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Netflix’s $5 Billion Budget for Content Guarantees Program Spending Arms Race

Phillip Dampier March 3, 2016 Competition, Consumer News, Online Video 2 Comments

Total-Cable-Rate-increase-FCC6Years of broadcast and cable networks relying on cheap reality TV fare, game shows, and lurid news magazines to save money are coming to an end as media companies realize the only way to stop the viewing shift to Netflix, Hulu, and Amazon is to create better programming viewers want to see.

With online video services like Netflix spending millions to create original content like House of Cards and Fuller House, viewers are becoming disenchanted with shoveled reality fare and reruns littering basic cable networks.

A decade ago, cable networks started pushing the envelope on their programming lineups to boost ratings. Sober educational history documentaries on The History Channel began to make way in 2008 for reality shows like Pawn Stars and Ax Men, along with dubious pseudo-documentaries like Ancient Aliens and UFO Hunters. Consistent weather forecast information on The Weather Channel often had to wait for various weather chasing reality shows and other long form programming. Even The Learning Channel ditched educational programming as early as 2001 to feature “lifestyle” shows maligned and lampooned by critics as “freak show” television.

Broadcast networks suffering through an interminable advertising recession increasingly ditched scripted dramas for much cheaper reality and game shows. Even though some of these shows are considered popular, the total number of households viewing them have been in decline for years.

With the advent of series and movies created and funded by online video providers, traditional television networks and cable outlets have realized they can no longer rely on Law & Order reruns and shows like The Real Housewives of Dallas to keep viewers. They have to spend more money to create quality new shows.

bill shockBloomberg News reports networks hit the panic button after learning Netflix intends to spend almost $5 billion this year alone on programming, far more than any broadcast or cable network would ever consider.

The new strategy in response: spend, spend, spend.

“All these companies have been raising the amount they’re spending on programming pretty consistently,” said Doug Creutz, an analyst with Cowen & Co. “TV is losing audiences, and you’re trying to have new stuff to keep audiences engaged with your programming.”

Discovery Communications, Viacom and Starz are among those planning spending boosts to deliver better programming to compete. Although that may be great news for television aficionados, consumers are likely to be handed the bill in the form of higher cable rates to cover the “increased programming expenses.”

The large broadcast networks, movie studios, and cable networks may have created this problem for themselves after they began dramatically boosting the cost of licensing movies and TV shows for ventures like Netflix, in hopes of limiting its growth while also profiting handsomely from their deep content libraries. In response to growing restrictions on licensing content, Netflix embarked on a plan to create some of their own exclusive content instead. Many entertainment executives did not take Netflix seriously until the arrival of House of Cards, a series that could easily have been created and financed by any major network.

Other online video companies quickly followed suit, often using the British TV model of creating affordable, high quality mini-series that might include 8-10 episodes per season instead of the usual two dozen common on American networks. Co-productions with content-starved networks abroad also helped share expenses, secure talent, and move into something beyond conventional programming.

Cable networks have also had increasing success creating shows not just for the American market, but also for export to the rest of the English-speaking world, particularly Great Britain, Ireland, Australia, and Canada.

discoverySome Wall Street analysts like Rich Greenfield at BTIG Research have gone as far as predicting the traditional cable TV bundle is threatened with extinction as cost conscious viewers continue to abandon linear/live television for on-demand content like that offered by Netflix instead. That has delivered a three-way punch: pressures on revenue as program creation spending increases, growing cord-cutting, and cable rate inflation cable executives are increasingly desperate to control.

The day the 500 channel cable package model falls apart may not be too far off. The cost of programming at Discovery’s cable networks, other than sports, has grown 55% from 2013 to 2016, according to projections from researcher MoffettNathanson.

Discovery is using the money to push aside some of its near-endless reality TV fare for scripted programming, developing 10 shows with Lions Gate Entertainment. Viacom, another major cable programmer, saw expenses rise more than 25%, in part to create a new night of programming on VH1, doubling animation at Nickelodeon, and budgeting for more special events programming on BET. Some smaller cable operators were not impressed with the asking price and dropped all of Viacom’s networks from their cable systems.

Starz-LogoStarz, dwarfed by HBO and Showtime, is spending $250 million on its own original programming including Outlander, Survivor’s Remorse and Power. Subscribers who want more will get it as Starz increases budgets enough to allow producers to create 80-90 original episodes this year, up from 75 in 2015. To introduce subscribers to the shows, Starz commonly offers cable subscribers free trials as part of ongoing cable company promotions.

If you run an entertainment studio, are employed in the entertainment field, or can act, these are good times. In fact, demand for scripted shows may be outpacing the capacity of studios to produce them.

John Landgraf, CEO of Fox’s FX Networks, asserted there’s “too much TV,” noting over 400 scripted shows were filmed last year.

Until the late 1980s, most of the demand for scripted shows came from NBC, CBS, ABC, and the then-new FOX, because they were the only ones with enough money to afford the high production costs. Today, cable subscribers foot the bill for most cable network original shows, causing cable rates to spiral. With Netflix ready to spend at least $11 billion on programming over the next five years, the days of rate hikes are far from over.

FCC Chairman Suggests He May Not Resign After President Obama Leaves Office

Phillip Dampier March 2, 2016 Public Policy & Gov't No Comments
Wheeler

Wheeler

FCC chairman Thomas Wheeler has not promised to vacate his position as chairman after a new president takes office in January 2017.

It has been customary for the appointed head of the FCC to automatically resign as a new president takes office, but Wheeler is keeping his options open.

This was not the answer Senate Commerce Committee chairman John Thune (R-S.D.) was expecting to hear at today’s FCC oversight hearing.

Wheeler responded he was not ready to promise to cede the chairmanship and it would not be wise to give an “ironclad commitment” at this time.

If Wheeler does not resign, he can stay as chairman of the FCC until his term expires in January 2018, potentially serving as a thorn during the first term of a possible Trump presidency.

Sen. Bill Nelson (D-Fla.) noted it was unlikely a President Trump would renominate him on his own.

 

Lifestyles of the Rich & Infamous: Altice Execs Splurge on Real Estate While Slashing Jobs

Phillip Dampier March 2, 2016 Altice NV, Cablevision, Consumer News, Suddenlink, Wireless Broadband No Comments
Via his company Canef SA, the businessman bought in June 2014 this property of 2,987 square meters in Cologny, near Geneva.

Via his company Canef SA, Altice founder Patrick Drahi secretly bought this sprawling estate in Cologny, near Geneva, Switzerland. (Image: Capital.fr)

Despite slashing jobs, ruthless cost cutting that degrades network quality for subscribers, and stiffing vendors, Patrick Drahi and his associates have spared no expense building a fabulous collection of Swiss real estate for themselves.

Drahi, the founder and president of Altice, the European cable and wireless conglomerate that today owns Suddenlink and some day soon may own Cablevision, has taken great lengths to hide his extravagant spending. He prefers to depict his carefully cultivated public image of frugality, seen publicly riding a bicycle to the office, eschewing secretaries and business cards, and claiming to be an expert at running a good business for less money.

But as French magazine Capital reveals, like many of Altice’s products and services, the marketing doesn’t match the reality.

Soon after Drahi signs acquisition papers for his latest deal, promising upgrades and enhancements to the public and regulators while telling investors he’s ready to cut to the bone, it becomes clear his promises to Wall Street and investors are the only ones that matter:

  • Soon after acquiring French daily Libération, one-third of the workforce found themselves out of a job;
  • Within the Express-Expansion Group, of the 700 employees he inherited after acquiring the media group, 115 were gone after the deal was signed and Altice is preparing to jettison another 90 positions in the near future;
  • At one of his biggest acquisitions — Numéricable and SFR, despite a commitment not to layoff workers until 2017, unions estimate 700 positions vacated by employees have remained unfilled;
  • In Portugal, trade unions last month accused Altice of continuing to slash employee benefits, ending free subscriptions to PT’s Meo broadband, phone and television service for employees, reducing meal allowances and restricting the use of company vehicles (except by executives).
In 2000, during the "lean years," Drahi managed to acquire this modest piece of property for a bit over $7 million. It's one of his least valuable properties, and has since been put under his wife's name and undergoing extensive renovation.

In 2000, during the “lean years,” Drahi managed to acquire this modest piece of property for a bit over $7 million. It’s one of his least valuable homes, and has since been put under his wife’s name and is undergoing extensive renovation. (Image: Capital.fr)

While employees watch company bean counters demand cutbacks that occasionally leave offices without basic office supplies, Drahi’s endless acquisition deals come with numbers that make your head spin:

  • At least $50 million dollars a month is paid to bankers to cover interest on Altice’s massive debts, which now range near €10 billion.
  • Altice’s finances seem so risky to many bankers, they charge Drahi 5-10% interest.

Altice’s endless promises of improved service through upgrades and better customer relations are little more than expensive fibs to their customers in France, who have endured rate increases and appallingly bad service.

In fact, UFC Que Choisir, France’s Federal Union of Consumers, reported last month Altice’s management of its mobile operator SFR has turned the company into the worst rated and most hated mobile operator in France.

The group reports “unprecedented levels of discontent” from consumers calling their legal information service for help taking SFR to court over its poor service and billing practices. Of all the legal disputes filed in 2015 against telecom companies, an amazing 44% targeted Drahi’s SFR Numéricable, which has only a 20% share of France’s mobile market.

Despite assurances of better service during 2015, customers continued to leave. In mid-2015 alone, 445,000 mobile customers permanently hung up on SFR Numéricable and switched to other providers.

Drahi doesn’t just alienate his customers. His competitors, notably Orange and Free have complained SFR engages in a pattern of misleading or outright false advertising. Two months after those complaints were lodged, officials from the Competition Authority raided the headquarters of SFR Numéricable and seized documents.

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Any provider except Altice-owned SFR-Numericable. When dissatisfied customers dump their current mobile provider, the last choices on their list are SFR and Numericable.

Any provider except Altice-owned SFR-Numéricable. When dissatisfied customers dump their current provider, the last choices on their list are SFR and Numéricable. (Images: Univers/Freebox)

Few of these developments have been noticed by regulators and investors in the United States, perhaps owing to the French-English language barrier. But Drahi’s arrival in New York turned out to be just as provocative.

A model of "7 Heavens," a set of seven luxury chalets under construction in the ski resort of Zermatt. Drahi has already bought two. (Image: Capital.fr)

A model of “7 Heavens,” a set of seven luxury chalets under construction in the ski resort of Zermatt. Drahi has already bought two. (Image: Capital.fr)

Last November, Drahi told Wall Street analysts at an investment conference that he does not like paying salaries and if given a chance, he will “pay as little as I can” to his employees. It’s a different story for his tight-knit management team, which have splurged on the 2.65 million stock options windfall granted to them, worth as much as $238 million dollars.

So where do the stacks of cash go? As far as Capital’s team of reporters can tell, it isn’t spent on network improvements, job retention, or customer service. Instead, a handful of top executives are quietly helping themselves to expensive Swiss real estate.

Following the money has not been easy. Drahi and his associates do not want customers to know where their money is being spent. Capital reporters were forced off one property after asking a developer about the buyer of two of seven chalet cottages nestled in the hills with a breathtaking view of the Matterhorn, Switzerland’s most famous mountain peak. That view came with a $45 million price tag. Drahi told Capital he knew nothing about the project, but newly-revealed documents from municipal authorities obtained by Capital reporters found Drahi-owned subsidiary NDZ was the buyer, and nobody expects the tony digs will house customer service agents.

But that isn’t enough for “Monsieur Altice.” In Cologny, a chic suburb of Geneva, Drahi’s 3,000 meter property surrounded by high fences and expensive security set him back around $19 million. He already owned a 2,400 meter property on the same street, acquired in 2000 for the modest sum of $7.4 million (he put the house in his wife’s name). Sixteen years later, it was time for an upgrade as a dozen construction trucks arrived to begin a major renovation.

Dexter Goei, CEO of Altice, bought this property in Collonge-Bellerive, in the village of Vésenaz, close to Geneva. The Swiss magazine Bilan estimates Goei is worth $275-370 million and growing.

Dexter Goei, CEO of Altice, bought this property in Collonge-Bellerive, in the village of Vésenaz, close to Geneva. The Swiss magazine Bilan estimates Goei is worth $275-370 million and growing. (Image: Capital.fr)

But wait, there is more. Drahi also invested 15 million euros for a 4,400 meter plot of land on which he’s building two villas with 700 meters of space each. On Jan. 15, also in Cologny, Drahi acquired another property via Canef worth an estimated $14 million.

Back in France, some customers were incensed to learn Drahi’s property shopping spree includes an advantageous tax package courtesy of the Swiss government, which bends over backwards hoping to attract the foreign super rich. Critics complain the Swiss effort to attract billionaires comes with premise a spare million or two might drop from their pockets onto the streets of Geneva and other major Swiss cities. Alas, Drahi has kept his money for himself. Altogether, Capital found over $110 million of Drahi’s money was invested in Swiss luxury properties.

Not to be left out of the Money Party, some Altice executives have moved money into Swiss real estate as well:

  • At Collonge-Bellerive, another upscale suburb of Geneva, Jeremiah Bonnin, the Secretary General of Altice, spent around $14 million on a 3,000 meter property;
  • Five minutes down the road is the $7.7 million estate of Altice CEO Dexter Goei.

Even former executives don’t leave the company empty-handed. Eric Denoyer, former director general of SFR-Numéricable for just one year, walked away with €2 million golden parachute, a €400,000 salary, and a gift of 1.2 million shares of the company.

Google Fiber’s Contractors Create Headaches for Austin Residents

Phillip Dampier March 1, 2016 Competition, Consumer News, Google Fiber & Wireless, HissyFitWatch, Public Policy & Gov't 3 Comments
Flash flooding in a neighborhood where storm drains were blocked by construction debris. (Image: Adolfo Romero)

Flash flooding in a neighborhood where storm drains were blocked by Google’s construction debris. (Image: Adolfo Romero)

Some Austin residents are fuming over the sloppy construction work and eyesores left by contractors hired by Google to install its fiber optic service.

Last year, 254 formal complaints were filed against Google and its contractors, by far the largest compared with AT&T and Time Warner Cable, which are also in the process of upgrading their networks in the city.

The epicenter of construction nightmares for homeowners is on Lambs Lane in Southeast Austin, where last October a flash flood allegedly caused by Google’s construction crews blocking nearby storm drains brought two feet of water into the home of Arnulfo and Dolores Cruz, causing $100,000 in damages.

“We are ruined,” Cruz told the Austin American-Statesman in an extensive piece. “We don’t understand. I don’t know what to do. I don’t sleep at night because I don’t know what is happening tomorrow.”

The Cruz family experienced the worst damage, but hundreds of other complaints cite yard and property damage, trespassing, and construction vehicles blocking access to driveways.

Coral Gables, Fla. firm MasTec, working on behalf of Google, has taken the brunt of complaints. The firm’s insurance company has already paid out $70,000 or more to each of three homeowners whose vehicles or property was damaged by the firm’s work. Several residents were put up in hotels for weeks, paid for by MasTec’s insurer, as repairs were made to their homes after the October flooding. The Cruz family is still wrangling for compensation for their damages.

Other residents cannot get compensation until they find out which of a litany of contractors and subcontractors working in the area dumped giant piles of dirt on their front lawns, dug open holes or trenches and left them uncovered, or used their yards to store construction equipment and supplies without permission. Multiple residents complain that with Google, AT&T, and Time Warner Cable all upgrading infrastructure, it is difficult to determine who is responsible for what. That also makes assigning responsibility for damages very difficult. In some neighborhoods, electric and water lines were severed by construction crews as well. Some residents have even resorted to calling police when crews trespass repeatedly on private property without the courtesy of prior notification or identification.

While a number of residents are complaining, many others consider the mess and inconvenience the cost of progress.

“One thing Austin does best is complain,” one person wrote in the newspaper’s comment section. “People in other cities would literally fight you for the chance at Internet speeds of over 18Mbps download and Google is putting it in the city for nearly free. Google will clean up the mess. It’s called infrastructure and they’ll get to it but it’s a big project.”

Cable Industry Exploring Adding Symmetrical Broadband Speeds to Boost Uploads

Phillip Dampier February 29, 2016 Broadband Speed, Competition, Consumer News No Comments
The original DOCSIS 3.1 standard offers up to 10/1Gbps speeds. Adding "full duplex" technology could boost that upstream speed as high as 10Gbps.

The original DOCSIS 3.1 standard offers up to 10/1Gbps speeds. Adding “full duplex” technology could boost that upstream speed as high as 10Gbps.

The cable industry is seeking to confront one of the strongest selling points of fiber broadband – identical upload and download speeds – by enhancing the DOCSIS 3.1 standard to support “full duplex” technology.

Since inception, cable broadband has been designed to deliver asymmetrical speeds, with priority given to download speeds. To this day, cable systems typically offer customers only a fraction of those fast download speeds for uploads. Cable broadband engineers originally assumed that since the majority of customer broadband usage would be on the download side, less bandwidth was needed for upstream activity. During the late 1990s, it was not uncommon to receive 6-10Mbps of download speed, while being offered just 384kbps for uploads. Today, 1-5Mbps is more typical for entry-level broadband upload speed, but that may no longer be sufficient.

The ongoing buzz for fiber broadband has called out this speed disparity. Most fiber to the home networks offer identical upload and download speeds, which can be as fast as 1,000Mbps or in some cases even faster. That marketing advantage may be costing some cable companies broadband customers. CableLabs, the engineering association of the cable industry, has been tasked with closing that gap and this week announced symmetrical speeds using the newest DOCSIS 3.1 specification are on the fast track and a release schedule could be announced as early as mid-2016.

Dan Rice, CableLabs’s senior vice president of R&D, told Multichannel News “full duplex” will be an extension of DOCSIS 3.1, not a replacement, which guarantees a faster rollout of the enhancement.

The delivery of symmetrical Internet speeds will likely require some cable operators to make hardware changes to their infrastructure. Key to that may be ridding cable plant of multiple amplifiers and filters installed between the cable company’s nearest fiber node and the customer’s home. As cable operators push more reliable fiber further out into their networks, reducing the amount of coaxial copper cable in use, network advancements become easier and less costly.

Whether cable companies will use the enhanced upstream broadband capacity to match their download speeds or just moderately improve them isn’t known. The completion of the enhanced specification will likely give engineers and accountants at each cable company a better idea of how much upload bang for the buck makes the most sense.

Oregon Lawmakers Write Loophole for Google Fiber That Will Save Comcast Millions Instead

Phillip Dampier February 29, 2016 Comcast/Xfinity, Competition, Consumer News, Google Fiber & Wireless, Public Policy & Gov't No Comments

bank_error_in_your_favorFrom the Department of Unintended Consequences, Comcast will likely be the biggest benefactor of a new Oregon law intended to attract Google Fiber to Portland.

The Oregon Legislature rewrote the state’s tax laws after learning Google objected to Oregon’s concept of “central assessment,” which calculates local property taxes partly on the value of a company’s brand. The tax policy proved so contentious, Comcast spent years fighting the tax before ultimately losing its appeal before the Oregon Supreme Court in 2014. After two years of lobbying Google to come to Portland, nothing short of a repeal or exemption of this tax policy was likely to get the search engine giant to reconsider.

Comcast officials must not have believed their luck when state lawmakers resolved the tax problem for them, all because of efforts to woo Google back to the state. Legislators proposed a tax exemption for companies that agreed to invest in gigabit speed broadband and deliver it to the majority of the state’s broadband customers. The new law was a clear invitation to Google to begin wiring the state for fiber, but Comcast has crashed the party instead.

Comcast officials argue their own new “Gigabit Pro” service qualifies the cable company for the same tax exemptions Oregon intended Google to receive, despite the fact its 2-gigabit offering costs a fortune and is unlikely to attract more than a fraction of Comcast customers.

gigabit proOregon lawmakers wrote a law seeking to assure equal access by prohibiting companies from targeting only affluent neighborhoods for fiber upgrades, while forgetting to consider the cost of the service itself. Gigabit Pro will never feature prominently in Portland’s challenged neighborhoods at a cost of $4,600 for service during the first year.

Lawmakers now face the wrath of several local tax authorities that report they’ll lose tens of millions in tax revenue if Comcast successfully applies for an exemption. Staff members of the Oregon Public Utility Commission believes Comcast ultimately will qualify for that exemption, even if only a few customers pay Comcast’s asking price for gigabit service.

“If the application is approved, schools, libraries and local governments across the state would receive significantly less revenue,” wrote Mary Beth Henry, director of Portland’s Office of Community Technology, in a letter to state regulators. “This application was not the kind anticipated by the Legislature.”

Portland officials argue Comcast is violating the spirit of the new broadly written law by pricing its fiber service at $300 a month, far out of reach of most households. Google Fiber typically charges $70 for its gigabit service.

Critics of the legislature contend this isn’t the first instance of the Oregon body making a mess of things. In addition to not bothering to define what qualifies as “affordable” Internet, how much companies had to spend to offer it, or how many customers had to actually sign up for the service, language in the original bill accidentally left Google Fiber off the exemption list.

Newest Google Fiber Cities Rely on Pre-Existing Fiber Networks; Is Google Cost-Cutting?

Phillip Dampier February 25, 2016 Broadband Speed, Community Networks, Competition, Consumer News, Google Fiber & Wireless, Public Policy & Gov't 4 Comments

google fiberTwo of Google Fiber’s newest fiber cities will only get the gigabit fiber-to-the-home service because someone else already laid the fiber.

In the last week, residents of San Francisco and Huntsville, Ala. were told they were next in line for Google Fiber service. But instead of proposing to build a citywide fiber network for all residents, Google will rely almost entirely on pre-existing fiber networks they will use to reach customers.

In San Francisco, only an unspecified portion of the metro area will qualify for Google Fiber, namely certain apartments, condos, and subsidized housing units already served by a fiber optic connection. Single family homes and apartments not currently connected to fiber may never qualify for Google’s service.

A Google Fiber executive seemed to signal Google may be taking a harder look at the cost of building fiber service, and future expansion may rely on renting space on someone else’s cable.

“To date, we’ve focused mostly on building fiber-optic networks from scratch,” said Michael Slinger, Google Fiber’s business operations director. “Now, as Google Fiber grows, we’re looking for more ways to serve cities of different shapes and sizes.”

That suddenly makes existing municipal and private dark fiber networks very attractive and in demand. Many municipalities have underused institutional fiber networks that serve anchor institutions, public safety, and government offices. Public access is often limited to non-existent. The prospect of Google paying to use those networks to reach more customers may prove attractive to cash-strapped cities. Private fiber overbuilders and those with excess capacity may also find a new revenue stream renting space to the search engine giant. In Huntsville, Google will have non-exclusive access to the city’s publicly owned fiber network. Any competitor could technically offer their services over the same network.

Competitors and analysts seemed ready to dismiss Google’s latest expansion announcements. Diffusion Group analyst Joel Espelien told the San Jose Mercury News Google Fiber’s plans to wire affordable housing in San Francisco was nothing more than “pure PR.” He’s unimpressed with Google Fiber generally, dismissing it as “Costco Internet,” delivering bulk sized connections at prices most consumers are unaccustomed to paying for Internet access.

“It’s both cheap and it isn’t cheap,” Espelien said. “It kind of depends on your point of view.”

Google’s reasons to offer service to only a few locations in San Francisco are clearly pegged to the costs of wiring the entire city.

“We considered a number of factors, including the city’s rolling hills, miles of coastline, and historic neighborhoods,” Google said in a blog post. All of those features that tourists love to see are also expensive because of costly engineering efforts to hide the cables from view to stay within zoning regulations.

Sanders, Warren Raise Doubts About Charter-Time Warner Cable-Bright House Merger

Phillip Dampier February 25, 2016 Bright House, Broadband Speed, Charter, Competition, Consumer News, Online Video, Public Policy & Gov't, Time Warner Cable 1 Comment
Sens. Sanders and Warren

Sens. Sanders and Warren

Democratic presidential hopeful Sen. Bernie Sanders (Ind.-Vt.) has expressed serious doubts about the claimed consumer benefits of a multi-billion dollar cable company merger between Charter Communications, Time Warner Cable, and Bright House Networks.

In a joint letter with Sens. Al Franken (D-Minn.), Ed Markey (D-Mass.), Elizabeth Warren (D-Mass.), and Ron Wyden (D-Ore.), Sanders told FCC Chairman Tom Wheeler and Attorney General Loretta Lynch the deal would create a “nationwide broadband duopoly, with New Charter and Comcast largely in control of the essential wires that connect most Americans to how we commonly communicate and conduct commerce in the 21st century.”

The senators explained that “broadband service is not a luxury; it is an economic and social necessity for consumers and businesses.”

The five Democrats believe the merger could have negative effects on consumer choice, competition, and innovation in broadband and online video. With Comcast and New Charter controlling at least two-thirds of the high-speed broadband lines in the country, Sanders and his colleagues are concerned this will allow Comcast and New Charter to raise rates while reducing broadband innovation, allowing the United States to fall even further behind other industrialized nations with superior broadband.

The senators asked the Department of Justice and the FCC to carefully evaluate how the proposed deal could impact the marketplace.

“New Charter must not only prove that this deal would not harm consumers, but they must also demonstrate that it would actually benefit them and promote the public interest,” the senators argued.

This week, New Jersey regulators approved the merger transaction in that state, leaving California as the last major challenge for Charter executives. Federal regulators are not expected to rule on the deal until the spring or summer.

Unlimitedville: Affordable Unlimited Wireless Broadband Service via Sprint

Phillip Dampier February 24, 2016 Broadband "Shortage", Broadband Speed, Competition, Consumer News, Internet Overcharging, Rural Broadband, Wireless Broadband No Comments

unlimitedvilleFinding affordable wireless Internet access that isn’t speed throttled or usage capped is becoming rare, but Stop the Cap! has been exploring a provider that offers both.

Unlimitedville is the latest authorized reseller of Sprint that has managed to get permission to market an unlimited LTE 4G wireless data plan that comes without speed throttles. The service is priced at $42.99 a month (not including certain minor fees and surcharges) and includes a 30-day free trial to test the service. A $50 setup fee includes a mobile hotspot device (typically a Netgear Zing or Pocket Wifi) that is yours to keep once you commit to the required 2-year contract (after the free trial).

Customers we have communicated with give the service a universal thumbs-up for not limiting or throttling usage. Customers in suburban and semi-rural areas near highways and interstates report the best speeds from relatively uncongested Sprint cell towers. Those in very rural areas may have a lot of trouble finding Sprint service available, so potential customers should review Sprint’s coverage map carefully for data service coverage before considering Unlimitedville.

There are some peculiarities about doing business with this reseller, however.

First, Unlimitedville acts as a front line sales agent, but accounts are apparently provisioned by an another company named Impact Wireless, a “master agent” for Sprint. After service is established, all future communications, support and billing take place directly with Sprint.

sprint zingGetting service established is the first minor hurdle. Because the contract plan is intended for business use, customers will need to list a company name on the enrollment form. It is acceptable to consider yourself a consultant or use your current profession if you intend to use the service at anytime/for any reason for work or while travelling for work. No formal business registration is required. Some customers sign up using their last name, as in “Smith Consulting.” You do have to give them your Social Security number or business Taxpayer ID Number to run the usual required credit check. Most applicants are easily approved within 72 hours and Sprint will then call to help arrange for service. If you are not approved, you can agree to pay an upfront deposit and after 12 on-time monthly payments, the deposit will be returned to your account.

Second, some customers have recently reported they’ve been surprised to discover their account activation came with membership in a free loyalty program for a certain home improvement retail chain. With the recent demise of Karma’s Neverstop plan, disconnecting customers are banging at the doors of Unlimitedville to get in. Evidently this overflow is also affecting Impact Wireless, which evidently has some limitations on how many new customers it can enroll itself over a certain period of time. As a result, they may be looking for other entry points available to them to get customers activated as quickly as possible. Customers should be ready to be flexible. Getting unlimited wireless data from anyone these days increasingly requires creativity.

As Unlimitedville gains more visibility, there are also questions about how long it will last given carriers’ dislike of resellers that attract a lot of heavy users. The service has been around at least as long as Karma and is still welcoming new clients, so it is hard to say. It will probably last longer if customers respect the wireless network that powers it was not built to sustain customers running up a terabyte of usage a month. Being a responsible user of a limited resource is likely to help keep these kinds of unlimited services viable, an important consideration for customers who do not have the luxury of going to another provider if Unlimitedville folds.

Frontier Plans National IPTV Service for Up to 50% of Their Customers

Phillip Dampier February 23, 2016 Broadband Speed, Competition, Consumer News, Frontier 2 Comments

frontier new logoFrontier Communications plans to leverage their existing fiber-copper infrastructure to offer broadband-powered television service for up to half of their national customer base over the next four years.

Like many Frontier initiatives, the company’s IPTV effort relies on minimal spending, with just $150 million in capital budgeted for the project, spread out over several years.

“Our plans are to introduce video service to more than 40 markets representing approximately three million households over a three- to four-year period,” said Frontier CEO Daniel McCarthy. “Once complete, video service will be available to about 50% of the 8.5 million households in Frontier’s existing footprint, not counting the pending Verizon acquisition.”

Frontier intends to sell the service to the 57% of customers it claims can receive at least 20Mbps broadband speed. The video streams will co-exist with customers’ data service.

“Our IPTV applications employ the latest very advanced compression technology,” said McCarthy. “[Each] HD television channel will require approximately 2.5Mbps of capacity, meaning a household with four HDTVs active at once will require 10Mbps of capacity into the home, leaving the remainder available for data usage.”

Frontier’s IPTV approach is similar to AT&T U-verse. The company will depend on fiber to the neighborhood service already in place in certain markets, coupled with existing copper wiring already on telephone poles or buried underground in each neighborhood. To further minimize expenses (and customer inconvenience), Frontier will rely on customer-installable wireless set-top boxes that can be relocated to any television in the home.

McCarthy

McCarthy

Frontier has experimented with its video service since last fall in its test market of Durham, N.C. That city also benefits from an extensive fiber upgrade undertaken by Frontier. Frontier’s website sells the service as Frontier FiOS TV, even though Durham’s fiber network was built by Frontier, not Verizon.

For customers, it will likely be a welcome change from Frontier’s ongoing dependence on its partnership with satellite provider Dish Networks to offer video service. One clue Frontier has not well withstood heavy competition from competing cable operators comes from the company’s latest quarterly earnings report. Frontier executives admitted voice service disconnects are accelerating beyond expectation and average revenue per customer dropped 1.1% to $63.14 for the fourth quarter of 2015.

Frontier also continues to feel the wrath of former AT&T customers in Connecticut that withstood a messy “flash cut” from AT&T to Frontier that left some customers without service for days. Despite the expiration of special pricing promotions for Connecticut customers resulting in the prospect of higher revenue, Frontier still recorded a $7 million decline from Connecticut alone, which it mostly blamed on customers ditching landlines. In the rest of the country, Frontier’s “legacy service areas” (those still dependent on aging copper infrastructure) delivered another $4 million decline in revenue for the quarter.

Where are those customers going? Cable operators continue to grab Frontier’s unhappy DSL customers and wireless companies continue to benefit from landline disconnects.

To prevent a repeat of Connecticut in the Frontier-acquired Verizon territories in Florida, California, and Texas, Frontier will keep Verizon’s service plans and only gradually shift services away from Verizon, with the ability to back out of the transition immediately if something goes wrong.

Frontier’s IPTV service will depend on the classic cable television model — 100+ local, network, and cable channels delivered in a bundle with broadband and voice service. At the outset, Frontier won’t be emphasizing skinny bundles of TV channels, but will allow existing Verizon FiOS customers to keep the slimmed down packages they already have.

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