Despite growing competition from Bell’s fiber-to-the-neighborhood service Fibe, now expanding into many of Cogeco’s outer suburban service areas, Cogeco will not negotiate a better deal for customers, preferring to emphasize its customer service and “right-sizing” bundles of services to best meet customer needs.

As a result of higher prices, Cogeco’s earnings and profits are up for the second quarter of 2014. In the quarter profits rose to $58.5 million — up from $48.9 million during the same quarter a year ago. Revenue rose to $518.4 million from $458.5 million.

“We don’t like competing on price,” said Cogeco CEO Louis Audet said. “I’m not saying it’s zero, but we really don’t like competing on price.”

Audet

Customers have been offered sign up discounts from Cogeco’s most aggressive competitor on pricing – Bell. But when customers in parts of Ontario and Quebec call Cogeco to negotiate for a lower price, they are largely being turned down.

Audet said Cogeco instead emphasizes that customers will receive better customer service from the cable company, and customer retention specialists are trained to adjust packages to emphasize the services customers want without cutting their cost.

“It’s a right-sizing exercise,” Audet said. “Maybe the person wants a little less video, but they want higher Internet speeds.”

Cogeco isn’t winning the battle to keep its price-sensitive customers, however. The company lost 10,305 subscribers in the second quarter, nearly double the amount lost in the same quarter a year ago. Cogeco now serves 1.96 million Canadian cable television customers.

Customers are also dropping their Cogeco phone service, a decision Audet said makes them “victims” of cell phones. Cogeco permanently disconnected 6,000 landlines in the quarter, up from 5,550 a year ago. It still serves 473,000 phone customers.

The company lost almost 6,000 telephone customers in the quarter compared with additions of 5,550 in the same quarter last year. It had more than 473,000 residential phone customers left.

Despite the customer losses, rate increases more than made up for lost revenue, giving the company a nearly $10 million boost in profits during the second quarter alone.

Comcast has boosted Internet speeds for some of its broadband customers in the northeast.

Xfinity Internet Blast now offers 105Mbps, up from 50Mbps and Xfinity Extreme 105 has been increased to 150Mbps, up from 105Mbps.

The upgrade is free and applies in 14 northeastern states between Maine and Virginia and the District of Columbia. Customers may have to reboot their cable modems to connect with the faster speeds.

Comcast claims a merger with Time Warner Cable will benefit everyone with faster Internet speeds, but the company has increased broadband speeds — especially for premium tier customers — almost annually without the benefit of a merger.

Northeastern Comcast customers have yet to experience the company’s growing reintroduction of usage allowances on its broadband service, now set at 300GB a month in several mostly southern markets.

Comcast’s gateway

Some customers are angry and frustrated to learn Comcast has stopped “officially” allowing the use of customer-owned cable modems for its 105Mbps “Extreme” service, insisting subscribers rent a company-supplied gateway for $8 a month.

“Only Comcast issued equipment ensures that the specifications are always met and are not altered intentionally or unintentionally,” reads a technical bulletin issued by the cable company issued Feb. 26.

The new policy was discovered by a Comcast customer in Virginia having trouble with his broadband service. He was using his customer-owned Zoom 5341J — equipment on Comcast’s approved modem list.

“[A Comcast executive customer service representative] insisted that list is incorrect and I must rent a modem from them to receive the correct speeds on [the] Extreme 105 package,” writes ExoticFish on the Broadband Reports’ Comcast forum.

The bulletin, identified as ID TLK1043 and intended for the use of Comcast employees, explains:

Document ID TLK1043; Published February 26, 2014

Overview

Extreme 105 is the latest Comcast DOCSIS 3.0 XFINITY speed product, which provides extreme and unbelievable Internet speeds for customers. The product provides:

• 105Mbps download speed
• 20Mbps upload speed

Affected Areas

National.

Some of the Talking Points are not applicable for the Central Division.

Impact to Comcast

The Premium Installation fee for Extreme 105 is $249. Extreme 105 is installed by 105Mbps trained technicians. The Comcast Technician will:

• Conduct an in-depth analysis of the customer network.
• Ensure that the customer’s home and equipment are prepared to support the speeds included in the Extreme 105 service.
• Perform a node health check on the day of installation and also on a daily basis after installation.

Impact to Customer

Extreme 105 targets:

• Hard-core gamers
• Users with several computers in their house
• Users who upload and share multimedia files

Media Inquiries

Any media inquiries should be directed to the local market media team.

Q&A

Some of the Frequently Asked Questions and their responses are as below:

Why do I need to use Comcast issued equipment?
Only certified Comcast equipment delivers the ensured service speed attached to the customer’s account.

Comcast allows customers to use their own equipment for all your other Internet packages, why not Extreme 105?
Generally customers can use their own equipment and configure it as they see fit. But for Extreme 105, the configuration must be done and maintained at certain specifications. Only Comcast issued equipment ensures that the specifications are always met and are not altered intentionally or unintentionally.

But I have a DOCSIS 3.0 Modem and N Router, why do I need your versions?
Comcast installs equipment which have gone through extensive network certification process of Comcast and which have been proven in both laboratory and live network tests. This ensures that the equipment performs consistently and delivers the subscribed speed and services.

Does the $249 installation fee include installation of a wireless router?
Yes, the installation fee includes the installation of Comcast owned wireless router.

Why is there a premium installation fee for Extreme 105?
Extreme 105 is a premier Internet product by Comcast and the premium installation fee guarantees a speed of 105Mbps. A Comcast Certified Installation Technician performs additional tests which are not performed during installation of other premier internet service.

Is the premium installation fee refundable if I disconnect the service in 30, 60, 90 days?
The installation fee is non-refundable.

With Comcast reportedly preparing to boost speeds for its customers in the near future, those signed up for Comcast’s 50Mbps “Blast” tier could soon see speed upgrades to 105Mbps. That might expose those customers to the same mandatory rental charge.

The Virginia customer never realized Comcast changed its policies until he had service problems. It was then that a senior representative insisted the customer switch to Comcast’s rented gateway device if he wanted his service fixed. Other customers still using customer-owned equipment and subscribed to 105Mbps service may continue to fly under the radar for some time and there does not seem to be any national effort to contact customers about their equipment.

Some speculate Comcast’s new policy might also relate to the company’s intention to expand its Wi-Fi network relying on Comcast customers with gateway devices to serve as hotspots. That would likely require the use of Comcast’s own gateway to be successful.

Updated: 3/26/14 — 12:17pm ET — Karl Bode at Broadband Reports got an answer back to his inquiry about this issue and a Comcast rep tells him the service tech handing out the above-referenced memo is not correct:

The painful spelling and grammar errors in the last bit of the supposed company memo seemed a little off, so I reached out to Comcast for comment. The long and short of it is: no, this is not official company policy.

“We’re going to have someone try to reach out to the forum poster to follow up, but the short of it is there is no policy change,” Comcast spokesman Charlie Douglas tells me. “Customers can buy or rent modems. Here is our approved devices list.”

Karl adds: “I’m still trying to ferret out why exactly this install technician was trying to push strange and unofficial company policy, and how and why he was using an incorrect and grammatically mangled memo to justify the behavior.”

Tracking Cable’s Top Internet Speeds

The National Cable & Telecommunications Association (NCTA) offers this infographic to suggest the deregulated cable broadband industry works well without any interference from meddling politicians.

Their claim: “Ongoing investments have enabled cable providers to continue boosting broadband speeds with top tiers increasing 50% every year.”

The reality: Cable’s broadband speed comes at a very high cost. The majority of Americans cannot buy 505Mbps residential broadband service from Comcast and even if you could, the price tag hovers around $300 a month, with a nearly-$1,000 early contract termination penalty, a $250 installation and $250 activation fee. Customers at other cable providers often find their maximum speed is just 50Mbps and/or their Internet usage is limited by a usage cap.

Google Fiber and some other gigabit fiber to the home providers are offering unlimited 1,000Mbps service for $70 a month with no installation or activation fee if a customer agrees to stick around.

Verdict: The cable industry could do better for much less.

Despite the fact cable companies routinely claim customers don’t want or need gigabit broadband speeds, property developers seeking an edge in the real estate market do.

A planned community of 6,000 homes under construction by Metro Development Group (MDG) in Tampa has signed a deal to commit Bright House Networks to install a 1Gbps fiber-to-the-home network within the development. MDG said the first homes wired for the new service will be ready for residents this summer, but the entire project will take three years to finish.

“MDG hopes the fast Internet speeds will attract would-be buyers for the new homes,” said MDG president Greg Singleton.

MDG is branding the fiber service as ULTRAFi. It will be accompanied by a gigabit Wi-Fi network accessible throughout the community. In addition to providing fast broadband, the service will include home automation and security services.

The driver for the gigabit broadband project isn’t Bright House Networks, it is the property developer. Even though Bright House has committed to the project, it still denies consumers need super fast Internet speeds offered by providers like Google Fiber.

Bright House president Nomi Bergman acknowledged the project is a special deal with MDG and it will be years before average consumers need anything close to gigabit broadband speeds. Bergman said there is insufficient demand to justify upgrading Bright House Networks’ broadband speed offerings to other customers.

MDG obviously disagrees, because it hopes to extend fiber-to-the-home gigabit service to its other new communities. That could mean 20,000 more homes could eventually get gigabit broadband.

“In five or 10 years, I think communities that are not doing this” will be “obsolete,” Singleton said.