Comcast, Verizon battle it out for market share
Varied TV, Web services make comparisons hard
Just listening to the advertising - and there’s plenty of advertising - at any given moment, an unwary consumer of cable services might get the idea that either Comcast Corp. or Verizon Communications Inc. has the best deals, the most amazing TV pictures, and Internet speeds to dazzle the cyber gods. But in the end, what’s the real difference in what each company offers?
The question is academic in Boston. The ferocious competition makes it seem as if the two companies are slugging it out in the streets - and can overwhelm earthbound rivals with less local presence, like RCN Corp., or satellite services, like DirecTV Inc. and Dish Network - but Verizon has yet to bring its FiOS cable TV and Internet service to the city, a Comcast stronghold.
But it’s not clear what Boston residents are missing, and it’s difficult to make a definitive judgment about which company offers better quality, service, or price. Cable services are thinly sliced into component offerings - a melange of cable movie channels here, a dash of staggered Internet speeds there - and offered in packages different enough to prevent apples-to-apples comparisons.
But based on interviews with customers, industry analysts, and the cable carriers themselves, Verizon has an edge in some places where Comcast customers are still on legacy systems - older cable networks set up by companies it has acquired over the years. But that difference is rapidly disappearing as Comcast upgrades its Bay State offerings.
There’s no question Comcast has the greater head count. With 1.6 million Massachusetts subscribers, Comcast is far out in front of Verizon FiOS, which has 226,000 customers in the state, and is expanding one town at a time as it re-wires communities to run its FiOS system.
Verizon touts the picture quality and Internet speed made possible by its FiOS, which it’s building at a cost of $23 billion nationwide. FiOS, which reaches more than 100 Massachusetts communities, runs on a network of fiber-optic cable to the customer’s home, with a short length of traditional coaxial cable that runs into the home and attaches to set-top boxes and cable modems. Fiber-optic cable delivers much more data capacity than the old metal and plastic coaxial cable. Verizon spokesman Phil Santoro said that FiOS is “giving customers the ultimate TV viewing experience currently available in the marketplace.’’
Comcast replies that it’s also got an fiber-optic network, although in the Comcast model, the fiber runs to neighborhood “nodes,’’ and coaxial cable runs from the nodes to customer premises. In addition, Comcast is in the middle of major investments to enhance its network to add more high-definition TV channels and faster Internet speeds, and to make significant improvements in customer service. The company recently said it will re-brand its cable services under the umbrella name Xfinity.
“Our technology platform has evolved so that we believe we’re transforming the way consumers will experience data, information, and entertainment,’’ said Steve Hackley, Comcast’s senior vice president for the Greater Boston region.
In many communities, Comcast systems offer a mix of digital and traditional analog video services. Analog video, the technology used for broadcast television from its inception until last year, takes up a lot of network capacity, which limits Comcast’s ability to provide high-definition television channels in some places. Customers served by older Comcast systems in communities like Quincy, Framingham, or Lexington can only get about 50 high-definition channels. By contrast, Verizon offers more than 100 HD channels, a big advantage at a time when about half of all US homes have high-definition TV sets.
But Comcast already offers about the same number of HD channels to customers in Boston, where it has upgraded to an all-digital system, and it is carrying out a digital conversion program to upgrade the rest of the state this year. And FiOS is not available in the city.
Even without the upgrade, Comcast systems in Massachusetts offer Internet download speeds as high as 50 megabits, the same top speed offered by Verizon FiOS. And last week, Comcast said that it will soon offer a 100-megabit Internet service.
Verizon insists that because it runs optical fiber right to the home, its FiOS system will always have more video and Internet capacity than the Comcast technology, and it will be easier for FiOS to add still more TV channels and faster Internet speeds. “The way we see this network, it’s actually future-proof,’’ said Vincent A. O’Byrne, Verizon’s director of wireline access technologies.
But industry analysts said that the technical differences between the Verizon and Comcast systems are relatively trivial. “They’re almost identical,’’ said Bruce Leichtman, president of Leichtman Research Group, a Durham, N.H., firm that tracks the cable industry. “If people think they’re missing out on a humongous product differentiation, that’s not true.’’
Independent telecom analyst Jeffrey Kagan said that Verizon entered the TV business with technology that was clearly superior to that used by traditional cable companies like Comcast. “That forced the cable companies to upgrade,’’ he said, and “where the cable companies have upgraded, they’re great.’’
Customers welcome the competition, with many switching from Verizon to Comcast and back again in search of better service and lower prices. Customers who switch can often win discounted rates from their new provider. What they probably won’t see is a big difference in the two systems.
David Wallace, a marketing consultant in Newton Corner, had no complaints with Comcast, but switched to FiOS when Verizon offered him a cheaper package deal. “I’m not a power TV watcher, so it wasn’t about anything like number of channels or quality of picture,’’ he said, adding he’d consider re-upping with Comcast if they make him a better offer.
Darcy Chamberlain, an unemployed event marketing worker in Marlborough, abandoned Comcast for Verizon, but then switched back again. “I didn’t think that their customer service was as good as Comcast,’’ she said.
Verizon’s cable TV and Internet service was fine, Chamberlain said, but “my bill was too high. It was higher than I thought it would be, and getting laid off and stuff, they just weren’t willing to work with me.’’
Since launching FiOS in 2004, Verizon has won good reviews from customers. This month’s issue of Consumer Reports magazine rated Verizon as the nation’s second-best provider of Internet and cable television service, trailing only Wow, a small cable company in the Midwest. Comcast was ranked 23d in Internet service and 14th in cable TV service. The ratings were based on a survey of customers.
Comcast thinks it can gain ground with a stronger focus on customer service. The company offers a service guarantee, including a 30-day, money-back offer to unsatisfied new customers and a $20 credit if a service technician misses an appointment. “We promise that we will be easy to deal with,’’ said Hackley.
Price comparisons are difficult; there are too many options. But for a new customer, Verizon’s introductory offers can cost less than Comcast’s in Woburn, for example. There, a basic FiOS package with more than 40 HDTV channels costs $94.98 a month for the first year and $119.98 for the second, including a monthly fee for an HD set-top box. A comparable Comcast package is priced at $124.99 a month for the first year and $139.99 for the second, including a monthly fee for a telephone modem. Not counting additional fees and services, a Verizon customer would save about $600 over two years, but at the end of that time, would need to do another comparison to see which company offered a better price for a desirable package.
A 2009 survey from the Federal Communications Commission found that cable TV prices tend to decline in communities served by more than one landline video provider.
Boston customers can always subscribe to satellite services, and the city has a second cable company in RCN. But RCN serves only part of the city and has just 20,000 subscribers. Verizon’s full-scale entry into the Boston market could create pressure to lower prices, but it would take a long time to wire Boston, and there are no plans to begin. Santoro said the company has allocated its capital elsewhere, but added that Boston has not been forgotten. “We’re getting there,’’ he said.
Hiawatha Bray can be reached at firstname.lastname@example.org.