Cox Communications Inc. is rolling out to most of its markets a $24.95-per-month, 256-kilobit-per-second retention-data package, while raising the speed of its mainstream 3-megabit-per-second service to 4 mbps, in a move that one analyst said could "spook" cable and Time Warner Inc. (America Online Inc.) investors.
"We view this as a direct attack on AOL's narrowband [$23.90 per month] service," wrote Rich Greenfield, an analyst with Fulcrum Global Partners LLC, in a research note. He also said the news could "spook" cable investors fearful that price competition with digital subscriber line is growing.
The move to 4 mbps affects nearly 2 million Cox subscribers. They won't pay extra for the additional speed -- the tier is priced at $39.95 per month -- which now features 512 kbps upstream.
Cox's premiere $54.95-per-month package was increased to 5 mbps downstream and 768 kbps upstream. The $24.95 package is available to noncable subscribers, and it is squarely aimed at the dial-up market.
Las Vegas, Gainesville, Fla., and Middle America markets won't see the speed increase at the moment, Cox said.