BendBroadband is not only screwing the future of broadband services in Central Oregon, but they are screwing the vast majority of their long-time faithful customers and employees. The facts are clear. Using general math skills, you can calculate the benefit to BBB by restructuring their “billing” on Internet services through a per bit model.
Internet service is not free. The cost for BendBroadband to supply Internet service to their 50,000 cable modem subscribers in the Central Oregon area is roughly $20,000 to $25,000 per month. The monthly income from just those 50,000 cable modem subscribers is roughly $2.0 million if you use an average of the two available tiers of service (Classic and Deluxe). But if their price restructuring model goes into effect, a conservative monthly income for BBB increases to $2.3 million. That is no less than an increase of $300,000 per month in revenue for the company.
The ugly piece of this business decision is that in both local newspaper articles, BendBroadband staff disguises the increase as a method controlling the 9% of cable broadband users who are abusing the services by downloading more than 50 GBytes per month. COME ON! Any solid knowledgeable networking team can target the 9% of users and fix that issue without ever requiring a restructuring of their rates for the other 91% of customers. I’ll say it again…they are making at least $2 million a month. They could throw money at the problem with that much income, even if their technical staff can’t solve the 9% problem. Keep in mind that the price of Internet connectivity for an ISP has been rapidly decreasing over the last 5 years. Equipment and technology costs are lower. That equates to their cost to operate decreasing while users cost to operate is increasing.
There was a time that BendBroadband (Bend Cable) actually was focused on providing the best customer service, “no matter what the cost”. It is a sad day when the bean counters and board members are making knee-jerk policy decisions based on a perceived threat to their TV product income.
Most people who aren’t living in a vacuum know that all things are moving to the Internet. Everyday, more and more people become dependant on it for a plethora of services out there. BendBroadband is trying to capitalize on this trend. The legal downloadable movie and music market is huge. BendBroadband TV products cannot compete with that and they know it. They are also trying to compensate for the loss of so many local and regional business customers in the last 3 years.
This move by BBB is simply another example in long line of bad business decisions. It proves to me that as long as there is no real competitive supplier of residential Internet service, and as long as the local newspaper and legislators are cozy with BendBroadband, then the monopoly on those services will continue. I can only pray for the day when a bigger fish buys the company and starts playing fair. It’s too bad that in recessionary times that BendBroadband would try to move to this operational model.