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Cable companies make 97% margin on internet services

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Cable companies make 97% margin on internet services

Postby skynet » Tue Feb 05, 2013 8:00 pm

...and they do absolutely nothing to improve the quality of service. Well, within a monetary system what do you expect? To a big corporation, profit comes first and quality comes last. We may never see faster internet or fiber in our lifetime. Hope I'm wrong but how long have we already been stuck with crap while fiber has been sitting around?

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Cable companies make 97% margin on internet services and have no incentive to offer gigabit internet.

The cable distribution giants like Time Warner Cable and Comcast are already making a 97 percent margin on their “almost comically profitable” Internet services, according to Craig Moffet, an analyst at the Wall Street firm Bernstein Research. As Levin points out, “If you are making that kind of margin, it’s hard to improve it.” And most Americans have no choice but to deal with their local cable company.

Confirmation of Lazy Money Grubbing Evil

While Verizon operates the fiber network serving the largest number of home subscribers in the nation, the company is backing off from installing additional U.S. fiber connectivity. The company’s fiber service, called FiOS, offers basic service starting at 15 megabits per second (which can be upgraded in some areas to as much as 300 megabits per second).

Verizon CFO Fran Shammo said in a conference call last fall that there are no plans to expand FiOS beyond those areas. “At this point we have to capitalize on what we have invested,” he said. The basic goal is to sign up more people in the existing service areas, which adds the most revenue without increasing capital costs.

The other cable and telecom companies are focused on capitalizing on existing cable infrastructure, not emulating Google Fiber by building out fiber connections to homes and businesses. In Kansas City, Time Warner Cable in late January (likely in response to Google Fiber’s presence) boosted speeds and lowered prices, offering download speeds of 100 megabits per second for $75 a month. For $199 users can get cable bundled with TV and phone service, with two DVR.

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