How Cox Prevents Me from Saving Money with Their Competition

About six weeks ago, I read about Playstation Vue. I’m not a console gamer, so I don’t typically follow anything with the word, “Playstation” in it. However, Playstation Vue is an Internet cable service. You stream cable channels. Sling TV works the same way. The prices are cheap at around $25-30 a month.

I dismissed Sling because it doesn’t have DVR. Other than football, I watch everything on DVR. However, Playstation Vue solved that with a $30 package of every cable channel that I care about with DVR. I’m paying Cox Communications $85/mo. for some extra channels that I don’t care about. Saving $55/mo. is $660 a year. That’s worth looking into, right?

[Note: I couldn’t Playstation Vue’s $30 plan on their website today. I think they are hiding it. For proof of it’s existence (at least in the past), I present CNET’s comparison of Playstation Vue and Sling. Also, I’ve read that Sling will be getting DVR at some point soon.]

Today there’s a new option to look into, DirecTV Now from AT&T. It’s Internet TV like Sling/Playstation Vue with no cable boxes or dishes to install. It’s $35 for 100 channels and only $5 to add HBO if you get in on the promotional price (which I think you can keep forever). However, they don’t have DVR, and they are missing CBS (there goes my football) from the channel line-up. It’s not a good fit for me yet, but for some people, it’s got some potential. The Verge gives a great review of the pro/cons of DirecTV Now. I’m still wrapping head around whether I’d get live NBC, ABC, and Fox as I thought all those channels were run by affiliates.

And to complicate matters even more, Cox has their own discount service, Contour Flex Economy, with 110 channels at $35.

Between Playstation Vue and Cox’s own cheaper service I should be able to save somewhere between $45-55 a month…

… then I remembered that dealing with Cox logically or reasonably has been a waste of time (such as in this article or this one.)

I figure, let’s give them one more try. I call up and explain that I’m dissatisfied at paying $85 a month for cable television when my needs are met by their cheaper $35 plan or Playstation Vue. They have their “specialist” review my bill and I wait on hold. She comes back tells me almost exactly what The Verge said in their review of DirecTV Now above. Here’s what the Verge said:

“Will it save money compared to what you’re paying Comcast or whoever now? Yes for some, no for others. Internet bills have a way of suddenly increasing when you call the cable company and cancel half of their precious double play.”

My Internet price is $65, but it would go up to $80 if I switched to a lower tier TV service (or out of it completely). This effectively raises the price of any competing service by $15. If I’m playing $150 ($65/internet, $85/television), then a move to $80 Internet means that my savings on another $30 television plan is only $40/mo ($150 – ($80 + $30)).

Once again saving $40/mo. isn’t bad. So I go forward with that. Unfortunately, that’s a dead end too.

I’d also lose my $50/mo. promotional bundle savings as part of not having the appropriate levels to qualify triple play (or Cox’s nomenclature for it) of television, internet, and phone. As I wrote over a year ago, I keep Cox’s phone in my basement for that discount. The $50/mo. promotional bundle is really worth only $20/mo. to me, because the phone costs another $30/mo. I explained that I feel the phone bundle is a Trojan Horse waiting to add another $30 to my bill if I forget to call up and get a new promotional bundle every 6 months.

With the promotional bundle being worth another $20 (after the telephone shenanigans), my switch to another television service (forfeiting this bundle “discount”) would make my savings probably closer to $15 or $20 a month.

To put it simply, I’m paying $129.97 for the two services I use (television and internet) and any change puts me at $80 for a internet, plus the cost of the of the other service. The other services have their drawbacks such as no DVR or limited time DVR, possibly limited local channels, limited sports packages (no NESN for me I think). For me, that’s a lot to give up to save $15 or $20 a month.

So Where Do We Go From Here?

Unfortunately there’s really no place to go. There’s no competition for Internet services in my area. After Cox the fastest internet available is DSL that seems to top out at 3Mbps download. That’s only 12% of the FTC considers to be a broadband connection. It’s actually quite common as telecom companies appear to split up territory to avoid competition.

I talked to an advanced representative from Cox who called back about my concerns (kudos to them for that). She explained that they bumped up the download rates from 25Mbps to 50Mbps at no cost. I said that’s great, but it’s like offering to give me 50 gallons of gas and watch it 25 of them spill on the ground. I’d rather have the amount of product I use at half-price. Of course that’s not an option on the table and I understand Cox’s reason for it. They want to get the most money from each customer. If they made a $40 tier providing 25Mbps of service, I could easily get Playstation Vue. It would be a total of $70 for what I’d want with Cox getting $40 from me. Instead they’ll get $130 from me.

I’m envious of Justin of Root of Good who is paying $34 for his 50Mbs service. That’s not part of a bundle or a promotional price (as far as I can tell). As we discussed in the comments, there’s actual competition in his area with Google Fiber coming and 1Gbps service. The same service is $80 for me. Cox, that isn’t cool… and you can’t take the high road and say that you doubled the speed because he’s getting the same speed.

How Can This Be Legal?

I wish I had an answer to that question. I simply don’t know. I’m not a law expert, but it feels like this is like Microsoft antitrust case. In that case, it is my understanding than an alleged monopoly (Microsoft) used it to undercut the competition’s (Netscape/browser) industry. I don’t see how this really is any different.

If we are to believe The Verge article (which I do considering the authors and source of the article and my experience) the internet access business is a monopoly seemingly divided among different competitors. And while I can’t feel too bad about Sony (PlayStation Vue) or AT&T (DirecTV Now) for not making a few extra dollars, the monopoly bundling makes their product pricing not very competitive.

If such bundling didn’t take place and/or if I could price-match Root of Good’s $34 Internet-only service, the pricing of PlayStation Vue is extremely competitive. It’s not Playstation Vue’s fault that Internet bundling harms its television service and I’m not sure what they do about it. (They can’t really charge less, because they need to pay the networks too.)

When I’ve written about this kind of thing I’ve gotten quite a few comments supporting it. I wonder if our representatives in the government are listening. I think they should be. However Gizmodo wrote in 2011 Why the Government Won’t Protect You from Getting Screwed by Your Cable Company. They tried to start a campaign to change things then. Five years later, it’s hard to say that much progress has been made.

Mr. Trump, I know there are a lot of things you want to fix. Many of them, such as the Affordable Care Act get to be real thorny. There are others that the people are very, very divided on. I think almost everyone can get behind $34/mo. broadband internet and the choice of $30-$40 cable package that works for them, right? This is easy, low-lying fruit that will have a very visible impact on the people.

I know it’s early to think about getting re-elected, but take a minute to think how easy it would be to say, “The average person has saved more than $500 a year on their telecom bills because I made real change.” I have to think voters, regardless of their political affiliation would say, “He’s got a great point.”