Verizon Sets New FiOS Bundles, Hikes Early Termination Fee
Telco Adds More HD to Entry-Level FiOS TV; Lowers Price on 7.1-Mbps DSL
By Todd Spangler -- Multichannel News, 1/15/2010 5:24:15 PM
Verizon Communications next week will revise FiOS TV packages to include more HD channels, introduce two new symmetrical Internet tiers of 25- and 35-Mbps -- and the telco's also boosting the penalty for customers who cancel their FiOS contracts early from $179 to as much as $360.
On the DSL side, Verizon is dropping the price of its 7.1-Mbps DSL service when ordered in bundles by $10, to match the same price as bundles with the 3-Mbps tier, and is offering other sign-up incentives to new customers of DSL-based bundles.
The three new FiOS bundles, terms and pricing, which apply to new customers, go into effect Sunday, Jan. 17. The revised tiers are Prime HD (which replaces FiOS TV Essential as the entry-level package), Extreme HD and the new Ultimate HD:
* The Prime HD bundle ($109.99 per month) includes at least 40 HD channels including AMC, Bravo, MTV, Food Network and TBS; FiOS Internet service with a connection speed of up to 15/5 Mbps; and FiOS voice service. By comparison, the Essential service included only the HD channels of local broadcast stations.
* The Extreme HD bundle ($124.99 per month) includes 65 or more HD channels; 25-Mbps symmetrical Internet; and FiOS voice service.
* The Ultimate HD bundle ($139.99 per month) includes 90 or more HD channels; premium content from EPIX, Showtime, TMC, Flix and the NFL RedZone; 35-Mbps symmetrical Internet; and FiOS voice service.
The new bundles are designed to provide more options to customers specifically regarding HD, Verizon spokeswoman Heather Wilner said. Under the two previous FiOS TV tiers, "you either got a lot of HD or just a little," she said.
In the New York City metro area -- where Verizon competes primarily with Cablevision Systems and Time Warner Cable -- the offers are slightly different. Prime HD includes all of the TV content offered with FiOS TV Extreme HD, for a total of more than 65 HD channels; Extreme also includes Showtime, TMC and Flix, for a total of 80 or more HD channels for $119.99 a month; and Ultimate includes HBO/Cinemax and other premium channels for a total of 125 or more HD channels for $149.99 a month.
The FiOS multiplay bundles are available with a 24-month service agreement that locks in the rate for two years. Canceling the contract can result in an early-termination fee (ETF) of up to $360, although Wilner said the ETF is pro-rated to drop $15 for each month a customer has maintained service.
Wilner also noted that Verizon will not apply a charge penalty to customers who decide to downgrade their bundles (i.e., change from a triple-play to a double-play). In addition, for the first time, FiOS bundles are available in month-to-month plans that do not require a minimum term agreement. The no-contract bundles will generally be about $20 more than the same bundles with two-year contracts, Wilner said.
Verizon has reinstituted symmetrical-bandwidth tiers for the top two FiOS bundles, after the telco last summer phased those out because most customers apparently didn't want or need that much upstream capacity. Verizon will use the 25/25 and 35/35 tiers to emphasize its upstream capability in contrast to cable services, which are typically lower on the upload side.
Triple-play subscribers who take Ultimate and Extreme -- as well as Prime triple-play subs in the New York City market area -- can get free access to thousands of Wi-Fi hot spots across the U.S.
Meanwhile, Verizon is offering additional incentives to new customers who sign up for a qualifying FiOS bundle by April 17. These offers include:
* A 12-month introductory price of $89.99 for customers who subscribe to the Prime HD triple-play bundle, $114.99 for the Extreme HD triple-play bundle and $129.99 for the Ultimate HD triple-play bundle. In the New York City area, the prices for these bundles would be $89.99, $99.99 and $129.99, respectively; or
* A free Verizon Home Media DVR, which provides multiroom DVR, media-sharing and Web video features, plus a free standard- or HD set-top box for six months (up to a $179 value). Customers who choose this option also qualify for special introductory prices of $99.99 for the Prime HD triple-play bundle, $124.99 for the Extreme HD triple-play bundle and $139.99 for the Ultimate HD triple-play bundle. In the New York City area, the 12-month introductory prices for these bundles would be $99.99, $109.99 and $139.99, respectively.
Finally, customers who order FiOS bundles online will receive an additional $5 off their monthly service rate for the first year of service.
In areas where FiOS is unavailable, Verizon is putting promotional offers together for DSL-based bundles. New customers who order bundles with DSL, DirecTV and Verizon phone service are eligible to receive a Compaq Mini netbook (valued at $299) or a $150 Visa prepaid gift card.
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Jeff, was Comcast your previous provider? If so, those three channels aren't part of the basic lineup on Comcast, either.
Frank A. - 1/31/2010 10:19:40 AM EST -
Clarification: in my previous post, I quoted a rate of $105/month for my unwanted upgrade to the Extreme package. The actual price of the Extreme package is $125/month; the figure of $105 includes my new subscriber discount of $20/month for 12 months.
Jeff Berkowitz - 1/30/2010 7:12:00 PM EST -
Hi Todd, Multichannel, there's an important point here that your article missed - don't worry, everybody else missed it too.
At least here in the Portland, OR area, the low-end 15/5 "Prime" package package doesn't include a set of "extended basic" type TV stations that almost everyone would assume to be present. Channels like DIY, National Geographic, and the Military Channel are not included in Prime, at least here in Portland.
There is an almost complete lack of understanding of this issue even inside Verizon itself. My installation was on 1/29. After I discovered the "missing" channels, I spent over an hour on the line with their tech support as they tried to figure out the "problem". Finally they gave me a trouble ticket and said they'd get back to me.
Hours later, someone in their sales department called and said they could fix me right up - for a mere $15 a month extra, i.e. by upgrading my plan (including the internet upgrade to, I think, 25/symmetric).
But I was satisfied with my previous vendors and had made the switch to FIOS based solely on price. The higher-cost plan that delivers the expected TV channels completely upset my ROI calculation; had I known it was really $105/month to meet obvious expectations, I would not have switched. Now I'm locked in and I am not a happy camper. So from my perspective, this new segmentation was a kind of sophisticated bait and switch tactic.
Jeff Berkowitz - 1/30/2010 5:45:01 PM EST -
Note that FiOS bundle prices do not include set-top lease fees. HD DVR is $15.99/mo.; multiroom DVR is $19.99/mo.; and HD set-top is $9.99/mo.
Todd Spangler - 1/17/2010 9:01:45 AM EST
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