How FiOS Impacts The Cable Market - In Massachusetts, RCN takes bigger hit on the chin...
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How FiOS Impacts The Cable Market
In Massachusetts, RCN takes bigger hit on the chin...
(old news - 10:08AM Wednesday Aug 08 2007)
tags: competition · business · cable · stats · Comcast · Verizon
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An intelligence firm by the name of OneTrak this morning emailed us this latest report exploring the impact Verizon's FiOS has had on cable and satellite operators. In particular, they focused on the 34 Massachusetts cities and towns where FiOSTV is offered. The report found three major items of interest:

•Initial incumbent cable subscriber losses can exceed 10%.•Traditional overbuilders, such as RCN, can take a disproportionate hit, effectively insulating the incumbent cable provider.•As many as 40% of FiOS TV subscribers could well be coming from DBS.

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According to the report, Comcast lost 5,216 subscribers out of 204,160 in communities served by FiOSTV, a drop of 2.6%. RCN lost 1,813 subscribers out of 25,895, a drop of 7%. Verizon gained 11,982 subscribers in these markets, and the firm expects Verizon to continue seeing double digit growth in these markets.

On the flip side, recall that 32 Massachusetts towns have no broadband at all, 63 municipalities have incomplete coverage and only a small portion of the state has a choice of three or more providers. The state recently announced a $25 million project to fill in some of these gaps.

In areas served by FiOS, it will be interesting to see if Comcast continues to ramp up speeds or ultimately resorts to lowering prices.

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moonpuppy @ 8th Aug 10:01AM:
Interesting

I wonder how many of these same people going to FIOS are going because they have a bad taste from dealing with Comcast. How many are just going to see what is on the other side.
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Hall @ 8th Aug 10:01AM:
Switching providers

I think the statistic "Initial incumbent cable subscriber losses can exceed 10%" is rather important. To me, that's not a lot. I didn't read the report (yet) but do they define what "initial" means, as far as a timeframe ?

You always read about people who say "as soon as FIOS is available, I'm switching" but the fact is, they're the exception. Within the first 6 months or so, I'll bet the number is a lot less than 10%.
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Rob @ 8th Aug 10:02AM:
Verizon FiOSTV is "BMW" and Comcast is "Hyundai"

I would love if the President of Verizon's FiOS Department would make a public statement comparing FiOSTV to BMW and Comcast to Hyundai. :D
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chemaupr @ 8th Aug 10:09AM:
Re: Switching providers

10% is not a lot???? I guess you do not own any business.In Average FIOS is about 12-18 months. If you can take 10% away from competitors which have been established for decades in a year that is very important. It shows a strong market presence and aggressive penetration.
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Rxdoxx @ 8th Aug 10:10AM:
Price

Would hope it lowers price.
For all of Comcast's ads hyping speed speed speed, users that have Comcast know that the only time those speeds are even close to experienced is on speed tests. So paying a "premium" for something not really seen, at least makes me become more price conscious.
Assuming other things like reliability and support are equal.
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chemaupr @ 8th Aug 10:12AM:
Re: Verizon FiOSTV is "BMW" and Comcast is "Hyundai"

Heck no... he should keep Comcast as the "BMW" but make FiosTV a "Ferrari" and if they are talking about fios internet make an Indy Car
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china crisis @ 8th Aug 10:14AM:
Re: Verizon FiOSTV is "BMW" and Comcast is "Hyundai"

said by Rob :

I would love if the President of Verizon's FiOS Department would make a public statement comparing FiOSTV to BMW and Comcast to Hyundai. :D
Yeah and I guess he would say " I know Comcast has 20 times more subscribers in this area, but our product is still better."
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Rob @ 8th Aug 10:16AM:
Re: Verizon FiOSTV is "BMW" and Comcast is "Hyundai"

said by china crisis :

said by Rob :

I would love if the President of Verizon's FiOS Department would make a public statement comparing FiOSTV to BMW and Comcast to Hyundai. :D
Yeah and I guess he would say " I know Comcast has 20 times more subscribers in this area, but our product is still better."
And he wouldn't be lying!
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anon @ 8th Aug 10:29AM:
"no broadband at all"

Where broadband is defined as at least 1 Mbit/s and definitely does not include satellite, according to the graphic. Sure, satellite is kind of crappy-- I think tends to top out around 500 kbit/s and the upload is terrible. The graphic also excludes 768k DSL (assuming that there are areas where 768k DSL is available but not faster speeds).

You've got to pick a dividing line somewhere, even though in reality there's no obvious mark. There are things that are possible or reasonable with 15Mbit and 30 MBit connections that are unreasonable with 1MBit-- if downloading lots of video is something you consider necessary to the Internet, then Massachusetts has fewer real "broadband" options than the map shows. (And after getting used to FIOS, 1MBit is definitely too slow for some of my Internet habits.)
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wdoa @ 8th Aug 10:48AM:
Verizon FIOS has very limited availability

Fortunately for the Cable and Satellite operators Verizon will never have FIOS available in more than 30 or 40 percent of the state. Verizon has cut off all further deployment of FIOS in Mass unless & until the legislature gives Verizon a statewide video franchise. Oh yeah, and they are also going around and saying if the state doesn't let them keep a tax exemption on their telephone poles (that was given in the 1920s to encourage the introduction of telephone service to rural areas), they will cut back their spending in Massachusetts.
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moonpuppy @ 8th Aug 10:49AM:
Re: Price

Not a chance.

Verizon is hoping the price stays the same so they can recoup their investment faster. Plus, if it was lower than Comcast, then the people will cry when it does go up in a year to match Comcast ("Why did we swithc in the first place?!")
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Hall @ 8th Aug 10:57AM:
Re: Switching providers

I mean based on what you hear from people. Some would have you believe 80% of the customers would drop their current "supplier" and switch to an alternative. In reality, that doesn't happen. Odds are, you ask people in these towns and they may not even know FIOS exists or if it does, "it's gotta be expensive", not realizing that the competitive nature will normally make it the same price or lower.
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Rickez @ 8th Aug 10:59AM:
Verizon

Verizon has not been a good company to Ma. for a long time. We suspect Western Ma will go up for sales as Maine and Vermont did by Verizon. Being around a lot of broadband customers in western/Central Ma I can say this Comcast is reliable. Verizon suffers many issues. There is rumors of FIOS being advertised out here but I have not seen any of it.
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NPGMBR @ 8th Aug 11:19AM:
Re: Interesting

I switched June 1. Of couarse I wanted FIOS but I was much more interested in what I'd be getting for my dollar. FIOS offered me faster speeds and more channels than Comcast although only for a few dollars less but thats still more money in my pocket. I called Comcast to see if they would match or beat Verizon's offer and they didn't budge.

Three months later now, I'm getting flyers in my mailbox at least once every week from Comcast offering a realy great deal on tripple play packages. Unfortunately, now that I've experienced FIOS I'm not willing to go back to Comcast which I often experienced pixelation (sp) when watching my favorite programs.
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maartena @ 8th Aug 11:36AM:
SoCal

In southern california, where 80% of the cable market is dominated by Time Warner Cable (and a smaller portion is Cox), TWC has opted to give higher speeds for the same price in areas where they have to compete with FIOS. This tells me they are definitly taking FIOS seriously.

Unfortunately, I live in a AT&T area, with no UVerse, and therefore I don't get the same speeds they get 10 miles down the road from me ;)
--
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moonpuppy @ 8th Aug 11:53AM:
Re: Interesting

Only once a week?

I have comcast and they call me non-stop along with flyers every other day.
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NPGMBR @ 8th Aug 12:16PM:
Re: Interesting

LOL Luckily for me its only about once a week. I just rip them up and toss them. Now im thinking about dropping my TiVo service and checking out Verizon's DVR. Just need to see if it can compete with TiVo.
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N3OGH @ 8th Aug 12:19PM:
Re: Interesting

said by NPGMBR :

..not willing to go back to Comcast which I often experienced pixelation (sp) when watching my favorite programs...
UGH, I have the same problem with Comcast here in PA. It's especially bad if you have a big screen TV.

Calmo....Calmo..... Fios TV is coming....
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majortom1029 @ 8th Aug 12:24PM:
depends on the company

It all depends on the company. HEr eon Long Island Cablevision is doing a great job with competing with verizon.

They just increased speeds for a second time. they increased the speeds on the basic internet from 15/2 to 16.5/2 .

They might have even increased the boost speeds also but we are still not sure if thats an error or not. People have reported that the download caps have been taken away.

Cablevision is doing a great job at competing.
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anon @ 8th Aug 12:26PM:
Good

At least there is one positive in the story posted. That RCN is taking a big hit.

RCN is losing money and cant even retain their own customers in the markets with FIOS TV as customers move over.

14k lost subs for RCN may not sound like much but the company is losing money at a fast clip and sub hits like that will cut into RCN deep and hurt bad. RCN's strategies are all lame and wont cut the mustard for them to stay afloat anymore.
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bigjimc @ 8th Aug 12:31PM:
FIOS TV Channel Lineup

If you live in Southeastern MA the channel lineup bites. They offer channels from New Hampshire. Here is a bit of advice for anyone working for Verizon.

GET ME MY LOCAL CHANNELS. LOOK AT COMCAST'S LINEUP!!!

I want my local channels. I have called to see if there is more information beyond what the website has and there isn't. Yet.

Not to mention they have not worked out the local access to Public Meetings (selectmen, town etc...) yet either.
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djrobx @ 8th Aug 12:34PM:
Re: SoCal

quote:
Unfortunately, I live in a AT&T area, with no UVerse, and therefore I don't get the same speeds they get 10 miles down the road from me
I'm in a UVerse area but am on 10/1 instead of the 15/2. I don't think TWC is too frightened by U-Verse's 6/1 service.
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ninjatutle @ 8th Aug 12:40PM:
.

At this rate, VZ is going to go bankrupt.
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smokythebear @ 8th Aug 01:08PM:
Re: FIOS TV Channel Lineup

In newton, ma they have soo many public channels, theres like 10 here, and fios tv has ALL of them. So hopefully you will get them soon enough and you can watch the local sports games and the mayor talking about how he will make the city better :)
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BosstonesOwn @ 8th Aug 01:45PM:
Re: Good

Why would you want an over builder to fail they are helping keep prices lower.

Some people I fail to understand.
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BosstonesOwn @ 8th Aug 01:47PM:
Re: .

What?

Their penetration rates are good for a company venturing into an area they are not known.
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Maarvin @ 8th Aug 02:35PM:
Re: Interesting

How interesting that some people might have a bad taste in their mouths from Comcast. Here in Denver, all cable is underground and Comcast uses fiber to the node (FTTN). Reliability is high, speed is excellent and consistent. There are rarely outages or any sluggishness during peak periods. I'm quite happy with it and I am sure that others will feel the same when fiber upgrades reach other areas, and they will.
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HyPeRbAnD @ 8th Aug 02:49PM:
In the end it will be customer service

The products will be the same, no matter which provider you pick. When you pick up your phone you will get dial tone, turn your tv on get video and your PC will be able to access the internet. The average customer has no clue on delivery methods and really doesn't care.

What will separate the companies will be customer service. I think price will not be a factor. Both will offer competitive rates.
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moonpuppy @ 8th Aug 02:52PM:
Re: Interesting

It depends on where you are. Friends of mine have Comcast because that is all that's available yet they hate the constant price hikes and they don't have HSI through them.

Lately, I have been having a LOT of pixalization on a lot of channels and my cable is underground too.
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JAdmiral @ 8th Aug 03:32PM:
FiOS is the best...

Ok, almost the best. The IMG isn't great (even the 2.0 version has some shortcomings). Other than that, it's fast, and the service is great. And I love Video On Demand!

I was a Dishnetwork subscriber for over six years, and while I did like Dish, I got really really tired of having to upgrade at my cost the boxes in order to get the latest channels they would offer. They'd call it a leased box, but you had to pay anywhere from $100-200, plus a monthly DVR fee, AND you still had to buy a new box if you wanted it. And God forbid if you wanted two HD DVRs at a decent price. They'd give you one, then tell you to go to eBay to buy another cheaper than what they had. Enough was enough.

I had had FiOS Internet for about 6 months, and it was great. After a little bit of comparison of channels, I made the switch. When I cancelled Dish, they asked what they could do to keep me. Too late.

I just signed up with FiOS at my workplace to provide both data and VoIP phone service. Hope it works well!
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dvd536 @ 8th Aug 04:02PM:
Re: Interesting

said by moonpuppy :

I wonder how many of these same people going to FIOS are going because they have a bad taste from dealing with Comcast. How many are just going to see what is on the other side.
FIOS causes cable companies to offer decent speeds ONLY IN FIOS AREAS!
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furlonium @ 8th Aug 05:47PM:
Re: Interesting

RCN offers 20mbps here, but no FiOS :(

Hopefully soon.
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tmc8080 @ 8th Aug 07:53PM:
FIOS in CA..

Yes, maybe when January 2008 rolls around they might actually be the first to pony up the big bucks for docsis 3.0 upgrades and compete... but then again. In NY, cablevision will certainly fork over the money when the time is right for them, however they're in no rush as they still beat Verizon on price. (if your wondering.. the POTS over fiber taxes/fees are the primary deal killer) Some customers have been savvy enough to play one off against the other to get the "best deal" possible to switch.. which works on a case-by-case basis.
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Tim @ 8th Aug 10:37PM:
Do some math

Actually FIOS getting 10% of the market is pretty impressive... until you figure out how much Verizon spent to get that 10%.

It is possible to make any money spending twice as much as cable just to wire a house while taking in less per subscriber? (Not to mention doing that while losing the core business of landlines.)

Therein lies the fundamental flaw of FIOS, at least economically.
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Rob A @ 8th Aug 11:43PM:
It's only a matter of time...

Before fios takes control over the cable isps, it is simply the future of broadband.
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DarkSly @ 9th Aug 10:52PM:
Re: Switching providers

FiOS is a niche product for Speed Junkies and early adopters.

By the time the masses are interested in Speeds that are offered through FiOS the MSOs will be offering comparable speeds (and still offer 24 hour tech support and sub $100 service calls)

Most customers who currently have a Broadband connection live under the rule "if it ain't broke don't fix it".

The test is to grab the customers who still use Dial Up services to connect to the Internet.

I actually met a person today who used Dial up ($21.95) and had POTS phone service ($55) just to connect to the internet, and I am sure there are thousands out there just like him.
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DarkSly @ 9th Aug 10:55PM:
Re: Verizon FiOSTV is "BMW" and Comcast is "Hyundai"

Stripped out BMW 3 series vs a top of the line Hyundai with every option imaginable.

Comcast in my area provides more channels then are available with FiOS a few towns over.

The real difference is the HD On demand content (virtually non-existent with FiOS)
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batterup @ 13th Aug 12:12AM:
Re: depends on the company

said by majortom1029 :

Cablevision is doing a great job at competing.
FIOS is costing you people a bundle and you can't win. Verizon is the 800 pound gorilla and Jim can't manage a basketball team.
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filcro1 @ 23rd Aug 11:17PM:
Re: Interesting

DSL –vs- MSO –vs- FIOS- vs- Wireless –vs- Satellite –vs- BPL =’s lousy service for America.
The United States is so far behind other countries from a communications perspective. Who loses? America.
The FCC needs to open the U.S. markets.
1. Open up the 700mhz band for open choice
2. Let consumers choose their equipment independent of carriers
3. Wireless – pick your own phone or device
4. MSO Operators – Allow people to use the tuners on their TV’s
5. MSO operators – Allow people to purchase their own cable boxes
6. MSO operators – Allow cable cards that work
7. The FCC needs to set min standards for cell phones
I think the whole system stinks. Everyone is carving out monopolies from a geographic or platform or equipment perspective and the consumer loses.
Blue-ray, 720P, 1080i, 420i, 420p, DTS, DD, THX…. What a joke….. who loses? The consumer.
iPOD, MP3, WMA, Flash Video…. What a joke… who loses? The consumer.
The thieves are watching the hen house and the American consumer is dinner 24/7
Corruption is alive and well. Too bad the head of the FCC does not have to run for election
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