News

FiOS Cranks Up HD, Internet

1/23/2010 2:00 AM Eastern

Verizon Communications redoubled efforts to poach cable’s subscribers, trying to lock up customers into FiOS bundles for two-year blocks with discount pricing, faster uploads and more high-def.

Last week the telco introduced three updated FiOS TV packages that include more HD channels, and added two new symmetrical Internet tiers that offer 25 or 35 Megabits per second for both uploads and downloads. It also hiked the penalty for customers who cancel their two-year FiOS contracts early from $179 to as much as $360.

Verizon remains particularly aggressive in the New York area, where it is offering a FiOS triple play for as little as $85 per month for one year (not including set-top fees) for customers who order online.

Cablevision Systems, which has the highest exposure to FiOS among major MSOs, parried the telco’s move by offering a free 8-Gigabyte iPod Touch to new double- or triple-play customers, a promo available through Jan. 31, along with 12-month pricing for Internet and phone services of $29.95 per month each. Also in the New York DMA, Time Warner Cable was offering a $99 triple-play bundle — plus Showtime free — for one year.

The revised FiOS TV tiers are Prime HD, which provides at least 40 HD channels; Extreme HD, with 65-plus; and Ultimate HD, with 90 or more HDs. Prime HD replaces the entry-level FiOS TV Essential tier, which included only the HD local broadcast feeds (up to 14 channels).

The bundles are designed to provide more options to customers specifically regarding HD, spokeswoman Heather Wilner said. Under the two previous FiOS TV tiers, “you either got a lot of HD or just a little,” she said.

The FiOS multiplay bundles are available with a 24-month contract that locks in the rate for two years. Canceling service can result in an early-termination fee 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 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 them 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.

Meanwhile, Verizon is offering additional incentives to new customers who sign up for a qualifying FiOS bundle by April 17, such as 12-month pricing of $89.99 for the Prime HD triple play. Additionally, customers who order FiOS bundles online will receive an additional $5 off their monthly bill for the first year.

The FiOS bundle prices do not include set-top lease fees. Monthly fees run $19.99 per multiroom HD DVR, $15.99 per standalone HD DVR and $9.99 per HD set-top.

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.

BUNDLE BOOST

National FiOS triple-play offers, effective Jan. 17:

* Requires two-year contract, with applicable early termination fees; pricing does not include set-top lease fees.
SOURCE: Verizon Communications
Prime HD: ($109.99/month) 40 or more HD channels including AMC, Bravo, MTV, Food Network and TBS; 15/5-Mbps Internet; unlimited calling plan
Extreme HD: ($124.99/month) 65 or more HD channels; 25-Mbps symmetrical Internet; unlimited calling plan
Ultimate HD: ($139.99/month) 90 or more HD channels, including EPIX, Showtime, TMC, Flix and NFL RedZone; 35-Mbps symmetrical Internet; unlimited calling plan


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