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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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  • Danny Lampley: "As we’ve reported before, Tom Wheeler has said almost nothing on his blog about consumer interests . . . ." Expecting a bit much aren't we? After ...
  • Phillip Dampier: I received information from our friends in North Carolina: AT&T has already won the right to redline customers in states like N.C. where they have a s...
  • elfonblog: And I certainly have a problem with that. AT&T is suggesting that they *deserve* the same deal. And they don't. Always playing the victim. Poor, p...
  • txpatriot: The NY PSC partially approved the VZ Tariff filing; you can find the Order and press release on this page: http://documents.dps.ny.gov/public/Matte...
  • txpatriot: AT&T is saying that if google is allowed to redline, then AT&T s/b allowed to redline....
  • Damaeus: Joshua Taylor says: >>> [SNIP]--- Get rid of your internet, save your money and READ. Who cares about AT&T and the Internet? ---[SNIP]...
  • Scott: Get 1GB of metered data transfer free with every $100.00 spent!!...
  • Tim: The fact that Erie, PA was chosen as an example is quite intriguing because Erie unlike Buffalo or Pittsburgh is a totally Fios-less market. Of course...
  • Ralph: The tv ads featuring "Frank " have been running quite a bit lately. I think Frontier chose an animal as their spokesman because no human being wanted...
  • elfonblog: Right right. AT&T wants us to think that it's diligently elbowing into municipalities that Google has bullied into relaxing their regulations. ...
  • Scott: Our internet and the majority of those lines were built with hundreds of millions of taxpayer dollars, the majority of it being ripped off via creativ...
  • Jim Donahue: In the long term fiber is less expensive than the old copper network. The problem is that it doesn't provide enough of a margin versus wireless wh...

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