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Big Red Verizon Really Wants to Own a Cable Company – Charter or Comcast Will Do Nicely

Shhh… Don’t tell anyone except the newspapers, trade journals, everyone else….

Well-placed sources inside Verizon are leaking like a sieve to the media about the phone giant’s ambition to own and operate a large cable company.

In what may be a trial balloon to test the waters with the incoming Trump Administration, at least two “well-placed sources” have told the New York Post Verizon CEO Lowell McAdam is seriously contemplating countering AT&T’s buy of DirecTV and its attempted acquisition of content company Time Warner, Inc., with the buyout of a major national cable operator.

Verizon’s primary interest, according to multiple sources, is expanding available content to fill its current and future wireless platforms, especially 5G. Acquiring a cable operator would make content deals easier and more affordable because of volume discounting. It would also allow Verizon to directly sell cable products and services without investing in further FiOS expansion.

The CEO told friends at the Consumer Electronic Show in Las Vegas that he “wants to buy into cable.”

The most likely targets would have to be large cable operators with a national footprint, and a source told the tabloid two companies qualified: Charter or Comcast.

“Altice is too small,” the source speculated. That would also count out other medium-sized companies like Cox and Mediacom, because they have too limited a service area to be of much use to Verizon.

No final decision has been made, the newspaper notes, adding no talks are underway between Verizon and any cable company at present. Should Mr. Trump repeat the earlier objections to the AT&T-Time Warner, Inc., merger he made last October, any marriage of Verizon with a cable operator would be unlikely. Trump cited unchecked media consolidation as his primary reason for opposing AT&T’s latest acquisition deal, but he has not repeated those objections recently. Last week Trump met with AT&T CEO Randall Stephenson in New York.

McAdam originally planned to use Verizon’s acquisition of Yahoo! as a way to broaden the phone company’s content library, but that yet-to-be-finished deal has been in turbulence since media reports exposed major security breaches of Yahoo’s e-mail and portal sites.

A deal with Charter is more likely than a buyout of Comcast because Charter’s most significant shareholder – John Malone, has no allegiance to keeping Charter Communications independent. Charter also lacks the kind of complications that an acquisition of Comcast could bring – notably Comcast’s ownership of NBC and its dozen owned-and-operated TV stations.

Malone has a long history of dispassionately buying and selling large telecom assets, including the cable company Tele-Communications, Inc. (TCI) he helped build from a handful of cable systems into what used to be the nation’s largest cable operator. In 1999, TCI was sold and rebranded as AT&T Broadband and Internet Services. Three years later, most of those cable systems were again sold to their present owner Comcast.

Verizon may argue it has already divested significant amounts of its FiOS service to Frontier Communications in the Pacific Northwest, Indiana, Texas, California, and Florida, limiting antitrust concerns. But state regulators, particularly in New York, are likely to raise serious objections if Verizon, already the dominant telephone company in New York (except Rochester) attempts to acquire Charter, the only significant cable operator in upstate New York and Manhattan. That would leave the vast majority of New York with a classic telecom monopoly, with only one provider for landline and broadband service.

Altice End Runs Around Connecticut TV Station’s Blackout By Sending Customers to CBS All Access

“Of course you know this means war.”

Altice USA has found a way to use CBS’ All Access online streaming service against a Connecticut CBS affiliate that blacked out its signal for some Connecticut Cablevision customers.

Meredith-owned CBS affiliate WFSB-TV in Hartford has been off the Optimum television lineup in two dozen Connecticut towns as of 5pm Friday, Jan. 13 after negotiations between Iowa-based Meredith and Altice USA broke down over the price of renewing a retransmission consent contract that Altice claims is 800% more expensive than before.

That means Optimum customers in Litchfield County no longer have access to CBS programming. Or do they? Optimum’s website is redirecting affected customers to WFSB’s network — CBS — and offering a week’s free trial of CBS’ All Access, which allows viewers online access to all CBS programming on demand.

Optimum’s previously negotiated distribution deal with CBS for the All Access platform has been in place since the summer of 2015, which means CBS cannot pull the offer down from Altice’s website. That effectively means CBS is being used to undercut its own affiliate’s most important leverage — taking away popular programming until a provider finally capitulates and signs a renewal contract.

Matt Polka, president of the American Cable Association, which represents small and independent cable companies, loves it.

“Local broadcasters cannibalized by their own network!” Polka tweeted.

Altice USA has promised investors it will hold the line on programming costs even if it means finding alternatives for customers. This seems to be an example at work.

Will CBS All Access weaken Meredith’s position on WFSB to force price concessions? The New Haven Register isn’t sure, reporting there are years of “bad blood” between Cablevision and Meredith over carriage contracts:

During the last retransmission agreement negotiations in 2014, Cablevision Systems called on the Federal Communications Commission to investigate whether Meredith Corp. was meeting public interest obligations that are an important component of all television station licenses. Cablevision also sued Meredith in Connecticut’s court system under the Unfair Trade Practices Act.

The latest dispute has attracted the attention of both of Connecticut’s U.S. senators.

“I typically don’t get involved because it’s not for me to dictate the terms of a dispute between a cable company and a network,” Sen. Chris Murphy said in a statement issued Friday night. “But I haven’t been pleased with Altice’s commitment to Connecticut since it bought Cablevision.”

FierceCable reported the area’s congressional delegation isn’t happy with either company:

Connecticut’s two Democratic U.S. Senators, Richard Blumenthal and Christopher Murphy, sent a letter addressed to both Meredith Corp. CEO Stephen Lacy and Altice USA CEO Dexter Goei.

“While we respect the private negotiations being conducted by Optimum and WFSB and make no representations as to the merits of either side’s position, we believe that the current impasse does a disservice to Connecticut families and we urge you to negotiate in good faith to bring an end to this blackout,” the Senators wrote.

Altice, meanwhile, said in its own statement, “We have been negotiating in good faith for weeks and made multiple offers to Meredith even though their initial request was for more than 800% over what we currently pay.”

Frontier Refuses Refunds When Its TV Package Gets Slimmed Down By Contract Dispute

Phillip Dampier January 16, 2017 Competition, Consumer News, Editorial & Site News, Frontier 2 Comments

Frontier FiOS TV customers in the Seattle area are still paying the same price for a cable television package missing one of its most popular channels and the phone company won’t lower the bill.

Since the New Year began, a retransmission consent dispute between Frontier Communications and Sinclair Broadcast Group — the nation’s largest station group owner, has meant customers can no longer watch KOMO-TV (ABC) in Seattle on their Frontier FiOS lineup.

Daily Herald columnist Julie Muhlstein pondered if that should inspire more Washington residents to retaliate with some cord cutting of their own, especially after Frontier Communications delivered an unsympathetic response to the questions many cable customers ask when channels suddenly vanish from the lineup – why isn’t the bill going down?:

Not only is FiOS my source of TV at home, The Daily Herald has a Frontier hookup. For now, there will be no watching KOMO News or ABC on our newsroom TV.

I don’t watch “The Bachelor,” but that’s not the point. Shouldn’t all local affiliates of major commercial broadcast networks — particularly the traditional big three, ABC, CBS and NBC — be the minimum of what cable providers offer? I think so.

And if Frontier Communications offers less, shouldn’t monthly bills be reduced? I think so.

That’s not the way the business works, said Javier Mendoza, director of communications for Frontier Communications. Mendoza confirmed Tuesday that Frontier’s agreement with Sinclair Broadcast Group, Inc. has expired. Sinclair owns Seattle-based KOMO TV, the local ABC affiliate.

“FiOS occasionally changes its channel offerings. That’s covered in our customer service agreement,” Mendoza said. “Such programming package changes are part of normal business and no discounts are available.”

In other words, tough luck and no refunds. Watch something else.

Phillip Dampier: TV retransmission consent disputes will eventually cost both sides money and customers.

Frontier may be its own worst enemy deleting major network affiliates from the lineup, because for many subscribers, those are the channels that keep them subscribed to a bloated, overpriced cable television package that includes dozens of channels they will never watch. Once off the lineup, customers begin searching for alternatives, and something as simple as a good over-the-air antenna can restore free television channels that now cost many cable subscribers several dollars a month only because they travel across a wire or through a satellite dish.

Sinclair, for its part, isn’t terribly sympathetic to the consumer either, demanding an ever-increasing amount of compensation from cable and satellite providers to carry their local stations on the lineup.

Barry Faber, Sinclair’s executive vice president for distribution and network relations, says their asking price was perfectly reasonable for other providers (even though many promptly pass those fees on to consumers in the form of a ‘Broadcast TV Surcharge’). Faber implied Sinclair offered a ‘take it or leave it’ price and Frontier left it.

“They just decided they don’t want to pay that amount. That’s their decision,” Faber said. “It’s up to subscribers to decide what they want to do. If I were a subscriber, I’d think about leaving them.”

Unfortunately for Sinclair, if subscribers go back to using an antenna for television, they will effectively no longer be filling Sinclair’s bank account either, because watching over the air television is still free, at least until someone tries to charge viewers for that as well.

Wall Street Analyst Craig Moffett Unhappy “Unwelcome” Phone Subsidies Are Back

Moffett

Craig Moffett, a Wall Street analyst specializing in telecommunications stocks, has lowered his opinion of T-Mobile after the wireless company successfully topped analyst estimates of subscriber growth, in part by giving customers a better deal than its competition.

Moffett is concerned T-Mobile’s subsidized holiday price cuts on the latest Apple iPhone and a new flat rate plan delighted customers but threatened profits.

“[…]Even as the wireless stocks were rising in November and December, handset subsidies were quietly making their unwelcome return,” said Moffett in a report to his clients. “T-Mobile’s new ‘All-In’ pricing plan opens yet another front in the battle over service plan pricing, leaving us incrementally more cautious about ARPU (average revenue per user) forecasts for all operators, not least T-Mobile itself.”

T-Mobile has ditched promotions for all of its usage capped data plans and is now advertising T-Mobile One, an “unlimited” (but throttled for very heavy users) data, text, and calls for an all-inclusive price of $40 per line. Customers can still buy a limited data plan, but T-Mobile’s website strongly de-emphasizes that option.

While T-Mobile added 1.2 million postpaid customers in the fourth quarter, exceeding estimates, Moffett isn’t happy with the prices those customers are paying because it may force other carriers to reduce their pricing as well. That hurts everyone… on Wall Street.

T-Mobile USA John Legere has become a perennial and profane thorn in the side of his competitors.

That kind of marketplace disruption the wireless industry could do without, so analysts on Wall Street are taking bets on what company will acquire T-Mobile and get things back to business as usual. Moffett believes all signs point to an unprecedented wave of deregulation, lower corporate taxes, and money-fueled industry consolidation under the incoming Trump Administration.

Sprint is a rumored favorite to acquire T-Mobile, but then so is Comcast, which may seek to enter the wireless space through a large acquisition. Companies repatriating billions in excess funds stashed in overseas banks at the special low tax rate President-Elect Trump is proposing may be what drives the next buyout frenzy.

Time Warner Cable Customers Bait and Switched to Charter/Spectrum Products

Milan Gohil’s customer retention promotion with Time Warner Cable was coming to an end. Following in the footsteps of what tens of thousands of other Time Warner Cable customers have done for the last several years – it was time to call and request another deal.

Unfortunately for Gohil, this year the phone was answered by Charter/Spectrum and not a customer retention specialist at Time Warner Cable. That will be increasingly true for all Time Warner Cable customers as Charter continues its gradual transition towards a Spectrum rebrand across the country. That transition for Bright House customers appears to have been already completed. As a consequence, Time Warner Cable and Bright House offers will be replaced with a “simplified” menu of options from Charter.

For Gohil, a Time Warner Cable Maxx customer, those choices didn’t amount to anything except a speed downgrade and a broken promise.

“I had 200Mbps for $60 a month through Time Warner Cable, but the plan was set to expire in a few days,” Gohil explained. “I spoke to a customer service representative and was told I could upgrade to 300Mbps service for $68 a month, including taxes.”

Believing a good deal was in hand, Gohil readily agreed and while waiting on the phone, the representative activated the new promotion. There was only one problem: Milan ended up with Charter’s default internet plan in Time Warner Cable Maxx service areas converted to Spectrum service – 100Mbps.

“I spoke to a Spectrum tech support agent and was told my account was downgraded and that my TWC legacy pricing was no longer available,” Gohil told Stop the Cap! Trying to get his old 200Mbps Maxx speed plan back at any price proved fruitless.

“I was then put in touch with a Spectrum ‘Customer Solutions’ representative and pleaded with them to reinstate my original TWC legacy plan,” Gohil said. “I was told this was not an option and that if I wanted their Ultra 300 (closest option), there would be a $200 activation fee!”

After an hour of negotiation, Spectrum had won the first battle, leaving a dissatisfied customer behind.

“I had 200Mbps just two hours ago and now have only have half of that. I am EXTREMELY disappointed,” Gohil shared. “I would never have agreed to a drastic reduction in speed to save a few bucks.”

Gohil regrets ever calling Spectrum, and is livid customer service could not restore a plan other Time Warner Cable Maxx customers still have and can keep for the next several years, all because a Spectrum call center agent misrepresented a promotion.

Despite’s Charter’s promises to consumers and regulators that their way of doing business would result in better service at a better price for Time Warner Cable and Bright House customers, many of those converted to Spectrum have told us they’d rather have Time Warner Cable and Bright House back, because more options were available and they were at least open to negotiation.

Finding a supervisor at a problem resolution center proved difficult at first. Time Warner Cable’s executive customer service department, formerly reachable at (212) 364-8300 has been taken over by Spectrum and disconnected. Calls are now being taken by 1-800-892-4357, and that is where we referred Gohil, which turned out to be at least some help.

“After an hour on the line with Spectrum/TWC billing and retention, I was able to get 300Mbps for $80 per month for one year,” said Gohil, but there was a catch. “I was informed that it will go up to $100 in 2018.”

But Spectrum has another nasty surprise in store for customers like Gohil looking for speed upgrades: a $200 activation fee.

Spectrum minimizes the chance customers will encounter this fee by marketing only one internet speed tier to most customers: 60Mbps for most Bright House and non-Maxx Time Warner Cable customers and 100Mbps for those Time Warner customers lucky enough to see Maxx upgrades completed before the cable company was acquired by Charter. Most customer service agents are trained to sell this single internet plan, and we’ve found several not trained to offer customers anything else.

When existing Time Warner Cable or Bright House customers are first converted to a Spectrum plan, the $200 activation fee does not apply. But once a Spectrum customer, any attempt to further upgrade broadband service usually results in a $200 fee. Some customers have managed to negotiate their way out of the fee, but it takes some effort and faith the representative isn’t telling you a tall tale to get you upgraded and off the phone.

“After negotiating with the retention specialist, she implemented the 300Mbps service for me,” Gohil reports. “It was implied that the ridiculous $200 ‘activation fee’ would be waived. However, I wouldn’t be surprised if [it] appears on next month’s bill. I’ll cross that bridge when I get to it.”

For Gohil, cable mergers have never lived up to their promised “consumer benefits” and he’s worried about what is coming next.

“With Trump taking office, it’s certain that broadband consumers are going to continue to be exploited by the telecom duopoly,” writes Gohil. “As a cord cutter and Net Neutrality proponent, I am deeply concerned about the future of America’s broadband landscape.”

Here are some tips from Stop the Cap! for Time Warner Cable and Bright House customers to consider before changing your account.

Time Warner Cable legacy offers in an area not yet switched to Charter Spectrum plans look like this.

If your local area is still being served by Time Warner Cable and their old service plans are still being advertised:

  1. If you are on a new customer promotion, have a rebate offer, or a discount you negotiated to remain a customer, Charter will honor the deal until it expires. However, once your offer or the submission deadline for a rebate has been reached, you will probably not be able to negotiate an extension or new offer. Your rates will either gradually or immediately reset to regular pricing and your rebate will be lost.
  2. Time Warner Cable seems to have ended most of their customer retention deals under the Time Warner Cable brand, but they are still offering new customer promotional offers. If you are an existing customer facing a rate reset, you can cancel service under your name and sign up with a new customer promotion under the name of another member of your household before the Spectrum plans arrive in your area. This is the only certain method remaining to get a discount off existing Time Warner Cable plans and will generally last one year.
  3. You can continue to select any Time Warner Cable legacy service plan advertised on the website, and as long as the transition to Spectrum has not yet happened in your area, you can safely change between those plans. You can also continue an existing plan indefinitely, but you will pay dearly for doing so — eventually forced to pay regular Time Warner Cable pricing which is generally higher than what Charter’s Spectrum plans will cost.

Bright House customers have already been introduced to Charter Spectrum plans.

If you are a Bright House customer (you have already been introduced to Charter Spectrum plans):

  1. If you are on a new customer promotion from Bright House or a discount you negotiated to remain a customer, Charter will honor the deal until it expires. However, because your area has now switched exclusively to Charter/Spectrum branding, your current plan has been grandfathered and you cannot change it without losing it and switching to a Spectrum plan.
  2. Any “promotion” Charter offers you will be based on a Spectrum plan. You will lose your existing Bright House plan permanently if you accept the offer.
  3. Spectrum’s broadband offer will likely default to 60Mbps, which may be a reasonably good deal if you subscribed to a lower speed tier through Bright House itself. Faster speeds may be available but you will need to call to be certain. There is a significant price jump of about $40 a month to upgrade to 100Mbps at regular Charter Spectrum prices. Ask about discounts and if one is available you may want to upgrade immediately. If you decide to upgrade later, you are likely to encounter a $200 upgrade fee.
  4. In general, Charter’s offer for Bright House customers will prove initially cheaper than what Bright House offered before at its regular prices. But most Spectrum plans will increase in price after your first and second anniversary unless Charter changes its rate structure. Charter has also strongly discouraged representatives from renewing promotions for existing customers as they expire, so negotiating a better deal is going to be more difficult than before.

When your area has been fully converted to Charter Spectrum, the available plans will look something like this.

If you are a Time Warner Cable Maxx customer now served by Charter/Spectrum (the only plans on the website are branded Spectrum):

  1. If you are on a new customer promotion from Time Warner Cable, have a rebate offer from TWC in progress, or a discount you negotiated with TWC to remain a customer, Charter will honor the deal until it expires. However, because your area has now switched exclusively to Charter/Spectrum branding, Charter has a demonstrated history of not honoring requests to renew customer promotions, will not honor rebate requests that have not been already fulfilled by TWC and will not be much help if you have to intervene about a missing rebate.
  2. You cannot change your Time Warner Cable Maxx plan features. Once an area has been converted to Spectrum, TWC Maxx plans are grandfathered as-is. If you want to change your plan, you will be offered a Spectrum plan instead. Any “promotion” Charter offers existing Maxx customers will also be based on a Spectrum plan. You will lose your Time Warner Cable Maxx plan permanently if you accept their offer.
  3. Choose wisely if you are thinking of moving from Maxx to a Spectrum broadband plan. Spectrum will usually enroll you in their traditional 100Mbps plan by default. If you already have 200 or 300Mbps service, you may see a significant price change switching to Spectrum unless you can negotiate a discount. If you decide to upgrade your speed later, you will also face Charter’s $200 upgrade fee. There are some promotions available that can get 300Mbps service down to about $80/mo for a year, but it will increase to $100/mo the following year. Some customers have successfully negotiated the $200 fee off their bill, but make sure you ask for the name of any representative offering to waive the fee and keep that information handy if the fee shows up anyway.
  4. Customer promotions are available for existing customers, but you will have to negotiate and you can expect them to be less generous than what Time Warner Cable offered in the past. Also, Charter has strongly discouraged representatives from renewing promotions as they expire. Charter management is on record stating they feel Time Warner Cable’s tradition of extending ongoing discounts were bad for business.

If you are in a Time Warner Cable area never upgraded to Maxx service -and- you are now served by Charter/Spectrum (the only plans on offer are branded Spectrum):

  1. If you are on a new customer promotion from Time Warner Cable, have a rebate offer from TWC in progress, or a discount you negotiated with TWC to remain a customer, Charter will honor the deal until it expires. However, because your area has now switched exclusively to Charter/Spectrum branding, Charter has a demonstrated history of not honoring requests to renew existing customer promotions, will not honor rebate requests that have not been already fulfilled by TWC and won’t be much help if you have to intervene about a missing rebate.
  2. You cannot change your current Time Warner Cable plan without switching to an available Spectrum plan.
  3. Any “promotion” Charter offers you will be based on a Spectrum plan. You will lose your existing Time Warner Cable plan permanently if you accept the offer.
  4. For most customers currently subscribed to a broadband plan up to 30Mbps, Spectrum’s broadband offer will likely be an upgrade worth considering, especially if you are still paying a modem rental fee. Spectrum will widely market just one speed in your area – 60Mbps, and that is the default plan you will get. Because Time Warner Cable already overprovisions their 50/5Mbps Ultimate tier to speeds that approach 60Mbps, Spectrum’s offer will probably be cheaper, but it won’t be faster. Your area will probably also have 100Mbps service available as an alternative, but it won’t be widely advertised. It’s not cheap, adding another $40 a month to your bill. If you think you may want that speed, ask about any discount promotions and sign up at the same time you abandon your Time Warner Cable plan to avoid paying a $200 upgrade fee later on.
  5. In general, Charter’s offer for Time Warner Cable customers never upgraded to Maxx will prove initially cheaper than Time Warner Cable’s regular prices. But the rates might not be cheaper if you negotiated a lower bill from Time Warner during the last year. Many Spectrum promotions initially offered are comparable to new customer deals and you can expect rates to increase on your first and second anniversary with Charter, with regular prices returning by the third year. Charter has strongly discouraged representatives from renewing promotions for existing customers as they expire. Charter management is on record stating they feel Time Warner Cable’s practice of offering ongoing discounts were bad for business.

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  • Paul Houle: My take is that a "wireless recession" will soon be at hand. There are a number of stories talked about on this site that, I think, are connected w...
  • Keanyn Gray: frontier every month for the last 8 month for incorrect bills amounts, each time they tell me they will correct credit my bills to the agreed amount ...
  • JayS: Channels, before they were removed from Tv and used to start the cellular telephone networks, went up to 83. Due to technology limitations, UHF (...
  • Josh: As near as I can tell we've had broadcast TV spectrum stolen from us TWICE. (Once during the NTSC to ATSC transition, but apparently once before that...
  • Phillip Dampier: The retention staff in Syracuse actually stopped handling those types of calls in early 2016 and referred everyone to the national customer retention ...
  • T Nelson: I am a Twc customer in the Rochester, NY area. In November my special promotion program ran out. In the past I had dealt with a retention specialist...
  • Milan Gohil: Thank you for publicizing my ordeal, Phillip! I hope this report opens the eyes of consumers and Spectrum executives!...
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