The Heeley family have been Cox customers for over 15 years, buying cable television, broadband, and phone service that costs them nearly $200 a month.

With nearly $2,400 a year going into Cox’s bank accounts from their family alone, John Heeley was a little upset Cox sent him a warning message about his family’s “excessive Internet usage.”

“It seems we went over our usage cap by 40GB in April thanks to a rotten spring and a lot of Netflix viewing,” Heeley tells Stop the Cap! “I didn’t even understand the letter because I never knew there was a cap on the Internet.”

Cox, like certain other providers, have arbitrary usage limits on broadband accounts, with larger allowances granted to customers who upgrade to faster speeds for more money.

Heeley’s fiancé Shelley was angry after realizing just how much the couple already spends with Cox.

“I called them on the phone and the first thing they want to do is get you to upgrade and spend even more money with them,” she tells Stop the Cap! “They tried to vaguely threaten our service if we continued to ‘overuse the Internet’ and suggested we cut back or cancel Netflix which they think is the reason we went over the limit.”

Shelley says she was born at night, but not last night.

“How convenient they want you to stop using Netflix, Amazon, or other online video services that their cable TV competes with,” Shelley says. “It is unfair competition.”

Shelley requested a Cox supervisor and threatened the company right back, telling Cox if they sent one more letter like that, the Heeley family would take their business elsewhere.

“He told us quietly we could ignore the letter and any future letters and they will add a note on our account,” Shelley tells us. “He confided they have customers going over the limit all the time and the letter is really about educating customers about usage.”

It seems if Cox threatens you, threatening them back with account cancellation is usually the end of the story.

We found Broadband Reports‘ readers who exceed usage limits with Cox largely unafraid of any consequences:

• Rakeesh: I’ve gone everywhere from 300gb to 700gb over the cap for the last 19 months in a row. You’re fine.
• Skeechan: I have gone over too. The nastygrams seem to only be sent in selective markets. I am on Ultimate, perhaps that is why they haven’t sent me one since I have nowhere to go plan-wise. And being triple play since 1998 offers up a reliable and high ARPU. Of course that assumes they actually give a crap about common sense.
• Maltz: I went over my cap by about 30GB last month and got an email telling me that I was over. That was the end of it.

Other stories of interest:

1. AT&T Cracking Down on DSL/U-verse Usage While Promoting “No Bandwidth Limitations”
2. Cox Slams DSL in New Ads, But Cox Cable Customers Stuck With Usage Caps
3. Shaw Sneakiness: Company Lowers Usage Limits, Hopes Nobody Noticed
4. Cox’s 3 Steps to Fatter Profits With Internet Overcharging: Upgrade or Your Services Will Be Blocked
5. Netflix’s Reed Hastings Discovers Comcast’s Usage Cap: The End Run Around Net Neutrality

A freak spring snowstorm has stolen CenturyLink’s thunder.

A freak spring snowstorm has covered up much of the anticipated publicity for CenturyLink’s plans to launch a trial of gigabit fiber broadband for 48,000 customers in western Omaha.

The phone company announced the pilot project this week amid a historic spring storm that dumped several inches of heavy, wet snow on parts of Nebraska. The media devoted most of its attention to the weather.

CenturyLink admits its gigabit fiber service is a pilot project designed to test consumer demand and the tolerance of local officials for limiting upgrades to selected neighborhoods and customers most likely to buy the service. CenturyLink has priced the gigabit service comparably to Google Fiber — $79.95 a month if bundled with other CenturyLink products. Standalone broadband is nearly twice as expensive — $149.95 a month.

“CenturyLink is pleased to offer its Omaha customers ultra-fast broadband speeds up to 1Gbps to help keep pace with growing broadband demands,” said Karen Puckett, chief operating officer. “This demonstrates our commitment to deliver communications solutions that provide our customers with the technology they need to enhance their quality of life, now and into the future.”

CenturyLink will not be building the fiber network from scratch. The company already runs a 100Gbps middle-mile/institutional fiber network in Omaha that reaches certain business clients and serves as a conduit for CenturyLink customer traffic. CenturyLink will supplement that by using the remnants of its predecessor’s long-gone Qwest Choice TV service. The company will spend millions to run fiber connections to homes and businesses, but around 9,800 residents formerly served by Qwest’s television service will be able to sign up for CenturyLink Lightspeed Broadband as early as Monday. Others may have to wait until as late as October.

CenturyLink now sells up to 40Mbps speeds in Omaha, with a 300GB monthly usage cap. The company has not said if it intends to apply a usage limit on its fiber customers.

The phone company’s largest and fastest competitor is Cox Cable, which sells up to 150/20Mbps service for $99.99 a month.

Cox Cable cannot match CenturyLink’s speeds at the moment, but does not think most Omaha residents need or want gigabit fiber.

“It is important to note that our most popular Internet package remains the one that provides speeds of 25Mbps, which meets the needs of the majority of customers,” said Cox spokesman Todd Smith. “We will continue to talk with our customers and invest in product enhancements to provide an optimal broadband experience.”

Only around 12% of metropolitan Omaha will have access to the experimental fiber service, primarily those living in West Omaha. The network will bypass residents that live further east. The boundaries of the forthcoming fiber network are notable: West Omaha comprises mostly affluent middle and upper class professionals and is one of the wealthiest areas in the metropolitan region. Winning a right to offer service on a limited basis within Omaha is an important consideration for telecom companies like CenturyLink.

AT&T, Verizon, CenturyLink and other telecommunications companies are seeking deregulation that would end universal service mandates that require companies to build their networks in every neighborhood, rich and poor.

Cable and telephone companies have taken careful note Google Fiber is being allowed to provide service only where demand can be found — a significant change in long-standing municipal policies that demand cable and phone companies provide access to nearly every resident.

CenturyLink delivered a “between the lines” message to local officials when it suggested it might expand its fiber network elsewhere in Omaha and beyond, but only after evaluating the project for “positive community support, competitive parity in the marketplace and the ability to earn a reasonable return on its investment.”

In other words, keeping zoning and permit battles (and residential complaints about construction projects) to a bare minimum, allowing the company the right to choose where it will (and won’t) deploy service, and making sure people will actually buy the service are all the key factors for fiber expansion.

AT&T said much the same thing when it vaguely promised a gigabit fiber network to compete with Google in Austin.

Google may have unintentionally handed their competitors a new carrot: deregulate us in return for fancy fiber upgrades that customers crave.

In perspective: CenturyLink’s fiber trial will only impact about 12% of the total population of metropolitan Omaha, primarily in and near affluent West Omaha.

WOWT in Omaha spent less than a minute reporting on CenturyLink’s forthcoming gigabit fiber trial. A spring snowstorm preoccupied most of Omaha’s media instead.  (1 minute)

Other stories of interest:

1. Breaking News: Provo, Utah the Next City Slated for Gigabit Google Fiber
2. AT&T Announces Its Own “Gigabit Fiber Network” for Austin; Details Leave Wiggle Room
3. Time Warner Cable, Verizon Insist You Don’t Want or Need Gigabit Broadband
4. AT&T, Time Warner Cable Claim They Are Ready for Google Fiber in Austin
5. Back to Kansas City: Google Fiber Now Going in the Ground; TV Service Also Announced

Cox Cable, on the heels of announcing another rate increase, is earning customer ire for downright nasty customer service.

Customers dealing with two different service blackouts and a flood have gotten a thumbs-down response from Cox when looking for some service credits and understanding.

‘We don’t give refunds,’ came the reply from one customer service agent called by Stop the Cap! reader Jennifer from Providence, R.I. Her service went out in mid-December after a burst water pipe in the neighborhood flooded their home, making in uninhabitable until a mold mitigation team completed repairs. After fleeing to stay with relatives, it suddenly dawned on Jennifer that Cox Cable kept her waiting on hold so long, she hung up and forgot to call them back.

“All I needed to do was notify them we were not going to be using our Cox service for about a month and we needed to suspend our account,” Jennifer tells us. “When I finally got a customer service agent, the first thing I heard was him blowing his nose several times before he finally introduced himself.”

The surly agent was not interested in Jennifer’s plight or her request to suspend service.

“Your flooding problems are yours to solve and we can’t help you with suspending service unless you are going away for much longer than that,” came the reply. “And we are certainly not able to give you a refund either. It isn’t our fault.”

Jennifer was stunned at the nasty attitude she got, especially after other companies were far more understanding.

“I had nothing but sympathy from Verizon, the power company, and even the newspaper which we also stopped,” she says. “Cox could not have cared less and we did not even create the problem.”

Cox customers in Ohio also got the same special touch from Cox’s representatives.

Rev. Dave Connor from Lakewood was looking for a $1.50 credit for a few local channels that were stripped off his cable lineup because of yet another carriage-for-money dispute. Raycom wanted more cash for its two local channels and Cox did not want to pay so off they went from the lineup, at least temporarily. But the cable operator did not want to give any refunds for the missing channels customers had been paying to receive.

It took several escalating phone calls before Cox finally relented to a one-time credit, putting a sour taste in the Rev. Dave’s mouth.

“Some ‘friend in the digital age,’” he told the Lakewood Patch, referencing the company’s ad slogan.

Before others got the idea they deserved a refund as well, Dana Alexander Nolfe, director of communications for Cox, hurried out to let customers know they can just forget it.

Nolfe told the Patch the refund granted Connor was a one-time “gesture of goodwill,” adding no one else will likely be given a similar refund.

“We are not crediting our customers as a result of the Raycom dispute,” Nolfe said. “We offer a package of channels, not individual channels on our lineup. We regularly make changes to our lineup, mostly with additions, but at times, regrettably, when a channel is removed from our lineup.”

Ian King called Cox “the worst,” noting the company refused refunds for customers left without service for days after the remnants of Hurricane Sandy meandered across Ohio.

“Cox is nothing but a PR campaign that constantly tells us how wonderful they are, but in reality they could care less,” King said.

Jennifer says she won’t forget.

“After we move back, one of the first things I will be doing is dropping them and their smug representative on their heads.”

Other stories of interest:

1. Where’s Our Refund? Cablevision Subscribers Want Credit for Now-Resolved TV Food Network/HGTV Spat
2. Comcast Makes Customers Wait 90+ Days for Refunds of Final Bills
3. Insight Leaves 300,000 Louisville Customers With Frozen Pictures for Nine Hours – No Refunds (Unless You Ask)
4. More Frontier Problems: Californians Wait Months on Refunds for Disconnected Landlines
5. Union Helps Sandy Victims Secure Cablevision Refunds; Lawsuit Threatened In Response

Cox Cable customers in Arizona, Florida and beyond face a significant rate hike for cable, broadband, and phone service in 2013 according to a notification from the company. Rates are going up for most individual services, although customers in selected package bundles or on promotions will avoid increases for now.

Cox claims “increasing programming expenses” and the “rising costs of doing business” are responsible for the forthcoming higher bills.

In Arizona, Cox’s prices change as follows:

Cox TV and Advanced TV:
Cox TV Essential will change from $60.79 to $63.99.
Advanced TV will change from $62.59 to $63.99.
Preferred TV will change from $69.59 to $73.99.
Super Mix will change from $69.59 to $70.99.
Premier TV will change from $80.59 to $83.99.
Ultimate TV will change from $122.58 to $125.99.
Advanced TV standard definition receivers will change from $6.99 to $8.50.

Plus Package fee will change from $10 to $5. (only decrease)
Variety Pak will change from $7.00 to $10.00.
Sports and Information Pak will change from $7.00 to $8.50.
Single premium channel rate will change from $14.99 to $15.00.
Two premium channels rate will change from $23.49 to $25.00
Three premium channel rate will change from $31.99 to $34.00.
Four premium channel rate will change from $39.49 to $42.00.

Telephone:
Cox Digital Telephone Essential will change from $19.99 to $21.99.
Voice Mail will change from $7.99 to $8.99.
To comply with federal regulatory guidelines for the Access Recovery Charge, the FCC Access Charge will increase by $0.12. Toll Restriction will change from $2.75 to $1.49.
Simply 5 Long Distance will change from $3.99 to $4.95.
For information on other telephone rate changes, please visit Cox.com

Internet:
Starter will change from $25.99 to $26.99.
Essential will change from $37.99 to $39.99.
Preferred will change from $53.99 to $55.99.
Premier will change from $64.99 to $67.99.
Ultimate will change from $94.99 to $99.99.

(Thanks to ‘BryanInPHX’ for compiling the changes.)

In Florida, Cox customers will pay $68.49 for “Advanced TV” service — nearly $70 for what some would consider “basic cable.” Equipment is going up as well.

Advanced TV standard definition receivers increase from $6.99 to $8.50 a month. Advanced TV High Definition and DVR receivers rise from $7.99 to $8.50.

Many Cox Internet customers in Florida will also pay between $3-4 a month more for their broadband service.

Other stories of interest:

1. Rate Increases for One and All: AT&T, Comcast, Cox, DirecTV — Up, Up and Away
2. Cox Cable Raises Rates 18% in Virginia – Local TV Fees Blamed for 2nd Hike in 10 Months
3. Fox News Channel – Time Warner Cable Deal Will Increase Cable Rates for Millions
4. Time Warner Cable Increasing Rates in South Carolina
5. Past is Prologue: The Great Telephone Strike of 1886, When Bell Tried to Eliminate Flat Rate Pricing

Cox injected this pop up message when customers launched their web browsers over the weekend, notifying them about the e-mail outage. (Courtesy: Broadband Reports forum reader ‘bb44′)

Our friends at Broadband Reports have been tracking Cox’s near-nationwide e-mail outage that left millions of customers without access to their company-supplied accounts over the weekend.

Customers in Rhode Island, Nebraska, Virginia, Arkansas, Florida, Kansas, Louisiana, and beyond began noticing the problem on Friday. Only Cox’s customers in the western and mountain states seemed unaffected.

Cox blamed the problem on a “failing server.” In an effort to reduce calls from complaining customers, Cox used a browser injection notification message alerting subscribers whenever they opened their web browsers. Sending e-mail to all affected subscribers was obviously not an option.

Cox customers, including many small businesses that still rely on their Cox-supplied e-mail addresses were very unhappy about the length of the outage.

By Sunday afternoon customers like Bill Roland of Ocala, Fla. were fed up.

“Heads should roll over this one and we should all get a credit on our bills,” Roland wrote on Broadband Reports’ Cox Forum. “I don’t really care when it’s out for 15 minutes in the middle of the night due to a maintenance window, but going on 48 hours with no end is sight is not acceptable.”

Roland would have to wait until early Monday morning for the queued mail held since the outage to begin slowly arriving in his mailbox.

Cox shared this statement about the outage:

As of 6:30 am ET, access to Cox email has been restored to all customers previously affected by the email outage. All customers should now be able to send and receive email messages.

If you lost access to your email during this outage, we have queued your emails received since Friday. You may continue to receive these queued emails over the course of the next several days. These will arrive gradually and may not be delivered in chronological order.

Now that service is restored we are moving forward with replacing email storage platform equipment and implementing measures to prevent a reoccurrence of these issues. We will remain intensely focused on this effort until all queued email messages are successfully delivered. Technical teams continue to be on high alert and monitoring systems closely.

We deeply regret the impact this outage has had on our customers and truly appreciate their patience as all Cox resources continue to be focused on this restoration effort.

Cox customers can call the company and request a courtesy credit for the outage, which the company is providing to those particularly upset by the e-mail loss.

Among those hardest hit: small businesses like those in Providence, RI which are particularly dependent on answering e-mail from customers during the holiday season. Several made their apologies to customers on their websites.

The best solution to this dilemma is to avoid using ISP-supplied e-mail accounts. Cox customers using Gmail or other web-based e-mail providers never realized there was an outage.

“The best reason not to use your ISP e-mail account is that it ties you down with your broadband provider,” writes Cox customers and Stop the Cap! reader Sam Hernandez. “I bought my own domain name for around $7 and I use Gmail to handle everything and have been able to switch providers or move to another city and never have to change my e-mail address. Gmail has proved to be very reliable as well.”

WJAR in Providence reports Cox’s near-nationwide weekend e-mail outage caused problems for area small businesses during the critically-important holiday season.  (1 minute)

Other stories of interest:

1. Breaking News: Comcast’s Nationwide E-Mail Outage
2. Another Comcast Nationwide E-Mail Outage Brings Complaints
3. Major Time Warner Cable Outage Interrupts Service for Rochester-Area Customers
4. New Hampshire’s Comcast Phone Service Outage: Like FairPoint Never Existed
5. Time Warner Cable’s Phone Service Wiped Out Across Southern Wisconsin

Despite perennial protests from pay television providers that programming costs are getting out of hand, this fall viewers will find an even greater number of costly sports channels that will fuel rate increases in 2013.

The biggest boost in sports programming comes from Time Warner Cable, which has finally signed a deal with the National Football League and will also launch a series of regional and sports specialty channels for subscribers already able to watch more than a dozen sports-related networks. The deal also affects Bright House Networks subscribers. Time Warner Cable handles programming negotiations for Bright House.

This past weekend’s addition of the NFL Network to the company’s digital standard service lineup and the niche NFL RedZone channel, which is part of the company’s $5.95 Sports Pass specialty tier comes nine years after the NFL Network launched. Time Warner Cable was the last major holdout that refused to carry the network, which costs an estimated $0.95 per cable subscriber, per month. But as League officials began gradually increasing the number of season games on the network, enraged sports fans feeling left out increasingly pelted the cable operator with complaints.

The NFL has also consistently refused to allow its primary NFL Network to appear on a mini-pay tier, available only to those willing to pay extra, instead demanding it be a part of standard service.

Another holdout, Cablevision, relented and agreed to carry the two NFL networks in August, leading to speculation the cable operator will break its promise not to increase rates in 2012 and will raise prices while blaming the addition of the costly sports networks.

At nearly a dollar per month per customer, it is a virtual certainty much, if not all, of that cost will also be passed on to Time Warner Cable customers during the next round of rate increases.

But that is just the beginning, especially if you are a Time Warner Cable customer in southern California.

In mid-August, most Time Warner customers began receiving at least one Pac-12 network on the company’s Sports Pass tier. But in Los Angeles, customers are getting two channels, one devoted to the entire conference and an extra channel dedicated to USC and UCLA coverage that every local subscriber will receive.

Your cable bill is going up again.

Both channels do not come cheap. Sports Business Journal has reported that the Pac-12 is seeking more than 80 cents per subscriber to carry its channels, about the same price charged by the Disney Channel.

Cox, Comcast, and Bright House Networks subscribers don’t get a free pass either. They will also find Pac-12 Networks on their local lineups (and bills) soon enough.

Also for southern California, Time Warner Cable is creating two new sports channels, SportsNet and Deportes (Spanish), that will exclusively carry games featuring the Los Angeles Lakers, Galaxy, Sparks, and perhaps one day the Dodgers.

The networks’ broadcast territory includes all regions that previously broadcast Lakers, Galaxy and Sparks games. That area stretches from Fresno County to the north to San Diego and Imperial County to the south. It also includes Hawaii (Time Warner Cable Deportes not available in Hawaii) and Clark County, Nev. A full list of California counties that can receive the networks: Fresno, Imperial, Kern, Kings, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo, Santa Barbara, Tulare and Ventura.

The Lakers signed a $4 billion, 20-year deal with Time Warner Cable for broadcast rights, taking them away from KCAL-TV, a free over-the-air station. Time Warner will want their money back, so they will get it from you, the subscriber. Ironically, while Time Warner complains about other sports programmers insisting their networks be carried on the standard service tier, it has no problem wanting the same for its own sports channels. Subscribers throughout the region may end up covering the nearly $4 monthly cost per subscriber for the two regional sports channels, whether they want them or not.

Other stories of interest:

1. Time Warner Cable Expands Sports Lineup On Online Streaming App
2. Increased Programming Costs: Time Warner Cable’s Multi-Billion Dollar Sports Deal
3. Time Warner Cable Interested In Spending Billions to Buy Los Angeles Dodgers
4. Time Warner Cable Forfeits NFL Network, Again
5. NY City Wants Time Warner Cable to Refund Cable Customers for MSG-Less Cable Lineup

Cox Communications has launched two new broadband tiers for business customers in the Acadiana region around Lafayette, La., offering speeds of  80 and 100Mbps.

With LUS Fiber providing community-owned fiber to the premises symmetrical broadband in the area, Cox Cable has been at a speed disadvantage, but hopes it is now better positioned to attract and keep commercial customers in southern Louisiana. LUS Fiber offers business customers speeds of 10/10, 50/50, or 100/100Mbps.

Cox’s new speeds, made possible with DOCSIS 3.0, are part of a $12 million upgrade the cable operator has underway in the state. Acadiana is the first Cox market in the country to get the new speeds. Other Cox markets will see upgraded speeds later this year or in early 2013.

Other stories of interest:

1. At Least One-Third of Great Britain Now Has Access to 100Mbps Broadband
2. Publicly Owned LUS Fiber Launching Gigabit Broadband for Lafayette, Louisiana
3. Virgin Media Doubling Broadband Speeds for Free While Competitor Sky Unveils 100Gbps Internet for UK
4. Alcatel-Lucent Announces VDSL2 Vectoring: 100Mbps on Copper Phone Lines
5. Fact Check: Time Warner Cable’s $25 Million Fiber Upgrade: For Business Use Only

(Image courtesy: FCC.com)

The Department of Justice today announced it had achieved a settlement with Verizon and four major cable operators regarding their efforts to establish a cross-marketing agreement to sell each other’s services, sell wireless spectrum, and develop a technology research joint venture.

Despite criticism that the deal represented a strong case for marketplace collusion that would reduce competition between Verizon’s FiOS fiber to the home service and cable company offerings, the Justice Department signed off on a series of deal revisions it defends as protective of competition and consumers. Among them is a time limit for the cross-marketing deal and restrictions on where Verizon Wireless can cross-market cable company services.

“By limiting the scope and duration of the commercial agreements among Verizon and the cable companies while at the same time allowing Verizon and T-Mobile to proceed with their spectrum acquisitions, the department has provided the right remedy for competition and consumers,” said Joseph Wayland, acting assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “ The Antitrust Division’s enforcement action ensures that robust competition between Verizon and the cable companies continues now and in the future as technological change alters the telecommunications landscape.”

The proposed settlement forbids Verizon Wireless from selling cable company products in areas where its FiOS service is available. That is a major reversal from the original agreement between Verizon and Comcast, Time Warner Cable, Cox and Bright House Networks which restricted Verizon Wireless from marketing FiOS. Under the original deal, Verizon Wireless stores could effectively only sell cable company products, never FiOS. The Justice Dept. will still permit Verizon Wireless to sell cable service, but supposedly not at the expense of the fiber service.

The agreement also specifies that Verizon Wireless can sell cable service in areas where it currently markets DSL only until the end of December 2016, renewable at the sole discretion of the Justice Dept. Antitrust lawyers were concerned Verizon would be unlikely to expand its FiOS network or improve DSL service in areas where it could simply resell cable service.

Justice lawyers also put a similar time limit on the technology joint venture, making sure any collaborative efforts don’t impede competition.

The settlement also approves of Verizon’s proposed acquisition of spectrum from the cable companies and T-Mobile USA’s contingent purchase of a significant portion of that spectrum from Verizon.

The deal has been signed off by Justice lawyers, the companies involved, and the New York State Attorney General’s office. FCC chairman Julius Genachowski also weighed in separately with a positive press statement about the agreement.

But consumer advocates remain concerned that the deal does nothing to enhance competition and allows the companies involved to enjoy a new era of competitive detente from a stable and predictable marketplace. Verizon still has little incentive to innovate its DSL service, free to pitch cable service in those areas instead, and without robust changes to the marketplace where FiOS is sold, cable operators have little to fear from Verizon’s stalled FiOS rollout and recent price increases.

Parts of the agreement may also prove confusing to consumers. An important concession prohibits Verizon Wireless from selling any cable service to a street address that is within the FiOS footprint or in any neighborhood store where Verizon FiOS is available. Consumers likely to receive broadly marketed special offers that offer bundled discounts could be frustrated when they are prohibited from signing up because of where they live.

This concession also requires both Verizon and cable operators collaborate to share information about where Verizon FiOS competition exists currently and where it will become available in the future, so that unqualified customers are not sold cable service in violation of the agreement. That represents valuable information for cable operators, who will receive advance notification that customer retention efforts may be needed in areas where Verizon’s fiber optic service is scheduled to become available for the first time.

Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Lawrence M. Frankel, Assistant Chief, Telecommunications & Media Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.

Other stories of interest:

1. FCC on Verizon-Big Cable Spectrum Deal: Sure, Why Not?; But Justice Dept. Thinking Twice
2. FiOS Leaves Cities Behind As Verizon Lobbies for Cross-Marketing Deal With Cable Foes
3. Verizilla: Bad for Competition, Bad for Consumers, Bad for You, Says CWA
4. New Study Claims Verizon-Cable Company Pact Could Cost 72,000 Jobs; Threatens FiOS
5. Video: Verizon/Cable Deals: Harmless Collaboration or Threat to Competition

Verizon has a moratorium on further expansion of its fiber to the home service except in areas where it has existing agreements to deliver service.

A new study predicts an agreement between Verizon and the nation’s top cable companies to cross-sell each other’s products could cost up to 72,000 jobs in the northeastern U.S. and potentially threaten Verizon’s state-of-the-art fiber optics network FiOS.

The Federal Communications Commission (FCC) and the U.S. Department of Justice are continuing to review a proposed deal that would allow Verizon Wireless and companies including Time Warner and Comcast to cross-market each other’s products, which critics allege will eliminate competition and job-creating investment.

In the crosshairs of the deal: Verizon’s fiber to the home network FiOS, which has been stalled since 2009 when Verizon signaled it was “winding down” FiOS spending. According to the new report, produced by the Communications Workers of America (CWA), FiOS is at risk of being undercut by Verizon in favor of reselling cable-TV packages from Comcast, Time Warner Cable, and other cable companies. At worst, some critics of the deal contend Verizon will eventually abandon FiOS altogether.

The CWA has already seen the impact of Verizon’s declining interest in expanding FiOS as the company has left several major American cities in its service footprint, including Baltimore, Buffalo, Syracuse and Boston without fiber optic upgrades.

The CWA is calling on regulators to impose conditions on any deal between Verizon and cable operators:

• Prohibit Verizon Wireless and the cable companies from cross-marketing in Verizon’s landline service areas;
• Require Verizon to build the FiOS network to 95% of Verizon households in its landline footprint, including in rural and low-income areas;
• Ensure that Verizon Wireless and other cable companies are not able to lock out competitors.

If Verizon were to maintain the expansion of FiOS to non-FiOS areas, about 72,000 new jobs would be created, the CWA report found. Job growth would be concentrated in eight Eastern states and Washington D.C.

“If done right, the proposed deal would add tens of thousands of new jobs and allow underserved communities access to high quality broadband service,” said Debbie Goldman, telecommunications policy director for the CWA. “The FCC has the obligation carefully to assess this deal in terms of likely job loss.  We expect regulators to reject this deal unless the parties accept conditions that would create jobs, increase network investment, and promote consumer choice.”

Those living in Verizon service areas without FiOS are already upset that they have been effectively bypassed by the phone company.

“It’s an arrogant stand,” Buffalo Councilman Darius Pridgen said in a phone interview with the Philadelphia Inquirer. Verizon has upgraded other areas in upstate New York with FiOS, but not financially distressed Buffalo. “It’s advertised in the city, but it’s not available in the city.”

In Philadelphia, Verizon obtained a 15-year video franchise agreement with city officials and the company agreed to extend FiOS throughout the city by 2016. But residents are complaining that Verizon’s definition of “extending service” has meant wiring cables down major thoroughfares, not wiring up every home that wants the service.

City Councilman James Kenney called for a public hearing in April amid complaints that Verizon was reneging on its commitment to city officials and residents.

Cole

Baltimore councilman William Cole thinks his city was skipped by Verizon for a reason, while more affluent areas are set to get fiber upgrades. Cole told the newspaper his constituents have called Verizon after seeing local ads for FiOS service, but are told they cannot get the service.

Verizon spokesman Edward McFadden said the decision to build the FiOS network was never popular on Wall Street. “We got hammered,” he told the Inquirer, “and our shareholders were punished for this.”

Now that the network is up and running, McFadden says Verizon retains a strong incentive to maintain its FiOS business because of the huge investment and the increased earnings it brings the phone company.

But the CWA’s Goldman remains convinced Verizon has broken its word with regulators and politicians who believed promises from Verizon and other telecom companies that passage of the deregulation-packed 1996 Telecommunications Act would inspire the dawn of a new competitive era in American telecommunications. Now instead, Verizon and the cable companies want to simply sell each other’s services.

“They wanted deregulation, and they said they would compete,” Goldman said. “This marks the beginning of the surrender, this truce.”

Other stories of interest:

1. No Wireless Spectrum Swap Until We See FiOS, Say Cities Waiting for Verizon Fiber Upgrade
2. Verizilla: Bad for Competition, Bad for Consumers, Bad for You, Says CWA
3. Cable Companies & Verizon Sign Non-Aggression Pact; Consumers May Pay the Price
4. Nine Upstate NY Mayors Accuse Verizon of Avoiding Urban Poor In Fiber Upgrades
5. Buffalo Group Says Verizon May Be Redlining Poor Communities With FiOS; Investigation Demanded

Despite concerns from consumer groups that a deal to exchange wireless spectrum in return for collaborative marketing between two competitors will lead to higher prices for consumers, the Federal Communications Commission seems prepared to approve it, according to a report from the Reuters news agency.

Two sources familiar with the matter told Reuters the FCC has taken the lead on the “spectrum transfer” issue, which involves turning over prime wireless spectrum currently owned by large cable operators Comcast, Time Warner Cable, Cox, and Bright House Networks to Verizon Wireless. The combined licenses the cable industry holds are in the majority of major American cities, which critics charge Verizon will acquire to eliminate any potential competitive threat from a new nationwide wireless carrier.

Verizon’s recent moves to sell off its own “excess” spectrum to its current competitors has garnered favor inside the FCC, according to sources. Verizon Wireless recently agreed to transfer some of that spectrum to T-Mobile USA, which coincidentally was a fierce opponent of the deal between Verizon and cable operators. T-Mobile’s opposition has since muted.

Licenses owned by the cable industry would have been expansive enough to launch a new national wireless competitor. (Image: Phonescoop)

The deal between Verizon and the nation’s top cable companies is worth about $3.9 billion, but the Justice Department continues to signal concerns it would ultimately cost consumers more than that. According to Reuters, Verizon remains in “tougher talks” with lawyers inside the Justice Department who are concerned cooperative marketing between the phone and cable companies would result in decreased competition and higher prices.

One source told Reuters regulators were hoping Verizon’s now-stalled fiber to the home network FiOS would bring major competition to the cable industry, which until then had only faced moderate competition from satellite dish providers. In return, Comcast and other cable operators were expected to invade the wireless phone marketplace, adding needed competition.

Instead, both sides have retreated to their respective positions — Verizon focusing on its wireless service and Comcast and other cable companies abandoning interest in wireless phones and sticking to cable-based products.

The idea that both would begin to cross-market each other’s products is “a problem” according to the Justice source not authorized to speak publicly.

Additionally, concerns are being raised over a proposed “joint operating entity” between Verizon and cable operators that would focus on developing new technologies that could lock out those not in the consortium.

No decision is expected from the Justice Department until August, but Justice officials have signaled they have several options they can pursue:

1. Sue to stop the spectrum transfer;
2. Force the companies to modify their proposal to reduce potential collusion;
3. Approve the deal but monitor how cross-marketing agreements impact on consumer markets for wireless and cable products.

Other stories of interest:

1. FCC Upset Over Comcast’s Admission It Had No Intention to Use Wireless Spectrum It Acquired
2. Video: Verizon/Cable Deals: Harmless Collaboration or Threat to Competition
3. Verizon Sells ‘Excess Spectrum’ to T-Mobile USA, With Conditions
4. Cable Companies & Verizon Sign Non-Aggression Pact; Consumers May Pay the Price
5. Call to Action: Tell the FCC Non-Compete Peace Treaties Are No Good for You