Triple Play Digital Services: Comcast and Verizon 
    (Digital Phone, Television, and Internet - 8/2007)

    by Douglas Dixon and Josh Page

The Summer of the Triple Play

In past summers, the merry tune of the ice cream truck would call kids out from their houses for some cool delicious goodness. This summer, the roads are filled with a different kind of vehicle -- Comcast and Verizon installation trucks. Children no longer wait for cool snacks; instead their parents lust for their own hot treat, as fast broadband data connections have replaced ice cream sandwiches and popsicles.
                                           
       

This summer's special goodie is Verizon FiOS (Fiber Optic Service, www.verizonfios.com), the next upgrade in digital connections to the home that promises faster Internet data rates, and allows Verizon to compete head-on with Comcast in providing the full "triple play" of services -- telephone, television, and Internet. Meanwhile, Comcast is fighting back with its own all-digital package of services and healthy advertising budget.

So what's the best choice in this battle of the phone/TV/Internet provider heavyweights, Comcast Corporation (www.comcast.com) and Verizon Communications (www.verizon.com)? Is the choice about technology, or is it more about the packages of services and deals that are being offered as this battle heats up?

       
        Comcast and Verizon "triple play" bundles

Looking at the technology, it's clear that Verizon's FiOS service offers a significant jump in download data rates, from Verizon's previous DSL service at up to 3 Mbps (million bits per second), to Comcast cable-based service at 6 to 8 to soon 16 Mbps (x2 with PowerBoost), to Verizon FiOS at 10 to 20 and up to 50 and then 100 Mbps and beyond.

    See sidebar: The Broadband Future of 100's of Mega-bits

But beyond the speed of light metaphors, the battle here in New Jersey is focused on the pricing. Not surprisingly, Verizon is undercutting Comcast on its traditional television service, and Comcast is undercutting Verizon on its base phone service. And both are promoting bundled "triple play" services with digital phone, TV, and Internet at around $99 with an annual contract.

    See sidebar: The Digital Home: Installing Digital Services

   
        Verizon NSAC (Network Service Assurance Center)

Consumers love these new offerings. Comcast reports 25 percent penetration of its high-speed Internet service to households where the service is available, and Verizon reports 19 percent penetration of its FiOS Internet service. And customers like the idea of buying the triple bundle of services, with Verizon reporting that it is purchased by some 70 percent of New Jersey FiOS consumers.

In comparing the services available today, Verizon is pushing the promise of better technology and a generally better slate of services at lower prices. But Comcast offers its digital services throughout its installed network, while Verizon is just in the early phase of its rollout of FiOS service, with New Jersey among the early recipients. And if you're focused on TV offerings, Verizon is still building its service, now up to over half a million total FiOS TV customers, while Comcast has more than 24 million basic cable subscribers, with over half taking digital cable services. Comcast also boasts a larger library of on demand programming, with 9,300 selections per month -- 95 percent of which are free.

    See sidebar: The Battle of the Broadband: A Market Scorecard

However, the offerings are rather confusing, as both companies have a variety of tiers of offerings for each of the three types of services. In addition, it's surprisingly hard to get a clear and complete list of all the available options. The prices listed here come primarily from the company websites, but were augmented after review by the two companies to try to best summarize the service offerings in the central New Jersey area. But as we found in researching this article, the services and plans listed on the websites are not complete, so you'll need to call a service representative to check for additional services, promotional offers, and precise pricing for your specific location.

Also check whether the rates require annual commitments (especially for Verizon), or offer the option to guarantee the price for a year or two (as with Comcast). And watch out for activation fees and early termination fees, which we're also ignoring here.

To help explain all this better, we'll look in more detail at the Comcast and Verizon service options for telephone, television, and Internet service, as well as the bundled plans for triple play services. 

Of course, there are plenty of other options to consider, for Internet-based services (VOIP, IPTV) and wireless connectivity (DBS, DTV, Wi-Fi, WiMAX, 3G).

    See sidebar: Alternate Delivery Channels: Internet and Wireless

In addition, we'll look at some of the details of actually installing these services, and some of the trade-offs in moving to the all-digital future.

    See sidebar: The Digital Home: Installing Digital Services

Comcast - Services and Prices
    www.comcast.com/Shop/Buyflow/Default.ashx

Verizon - Services and Prices
    www22.verizon.com/Residential

Verizon - FiOS Services
    www.verizonfios.com

About Those Data Rate Numbers

For a more visceral understanding of these Mbps data rate numbers, we can do some ballpark calculations for download times for a three-minute song and a one-hour TV show. Of course these numbers can vary widely, both depending on the quality of the audio and video (how aggressively they are compressed), and the actual (not theoretical) bandwidth from the download website through the Internet into your home network.

Downloading a three-minute song (around 3 MB at good quality) is not a big deal these days: it would take around 16 seconds on a DSL line (at 768 Kbps), more like 2 to 4 seconds on today's Comcast cable (at 6 to 12 Mbps), and 1 to 2 seconds on Verizon FiOS (at 10 to 20 Mbps).

But for longer downloads, such as a collection of songs or a movie, these speed differences can make a huge difference. Downloading a one-hour TV show (around 600 MB at good quality) would take around an hour on DSL, some 6 to 13 minutes on Comcast cable, and more like 4 to 8 minutes on Verizon FiOS. And in the future of 100 Mbps FiOS, the one-hour video would download in under a minute.

Real-World Numbers

Note that these glorious megabit-per-second data rate numbers are design specifications, and not necessarily what you will see in real life. Actual speeds depend on your provider, as well as the performance of your computer, the configuration of your home network and router, contention in the "last mile" connection to your neighborhood, and any other sluggishness in the public Internet and the sites that you are accessing,

    See PC Magazine, "Real World Testing: The Best ISPs in America," 5/30/2007
        www.pcmag.com/article2/0,1895,2139627,00.asp

For example, the Comcast cable service is a shared line within your neighborhood, as opposed to a dedicated connection like a traditional phone line or the Verizon FiOS service. This means Internet data service can slow down if all your neighbors sign up and start massive downloads.

    See Comcast FAQ, "Cable is a shared line"
        www.comcast.com/Customers/FAQ/FaqDetails.ashx?Id=2192

And the Comcast TV line is shared as well -- you actually can use a special TV tuner to search beyond the high channels and find the slots where Comcast delivers the on demand services that your neighbors are watching -- or at least until Comcast decides to encrypt the signals.

    See "Other People's Porn," Slate, 6/2007
        www.slate.com/id/2167389

[ Top ]

Digital Telephone Services

We've gone from the AT&T monopoly in telephone service, to unbundled services for local, regional, and long-distance calling, back to consolidated bundled services from both Verizon and Comcast that offer with unlimited calling throughout the United States, Puerto Rico, and beyond. 

As the new entry in the market, Comcast is offering better deals on phone service, with calling plans that are generally less expensive than Verizon, include more countries, and offer more phone features.

Verizon Freedom Telephone Services

As the incumbent telephone provider, Verizon offers a variety of al la carte telephone calling plans, for local service, plus add-ons like caller ID, plus national and international long distance. Its Freedom unlimited calling plans are available for both traditional analog service and the new FiOS digital service.

The Verizon Freedom calling plans offer unlimited local, regional and long distance. They start with the Freedom Value plan at $34.99, stepping up to Freedom Essentials at $44.99, Freedom at $59.99, and Freedom Extra at $64.99 when adding 3, 5, and 10 calling features, respectively (voice mail, caller ID, call waiting, 3-way calling, speed dialing, etc.). The base Verizon plans cover the U.S. and Puerto Rico, and the two more expensive plans add Canada.

Comcast Digital Voice Telephone Service

The single Comcast Digital Voice unlimited telephone service has several advantages, especially if you are interested in calling features and an extended calling area. The pricing ranges around $39.95 to $44.95, depending on bundling of other Comcast services.

        Comcast Digital Voice 

The Comcast service includes 12 calling features, plus voice mail. And Comcast extends the included countries beyond Puerto Rico and Canada, adding the US Virgin Islands, Guam, America Samoa, and Saipan/N. Mariana Islands.

If you need an additional phone line, Comcast offers a Twice the Talk plan for $49.95 plus an additional $10 when bundled with other Comcast services. With Verizon, you'll need to independently sign up for the services you desire on the second line.

[ Top ]

Digital Television Services

For "cable" TV service, both Comcast Digital Cable and Verizon FiOS TV offer a large catalog of television channels, with a selection of specialty channels, music stations, premium packages, and on-demand programming. And, in our area, both offer local channels from New York and Philadelphia -- though check if your favorite channel is included (for example, in at least some areas, Verizon omits WNET 13 / PBS N.Y. and Comcast omits WPIX 11 / CW N.Y.).

Both companies offer a full basic service package with a full slate of 200-some channels, including local stations, cable standards (like CNN, ESPN, Discovery Channel, Nickelodeon, MTV), and 40-some music channels. Both digital services include an interactive program guide and an on-demand service with some free programming to watch when you want as well as pay-per-view for ordering movies and other material.

       
    Comcast Mini Guide / Verizon Interactive Media Guide

Beyond the basic cable channels, Comcast and Verizon offer add-on packages with additional channels including movies, sports, and Latin programming. And they offer packages of the branded premium channels, including HBO, Cinemax, Starz!, Showtime, The Movie Channel, and Encore. The premium "channels" are actually multiplexes -- mini-networks with multiple channels under the brand (East, West, Family, Comedy, etc.). Subscribers to premium services also can access some popular shows after the air date through the on demand service.

Since Verizon is the challenger in TV service, it offers more aggressive pricing and more premium channels and options. For example, the Verizon FiOS TV Premier service at $47.99 offers the full set of cable channels and on demand programming, compared to $70.70 for Comcast Digital Preferred (with some second-tier premium channels including Encore and Flix). (Add $5 to Verizon's prices for the required digital set-top box, which is included in the Comcast prices.) Then Verizon FiOS TV with full premium movie channels adds up to $86.97, compared to Comcast Digital Premier at $114.95. And adding premium channels plus a variety of sports channels tops out at $89.97 for Verizon and $119.90 for Comcast.

HDTV and DVRs

Both Comcast and Verizon offer an upgrade to High-Definition TV (HDTV) service for an additional $5 a month, which includes the required HDTV set-top box.

Both also offer set-top box upgrades to add the ability to record the digital programming with a Digital Video Recorder (DVR).

Comcast offers a dual-tuner DVR for $12 a month (can record one channel while watching another). Verizon offers a dual-tuner HD/DVR for $13 a month (can record up to two shows at same time while watching a previous recording).

       
    Comcast HD DVR                    Verizon DVR

Then to access your recorded shows from other TV sets in other rooms, Verizon offers a Multi-Room DVR for $20 to that can feed recorded programs to other TVs with the standard set top box ($5 each). Or you can get separate DVRs for each set.

Comcast Digital Cable Service

Comcast still offers plain analog basic analog cable service for $12 a month with local stations, or its standard analog service for $55, with national channels including CNN, ESPN, Nickelodeon, and MTV.

        Comcast Digital Cable

Comcast Digital Starter service starts at $56 a month, about the same price at the standard analog service, with some 141 channels (CNN, ESPN, Nickelodeoan, etc.), plus On Demand, which offers more than 9,300 programs each month that can be watched at your convenience, complete with pause, rewind, and fast-forward control. Nearly 95% of On Demand content is available at no additional charge. Comcast also offers a base Spanish-language digital service for $22.

Comcast than offers its entry level premium digital package, Digital Preferred for $70, with over 200 digital cable channels , and 47 music channels. This service also includes second-tier premium channels Encore, Sundance, Indieplex, Retroplex, Movieplex, and Flix.

For top-tier premium channels, Comcast Digital Preferred Plus adds three premium networks for $99.95 (HBO, Showtime, and Starz!). And the top tier Digital Premier adds all five premium networks for $114.95 (HBO, Showtime, Starz!, Cinemax, and The Movie Channel) .

The price of the digital converter and remote is included in Comcast's digital services for the primary outlet.

Comcast also offers an additional sports package for $5 (NFL Network, NBA TV, Fox regional, College Sports TV, Fox Soccer), a MLB package for 60 games a week ($99 total), and a Latino service.

Verizon FiOS TV Service

Verizon FiOS TV offers basic local service for $12.99 a month for 15 channels.

The Verizon FiOS TV full non-premium service with On Demand starts at $42.99 a month, with some 200 digital channels and 47 music channels. (Verizon also offers a base Spanish-language service for $32.99.)

(Again, Verizon requires a set-top box for $5 a month, with upgrades for a digital video recorder. We've therefore added $5 to total prices.)

For premium channels, Verizon offers an add-on Movies package with 45 movie channels for $12.99 (Starz!, Showtime, Encore, TMC, Flix, Sundance). Plus it offers the addition of HBO or Cinemax separately for $15.99 each, or both for $25.99. Or load up for full digital service with all the Verizon premium movie channels for a total of $86.97 for 8 networks.

Verizon also offers a variety of add-on options, including sports for $7.99, karaoke music for $7.99, Spanish language for $11.99 with 25 channels, and some 15 international premium channels for $9.99 and up (China, Japan, Filipino, Russia, etc.).

[ Top ]

Broadband Internet Services

The big news for home Internet service, of course, is Verizon's introduction of its FiOS (Fiber Optic Service) "state-of-the-art fiber-optic network," with speeds of up to 50 to 100 Mbps through optical fibers that weigh less, carry information faster, and use less electricity than standard copper wiring. Even in its initial roll-out, the Verizon FiOS broadband service offers faster data rates than Comcast at lower price (also with significantly faster upload speeds), with the option to expand to even higher rates.

From the early days of online computers, plain old dial-up phone service offers nominal data rates of up to 56 Kbps (thousands of bits per second). Today's broadband Internet services in the United States can run 100 to 1000 times faster, with download speeds in the multiple Mbps (million bits per second). Upload speeds are typically significantly slower.

Then came DSL (Digital Subscriber Line), which embedded digital data service on existing analog lines. However, DSL service was limited by the distance from your house to the local office -- longer distances degraded speeds, and too much distance meant service was not available.

Current Verizon DSL service offers 768 Kbps to 3 Mbps download speeds, with upload rates of 128 to 768 Kbps respectively. For inexpensive broadband, Verizon 768 / 128 Kbps DSL is only $14.99 a month, albeit with really slow uploads.
The top DSL service is 3 Mbps / 768 Kbps for $29.99, which now can't compete with even the basic Verizon FiOS service (5 / 2 Mbps at a similar price).

To move beyond DSL, Comcast offers 6 and 8 Mbps service in New Jersey for $42.95 and $52.95 respectively, with relatively slow upload rates of 384 and 768 Kbps. Comcast is also beginning to deploy a 16 / 1 Mbps service at the same $52.95 price.

        Comcast PowerBoost

Comcast also has added a feature called PowerBoost, which doubles the download rates when downloading larger files, including software, games, music and photos -- up to 12 and 16 Mbps, respectively, on its 6 and 8 Mbps services. Comcast states that the PowerBoost burst will normally last as long as the 10MB of a file download on Comcast's 6Mbps High-Speed Internet service, and as long as 5MB of a file upload. PowerBoost works by exploiting excess capacity in the Comcast backbone to effectively double the download rate, as long as your neighbors are not all busy downloading at the same time. PowerBoost also can significantly improve upload data rates with a boost of up to 2 Mbps (www.comcast.com/powerboost).

And now there's optical fiber. The basic Verizon FiOS service at 10 / 2 Mbps for $39.99 is faster than Comcast's highest standard rate, with significantly better upload speeds, and less expensive than even the slower Comcast service. And the next step doubles both download and upload speeds to 20 / 5 Mbps for $49.99. The next step to 50 / 5 service is also available for $139.95 to $179.95 (depending on location), and 100 Mbps download rates are on the horizon. (Again, these prices require an annual contract, so watch out for activation and early termination fees.)

    See sidebar: World Broadband Top Ten: The U.S. Falls Behind

    See sidebar: The Broadband Future of 100's of Mega-bits

Both the Comcast and Verizon services include technical support and tools such as anti-virus software and multiple e-mail addresses. Both include a free modem, and can be turned into a wireless network with the help of a router.

Comcast High-Speed Internet Service

Comcast High-Speed Internet service goes up to around 4 times faster than DSL, with speed tiers from 4 to 16 Mbps download (doubled with PowerBoost), and corresponding upload rates from 384 to 1 Mbps (to 2 Mbps with PowerBoost).

        Comcast High-Speed Internet service

Comcast starts with Performance service at 6 Mbps / 384 Kbps for $42.95, with a step up to Performance Plus 8 Mbps / 768 Kbps service for $52.95. Comcast is also beginning to deploy its Blast! service at 16 / 1 Mbps in limited areas in New Jersey, which replaces Performance Plus at the same $52.95 price.

Verizon FiOS Internet Service

Verizon FiOS Internet broadband service then goes another jump times faster, ranging from 5 to 50 Mbps download rates, with improved upload speeds from 2 to 5 Mbps.

Verizon FiOS service in New Jersey starts at 10 / 2 Mbps for $39.99 a month, and 20 / 5 Mbps for $49.99. The next big jump up to 50 / 5 Mbps is priced at $139.5 to $179.95, depending on the area.

Verizon also is developing plans to deploy the next step to 100 Mbps.

[ Top ]

Hitting the Triple Play: Bundled Phone + TV + Internet

You may think of companies like Verizon or Comcast in their old roles as providers of specific services -- in this case, plain old telephone or cable television. But in this new age, these companies see their digital pipes into the home as the conduit for additional services -- and additional income. Their goal is to increase ARPU ("are-poo") -- the Average Revenue Per User -- not only by upgrading existing services (i.e., adding caller ID or premium TV channels), but, even better, by adding entire new services such as broadband Internet.

    Wikipedia: ARPU (Average Revenue Per User)
        http://en.wikipedia.org/wiki/Arpu

These companies therefore would really like to hook you for the so-called "triple play" of services -- telephone, cable television, and broadband Internet -- all from the same provider, and all charged on one "convenient" bill.

       
        Comcast and Verizon "triple play" bundles

To encourage you to sign up (and to switch from the competition), both Verizon and Comcast are offering triple-play bundled packages starting at around $99, with a significant price break for signing up for all three services.

The Comcast Starter Triple Play bundle at $99 includes the lowest tier of each service -- not the full set of 200-some non-premium cable channels, and 6 Mbps/384 Kbps Internet service. The Verizon bundle at $94 steps up to the full non-premium TV service, 20 / 5 Mbps Internet service, but has the basic telephone service without calling features (plus, add $5 for a set-top box, and note that the Verizon price requires an annual contract with termination fees).

In addition, when evaluating these offers, note they are promotional rates and work on one- or two-year annual cycles. Once the annual term expires, you will be back to paying full price -- or you can hope that ongoing competition will continue to encourage bundled pricing.

    See sidebar: The Digital Home: Installing Digital Services

Comcast Triple Play Bundles

The highly advertised Comcast Starter Triple Play package boasts a price of $99.00 for the three base services: Comcast Unlimited Digital Voice, the basic Digital Starter cable TV service, and the lower Internet service at 6 Mbps (download speed, with 5 Mbps upload). In comparison, the total price of the three individual services is $139.65 a month (www.comcast.com/tripleplay).

        Comcast Triple Play

Comcast also offers a less-advertised Preferred Plus bundles with the higher Preferred Plus tier of TV service with the full 200-some non-premium channels for $129.00 (vs. $182.85 individually), and the Premier Triple Play with 5 premium TV channels and the higher 8 Mbps Internet service (or 16 Mbps when available) for $159.00 (vs. $212.80 individually). Note all prices already include a single digital set-top box.

Verizon Triple Play Bundles

Separate from its FiOS services, Verizon offers Double Freedom bundles of unlimited calling and 3 Mbps Internet DSL service for $69.99 a month. And it has a triple-play service by adding bundled DIRECTV satellite service for $99.99 a month.

        Verizon Triple Bundle

In locations with FiOS service, Verizon offering a $94.99 triple-play bundles (vs. $142.97 individually), with digital telephone, FiOS TV Premier with full service but without premium channels, and fast FiOS Internet service with 20 Mbps service (download speed, with 5 Mbps upload). Again, add $5 for a set-top box.)

On to the Quadruple Play

And beyond triples, the industry is looking forward to the home run of bundled services, the "quadruple play," with the addition of Verizon Wireless mobile phone service, all in one conveniently consolidated (and even larger) bill.

Verizon reports that it will be adding bundled wireless service later this year.

[ Top ]

    
    Portions originally published in the U.S.1 Newspaper, Sept. 5, 2007
    Princeton's business and entertainment weekly, www.princetoninfo.com