Tuesday, June 23, 2009

Cable competitor Raises Prices in Recession. What happened to Lower Prices?

The telcos promised competition that would rein in the cable industry monopoly and high prices. That’s not happening. State legislatures allowed state wide contracts, bypassing local community agreements so the consumer could benefit from free market competition. That didn’t happen. Now comes this:

N.Y. Times: Verizon Raises FiOS Prices, but Hardly Mentions It

It takes a lot of moxie to raise prices in a deep recession, particularly when you are the newcomer to a hotly competitive market. But that’s exactly what Verizon is doing with its FiOS service. In many markets, the company is raising the price of basic triple play bundle (TV, Internet and Phone) to $109 from $99 . The price of its step-up bundle, with faster Internet service and more channels, goes up by $10 to $119.

Mike Ritter, the chief marketing officer for FiOS, made it clear that the company is feeling good enough about its brand position that it can charge a premium price even as it tries to steal customers from cable. Indeed, he said the company expects to sign up more new customers for the more expensive plans.

“You will not see us advertising prices any more. You will see more about what the experience can be,” he said.

Wow, higher prices? Where can I sign up?

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