Saturday, April 14, 2007

Cox Small Business "Deal" No Deal

Cox has been rolling out business services in Lafayette recently and if you are a small business owner you might have seen a large glossy postcard like the one at right recently. (Click for a larger image.) A friendly downtown businessman passed me this one not too long ago. He was pretty dismissive—and was right. It's way too early to take the paltry offers Cox is currently making very seriously.

Cox has been vigorously promoting its small business services recently. Compared to BellSouths' (oops, AT&T's) traditional offerings their sales force is no doubt are a welcome competitive sight for most small business folk. Small businesses have had no practical alternative to the phone company's lock on the telecom market in both data and voice and Cox has moved aggressively into that space. —By all accounts its been successful as well, which is no surprise considering the way the phone company has exploited its monopoly in this market. (If you think America's residential broadband is irrationally costly....)

But Cox's recent mailer doesn't make much of an offer—if you stop to read the small print. Cox is offering you a free month of service. If you lock into at least a 3 year contract. With installations fees, availability restrictions, and no service guarantees....

3 years! That works out to less than a 3% break in return for locking a business into Cox as a provider while all the real price breaks are being offered. Three years takes you into 2010, and LUS will be offering competitive services via a fiber to their clients door in by the end of 2008 or the beginning of 2009. It's hard to believe that LUS won't provide more for less--just as they are doing with their residential service. But whether you agree with that judgment or not it is a lead pipe cinch that this little offer is the smallest discount that Cox will offer over the next three years. As soon as Cox makes real strides locally you can count on the ponderous AT&T beginning to offer discounts of its own. Cox will have to respond. And as LUS' launch looms the deals will start getting really good.

Small business owners ought not let themselves be played by this offer. Ask for a real discount. And don't agree to any terms that extends your obligation beyond the date when the real price cutting will commence.

Real competition is coming. But it is not here yet.

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