Why is it a huge and short sighted mistake? Without data, this statement is unsupportable. As a numbers guy, I'm inclined to believe it's a smart decision. In most jurisdictions, the cable operator has a monopoly. That's why cities offer franchises. If your current customers can't easily switch, then why on earth would you give them a break?

Now, as we start seeing competition from telcos, these "for new customers only" deals go away - everyone becomes a free agent when their contracts are up. We see this in the relatively competitive cell phone market: once your contact is up, you can get a new, fully subsidized phone from your current carrier.

He isn't real. Nobody is a fan of Comcast.

I'm a fan of Comcast -- namely their total lack of countermeasures aimed at cable modem modification.

Unlike some of the Cable ISPs in Europe, they don't:

  * Make any attempt to fingerprint / forcibly upgrade your firmware
  * Restrict routing to unauthenticated modem MAC addresses
    * All they do is give you a walledgarden config
    * The MAC address database is global and lock-free
      * The only real authentication is locally in Layer 2
  * Ever change the locations/names of their config files

Hey, I was careful to say that my experience of Comcast has been good, and it is clearly an atypical experience. Still, in the vacuum of my experiences, Comcast has been good.

I have no idea why everyone hates Comcast so much. I've lived in SF for more than three years and had Comcast the whole time. I have had exactly zero issues, from reliability to speed to torrenting to customer service. It could be a bit cheaper and a bit faster, I guess, but I never really think about it, which is 95% of what I want from my internet provider.

Interestingly, doing the alternative (as suggested in the post) never seems to get tried in large. Tivo, for example, curtailed their beloved lifetime subscriptions, which was a bit like a reward for long term customers.

I agree it is a huge and short-sighted mistake, but I can't come up with an example to show it. It jsut seems to be conventional corporate wisdom with little to base it on.

You might be interested in reading up on the Loyalty Effect by Fredrick Reichheld (and associated books Loyalty Rules and other). He used to be a partner at Bain consulting but the premise of his books is that consumer loyalty has value and it's worth the time of organizations to measure and maximize that value...

He makes similar points you have that it doesn't make sense to charge new customers more than existing clients because existing clients add more value through things like referrals, they buy more services at lower cost, they no longer incur acquisition costs, etc. An example of trying the alternative would be places like my gym which happens to be a national chain - whose membership services I hate but I bought a while back and they don't up membership costs for old clients but they do for new ones. My membership costs probably about half that of new members because I joined a good 6-7 years ago which makes it rather unlikely that I'll ever give it up.

Personally I think the reliance and dependence of a lot of service companies like Comcast on the value of their infrastructure is a dangerous game given how much the cost of infrastructure has fallen and continues to fall.

The economics indicate that giving discounts to new customers is more NPV positive than just repricing the whole portfolio. Every portfolio has sleepy customers who don't get maximum value or the maximum perceived value. However, every active and vocal customer should be provided with all benefits. That's the perfect marriage of economics and customers service.