When Philadelphia City Council hosts hearings about Comcast later this spring, members will hear a lot of complaints over costs.
Philadelphians will say they pay too much. Comcast will respond that rates here are on par with other cities with different providers.
But, according to the City’s newly-released report on Comcast, comparing Philadelphia to other cities isn’t so easy.
The report was commissioned in advance of negotiations over the renewal of Comcast’s local franchise, which gives it access to public streets and telephone poles. The report found that despite widespread concerns about the company’s rates, the various bundles and packages of cable and internet services have grown so complex that comparing one city’s prices to another is almost impossible.
Ram Mudambi, a professor at Temple University’s Fox School of business, says the explosion of choices and services has made comparisons between cities and even individual customers very difficult.
“Through the same pipe, you get all these different services that are providable. Not only TV, but telephone and internet as well,” Mudambi said. “Each one of these three different media are available like Baskin-Robbins – in 27 different flavors.”
Mudambi says cable and internet services are now similar to airfares, where almost every passenger on a given plane might pay a different price. Just because passengers can shop around for the best available price, doesn’t mean they can tell whether or not they’re getting the best possible price.
“Every consumer is essentially picking from a menu as long as a Chinese restaurant’s,” he said. “That’s where the complexity comes in. It’s really really hard to say what’s the real price.”
Mudambi said that the lesson from the airline industry is that the only one sure way to lower prices is to bring in more competition. A series of public forums about Comcast will begin later this month, and Mayor Michael Nutter has urged the public to share their concerns. He calls public opinion a “critical aid” to the city’s negotiations.