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Competition Breather: Verizon FiOS Rate Hikes Ease Pressure on Cablevision, TWC

Verizon customers can expect to pay more for the company’s fiber to the home service, FiOS, even as promised higher speeds arrive.

Most customers off contract can expect to pay $10-15 more a month under the new pricing regime, or cut back on selected television channels to keep their price the same. Verizon customers currently on a promotional offer will not see any price changes until their promotion expires.

Wall Street analysts call Verizon’s rate hikes a return to “pricing rationality.” The phone company has engaged in years of aggressive pricing, promotions, and rebate offers, especially in the northeast. At one point, Verizon was offering New York-area customers up to $500 in rebates when signing up for a triple play Verizon FiOS package. As Verizon pulls back from aggressive promotions, some analysts predict cable competitors Time Warner Cable and Cablevision will be able to resume more typical rate increases common before Verizon FiOS launched. Cablevision previously announced it would not increase rates during 2012, mostly in response to Verizon’s aggressive pricing.

Verizon has significantly boosted speeds on most of its broadband offerings, with the exception of its standard entry-level 15/5Mbps package, which remains unchanged. Verizon is hoping customers will find that entry level package less and less attractive and be amenable to upgrading to faster speed service at a higher price.

“We’re expecting that 80 percent of customers will want more than 15 megabits per second,” Arturo Picicci, Verizon’s director of product management told Reuters.

Under Verizon’s new pricing, triple play customers with unlimited calling, 15/5Mbps broadband, and 290 television channels pay $109.99. The next step up, for $15 more a month, would upgrade broadband to 50/25Mbps service.

Verizon is also shaming New York area cable operators with speed increases that Time Warner and Cablevision currently cannot match.

The company’s 150/65Mbps service is now priced at $99.99 a month, down from $209.99. Customers in some areas can also sign up for 300/65Mbps service for as low as $204.99 with a two-year contract.

In contrast, Comcast charges $200 a month for 105Mbps, Cablevision prices its 101Mbps service at $104.95 a month.

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  • Kwame: You are obviously not a student of history, of the current state of African geopolitics. Stick to what you know - which seems to be telecommunications...
  • Milan In Austin: Phillip, what are your thoughts on petitioning Google to consider making an offer on TWC if the merger is blocked?...
  • speeds suck: That's still terrible speeds compared to fiber like Google or Verizon. 15mbps up! Lol my cell phone days speeds are faster than that....
  • MTA Victim #1210213: Great! Now we just need MTA to be abolished and Alaska will have good internet at last!...
  • ppppp: Verizon and Comcast, A match made in hell...
  • dancer: I'm against Verizon reducing their FiOS coverage by getting rid of highest FiOS based areas in Southern California where Verizon sells FiOS, Northern ...
  • Bonnie: I agree...
  • Bonnie: That's probably why the tennants at 1919 east Spruce st. #A Seattle Wa. 98122 are getting the cable service from this company for free. They just have...
  • Phillip Dampier: Zimbabwe is one of the fastest growing African countries with respect to Internet access. Approximately 40 percent (5.2 million) of Zimbabwe's populat...
  • Bernie B: Used the twitter method and was able to secure a reduction of $12.50 a month and got a speed up on internet from 5 up 50 down to 10 up 100 down. I li...
  • Kwame: You do realize that Zimbabwe is a fascist failed state where internet is the least of their concerns? Or, are you blind to the devastating human right...
  • Ex2bot: Approximately what are "high congestion times" for you? I have an iPhone 4, and I'm saving for a 6+. I want to try moderate Netflix usage when I get m...

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