A Philosopher's Blog

How Comcast & Century Link Lost My Business

Posted in Business by Michael LaBossiere on May 10, 2013
English: Comcast service van, Ypsilanti Townsh...

(Photo credit: Wikipedia)

Like many places, Tallahassee has one cable provider. This is, of course, the often reviled Comcast. For quite some time people had the choice of Comcast or nothing, but the rise of DISH TV provided some competition in the TV area. Century Link also recently entered the battle with PRISM and they have offered DSL for a while.

When I moved to my current house I was married and my wife had a deep and abiding love of TV, so we got Comcast cable. We also got a land line phone, since this was well before the days of the mobile phone. When broadband internet became available, I added that that via the only option in town: Comcast. My phone service went through various providers as this company bought or merged with that company, finally resulting in Century Link being the one sending me bills.

As the years passed, I noticed that the bills always went up, although the service provided was the same. Then I noticed that the bills started going up far more frequently, despite the fact that what I was paying for was the same. When my land line bill hit $45 for the basic service, that was that-I went with a mobile phone that provides unlimited data for $35 a month and set up Google Voice with a VOIP adapter (the OBI 100) so I could still have a home phone that worked (more or less) as a home phone.

For Comcast, the final brick that broke the camel’s back was when they started billing me $1.99/month for the digital adapters that had been “free” for the past three years. While I do understand charging for premium equipment, charging extra for what is needed to even use the service pushed me over the edge and that was it for cable TV. While I will miss a few shows that I cannot find (legally) online, most of what I used to watch is readily available online. For free. Most networks now have their own streaming shows, plus there is Hulu. I already had Amazon Prime and Netflix, so I don’t really miss the TV. I sort of miss CNN, but not really.

My situation got me thinking about more general matters, such as how companies can hurt themselves. In the case of Comcast and Century link, they face many problems, some of which are self-inflicted.

One obvious problem is that they increase the cost of their services relentlessly while not offering customers any greater value in return. While I get the need to deal with inflation, the increase in the bills seems to be rather out of proportion to inflation. For people like me who do not get regular cost-of-living pay increases, these increases are especially bad-the increasing bills are push towards a non-increasing salary. Not surprisingly, people do elect to cancel services.

It might be replied that these companies are only raising prices because they must-they have no choice in order to keep up with inflation and other cost increases. However, as my friend Ron always notes, when people cancel a service like cable, they are often offered  better deals to stay. As Ron says, if they had offered him that deal before, he would not have cancelled. This sort of thing indicates that they can actually offer the services without such relentless increases but chose not to do so.

One point worth considering is that perhaps companies are following not a stupid strategy, but a clever one. Some years ago, I needed repairs done on my house and got some estimates. One contractor’s estimate was three times that of the others. Naturally, I went with a lower estimate. While the contractor’s approach might seem like a bad idea, it could actually be a good approach. After all, suppose that the contractor charges three times what other contractors do and only gets one third of the jobs they do. He actually comes out ahead, since he does a third of the work (in hours) for the same income. Perhaps Comcast and Century Link have the same approach: when they raise their prices, they lose customers. But, perhaps this is offset by the decrease in their operating costs. So, if Comcast loses X dollars because customers cancel due to bill increases, but the money they get from the increase paid by remaining customers and the lowered expenses from having fewer customers results in them making that X back (or better), then that was a smart move. Of course, they have to be careful to avoid losing too many customers and they probably have to worry a tiny bit about people saying bad things about them.

Another obvious problem is that companies like Comcast and Century Link that increase the cost of TV and phone service run the risk of losing out to alternatives. As I noted above, when my phone bill hit $45 a month, it made more sense for me to abandon Century Link and go with Google and Virgin Mobile. In the case of Comcast, I am still stuck with them as my ISP, but I can do without TV thanks to the internet. It was not so much that I just wanted to not pay anything-I was willing to pay a reasonable amount for cable TV and a land line. But, the relentless price increases convinced me to scrape off the leeches.  If I am not unusual in having such a breaking point (at which doing without or finding alternatives beats paying a company), then companies like Comcast and Century Link will need to approach the future cautiously-they might price themselves right out of profits.

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RIAA Strikes Again

Posted in Ethics by Michael LaBossiere on June 23, 2009
The RIAA Logo.
Image via Wikipedia

The RIAA has struck once again, winning a $1.92 million settlement against
Jammie Thomas.

A few years back, I wrote the following sample ethics argument for my students. While the specific numbers are different from the current situation, the basic reasoning still holds:

While the music industry put an end to Napster some time ago, peer-to-peer networks, such as Kazaa, arose to fill the void. These networks enabled people to share files via the internet. While file sharing can be used for legitimate purposes, such services were used to swap files without the consent of the copyright holders. In response, the RIAA has launched an attack on the file-swappers. Using the equivalent of hired guns, the labels in the RIAA has hired professionals to send out “spider” software to search for the digital signatures of songs in the users’ shared folders. When the songs were located, the hired guns would send their employer the users’ names, playlists and IP addresses. The company would then subpoena the swappers’ ISPs to acquire their real names and bring the swappers to court. In the first round, 261 swappers were targeted by the RIAA including a 12 year old and a 14 year old. Under the laws of the time, the RIAA could demand up to $150,000 per song. While the legality of this sort of thing is a matter for the courts, three arguments will be presented to show that the RIAA’s actions are morally unacceptable.

First, the method used by the RIAA is morally unacceptable. As noted above, the RIAA finds it targets by having its agents intrude into the hard drives of the music swappers. Presumably, the RIAA regards such intrusions as justified because they suspect the file swappers have stolen property on their computers. Using the same reasoning, it would seem that the RIAA should be allowed to hire people to plant microphones and cameras in the homes, apartments and dorms of people who have purchased CD burners. After all, if being involved in file sharing marks one as a potential music file swapper, then buying a burner would mark one as a potential CD swapper. However, our intuitions tell us that this sort of intrusion would be morally unacceptable.

It might be thought that an additional argument is needed to support of the claim that people have a right to privacy against corporate intrusions. However, it seems more reasonable to hold that the burden of proof is on the corporations to show that they have the right to make such intrusions-and they have yet to give a good reason. Thus, it must be concluded that the virtual intrusions are also morally unacceptable.

Second, there is the matter of proportionality. If it is believed that a wrongdoer is morally obligated to make amends for doing wrong, it seems to also follow that the punishment should be proportional to the misdeed. After all, if the original wrongdoing creates a debt that must be repaid, forcing the wrongdoer to pay beyond this would create a new debt-this one on the part of the agent or agents extracting the punishment. Thus, it certainly seems morally wrong to inflict a punishment that goes beyond what is proportional to the offense.

In its first round of action the RIAA claimed it was entitled to up to $150,000 per pirated song found in a shared folder. Using this figure, 14-year-old Courtney Fitzgerald could owe up to $120,000,000 for the 800 songs located on her computer. It is inconceivable that Courtney Fitzgerald did up to $120,000,000 worth of damage to the RIAA members. This certainly seems to make their punishments disproportional.

To be fair, the RIAA generally did not push for the largest amount. For example, it demanded only $2,000 from the mother of 12-year-old Briana LaHara for her file swapping. This might seem proportional, but consider the following. There were an estimated 80 million people using services like Kazaa at the time. If we assume that only 1 in 80 users have illegal music files and we assume that each did $2,000 dollars in damage, then the RIAA would have sustained $2,000,000,000 in total damage from them. If we assume 1 in 8 people have illegal files, then the damage would be $20,000,000,000. Given that the RIAA members are still in existence and still making rather large profits, it seems unlikely that they have sustained that sort of damage. Thus, they are inflicting punishments that are disproportional to the damage being done, which is immoral.

Third, there is the matter of the harm being created by their actions. One point of concern is that if the RIAA is allowed to continue using its intrusive methods to find illegal files, this will set a legal precedent that can be used to further erode privacy rights. History has shown that inroads into rights tend to lead to further inroads, though this typically takes time. Such inroads would most likely be harmful. After all, corporate behavior, from the robber-barons to Enron, has generally been detrimental to the people. Given the potential for such harms, the actions of the RIAA are immoral.
A second, and ironic, point is that the RIAA could well be harming itself with its actions. The people under attack and branded as criminals are the very customers whose dollars the RIAA hopes to acquire through music sales. Angering them seems to be an obvious way to decrease sales. This will simply increase the harms that the RIAA’s actions were intended to curtail.

Thus, it seems safe to conclude that the RIAA’s actions were immoral.

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