Even though its deal to buy Time Warner Cable (UNKNOWN:TWC.DL)was shot down by the Federal Communications Commission, Comcast (NASDAQ:CMCSA) has moved forward with the service improvements it promised would happen had the merger been approved.
The company has invested in improving its customer service and upgrading its network. That has resulted in thousands of new employees and an effort to overhaul how it deals with subscribers. It's a massive revamp involving a huge investment of resources.
Comcast deserves credit for pushing forward with these changes and improvements because when they were announced they looked like an attempt to placate the FCC. Of course, the company will need the federal agency's blessing at some point in the future and these moves could earn it some goodwill, but it does appear the not-well-liked-by-the-public cable and Internet provider has realized it needs to prioritize treating people well.
It's latest effort to do that may be its most important as the company has started deploying 2Gbps service to some of its customers with plans to roll it out to all of them in two to three years, ARS Technica reported.
What is Comcast planning?
The company wants to bring fast Internet service to all of its customers on a relatively aggressive schedule.
"Our intent is to scale it through our footprint through 2016," Comcast VP of network architecture Robert Howald said in an interview with FierceCable. "We want to get it across the footprint very quickly... We're shooting for two years. It could take up to three years."
The largest Internet provider in the country, Comcast operates in 39 states, plus Washington, D.C., and has 22.5 million subscribers.
In the limited areas where it's offered, Fiber charges $70 for Gigabit Internet, or $130 when you add the company's cable-like pay TV package. That's half the speed Comcast is offering, but the cable company is charging $299 a month for its service.
Comcast is offering a promotional price of $159 a month for three years in some markets but not all of the ones it currently has rolled the 2Gbps service to.
Prices should come down
Offering faster speeds to its customer base makes sense, but charging dramatically more than the going rate does not. Google only has a limited footprint for Fiber with only a slow expansion planned, but there are other players in the field and more could emerge.
Comcast is doing a good thing by investing in infrastructure to bring faster speeds to its customers, but it's falling back on its old monopolistic ways in how it's pricing the new service. It's hard to imagine much of a consumer market for $299 high-speed Internet service. You don't need 2Gbps or even 1Gpbs to stream movies and for most people those speeds are overkill.
This is an area where the new Comcast is doing the right thing but the old Comcast is rearing its ugly, anti-consumer head. The company can solve this easily enough by lowering the price to under $100. It does not have to match Google, except in markets where the two compete, but it should come close even when it has no competitor.
The one lesson Comcast should understand by now is that treating people badly when they have no options always comes back to bite you. The company has the opportunity to do a good thing here and bring people faster Internet service at a decent price. It needs to forget the lessons it learned from years of having a cable monopoly and remember to put the customer first.
If it learns that lesson -- and Comcast seems to want to change -- this new, faster network could be the cornerstone for its continued growth. If it forgets and insists on gouging people because it can, then another company will eventually find a way to win over Comcast's customers by treating them well and charging them fairly.
Daniel Kline has no position in any stocks mentioned. He wrote most of this on a mobile hotspot with dial-up-like speeds. The Motley Fool owns and recommends Google (A shares) and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.