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Comcast’s $2 Billion-a-Year Secret

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How would you like to earn a $300-400 return on a $70 investment, give or take a few dollars? Let me ask you something else, are you happy with your internet provider? If you’re like millions of Americans who use Xfinity/Comcast’s high-speed internet, chances are you’re not.

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What if I told you that sending a message to Comcast is as easy as driving to the local big box store and making a simple phone call? Intrigued?

Let me explain:

Comcast is the big brother of cable providers, especially here in the Northwest. If you want digital cable and high-speed internet without a dish, you’ve pretty much got no other choice. While supposedly their conglomerate is not big enough to warrant an anti-trust fine, Comcast is a monopoly in the true sense of the word. They have a lock and key on the internet above 30mps speeds, and if you want to get that high-speed bandwidth, at some point you have to go through Comcast.

IMG_0481But what does getting internet from Comcast entail? For those already customers, we know this story front and back. The phone calls, the technician appointments, the service call windows that last all day and the guy shows up early anyway because another job was cancelled and you’ve got to go get the kids from school… Then there’s the equipment. With any internet package, you need a modem to translate that signal from the cable line into Netflix or Call of Duty or Cat Videos.

When you think about it, equipment rentals are the bread and butter of Comcast’s quarterly income. Think about the last time you looked at your Comcast bill. They have a piece of equipment for each service they provide. Whether you want digital cable (which means you pay at least $10 a month for a set-top box), or phone (which takes a different huge, expensive modem) or just plain-old high-speed internet, Comcast is going to charge you a monthly fee for renting that equipment… That’s just to get the service you’re paying for already.

I don’t know about you, but it doesn’t make any sense to charge customers a certain price for a certain service, and then turn around and say, “We’re going to need another $25 a month to allow your TV/computer to receive that service.”

In my book, that’s called “The Ol Okie-Doke.”

The truth is that these huge “providers’ get away with this kind of behavior all the time. They laugh in the face of government regulation because they pay lobbyists a lot of money to make sure congress keeps passing legislation that helps companies like Xfinity/Comcast grow even more powerful. Because seriously, when was the last time a Senator worried about his internet bill? The people that have the power to make decisions about whether huge multi-national conglomerates are not fleecing the rest of the 99% just don’t think about these kind of things… Not because they’re bent, corrupt stooges, but because they’ve never had to sit down and decide whether they can afford to keep INTERNET or not.

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The way to send a message to Comcast, and get a return on your investment, somewhere in the vicinity of 11% is simple. Most of the equipment you rent from Comcast is specific to the service they’re selling, for instance you can’t just go buy a set-top cable box and expect 700 channels. You have to “rent” Comcast’s.

This isn’t so for internet.

Last Saturday night, when our internet died, panic gripped the Toomb household. We’d been having issues for a while, with dropped signals and spotty connectivity… But we figured it was just the fact that we’ve got a house full of people that are constantly plugged in. We are bandwidth hogs. From high definition multiplayer video games to streaming HD movies and tv shows, we cut the cable cord almost two years ago and get all our entertainment through the internet. Therefore we rely on every drop of juice we can squeeze out of that connection. That plus the fact that my wife and I both work from home, when the internet goes out in our household, alarm bells go off and a ticking clock starts... The ever-constant pressure to get the network back up before Monday hits.

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I spend most of the night troubleshooting with the friendly Comcast operator before he confirmed my suspicions by letting me know the modem was dead and I needed to take it in to the nearest Comcast office to swap it out for a new one. That and take the opportunity to tell me how he can save me such and such by switching to whatever.

That’s when I realized that I could just go out and just buy a new modem and have Comcast register it over the phone… And it hit me… I’m paying $8 a month for nothing. I’ve had a Comcast account in my name since 2002, a fairly long-term customer. At $8 a month for 12 years, that’s a cool $1,152 I’ve paid in rental fees for a modem alone.

It actually makes me cringe.

If you figure the average lifespan of a modem is 3-5 years, I could have bought 3 brand new from the store and saved myself $989 in the mean time. This time I didn’t hesitate. I looked up the exact same model that Comcast rents now and found it for $69 at Walmart. That $69 will save me $315 if the modem only lasts 4 years, and $411 if it hangs in there for 5.

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Comcast has something like 22 million customers, and at $8 a month, modem rentals are a $2 billion a year business. That’s $2,000,000,000, with 9 zeros. Imagine if every person that pays that $8 a month took their next paycheck and bought a comparable $60-80 cable modem. When was the last time you heard about a company losing $2 billion a year and not get shaken to the foundation?

The only way to let Comcast know that we are unhappy with this system is to do just that.

The numbers don’t lie, if any company lost $2 billion in profits, their stockholders would be screaming for their heads, holding pitchforks and torches high. I don’t know about you, but I personally think Comcast has a little pitchforkin’ coming. I mean, seriously, if $8 a month is worth two billion a year, imagine what they make from HD DVR boxes that they charge upwards of $15-20, and that’s just for one television. If you’re crazy like me and want high definition on the various high definition televisions in the house, you’re shelling out rental fees like nobody’s business. So go ahead, grab your pitchfork…

Here is the modem I bought, I’m not being paid to recommend it, there are just a boat load of options and this one is a good, solid bet that is compatible with Comcast’s system.

http://www.walmart.com/ip/Motorola-SB6121-SURFboard-DOCSIS-3.0-Cable-Modem/20742485

 

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