Dow Jones ran a news story on Tuesday noting that Verizon was raising the price of its FiOS TV service purchased outside the bundle by 12% for 2008. This is the second consecutive year that Verizon has raised FiOS TV prices.
Wait a second. I thought that FiOS TV was going to set off a price war with cable. At least that is what you might think if you looked at a chart of Comcast’s stock price. The reality is that pricing for all parts of the triple play bundle has been very stable. Verizon is just facing its own reality – it can’t buy programming at the same price as Comcast, DirecTV, et al because it doesn’t qualify for subscriber discounts while it faces the same programming price hikes from cable network providers. And just in case he missed it, here’s a shout out to FCC Chairman Martin. It isn’t just the cable industry that is raising prices of multichannel video subscriptions. Lack of competition is not the issue. Multichannel video distributors are just passing through the annual increases charged to them by the likes of CNN, ESPN, and HGTV.
Cable still has serious issues with investors (though not nearly so serious with fundamentals) but after a summer and fall of discontent and bad news this is the first positive datapoint. Now if Brian Roberts would just step up his share buyback and show the same confidence with his actions that he expresses with his words.