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The Huffington Post reports
In our Petition for Investigation of Time Warner Cable (TWC) and Comcast, we point out that TWC's High-Speed Internet service has a 97 percent profit margin and a number of people asked how that statistic was derived. Simple. Time Warner Cable provides the information, (with some caveats).
Below is the actual financial information excerpted from the Time Warner Cable, 2013 SEC-filed annual report. (Please note that this same mathematics is also used by Comcast and probably Verizon and AT&T, though they do not explicitly detail their financials in this way.)
Moreover, we need to put this financial information in context to what customers are paying, and more specifically with the Time Warner Cable Triple Play bill that's been featured in previous articles.
[...]
Net Neutrality, Competition, and Fees to Competitors
In the current FCC proceeding about Open Internet, commonly known as "Net Neutrality", one of the issues surrounds what the competitors and content providers, such as Netflix, are paying to connect to the cable networks. On the other side, the 'slow-lane-fast-lane' discussion is all about charging end-user customers more or getting your service slowed down in some way.
To put it bluntly, with a 97 percent profit margin for High-Speed Internet, TWC has given its own services 'priority' favoritism, a sweet-heart deal,--call it what you want--but any other company would never, ever [be allowed to pay just] $1.32 a month to use the TWC networks to offer competitive High-Speed Internet, but this is what it costs Time Warner Cable's ISP, the part of the company offering the Internet and broadband service, to offer end users High-Speed Internet service. Competitors would most likely have to pay about 50 percent or more of the 'retail' average price of $43.92 to offer their service as a competitor.
If customers have been 'defacto' investors, paying an extra $5.00 a month since 2001 under the "Social Contract" to fund upgrades of the cable networks for High-Speed Internet, why shouldn't these networks be open so we can choose who offers us Internet or cable service over these wires?"
(Score: 2, Interesting) by Anonymous Coward on Monday February 09 2015, @03:32PM
In economics class the teacher should use Cable as an example of what happens when there is little competition.
(Score: 4, Informative) by Thexalon on Monday February 09 2015, @03:53PM
They absolutely do, along with Standard Oil and US Steel for historical examples, and phone networks today. Where you tend to get monopolies are cases where the economies of scale always outweigh the diseconomies of scale, and thus the place with the minimum marginal costs are at least equal to the total demand for the product. In those instances where the product in question is basically a modern necessity, such as a utility, a regulated monopoly is the least-bad situation for the economy as a whole, because otherwise all suppliers will tend to merge until there's a monopoly.
The thing is, if the regulators loosen their grip (or never existed), then the monopoly will overcharge customers dramatically. That hurts the economy as a whole, because all the monopoly's customers will have to pay much more than the product is actually worth, which means they have less to spend or invest on other more-useful products.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 3, Insightful) by Anonymous Coward on Monday February 09 2015, @04:06PM
But regulation is evil and the free market will fix everything!!!!!!!111eleven