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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.

Arris’ First DOCSIS 3.1 Modem is Coming Soon… for $199.99

Phillip Dampier January 17, 2017 Broadband Speed, Comcast/Xfinity, Consumer News, Cox No Comments

The Arris Surfboard SB8200, in white. Arris usually releases identical versions in black and white colors. (Photo courtesy of: Arris)

Arris, the nation’s number one manufacturer of cable modems, will introduce its first DOCSIS 3.1-compatible cable modem as early as this week.

The Arris SB8200 will reportedly cost consumers a steep $199.99 when it goes on sale at the end of this month.

Multichannel News reports the modem box will include the logos of Comcast and Cox, advertising compatibility with Comcast’s ongoing DOCSIS 3.1 trials and the forthcoming introduction of DOCSIS 3.1 to a significant number of Cox Cable customers.

It is capable of download speeds up to 5Gbps, uses up to 32 downstream and 8 upstream channels, and includes two gigabit Ethernet ports.

Customers can begin using the new DOCSIS 3.1 modem as soon as it is available for sale, because it will be backwards-compatible with existing DOCSIS 3 broadband networks. Prospective buyers should check with their cable operator before purchase, to make sure it is officially supported.

As cable operators upgrade to DOCSIS 3.1, the SB8200 should allow customers to immediately take advantage of speed upgrades, which are expected to be dramatic. Many cable operators are targeting gigabit download speeds for their top-tier, although upload speeds are expected to be considerably lower than 1000Mbps.

At least one cable operator has been wavering about whether to move towards DOCSIS 3.1 or switch to fiber broadband technology.

Altice USA, which currently owns Suddenlink and Cablevision/Optimum, has announced plans to scrap its existing hybrid fiber/coax infrastructure and upgrade Cablevision customers to fiber-to-the-home service, which will not use DOCSIS cable modems. Altice has not ruled out fiber upgrades for its Suddenlink systems, but has upgraded speeds in many markets using the older DOCSIS 3 standard. Altice USA is expected to continue acquiring smaller cable operators this year – most likely bidding for Cable ONE and a handful of other smaller, regional cable operators.

Among cable operators that have made substantial investments in DOCSIS 3.1 upgrades and are least likely to abandon the technology include: RCN, Mediacom, and WideOpenWest (branded: WOW!). Charter Communications is also expected to be a DOCSIS 3.1 provider… eventually. The company is likely to be preoccupied over the next few years upgrading Time Warner Cable and Bright House Networks systems it acquired to all-digital platforms before it considers moving to DOCSIS 3.1.

Arris will face competing models including Netgear’s CM1000 ($179.99) and the Linksys CM3132 ($199.99) which should be available by late spring.

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.

Charter Tells Tenn. Fire Victims to Dig Through Rubble to Find Their Cable Boxes Or Else

Phillip Dampier January 16, 2017 Charter Spectrum, Consumer News No Comments

(Photo courtesy of: Chattanooga Fire Dept.)

One month after country music legend Dolly Parton raised nearly $9 million dollars to support fire victims through her “Smoky Mountains Rise: A Benefit for the My People Fund” telethon, Gatlinburg, Tenn. homeowners report in contrast to that generosity, they are being harassed with huge cable bills and collections calls from Charter Communications.

Stephanie and Donald Isakson’s three-story vacation cabin at Chalet Village North is now a driveway leading to a still-standing chimney and a big pile of ashes and debris. Stephanie told Knoxville’s News-Sentinel she called “everyone that we could think of” to turn off now-useless services. She said firms such as DirecTV “couldn’t have been any nicer,” offering discounts that left DirecTV owing the Isaksons $1.09.

Charter/Spectrum was the lone exception.

“They sent us a bill for the next billing period after I called to cancel, and they say if we’re going to cancel, we owe the box or they’re going to charge us for the equipment,” Stephanie said. “We were told that if we dig through the rubble and found parts of the equipment, we could bring it in as proof. Otherwise, we couldn’t prove that the equipment was in the cabin at the time of the fire, and would be charged 100 percent for all Charter equipment.”

Charter, like many cable companies, usually demands reimbursement for lost/unreturned equipment, even after natural disasters like the wildland fire that hit the region Nov. 28. Companies tell customers to file a claim with their insurance carrier to assure reimbursement, and if a customer lacks coverage, they are usually personally responsible for the charges, which can easily exceed $300. Renters are usually the most exposed to unreturned equipment charges because many lack personal insurance coverage, mistakenly assuming the property owner’s insurance will cover a renter’s property damaged in a fire. Renters, like homeowners, must buy their own insurance policies to protect personal property. The good news is that renter’s insurance is usually affordable, often available for about $100 a year.

While Charter is preoccupied with its cable equipment, many affected homeowners remain in emotional distress and have larger priorities than picking through ashes looking for remnants of Charter’s cable modems and set-top boxes.

“There’s some people out there who don’t have anything left, and the last thing they need to worry about is Charter coming after them for cable boxes,” local resident Michael Luciano told the newspaper.

Luciano’s personal Christmas gift from Charter was a Dec. 25 cable bill for $626.89 — $207.30 in advance for TV and internet service from the first month of 2017, and $419.59 for his past-due balance, which he says includes $212.29 for the month of December, during which he had no service. Luciano is among several area residents whose homes survived the fire, but Charter’s infrastructure in the area did not. Large parts of the area, including Luciano’s home, remain without service to this day.

When customers refused to pay for service they did not receive, Charter responded with “harassing” automated and live collection calls up to eight times a day for some customers.

Charter’s behavior in the aftermath of the fire has been criticized in the area’s media but the company downplayed the reports as isolated incidents and a company spokesperson said the cable operator sympathizes with people affected by the fire, some of them Charter employees.

Patti Michel, director of communications for Charter Communications South Region, told the Knoxville daily it is not Charter policy to bill for service that cannot be provided or to charge for lost or damaged equipment in natural disasters. She urged customers to call 1-888-GET-CHARTER to talk about their problems with Charter.

“Callers may not have specified that their houses burned down [to a Charter representative],” offered Michel.

A post-fire set top box still largely intact.

In Pigeon Forge, Beau MacLellan said that calling Charter about the fire didn’t make any difference, and the result was repeated automated calls requesting the return of the company’s cable equipment, now incinerated.

The company has also been criticized for showing little sympathy for affected residents that occupy their cabins and homes only part-time during the year.

Alecia Hasselbeck, who lives in New Orleans and rents out a cabin two streets down from Luciano’s home, was told by Charter she had to make a 640-mile trip to her cabin in Tennessee to pick up her cable router and set-top boxes and drop them off in person at a nearby Charter office, even through her cabin was undamaged and service was on the verge of being restored within the next few days.

As has been so often the case when these types of stories appear in the media, an embarrassed provider quickly tries to make amends to soften the impact of bad publicity. Charter was no exception. Last week the News-Sentinel reported many of the customers quoted in an earlier story began receiving “mysterious checks” from Charter.

“Maybe it’s a way to say, ‘Sorry for asking you to dig ashes out of your burned-down home,'” Isakson speculated after receiving a “refund” check last week for $116.49. Other customers are also getting unexplained checks.

The Knoxville newspaper reported Kristi Buccholz, whose cabin near the Isaksons’ also burned, said she was “set off” when she received a collections letter from Spectrum after the fire. She gave a Charter manager a piece of her mind.

“I said, ‘Have you heard about the wildfires?'” she said, “And (the manager) said, ‘Yes I have.’ I said, ‘You’re harassing me and other people here about the equipment. … I would love to give you the 52-inch TV and the house it was attached to, but I can’t. I’m fine, but there are people who are not fine, and you are adding to the stress.”

Buccholz’s outstanding bill was canceled and last week she received a check for $75 with no explanation.

“I don’t know what it was for,” Buccholz said. “I just deposited it in the bank.”

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