Having been accused by analysts of steadily raising the pricing of its broadband services within its largely rural, economically challenged footprint, Cable One stayed on the offensive, insisting to FierceCable that it has only instituted one price increase on high-speed internet (HSI) services in recent years.
“The correct fact is—the last broadband rate increase we took was in 2015,” said Cable One spokeswoman Patricia Niemann in an email to FierceCable. “Prior to that time, we had not taken a rate increase in five years. So that is just one rate increase in seven years. Clearly [that’s] not a steady increase in broadband pricing.”
Niemann reiterated an earlier stated position staked by company CEO Julie Laulis.
The Phoenix, Arizona-based cable operator was objecting to a statement in a Monday FierceCable story, in which we suggested that the MSO has “relied on steady increases in broadband pricing in largely poor, rural areas in order to sustain growth.”
Cable One strongly disputes this statement, but analysts, notably Craig Moffett, have made the notion of HSI pricing increases the underpinning of arguments to investors questioning the company’s growth strategy.
Moffett has accused Cable One of steadily replacing lower-speed internet products with faster, pricier models in rural places that lack other choices for HSI services.
“Their average broadband price has also increased by customers dropping video—for which they have raised prices quite dramatically—and thereby losing bundled discounts, resulting in higher monthly broadband charges,” Moffett said in an email to FierceCable this morning.
Moffett has previously said in notes to investors that Cable One’s broadband pricing has caused executives at larger cable company’s to worry about the regulatory consequences of steadily rising HSI prices in poor regions of states like Mississippi, which don’t have a lot choice for broadband.
Moffett noted that in the first quarter, Cable One’s average revenue per user for residential broadband services was up 6% to $63.53.
“Their adherents on Wall Street, of which there are many (at least to judge by the stock price), would argue that Cable One has only scratched the surface, and that they have a lot of pricing runway,” Moffett wrote in an investor note published May 4. “Never mind that the per capita income in Cable One’s footprint is the lowest (by far) of the companies we cover, or that the percentage of customers living below the poverty line is the highest (also by far). What matters is that there is very little competition in Cable One’s footprint. If you want high-speed broadband, where else are you going to go?”