
If we both agree you can charge whatever you want and price differences don't have to relate to actual costs then what's the problem?
You are upset solely that they called it an "installation fee" rather than an "upgrade fee"? I see your point... but like I said, hardly the crime of the century.
Why? Because there is no competition.
That is, the difference between slowly browsing the textual internet forever on dailup and watching khanacademy youtube videos with a crappy DSL connection. Imagine that everyone are on gigabit connections? What would that entails in term of increased well-being and economic propserity to humanity?
Cable companies don't seem to care about anybody but themsleves. Not the future of humanity, not the employees, not the concept of enlightened self-interest, not even the rich. They only care about MONEY.
>> "watching khanacademy youtube videos"
You don't need crazy fast internet to watch YouTube videos. I've been watching theme fine since I was on 1 mobs broadband. And do you really think that if we suddenly have super fast connections people will spend time watching educational content instead of porn and cat videos?
>> "Cable companies don't seem to care about anybody but themselves"
They care about their shareholders and maximising profits. They are running a telecoms business not trying to improve humanity!
My point of comparsion was between dailup and DSL, and how DSL enables khanacademy videos. With faster internet, it will alow things beyond khanacademy videos.
And do you really think that if we suddenly have super fast connections people will spend time watching educational content instead of porn and cat videos?
A faster internet allow more things that can be done to improve humanity as well allow humanity to watch better porn and cat videos.
They care about their shareholders and maximising profits. They are running a telecoms business not trying to improve humanity!
If you the rest of the comment. I was noting how short-sighted the cable corporations are. If anything, they are like paperclip AI that wishes only to make paperclips. Cable corporations are like that, except it's all about printing money.
Seems likely it's just an example of price discrimination: people who need more than 50 Mbps are probably willing to pay a premium to get it.
After some time on the phone, I was able to get my monthly cable modem fee removed (seemly forever) but they tried to sneak it back into my bill recently.
I wish we had more options for ISPs in america.
[1] Not sure of the exact name or cost but it was around $75-$90.
The only wrinkle is that I provided my own modem.
Then they insisted that I "prove" that I purchased a modem, I suggested that if they charge me for something that they have to proof that they sold me said service.
Anyway, I haven't heard back since. Waiting for the next bill. Has anybody else experienced this, seems like a scam to me.
I... I think that's a fair deal better than being charged $250.
I've talked to a couple techs who mentioned it, but the appointment I made there was no such mention of fee nor was I ever charged.
So the author spent maybe 12 hours figuring this out? Is his or her time worth more than 20 or so bucks per hour?
I could get a second job, but that would pay less per hour, would start at a higher (fixed) number of hours, and bring a lot of responsibilities. Plus, it would cut into my precious free time.
Only for hyper-demanded successful freelancers time is completely fungable and arbitrarily tradeable into dollars. The rest of us can't monetarize their free time so easily. And I think a $250 saving for a day's work is pretty good for regular people. Besides, I think there was a bit of hyperbole in the "10 hours"...
I constantly see people misinterpret "opportunity cost" in a situation like this, and you cleared it up nicely.