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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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  • Joe V: Here's the irony : I watched the Frontier go in front of California politicians broadcast play out and two things that got underneath my skin : I...
  • Matt: It won't increase it any more than what were paying for(1.5 Mbps) right?...
  • Joe V.: Replace the frontier supplied DSL modem and buy your own. The modem they give you is locked down and does not deliver the promised speeds....
  • Matt: I wish Frontier would upgrade our internet over here in Doyle, Ca! We've had 1.5(not even that) Mbps for 12 years!!!!!! And out here in the middle of...
  • TekTalk: I have the blazing fast 5 Mbps Frontier DSL in WV. Frontier won't even say it IS broadband. They know they can't call it that. They only call it "H...
  • Phillip Dampier: It is odd to write that way I agree, but it happens when there is a high demand from media outlets for our official comment, which they can obtain fro...
  • Poorlytoldjoke: I appreciate how you can write an article and quote yourself as a source....
  • Duffin: Utter utter insanity that this was approved. Why was this approved but the Comcast/ Time Warner merger wasn't? I really don't see a difference here....
  • Bob: As a long time Charter customer, I can say that if Charter can get the service quality as high as what I've experienced, it won't be all bad. At least...
  • Ty: I guess it could be worse for us Time Warner Cable customers... We could have a cable company owned by Altice!...
  • Sergio: Tomorrow Wednesday May 18th the California State Assembly Committee on Utilities and Commerce will be meeting at 1:30 pm in Sacramento Please send you...
  • James R Curry: $20 per 250GB up to $60? So if you use 2TB of data in a month, it's actually cheaper to stay on the 250GB plan than it is to pay $30 for 1TB and th...

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