Comcast Cuts Raise Fears on Price Front

Such discounting -- targeting customers of SBC (SBC Quote) and Verizon (VZ Quote) -- would also be noteworthy, given Comcast's disdain of offering cheaper, less-featured service as a competitive tool -- though the company has at the same time said it makes aggressive promotional discounts to match aggressive discounting on DSL by telcos.

On Comcast's third-quarter call, Comcast Cable President Steve Burke said, "I think when you go downmarket and you compete on the basis of a lower price, and the product that you're offering is a product that in many instances has lower speed and lower service -- I think you're at a competitive disadvantage vs. someone like ourselves who says we have a faster product, we have a more reliable product," according to the CCBN and FDCH e-Media transcript of the call.

So if Comcast isn't interested in offering lower-priced, lower-featured service, at what point do discounts on full-priced, full-featured service become price erosion?

Not here, says Comcast, which compares the offer to previous promotions the company has instituted to poach video customers who have subscribed to satellite service instead of cable.

"This highly targeted email offer is a test campaign aimed directly at DSL customers," said Dave Watson, Comcast's executive vice president of marketing, in a statement. "It is similar to other winback-type programs we've conducted in the past. This particular campaign is a limited offer, and we anticipate it to be a one-time event as other offers of shorter duration such as six months have proven successful."

Up to Speed

To its credit, Comcast showed no sign of slowdown as it added cable modem customers in the third quarter. In fact, the company added more cable modem customers than it had in either the third quarter of 2002 or the second quarter of 2003, beating analysts' estimates.