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Saving a Bundle on Voice, Video & Data

By: Paul Rodriquez, Cable Tech Talk

In the new issue of Consumer Reports, the cover story is their annual look at TV, phone and Internet service (Here’s a news article about it.). Their description of cable’s position in the marketplace is perhaps the most positive that I’ve seen in CR’s coverage, but I do have a few nits to pick with the article.

The good news is that some cable operators receive high marks from consumers about the service they receive. While some cable companies are not viewed positively, there seems to be a general air against incumbents. In other words, when it comes to video service, the incumbent cable providers are not viewed as positively as newer competitors; however, when it comes to telephone service, cable is viewed more positively than traditional phone providers.

In addition, Consumer Reports’ reader survey points out something that’s been known for some time: Customers who take bundled service are happier with their provider. Since cable first rolled out Internet access and then telephone service – as well as services such as DVRs, HD and digital cable – we have seen the take rates increase dramatically for the new services. Consumers are getting more out of their cable subscriptions, and by bundling Internet access and phone with their video service, they’ve also been able to see savings.

Now for a few factual problems…

The article lumps together the services provided by the phone companies (AT&T’s U-verse & Verizon’s FiOS) as “fiber-optic service.” In fact, while Verizon has widely deployed fiber, AT&T is still using twisted copper pair. You may recall that cable has a hybrid fiber-coaxial infrastructure.

A sidebar of the costs of TV service completely bungles its analysis of the impact of CableCARDs, but more distressingly, the article gets its description of E911 wrong.

Emergency 911 service varies among technologies. Fiber phone service uses the same long-proven location system as a landline phone. New cable-phone and other VoIP 911 services are less universally dependable.

The section on emergency phone use seems to confuse cable’s phone service, which transports your call over cable companies’ privately managed IP networks, with VoIP services such as Vonage, which use the public Internet for transport. The concern is that when a customer calls into a 911 operator, emergency responders should be able to know where the household is located – and that in the case of VoIP calls transport entirely over the public Internet, that may not be possible. Cable operators do not have this problem. As the article notes, phone service from cable or U-verse/FiOS may need to instead rely on a cell phone in the case of a power outage.

In a section on Internet speeds, the article argues that only 1 Mbps is necessary for most customers. That’s not a problem for cable customers, since the average standard speed typically exceeds 5 Mbps, but it seems a little silly to argue that very high speeds, such as cable is offering now through the DOCSIS 3.0 standard, are mostly a “marketing game.” Certainly, not everyone needs 50 to 105 Mbps, but I think 1 Mbps is hardly adequate these days.

I also found it telling that they buried the cord-cutting strategies at the back of the article. You can just rely on an antennae and over-the-air broadcast television, but if you have reception issues, then you’ll be out of luck. You can turn to the Internet, but content is limited there as well, and you’ll still need to subscribe to an Internet connection.

In the end, it seems like consumers are being serviced quite well by today’s vibrantly competitive marketplace.


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