Unfortunately, they will probably respond by raising rates to cover lost revenue from early termination fees and the loss of lock-in. This is arguably better though, since there is up-front pricing.
EDIT: Perhaps the only situation where it isn’t is where they are the only game in town and you intend to ride out the whole contract.
They will do what they've literally always done. Raise pricing, as much as possible. The reasons are usually meaningless excuses or genuine issues, but the prices will not drop after those issues pass, so still horse shit.
> Perhaps the only situation where it isn’t is where they are the only game in town and you intend to ride out the whole contract.
They should use loyalty discounts then, or any other system where the business incentives align with the customer incentives. ETF's are the exact opposite of that.
Not necessarily and not straightforwardly. At least theoretically, the monthly fees are already at the maximum they an extract. Making them higher means less customers and that trade off did not changed.
Companies are not trying to earn enough to cover expenses. They are trying to earn maximum possible.
Not really no, ISPs charge as much as they can and already charge what the consumer base will pay, they aren't a company that's on the edge of profitability that needs to raise rates.
They might try to use it as a PR smokescreen but except for consumers that do not understand reality, this will not work.
Will they raise rates, or just stop offering the discounts for contract?
Right now the way it typically works is they have some monthly rate for service without a contract, say $100/month, and a discount monthly rate if you are on a contract, say $80/month but with a termination fee if you cancel service before the end of the contact (unless you are moving to somewhere where their service is not available).
Wouldn't their response to this be to simply stop offering the $80/month with a contract option so everyone has to go for the $100/month month to month service?
Speaking of contracts, I've realized from other comments that there are actually at least two kinds of contracts ISPs are using.
Apparently at some ISPs your contract is for N years of a specific plan. If you want to change to a different plan at that ISP you have to break the contract and can get hit with the early termination fee.
At others, such as Comcast, the contract is that you will maintain Comcast service for N years, and that if you keep the specific plan you are on they will not raise your price for N years. Changing Comcast plans does not break the contract. You just lose your price guarantee on your original plan, so if you later change back to it you will pay whatever the current price is.
For example, I canceled my Comcast "triple play" internet/voice/TV plan and replaced it with an internet-only plan a year into a two year contract with no problem and no termination fee.
I'm curious which of these approaches is more common.
I think is is overstepping what I need the FCC with my life. But you know what I want them to do? Increase the number choices I have. Breakup local monopolies on cable/fiber and make tax deals with local municipalities illegal or fair to competitors so we can avoid "I get one choice in internet provider".
This is something the FCC definitely has power to do and if you think this is overstepping then they certainly would not be able to do anything about anti-competitive behavior in your idealized version of them.
If you own an ISP would you invest in an area where another ISP monopoly exists and all users in an area will have to pay sum to pay contract to move to your service.
This also about competition just not customer service though yeah I agree internet infrastructure should be financed and run by the local governments just like roads etc are and let ISP compete on services
That's not the issue. There is lots of money to be made competing with ISPs in dense urban areas, but such competition is actively illegal in many of them.
We really need Congress to act, to try to restore the Telecommunications Act of 1996 to it's written purpose. The courts gutted access to Unbundled Network Elements, meaning that anyone trying to provide high speed internet basically has to DIY the infrastructure themselves.
Congress should pass another law. The courts basically sided with arguments that high speed internet would only be deployed if a monopoly was provided. And that hasn't been true in many other places, which do have competitive Internet by way of unbundled local loops.
Respectfully, I suggest that part of the purpose of Government Communications is to be formal. That is, to be explicitly separate from the mundane day-to-day work. Governmental rulings, especially at the Federal level, affect a lot of people. I want them to take their jobs seriously, and one of the ways they can convey that they’re being serious is by their non-standard, formal language.
And the converse makes me feel like the statements are conveying emotion and aesthetics and reinforce the idea that politics are sport for the professional management class.
Termination fees are utter garbage because say you happen to get locked into a 3 year fiber internet contract[1] (we are), and the price of fiber internet suddenly decreases by 3/4 then you end up paying like $200 more per month than anyone else getting the same fiber internet from the same company.
The minute you eliminate termination fees, it’s a free market again and the company is obliged to give you the best price at any given time.
[1] you really have no choice here because if there is any kind of infra upgrade involved then every telco wants 36 months despite the build only costing ~$500.
> Termination fees are utter garbage because say you happen to get locked into a 3 year fiber internet contract (we are), and the price of fiber internet suddenly decreases by 3/4 then you end up paying like $200 more per month than anyone else getting the same fiber internet from the same company
How often does that happen?
All I've ever seen in ~35 years of using online services (dialup service, cable, DSL, satellite...no fiber though) is prices going up.
BTW, the contract you describe is quite different from the contracts I've had with Comcast. It seems that there are two very different approaches among ISPs, and your ISP is using the most restrictive one.
The Comcast contracts only charge a termination fee if you leave Comcast completely, unless you are moving out of the service area in which case there is no termination fee. If you just change which Comcast services you subscribe to that's not cancelling the contract.
I.e., the contract is not that you will subscribe to specific Comcast services for N years...it is that for the next N years you will have at least once Comcast service, and that if you stick with the specific services you started the contract with their prices will not increase for you for those N years.
For example a year into a two year "triple play" contract I dropped TV and voice and I changed to a different internet plan and that was fine. Since the new internet plan was still with Comcast it did not count as breaking the contract.
They could still give a discount to new customers only. There may be ways around it for some people through changing account names or something, but it'd mean that it isn't as easy as you say. There is friction to changing services and some people won't want the hassle.
Law of unintended consequences: these services will get more expensive either monthly, upfront setup costs, or require customers to buy the equipment. End result, all customers will now be subsiding those early terminating subscribers. This will probably lead to lower connectivity in rural and poor areas (who can no longer afford up front setup fees) causing a new, much worse problem.
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[ 4.5 ms ] story [ 72.9 ms ] threadEDIT: Perhaps the only situation where it isn’t is where they are the only game in town and you intend to ride out the whole contract.
edit: I stand by it. I have fucking decades of history behind my statement so just enjoy being wholly inaccurate!
It's difficult to know how much this will impact what they raise rates by.
They should use loyalty discounts then, or any other system where the business incentives align with the customer incentives. ETF's are the exact opposite of that.
https://www.federalregister.gov/documents/2023/11/09/2023-24...
Companies are not trying to earn enough to cover expenses. They are trying to earn maximum possible.
They might try to use it as a PR smokescreen but except for consumers that do not understand reality, this will not work.
Right now the way it typically works is they have some monthly rate for service without a contract, say $100/month, and a discount monthly rate if you are on a contract, say $80/month but with a termination fee if you cancel service before the end of the contact (unless you are moving to somewhere where their service is not available).
Wouldn't their response to this be to simply stop offering the $80/month with a contract option so everyone has to go for the $100/month month to month service?
Speaking of contracts, I've realized from other comments that there are actually at least two kinds of contracts ISPs are using.
Apparently at some ISPs your contract is for N years of a specific plan. If you want to change to a different plan at that ISP you have to break the contract and can get hit with the early termination fee.
At others, such as Comcast, the contract is that you will maintain Comcast service for N years, and that if you keep the specific plan you are on they will not raise your price for N years. Changing Comcast plans does not break the contract. You just lose your price guarantee on your original plan, so if you later change back to it you will pay whatever the current price is.
For example, I canceled my Comcast "triple play" internet/voice/TV plan and replaced it with an internet-only plan a year into a two year contract with no problem and no termination fee.
I'm curious which of these approaches is more common.
Congress should pass another law. The courts basically sided with arguments that high speed internet would only be deployed if a monopoly was provided. And that hasn't been true in many other places, which do have competitive Internet by way of unbundled local loops.
Is it too much to ask that those who run the government use just slightly more formal language when making statements in their official capacity?
The minute you eliminate termination fees, it’s a free market again and the company is obliged to give you the best price at any given time.
[1] you really have no choice here because if there is any kind of infra upgrade involved then every telco wants 36 months despite the build only costing ~$500.
How often does that happen?
All I've ever seen in ~35 years of using online services (dialup service, cable, DSL, satellite...no fiber though) is prices going up.
BTW, the contract you describe is quite different from the contracts I've had with Comcast. It seems that there are two very different approaches among ISPs, and your ISP is using the most restrictive one.
The Comcast contracts only charge a termination fee if you leave Comcast completely, unless you are moving out of the service area in which case there is no termination fee. If you just change which Comcast services you subscribe to that's not cancelling the contract.
I.e., the contract is not that you will subscribe to specific Comcast services for N years...it is that for the next N years you will have at least once Comcast service, and that if you stick with the specific services you started the contract with their prices will not increase for you for those N years.
For example a year into a two year "triple play" contract I dropped TV and voice and I changed to a different internet plan and that was fine. Since the new internet plan was still with Comcast it did not count as breaking the contract.