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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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  • Peter Herz: This is mostly accurate except that they're not doing the 4G LTE throttling as of Oct 1st 2014 major announcement....
  • Drema: Jack I have had Frontier for years. Only provider available in my area. It doesn't work right and has never worked right. I work from home and I need ...
  • Brittney ward: I'm currently standing at Comcast trying to have this exact issue resolved. If anyone has any helpful advice I would very much appreciate it. I am als...
  • WalterH: So the new business speeds were announced - and they're awful. 75/10, 150/20, 500/50, and 1000/100 are the NON-SYMMETRICAL speeds. Like businesses d...
  • John: I just noticed on my most recent invoice Shaw is increasing my BB 250 from $120 to $130 Jan 1st 2015. That's over an 8% increase while I'll HOPEFULLY ...
  • Scott: For corporations at that size they typically expect a 10-20x return on every dollar spent (that's at the very low end) lobbying the government for ben...
  • StrykerX: I really don't think they have to much to worry about in this regards, as Comcast typically will incorporate services and usually expands upon them wh...
  • Phillip Dampier: Here in upstate New York, part of the northeast division, there is a pretty clear line between different metro areas - Rochester, Syracuse, Buffalo, A...
  • Ian L: Seven areas isn't exactly an "only" proposition; remember that TWC upgrades entire markets at a time. So when Austin was upgraded, so was Fredericksbu...
  • Ian L: That assumes that Comcast will immediately "harmonize" tiers to their more expensive/slower options. Judging by the fact that they're pushing their st...
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