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Pricing Doc$i$ 3.0

Jeff Baumgartner

4:50 PM -- Why is it that Comcast Corp. (Nasdaq: CMCSA, CMCSK) charges an arm and a leg for a 50-Mbit/s wideband service, and Cablevision Systems Corp. (NYSE: CVC) charges just a leg for a 101-Mbit/s wideband service? (See Comcast Enters the Wideband Era and Cablevision Debuts 101-Mbit/s Wideband Service.)

That question, not in those same words, was posed to Comcast execs during this morning's earnings call… and I didn't exactly hear much of an answer, let alone a glib one like: "Well, Cablevision is just an industry maverick. They're just a bit wackier than the rest of us." (See Comcast's $1B Bandwidth Plan .)

But Comcast did manage to give itself some wiggle room and appears at least open to the notion of adjusting its wideband pricing down the road. Comcast cable division president and Comcast Corp. COO Steve Burke would only say that wideband is still a "brand-new product… We are going to trial different things, and we will see what resonates with the consumer."

Hard to say if Comcast's present pricing scheme is resonating much now, since the MSO doesn't break out its wideband subs, even as it has nearly 40 percent of its plant wired up with the Docsis 3.0 platform. (See 40%... & Counting.)

For an inkling of what that answer might be, look to Arris Group Inc. (Nasdaq: ARRS), a big Comcast supplier, which said on yesterday's first-quarter conference call that Docsis 3.0 modem shipments were in the "single-digit range" percentage-wise in the period. For the record, Arris shipped 1.26 million Docsis EMTAs in the first quarter, and 58,876 cable modems. (See Arris Readies for a Rebound .)

Comcast was also asked when it will finally offer a whole-home DVR, a hot topic at the recently concluded cable show in Washington. (See The Cable Show '09: 5 Takeaways .)

The answer: Wait. "It's on our roadmap, and within the next nine to 12 months you will see it," Burke said.

— Jeff Baumgartner, Site Editor, Cable Digital News

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12/5/2012 | 4:05:44 PM
re: Pricing Doc$i$ 3.0

Why do you make an assumption that price is cost based?  Price is value based - what the market will bear.  Comcast and Cablevision have distinct properties - they don't actually compete with one another and have separate competitive pressures.  So, they price where they view that they will maximize their return.




Jeff Baumgartner
Jeff Baumgartner
12/5/2012 | 4:05:43 PM
re: Pricing Doc$i$ 3.0

To further illustrate Seven's point, I should've mentioned how competition is affecting D3 pricing in Japan.  JCOM's 160 Mbit/s wideband tier is just $5 more per month than their best single-channel Docsis tier, which is 30 Mbit/s down/2 Mbit/s up.



Jeff Baumgartner
Jeff Baumgartner
12/5/2012 | 4:05:43 PM
re: Pricing Doc$i$ 3.0

Exactly. I agree that competition has just about everything to do with how this is being priced, but they sorta just sidestepped the question and didn't even address it. To me, it seems as though Comcast is keeping pricing on the tier artificially high to keep demand in check....no sense letting in the masses early on if they don't have a good handle on how that will impact capacity on the network.

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