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Comcast Backs Off Charging Customers Double for Gigabit Speed in Chicago

comcast gigabitTo be a Google Fiber city or not to be a Google Fiber city. It could make a big difference to your wallet if Comcast upgrades broadband speeds in your neighborhood before Google Fiber finally arrives in your “fiberhood.”

When Comcast first announced a major trial of DOCSIS 3.1 gigabit broadband service in Chicago, it confirmed it would cost $139.95 a month — double the price Comcast charges customers in cities where Google Fiber has expressed an interest in providing gigabit service as well. With Chicago nowhere on the Google Fiber upgrade list, it seemed Comcast was prepared to prove the point that competition can really make a difference in broadband pricing, at least until stories appeared headlining Comcast’s pricing policies. Within hours, Comcast “clarified” it was prepared to sell gigabit service in Chicago for $70 a month as well, with a three-year contract.

“We are now able to deliver gigabit speeds over the existing lines that already reach millions of homes in the Chicago area,” Comcast spokesman Jack Segal told the Chicago Tribune. “This is a major step in the evolution of high-speed broadband.”

This is not Comcast bringing a new fiber line to your home or business. This is gigabit download speed over Comcast’s current cable/fiber network — the same one that delivers your current broadband service. DOCSIS 3.1 allows Comcast to bond additional channels together to boost speeds, at least on the downstream side. This technology will not deliver gigabit speed in both directions, at least for now. Comcast’s DOCSIS 3.1 gigabit plan delivers 1,000Mbps download speed, but just 35Mbps upstream. Customers looking for something faster can pay dramatically more for Comcast’s Gigabit Pro fiber to the home service, offering 2,000Mbps speeds. But it will cost up to $1,000 to install and is priced at $300 a month with a two-year contract.

Comcast’s 1TB usage cap (with up to $200 in overlimit fees) will apply to Comcast’s DOCSIS 3.1 plans, unless you opt for unlimited service… for another $50 a month. Comcast gracefully includes unlimited with its Gigabit Pro service.

gigabit comcast

Chicago residents can sign up for either gigabit plan at www.xfinity.com/gig. A $50 installation fee applies and a service call is required. Customers signing up will need a new cable modem that supports DOCSIS 3.1, and there are only a handful on the market so far. Many more will be available in 2017.

Police Looking for Comcast Contractor That Ran Over Georgia Grandfather

Phillip Dampier August 22, 2016 Comcast/Xfinity, Public Policy & Gov't No Comments
This Comcast truck was involved in a hit and run accident that left a Georgia grandfather dead.

This Comcast truck was involved in a hit and run accident that left a Georgia grandfather dead.

Georgia police are looking for information about a Comcast contract driver they say may have intentionally run over an East Point grandfather.

Local police originally assumed the July 17 accident along Camp Creek Parkway that fatally injured 60-year-old Dewey Skidmore was a drunk-driving incident, but new surveillance footage showed the driver looking out the window of his Comcast truck as he hit Skidmore, who died of blunt force trauma to his chest.

“If you look at the video you can see that the driver is driving at a slow pace, [but] begins to speed up as he runs over the victim,” East Point police spokesman Capt. Cliff Chandler told WSB-TV in Atlanta.

Comcast quickly distanced itself from the crime and the contractor, but has so far not released the driver’s name or truck ID to police. The cable company claims the contractor is not connected with Comcast, even though surveillance footage shows the company’s logo on the side of the vehicle.

“We extend our deepest sympathies to the victim’s family,” the company told the TV station in a news release. “We are cooperating with the police in their investigation of this incident, which we believe involved one of our contractors.”

Comcast claims its contractors are “thoroughly vetted,” but as we’ve reported for the last several years, some of Comcast’s “vetted” contractors have committed serious crimes, including rape and murder, while on service calls.

Skidmore’s family is upset that more than a month has passed without any leads in the case.

Wash. Attorney General: Comcast Broke the Law 1.8 Million Times

comcastWashington State Attorney General Bob Ferguson filed a $100 million lawsuit today against Comcast Corporation in King County Superior Court, alleging the company’s own documents show a pattern of illegally deceiving customers to fatten their bottom line by tens of millions of dollars.

The lawsuit claims Comcast violated Washington’s Consumer Protection Act (CPA) at least 1.8 million times as the cable operator misrepresented what is covered under its “Service Protection Plan,” improperly charged customers service call fees when they should have been free, and violated customer privacy by engaging in improper credit screening.

At least 500,000 Washington residents are victims of Comcast’s deceptive acts, the lawsuit alleges.

“This case is a classic example of a big corporation deceiving its customers for financial gain,” Ferguson said. “I won’t allow Comcast to continue to put profits above customers — and the law.”

Ferguson

Ferguson

Comcast routinely claims its $4.99/mo “comprehensive” service plan covered the cost of all service calls, including those related to inside wiring, customer-owned equipment connected to Comcast services and on-site education about products. That is, unless a customer wanted the wiring hidden by installing it inside a wall, which the majority of customers want. A so-called “wall fish” is not covered by Comcast’s plan, even though 75% of the time, Comcast representatives told state investigators the plan did cover all inside wiring.

It turns out many other things are not covered by Comcast’s “comprehensive” plan, including consumer-owned equipment troubleshooting and repairs involving cable jumpers, splitters, and other types of connectors. Some customers were billed for an entire service call if an excluded item happened to be checked by a Comcast technician. Ferguson claims Comcast does all it can to keep the fine print revealing the exclusions away from customers. Comcast does not offer customers enrolling in the plan a printed terms and conditions brochure or point to one on its website. Customers must dig around Comcast’s website to find the terms on their own. Just enrolling in the plan automatically gives Comcast a customer’s consent to whatever terms and conditions are in effect at the time.

Comcast also has a habit of charging Washington customers for trouble-related service calls that should have been free, the lawsuit alleges.

Comcast’s so-called “Customer Guarantee” promises that the company “won’t charge you for a service visit that results from a Comcast equipment or network problem.” Comcast discloses no limitations on this guarantee. But state investigators discovered Comcast routinely charged thousands of customers for service calls involving Comcast’s own equipment or service problems. Customers were also billed for service calls involving defective Comcast-supplied HDMI and component cables, cable cards, and installations of drop amplifiers, commonly installed to resolve a signal problem when Comcast’s network is not functioning properly.

long distance billComcast allegedly facilitated the service call charges until approximately June 2015 by encouraging technicians to use a service call “fix code” that permitted Comcast to “add service charges to a normally not charged fix code.” That allowed technicians to properly track Comcast’s own network troubles yet still charge customers to roll a truck to their home, even when the service call should have been free.

Finally, as many as 6,000 Washington residents saw their credit scores drop after Comcast engaged in improper credit screening, causing a “hard pull” on credit reports which can negatively impact credit scores, at least temporarily.

Comcast requires an equipment deposit, but it is usually waived for customers with an adequate credit score. But the AG’s office uncovered at least 6,000 occasions where customers paid an equipment deposit, despite their high credit score. Ferguson’s office claims this indicates either:

  • customers “opted out” of a credit check and paid the deposit instead to avoid a credit score hit appearing on their credit report, only to have Comcast run one anyway; or
  • customers were forced to pay the deposit despite their high credit score, contrary to Comcast’s policy.

The case is the first in the nation of this size and scope, and comes after Ferguson spent more than a year trying to work with Comcast. Ferguson said he was not satisfied with Comcast’s response and filed the lawsuit.

For violating Washington’s Consumer Protection Act, the Attorney General’s Office is seeking:

  • More than $73 million in restitution to pay back Service Protection Plan subscriber payments;
  • Full restitution for all service calls that applied an improper resolution code, estimated to be at least $1 million;
  • Removing improper credit checks from the credit reports of more than 6,000 customers;
  • Up to $2,000 per violation of the Consumer Protection Act; and
  • Broad injunctive relief, including requiring Comcast to clearly disclose the limitations of its Service Protection Plan in advertising and through its representatives, correct improper service codes that should not be chargeable and implement a compliance procedure for improper customer credit checks.

Apple’s Arrogance Meets Big Cable, Hollywood’s Intransigence

Apple TV

Apple TV

Apple’s ability to successfully force its way into the pay television business with a cord-cutter’s streaming TV solution has been left languishing since 2009, thanks to some of America’s largest cable and entertainment companies who think Apple is arrogant and out of touch.

The Wall Street Journal today published a story showing how Apple’s plans to challenge the cable TV industry much the same way it revolutionized digital music has rubbed the big and powerful the wrong way. Apple’s desire to launch a cheaper streaming video service with a slimmed down TV lineup and robust on-demand options has flopped, because executives have no interest in bending to Apple’s way of thinking.

In 2009, Apple decided it wanted in on the streaming pay-TV business. At the same time Time Warner Cable began experimenting with data caps, Apple was approaching local stations and broadcast networks and offering them premium payments — higher than what the cable industry itself paid — for Apple’s choice of stations and cable networks. The deal meant Apple would alone be free to pick only the channels it wanted to carry, a major departure from the industry practice of contract renewals that bundled popular networks with spinoff and lesser-known channels cable operators didn’t want to carry. Apple’s hard-charging negotiator, Eddy Cue, seemed to believe that if Apple was at the negotiating table, that alone would be enough to get a deal done. It wasn’t.

Two years later, Time Warner Cable approached Apple seeking to launch a joint TV venture that could compete nationwide with satellite and phone company competitors. The talks were at the highest levels at both companies, involving Time Warner Cable’s then-CEO Glenn Britt, Cue, and Apple CEO Tim Cook. Cook also approached Brian Roberts, CEO of Comcast, promising him the service would only be sold through cable operators — good news for Comcast but bad news for open competition.

market share streamingThis time, Apple sought money from the cable companies, not the other way around. Cable operators were told they would need to pay $10 a month per subscriber to Apple, with no guarantee that fee would not increase in the future. Just as concerning was Apple’s insistence that subscriber authentication would require customers to use their Apple IDs, a departure from the cable industry’s push to adopt TV Everywhere, where customers could unlock streaming video from any cable network simply by logging in with the username and password they set up with their pay TV provider. Apple was also characteristically secretive about their user interface and left cable industry executives flummoxed when they asked Apple to sketch out what the service would look like on a napkin. An Apple official would only respond that their interface would be great and “better than anything you’ve ever had.” The fact Apple refused to answer the question did not go unnoticed.

Nor did Cue’s unconventional way of negotiating with some of the most powerful entertainment executives in the country. When Jeff Bewkes, CEO of Time Warner (Entertainment) agreed to meet with Cue about Apple licensing Time Warner’s critical networks — which include HBO, CNN, and TNT — Apple’s negotiator showed up 10 minutes late. While Time Warner’s negotiators were smartly dressed in business attire, Cue turned up wearing jeans, a Hawaiian shirt, and sneakers with no socks. It went downhill from there, because Apple insisted on valuable on-demand rights to full seasons of hit shows and permission to let viewers store their favorite recordings on a massive cloud-based DVR that included features like automatic recordings of hit shows and advanced ad-skipping technology.

Crickets.

More than a few programmers used to having their way with cable operators were shocked by Apple’s ‘arrogance’ and unconventional way of doing business. The newspaper reports one former Time Warner Cable executive watched with amusement as stone-faced programmers were unimpressed with Apple’s demands.

Jon Lovitz offers a visual hint what Mr. Cue must have looked like meeting with high-powered execs at Time Warner (Entertainment)

Jon Lovitz offers a visual hint what Mr. Cue must have looked like meeting with high-powered execs at Time Warner (Entertainment)

“[They] kept looking at the Apple guys like: ‘Do you have any idea how this industry works?'” said the former executive.

Apple responded ‘doing new things requires changes that often are unsettling.’

A year later the negotiations were on life support, as Apple struggled with the arrival of 2015 with no slimmed down streaming TV package to offer Apple TV owners.

Apple’s demands flew in the face of decades of cable industry business practices, which give channel owners virtual guarantees of rate hikes with each contract renewal, the right to force their spinoff networks on the cable lineup in return for a comfortable renewal process, and the cable industry’s right to an assurance everyone was getting the same kind of deal (except volume discounts). Any deviation from this would result in panic on Wall Street, as investors’ dependence on perpetually improving quarterly financial results based on revenue boosts from new or higher fees would come crashing down if a company like Apple got a better deal.

One industry insider suggested once a company like Apple got a deal on sweetheart terms, every other distributor would demand the same deal (and many have contract provisions that require it). Apple may have assumed that because it managed to get the recording industry to agree to its iTunes digital music distribution deal 15 years earlier, so the cable industry would go. Except the road to cut-throat deals for entertainment programming is littered with dead-end business plans that had to be quickly modified when the discounts ended.

Netflix and Starz both learned expensive lessons when early discounts on licensing deals ended after Hollywood saw how much money those companies made from streaming. When licensing contracts expired, entertainment companies sought massive increases in licensing fees to “fairly share” the proceeds. Netflix ended up walking away from several studios, seriously impacting their online streaming catalog. Eventually, Netflix decided if they cannot beat the studios, they should join them, creating original programming to attract and keep subscribers.

Cue in real life

Cue in real life

After almost a decade spent trying to get into the online cable business, Apple now seems more likely to follow Netflix, Amazon, and Hulu, and devote time and money on developing its own original programming. Instead of trying to license and bundle network programming, Apple TV today supports independent apps created by various networks. Viewers still get to watch their favorite shows, Apple does not have to pay for streaming rights, and there is a joint effort to create and support a single login so viewers can get access to content without constantly re-entering usernames and passwords.

Apple’s original shows include “Planet of the Apps,” a reality series, a miniseries being developed by Dr. Dre, and a spinoff of CBS’ “Carpool Karaoke.” The shows serve a dual purpose — entertaining viewers and helping push sales in Apple’s App Store and streaming music service.

Also under consideration are big budget, critically acclaimed original shows and series that could generate positive buzz for Apple TV, like “House of Cards” has done for Netflix.

Developing programming keeps negotiators like Apple’s Mr. Cue from having to challenge a very profitable pay television industry on their terms and spares Apple from creating a cable package of linear TV channels subscribers increasingly don’t care about. Viewers want on-demand access to the shows they want to see and don’t care that much about who supplies them and how.

So in the end, the intransigence of Big Cable and Hollywood studios that are now worried about cord-cutting may have done Apple an enormous favor, sparing them from being entangled in a business that buys and sells channels to fill a bloated and expensive cable television lineup more and more consumers are now deciding they can do without.

Updated: Link to WSJ story corrected.

Comcast Still Telling Funny Stories to Wall Street About Usage Caps/Usage-Based Billing

xfinityOn a morning conference call with Wall Street analysts, Comcast continues to misrepresent its vision of broadband usage caps and usage-based billing, claiming customer preferences echoed through Comcast’s performance in the marketplace will tell the company what is “best for consumers,” and guide Comcast how to realize the most value for shareholders.

Wall Street is very interested in usage caps and usage-based billing because cable operators can protect video revenue threatened by cord-cutting and boost revenue earned from customers who exceed their allowance.

Vijay Jayant, and analyst at Evercore ISI, quickly zeroed in on the potential loss of anticipated revenue from Comcast’s recent decision to boost its data cap from 300GB to 1TB, something Jiyant characterized as a “hurdle” for future usage-related charges.

“Well we have one terabyte. We moved it up from 300 gigabyte to one terabyte in 14% of our markets where we have usage-based pricing,” responded Neil Smit, Comcast Cable’s president and CEO. “We think we’re going to continue to adjust and look at it as the market evolves and as usage evolves. We have different pricing models, some based on speed, some based on usage, and we’re going to be flexible and kind of let the market tell us which way is best for consumers and how we add the most value. We continue to add speeds. We’ve upped speeds 17 times in 15 years. We’ve built out the fastest Wi-Fi. So we’re going to continue to invest in the network to stay ahead of things.”

Smit’s response was incomplete, however.

Smit

Smit

Comcast’s usage and speed-based pricing models are hardly “flexible” and do not co-exist in the same markets. Customers are compelled to obey Comcast’s usage cap, face overlimit fees up to $200 a month, or pay an additional $50 a month to buy back their old unlimited use service. In Comcast markets without usage caps, the cable company only sells speed-based internet tiers with no enforced caps.

Comcast has consciously avoided allowing customers to choose between speed-based or usage-based tiers, because years of experience among other cable operators quickly proved customers intensely dislike usage caps of any kind. In fact, the largest percentage of complaints filed with the FCC about Comcast are about its compulsory usage cap trial and the fees associated with it.

One reason for that hostility may be that Comcast’s broadband prices do not drop as a result of the introduction of usage caps in a service area. The customer effectively receives a lower value broadband product as a result of its arbitrary usage limit, and the potential exposure to overlimit fees or a very expensive “insurance” plan to avoid the cap altogether. Earlier trials offered some customers a small discount if they kept usage under 5GB a month, a difficult prospect for most and in any case not much of a revenue threat for Comcast.

Comcast-marchIf Comcast was seriously interested in what its customers think about its usage cap trial, it need only review the FCC’s complaint database. According to a Freedom of Information Law request from The Wall Street Journal, nearly 8,000 complaints received by the FCC in the second half of 2015 were about data caps, and most of those were directed at Comcast.

Comcast’s claim it will let the marketplace decide only delivers a distorted view about usage caps, because many Comcast customers have only one other competitive choice, and there is a significant chance that provider caps customer’s broadband usage as well. AT&T, for example, caps its customers at a level even stingier than Comcast. Those caps have not been enforced with overlimit fees on customer bills (except for AT&T’s DSL customers), although AT&T suggests it is getting serious about collecting future overlimit fees. If Comcast gains new customers leaving AT&T to avoid smaller caps, Comcast executives seem to believe they can claim consumers have ’embraced’ Comcast’s usage billing. But we know that is about as credible as an election in North Korea.

Time Warner Cable has been one of the few honest players about usage billing, giving customers the option of keeping unlimited or switching to a capped plan for a discount. More than 99% of customers have chosen to stay with unlimited and only a few thousand have chosen to limit their usage for a small discount. An honest market test from Comcast would extend a similar option to customers. Keep unlimited or voluntarily limit usage for a small discount. Given this kind of test, we expect the overwhelming majority of customers would keep unlimited at all costs. Doing so would hurt shareholder value, however.

The only value Comcast is concerned with is how much more money they can charge customers for broadband service. In America’s broadband duopoly, where speed-based broadband pricing is already outrageously high, usage caps and usage billing are nothing more than a greedy cash grab. When money is at stake, reputation comes in a distant second at Comcast, as the company continues to prove its poor reputation with American consumers is well-deserved.

Netflix on Your Comcast Set-Top Box Will Count Against Your Usage Allowance

Comcast-LogoLater this year, Comcast customers will be able to watch Netflix content with the cable company’s X1 set-top box.

At the time the deal was first announced, there was no word whether Comcast would apply its usage caps on Netflix usage, but Ars Technica reports Comcast will, in fact, count Netflix content you watch with an X1 against your monthly internet usage allowance.

“All data that flows over the public internet (which includes Netflix) counts toward a customer’s monthly data usage,” a Comcast spokesperson said.

Comcast has been gradually imposing its 1TB cap in an increasing number of service areas, where customers face paying an extra $50 a month for an unlimited plan or up to $200 a month in overlimit penalties for exceeding that allowance.

As of now, only Comcast’s own Stream TV is exempt from Comcast’s usage caps. Comcast claims its streaming service doesn’t qualify for its usage caps because it uses Comcast’s own internal network, not the public internet, to reach customers.

 

Comcast Says It Will Spend $100M on Chicago, But Not Before Capping Internet Usage

comcast cartoonComcast announced last week it will invest $100 million in fiber optic and coaxial cable to expand its network for businesses and residents across the Chicago region, but not before it slaps a usage cap on Chicagoland internet users forced to join its compulsory data cap “trial.”

Beginning Aug. 1,  customers who exceed 1 terabyte of data usage per month will face a nasty overlimit fee of $10 for each 50GB of additional usage they rack up over the course of a billing cycle. Customers who want to keep the unlimited broadband plan they have today can, if they are willing to pay an extra $50 a month.

Comcast’s PR department has christened the incoming data cap the “Terabyte Internet Experience,” suggesting customers will now have the privilege of using up to 1,000GB each month without facing extra charges. But the plan customers have until the end of this month already allows that, and more, without facing overlimit fees that will top out at $200 a month.

Customers like Greg believe Comcast has a different agenda imposing data caps.

“We’ll teach those cord cutters a lesson,” he wrote. “We’re going to get your money one way or another. Comcast is just greedy, they want to extort as much money as they can from people. I’m paying $90 for internet, with the option to charge more based on their conditions. Remember when consumers had options?”

Other residents looking for an opt-out of the “trial” are out of luck.

comcast“Got the email this week we get to be part of this data cap ‘trial,'” shared another customer. “How lucky are we? And what do we get for being part of this trial? Absolutely nothing! And can we opt out of this trial? Heck no!”

Comcast claims almost nobody will be impacted by the terabyte cap, predicting as few as 1% of their customers reach that level of usage. But 25% of Comcast customers nationwide have now received email and other notifications about a data cap plan “trial” Comcast has spent time, money, and resources trying to explain and implement in a growing number of cities in their service area. Many ask if so few are affected, why make the effort?

The FCC received 11,812 complaints about Comcast in 2015, mostly about its data cap trials. That is at least 5,000 more complaints than AT&T, Verizon, and Time Warner Cable received combined. That would seem to indicate a significant percentage of Comcast customers are concerned about data caps, even if they are not among the “1%” Comcast now claims will be affected by caps.

Comcast’s plan to invest $100 million in Chicago, primarily on fiber expansion, may not placate customers who do not appreciate their internet usage being capped at the same time Comcast’s network capacity continues to increase. Most of the upgrades may be targeted to benefit Comcast’s business customers. The expansion will string 50 miles of fiber cable across seven square miles of downtown Chicago, including the Loop, River North, and River West. Additional expansion will target the city’s Back of the Yards and Bridgeport neighborhoods at in the Peterson-Pulaski business district near O’Hare.

Comcast claims the upgrade will expand internet, video, voice, and home security/automation services for residential customers. They will just need to make sure not to use them too much.

Comcast Angry It Had to Pay a Pole Attachment Fee on Time or Get Disconnected

Comzilla

Comzilla

Comcast just felt for itself what can happen if their customers don’t pay their bills. They threaten to cut them off.

With just one day remaining before Duck River Electric Membership Corporation claimed it would rip Comcast’s equipment and wiring off its utility poles for non-payment of pole attachment fees, Comcast showed up with a check.

“To avoid an interruption of service, Comcast has once again agreed to pay Duck River significantly more than what is owed under our current contract, despite Duck River’s refusal to negotiate reasonable terms,” Alex Horwitz, vice president of public relations at Comcast, told Times-Free Press reporters.

Duck River officials dispute that and say Comcast was behind (again) on its pole attachment fee payments and is the only utility company complaining about the price.

duck river“Size-wise, they’re the Godzilla of telecommunications,” said Steve Oden, director of member services at the tiny electric co-op. “And we’re just a lowly electric co-op here in Middle Tennessee.”

Oden claimed he is treating Comcast exactly the same way they would treat their own customers.

“If you don’t pay your Comcast cable TV or internet bill, they’re going to do what?” The answer, Oden said, is they “cut you off.”

Comcast claimed in turn Duck River is using their position as a monopoly to gouge customers with high rates.

“Unfortunately, the utility has been unwilling to compromise and has billed Comcast for arbitrary pole rates that are nearly three times the national average,” said Horwitz.

Had Comcast not come up with a payment, Duck River was prepared to start removing Comcast’s wiring and equipment from its poles, and cut power to Comcast’s equipment, which would have killed service for about 7,000 Comcast customers.

The two are now talking (again) about securing a long-term contract that will stabilize pole attachment rates and keep Duck River’s local power co-op from having to make collection calls in the future.

Is Your Landlord Taking Kickbacks to Keep Better Internet Out of Your Building?

xfinity communitiesIs your cable television service included in your rent or condo “services” fee? Have you ever called another provider and told service was not available at your address even through others outside of your condo neighborhood or apartment complex can sign up for service today? Chances are your landlord or property management company is receiving a kickback to keep competition off the property, while you may be stuck paying for substandard services you neither want or need. Worst of all, chances are it’s all legal and everyone is getting a piece of the action… except you.

Welcome to the world of Multiple Dwelling Unit (MDU) Bulk Service Agreements, the seedy underbelly of the anti-competitive cable and telco-TV world. When cable TV first got going, most people wanted access. In the early days, cable franchises were typically exclusive and cable companies maintained the upper hand in negotiations with apartment owners and property owners. Since the service was in demand, many property owners were told to sign whatever “Right Of Entry” Agreement (ROE) was put in front of them. Most contained clauses that guaranteed that cable company would get exclusive access to the property for as long as it was given a franchise to operate within that community. In other words, basically forever.

This turned out very handy when competitors started showing up. First on the scene were satellite television providers, which had a rough time dealing with landlords who loathed tenants installing satellite dishes that “ruined the aesthetics” of the property. Many rental agreements still restrict satellite television dishes in ways that make their use untenable. But things got much more serious when Verizon and AT&T got into the cable business. Initially, both companies found extending FiOS and U-verse to some rental and gated communities was blocked by the exclusive agreements held by cable operators. By 2007, the FCC finally acted to forbid exclusive service contracts, but the cable industry and property developers have played cat and mouse games with the FCC’s loopholes ever since.

Property Developers, Management Companies, Landlords, and Homeowner Associations With Their Hands Out

att connectedWith the FCC’s 2007 declaration that exclusive contracts between cable companies and property owners were “null and void,” the power of the cable industry to negotiate on their terms was markedly diminished. Although many property owners applauded their new-found freedom to tell the local cable company to take a hike if they did not offer better service to their tenants, many others saw dollar signs in their eyes. With leverage now in the hands of the property owner, if the local cable company wanted to stay, in many cases it had to pay. Only the most brazen property owners kicked uncooperative cable companies off their properties, putting tenants at a serious inconvenience. Instead, many found life more peaceful and lucrative to stick with the existing cable company, signing a new contract for “bulk billing” tenants. On the surface, it seemed like a good deal. Property owners advertised that cable TV was included in the rent (and they paid a deeply discounted price per tenant) and the cable operator had a guaranteed number of customers, whether they wanted the service or not.

Bulk billing also proved a very effective deterrent for would-be competitors, who had to overcome the challenge of marketing their service while the tenant was already paying for another as part of their rent. As a result, telco TV competitors often stayed away from properties with bulk billing arrangements.

As broadband has become more prominent and threatens to become more important than the cable TV package, the cable industry has refined its weapons of non-competition. While they cannot force competitors off properties, they can make life very expensive for them. The latest generation of ROE agreements often grant access rights to the building’s telecommunications conduit, cabling, and equipment exclusively to the cable operator.

fiosIf Google Fiber, AT&T U-verse or Verizon FiOS sought to offer service on one of these properties, they would have to overcome the investment insanity of wiring each building with its own infrastructure, including duplicate cables, in separate conduits and spaces not already designated for the exclusive use of the cable company. Verizon in New York City has faced numerous obstacles wiring some buildings, including gaining access to the building itself. Intransigent on site employees, bureaucratic and unresponsive property management companies, and developers have all made life difficult for Verizon’s fiber upgrade.

AT&T often takes the approach “if you can’t beat ’em, join ’em” and offers its own bulk billing incentives, along with occasional commitments for fiber upgrades. Google Fiber can afford to skip places where it isn’t wanted, although with recent revelations that landlords can raise the rent by up to 11% with the arrival of Google Fiber alone, it may hurt to alienate that fiber to the home provider.

Kickbacks for New Developments = Windfall

Kickbacks for existing properties are lucrative, but nothing compared to the lucrative windfall new property developments can achieve with the right deal.

In 2013, one property developer in Maryland went all out for an exclusive deal with a provider that was going to get de facto exclusivity by using a convoluted series of entities and agreements designed to insulate the company from competition and a challenge from the FCC. A court later ruled the provider used an “elaborate game of regulatory subterfuge” using various corporate entities to escape potential competition.

Some lawyers devote a substantial amount of their practice to the issue of bulk contracts and ROE agreements. Carl Kandutsch serves clients nationwide, many trying to extricate themselves from bad deals of the past. In many cases, an attorney may be needed to find a way out of contracts that don’t meet FCC rules. Other communities sometimes have to buy out an existing contract. Many have to sit and suffer the consequences for years. One residential community found itself trapped with a service provider that was quietly protected by an “airtight contract” negotiated not with the property management company or the homeowner association, but the development’s original builder. The provider delivered lousy service and the community spent six years trying to get rid of the offending firm with no result until they hired an attorney. Although happy to be rid of the bad provider, the homeowner association ended up illustrating how pervasive this problem is after it signed a similar contract with another provider also handing out kickbacks.

Comcast pays up to 10% of a renter's cable bill to the landlord.

Comcast pays up to 10% of a renter’s cable bill to the landlord. (Image: Susan Crawford)

Comcast is more creative than most. It calls its handouts: “Marketing Support Compensation.” The property owner gets an increasing reward for every tenant signed up for Comcast service. Once around two-thirds of tenants are subscribed, the owner gets up to a 10% take of each bill, plus a one time payment of up to $130 per tenant.

Because Comcast’s reputation often precedes it, customers reluctant to sign up without considering other providers will find that tougher to do because Comcast bans other providers from marketing their services to tenants with the support or cooperation of the landlord. In other words, no door hangers, free coffee, brochures in the lobby, or any other on-site promotions. In case a property owner forgets, Comcast sends reminders in the mail:

Comcast likes to remind landlords it has an exclusive. (Image: Susan Crawford)

Comcast likes to remind landlords it has an exclusive. (Image: Susan Crawford)

Susan Crawford calls it “astounding, enormous, decentralized payola” and claims it affects millions of renters.

Crawford

Crawford

“These shenanigans will only stop when cities and national leaders require that every building have neutral fiber/wireless facilities that make it easy for residents to switch services when they want to,” Crawford wrote. “We’ve got to take landlords out of the equation — all they’re doing is looking for payments and deals (understandably: they’re addicted to the revenue stream they’ve been getting), and the giant telecom providers in our country are more than happy to pay up. The market is stuck. Residents have little idea these deals are happening. The current way of doing business is great for landlords and ISPs but destructive in every other way.”

One real world example of how this deters competition comes from Webpass (recently acquired by Google), which offers gigabit Ethernet speeds in select MDUs in San Francisco, San Diego, Miami, Chicago, and Boston. The service comes with a low price, but that doesn’t get the company in the door, according to its president, Charles Barr.

Barr has been refused entry by multiple building owners who have agreements with Comcast, AT&T, or others.

“Tenants want us, but we can’t get in,” Barr said.

Crawford argues the FCC has once again been outmaneuvered by ISPs and their attorneys.

“Sure, a landlord can’t enter into an exclusive agreement granting just one ISP the right to provide Internet access service to an MDU, but a landlord can refuse to sign agreements with anyone other than Big Company X, in exchange for payments labeled in any one of a zillion ways,” added Crawford. “Exclusivity by any other name still feels just as abusive.”

This isn’t a new problem. Stop the Cap! first reported on these kinds of bulk buying arrangements back in 2010, all made possible by the FCC’s regulatory loopholes. Six years later, the problem appears to be getting worse.

AT&T’s King of Lobbyists Endorses Hillary Clinton for President

Cicconi

Cicconi

The Telecommunications Act of 1996 was the first major overhaul of telecommunications law in almost 62 years, and the deregulation measure supported with ecstasy by many in the telecom industry was signed into law by none other than President Bill Clinton, opening the door to a massive wave of industry deregulation and multi-billion dollar media consolidation.

It therefore comes as no surprise — to some at least — that AT&T’s top lobbyist Jim Cicconi, perhaps rivaled only by Comcast’s David Cohen in power and influence, has endorsed Hillary Clinton for president. The Wall Street Journal reported Cicconi has joined several other Republican corporate executives signing up for Team Hillary this election cycle.

Cicconi is voting Democratic this year, despite supporting every Republican presidential candidate since President Gerald Ford’s run against Jimmy Carter in 1976. This year is different, he claims.

hillary 2016“I think it’s vital to put our country’s well being ahead of party,” he said in a statement provided by the Clinton campaign. “Hillary Clinton is experienced, qualified, and will make a fine president. The alternative, I fear, would set our nation on a very dark path.”

Comcast’s David Cohen is also well-known for leaning to the left, and has been considered a friend of the Obamas since they took office in 2009. Cohen hosted 120 people in his home for a dinner in 2011 on behalf of Obama’s 2012 re-election campaign. It was an expensive dinner — each guest contributed at least $10,000.

The alternative, Donald Trump, represents what corporate America and Wall Street hates above all else – unpredictability and uncertainty.

Telecom issues have not made a big splash this year in either campaign, and regardless of who wins, their appointments to regulatory agencies like the FCC can have a major impact on consumer broadband initiatives and public policy. A Clinton administration could result in appointments of “centrist” Democrats that Bill favored during his two terms in office. Many of those former regulators are now lobbyists for the telecom industry. Or Hillary could move closer to Obama’s surprisingly tough pro-consumer policies on broadband issues and keep Thomas Wheeler at the helm of the FCC for a few more years.

attverizonCicconi would be pleased to see someone like former Tennessee congressman Harold Ford, Jr., take a seat at the FCC under a future Clinton Administration instead. Ford has served as an honorary co-chairman of Broadband for America, an industry-sponsored astroturf operation, for most of Obama’s two terms in office. He remains a close friend of both Bill and Hillary and is never far from the public eye, turning up regularly on MSNBC.

Broadband for America supports deregulation, opposes Net Neutrality, and essentially shills for its corporate sponsors. Rep. Ford would likely oppose Net Neutrality and continue support for near-total deregulation.

Verizon has also shown itself to be a Friend of Hillary. Three Verizon vice presidents each donated $2,700 to Hillary for America. They were joined by a senior vice president and another vice president, who gave an additional $1,000, according to Salon. A former Hillary Clinton operative who now lobbies for Verizon donated $2,700 as well, along with another Verizon lobbyist who pitched in $1,000.

While Bernie Sanders joined striking Verizon workers on the picket line, the Clinton campaign was cashing checks worth tens of thousands of dollars from Verizon executives and lobbyists. In May 2013, the telecom company paid Hillary a $225,000 honorarium in return for a speech (the text has not been disclosed) to Verizon executives.

The Clinton Foundation also benefited from Verizon contributions ranging from $100,000-250,000.

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