Mediacom increases monthly rates for Des Moines customers
Des Moines' Mediacom users received a notification last month that their internet rates were rising between $5-$10 a month in exchange for higher speeds and more data usage.
Yes, but: A price hike up to $10 a month is higher than what it actually costs the company to increase speeds for its customers, said Jonathan Schwantes, an attorney with Consumer Reports, a Washington D.C.-based nonprofit focused on consumer protections.
- He tells Axios the sudden hike exposes the greater issue of the lack of regulation on internet companies, especially in smaller cities like Des Moines that don't have as much competition.
Driving the news: The change was spurred because Mediacom increased its speed and data allowances for customers, said Phyllis Peters, a spokesperson for the company. It also accounts for inflation, she said.
- The change doesn't affect customers who are still paying promotional or bundled pricing.
What they're saying: Schwantes said he's "suspicious" of the $10 price increase for some high-speed internet plans, saying broadband internet is "wildly unregulated."
- Unlike electricity or water usage, which is measured, it's unclear what the profit margins are for companies like Mediacom, he said.
- He also believes broadband providers shouldn't enforce data caps, saying it chills internet usage or scares people into paying for unlimited data out of fear they'll be charged overage fees.
The other side: Peters said the criticism is a "broad perspective" that doesn't take into account the last time Mediacom raised prices or the number of households per square mile.
- As for data allowances, Peters said customers are informed if they're getting close to their limit and few actually reach the capacity.
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