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Verizon Wireless Closing Unlimited Data Plan Upgrade Loopholes; The Latest Party Ends 8/24

610px-Verizon-Wireless-Logo_svgVerizon Wireless is closing several loopholes that customers have used to acquire new subsidized, on-contract smartphones and keep their unlimited data plans intact for an extra two years.

Since Verizon Wireless stopped enrolling customers in unlimited use data plans in 2012, current customers have been able to hang on to their unlimited use plans with the understanding they will not be entitled to subsidized upgrades or new lines with unlimited data. Despite that, Verizon still aggressively pursues unlimited data customers at almost every contact encouraging them to ditch their unlimited plan in favor of much more profitable Family Share plans, which feature usage-based billing tiers that customers will need to regularly upgrade to stay ahead of increasing data usage trends.

A study from Consumer Intelligence Research Partners showing Verizon has successfully convinced all but 22% of their customers to dump their unlimited plans. Those still hanging on guard their unmetered plans zealously. Some have even managed to find loopholes that let them keep unlimited data while getting subsidized device upgrades. But Verizon has caught on and is slowly closing the loopholes, increasing restrictions on unlimited data plan customers.

The Loopholes

One of the newer loopholes is a type of subsidized upgrade through Best Buy. A number of careful steps are required to win the upgrade without changing your data plan, and there are several side effects explained exhaustively on the Slickdeals website. If you try, read the instructions very carefully or you could lose your unlimited plan. The upgrade has been successful for many who have kept their unlimited packages, signed a new two-year contract exempting them from Verizon Wireless’ 4G speed throttle, and getting a new device at a subsidized discount. it won’t be easy to tell when this loophole is closed, and you might have to fight to win back your unlimited data package if it is removed from your account.

Another loophole involves shifting upgrades around on your current family plan. As different family members become eligible for device upgrades, it is possible to an upgrade to an existing number with an unlimited data plan without losing that feature. This is the most popular loophole at the moment and the one Verizon Wireless wants to kill the most.

"Tina, bring me the axe!"

“Tina, bring me the axe!”

Verizon Takes the Axe to Loopholes, Discounts, and Finance Plans for Unlimited Data Customers

Verizon has declared a virtual war on their grandfathered unlimited data plan customers, and has gradually tightened the noose:

  1. Verizon Wireless will begin throttling 4G/LTE speeds of off-contract, unlimited data plan customers deemed heavy users who consume more than 4.7GB of data per month beginning this fall;
  2. On July 13, Verizon Wireless quietly terminated its Device Payment Plan for unlimited data customers seeking to finance the cost of an unsubsidized device upgrade over 12-20 months. Instead, customers must enroll in Verizon Edge to get a phone with little cash upfront and monthly payments. One of the conditions of the Edge program is forfeiting your unlimited data plan;
  3. Verizon will no longer allow customers with unlimited data plans to transfer an available device upgrade from another line on the account to get a subsidized device upgrade while keeping their unlimited data plan.

In the past, some customers who love upgrading devices a lot either grabbed other family members’ device upgrade offers or opened up extra lines on the account. For each additional $9.99 a month basic line, a customer could qualify for a new subsidized device with a two-year contract, initially attaching a basic 2GB $30/month data plan they can immediately drop when the phone is switched to a line with unlimited data. Some customers have even maintained two or three unused phantom lines just so they can upgrade their phone every 10 months or so.

Beginning Aug. 24, Verizon will close that loophole by forcing customers to keep a data package associated with every subsidized device on their account for the length of the contract. This means customers must pay at least $30 for a 2GB data package, plus the usual $9.99 a month fee for service over the next two years for each line with a smartphone attached, regardless of what number it gets associated with.

According to information received by Droid Life, Verizon believes that when it “gives customers a discount on the retail price of a smartphone, we expect them to pay for data services and keep the smartphone activated for two years. This change closes the loopholes which allowed customers to activate/upgrade a smartphone and immediately revert back to a basic phone, resulting in a discontinued smartphone with no associated data plan.”

This may explain why Verizon Wireless is so gung-ho about getting me to switch to their "money-saving" Family Share Plan. In fact, it's a Family Theft plan -- nearly three times more expensive with a data cap that will force even more upgrades at a higher cost in the future.

Here’s an offer I’d like to refuse: This may explain why Verizon Wireless is so gung-ho about getting customers to switch to their “money-saving” Family Share Plan. In fact, it’s a Family Theft plan — nearly three times more expensive with a data cap that will force even more upgrades at a higher cost in the future.

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Wining and Dining the FCC: Comcast Sponsors Honors Dinner for Commissioner During Merger Review

FCC Commissioner Mignon Clyburn

FCC Commissioner Mignon Clyburn

Comcast will pay $110,000 to sponsor a major dinner honoring FCC commissioner Mignon Clyburn at the same time the regulator is considering whether to approve the cable company’s application to acquire Time Warner Cable.

In a barely noticed Senate lobbying disclosure released last month, Time Warner Cable admitted it was also spending $22,000 of its subscribers’ money on the same meal.

The money gets Comcast a top-level commitment as a “presenting sponsor” at the Walter Kaitz Foundation dinner next month, which features Clyburn receiving a “diversity advocate” award. Comcast will be prominently recognized with marquee recognition, get premier seating for 40 of its guests, and inclusion in a variety of ads and “E-News Blasts.”

Some good government groups hope Clyburn can arrange for a last-minute scheduling conflict to avoid the obvious conflict of interest of a cable operator honoring a commissioner who could decide the fate of its multibillion dollar merger deal.

“I think that the timing is curious,” said Carrie Levine, research director at Citizens for Responsibility and Ethics in Washington (CREW), which noted the corporate sponsorships in a blog post Monday. “They’re honoring an FCC commissioner at the exact same time they’re trying to get approval for a merger. And that doesn’t look so good.”

CREW found TWC listed as a “benefactor” on the event’s supporters’ page and the cost of a “benefactor” level table package at the dinner is $22,000. Comcast, meanwhile, is listed on the foundation’s web site as a “presenting sponsor” for the dinner, which costs $110,000.

Comcast is working minority groups hard for letters and votes supporting its merger with Time Warner Cable, notes CREW:

TWC and Comcast’s contributions in honor of Commissioner Clyburn were made at a time when the two companies are aggressively working the levers of power to get their merger approved. As CREW has noted, using honorary contributions to lawmakers and regulators’ favored charities to curry favor is one of the more under the radar moves in Comcast’s merger playbook—a playbook that also emphasizes lobbying, campaign contributions, and winning support from third-party groups, especially those representing minorities.

Regulators must approve the deal, and Congress has been scrutinizing it. Several lawmakers have voiced reservations in hearings about the merger’s potential impact, and this month, more than 50 House members sent Comcast and TWC a letter saying they should commit to carrying independent Latino-focused channels as a condition of the merger. In May, CREW found that between 2011 and 2013, Comcast had spent heavily to honor the Congressional Black Caucus (CBC) and the Congressional Hispanic Caucus (CHC), whose members could be important supporters of the merger. Comcast also gave big to the Asian Pacific American Institute for Congressional Studies (APAICS), honoring, among others, Rep. Judy Chu (D-CA), who is a member of the House Judiciary Committee’s Subcommittee on Intellectual Property and the Internet and supported the Comcast/NBC Universal Merger approval in 2011. TWC made fewer honorary contributions than Comcast during the same period, but also contributed $100,000 in honor of the CHC.

A review of the two companies’ 2014 mid-year lobbying contribution reports reveals money is still flowing to these key groups, and there has been a significant uptick in giving to the CHC. In the first six months of 2014, Comcast contributed $273,454 in honor of the CHC, more than the company contributed in any individual year between 2011 and 2013. Comcast also reported giving $125,000 in honor of the CBC and $50,000 to the APAICS in honor of Rep. Chu and Rep. Mike Honda (D-CA).

TWC increased its giving to other Latino advocacy groups as well. On February 18, 2014, the company contributed $25,000 to the League of United Latin American Citizens (LULAC) in honor of several members of Congress and Secretary of Labor Thomas Perez, an increase from its $20,000 contribution to LULAC in 2013. In addition, on March 5, 2014, Time Warner Cable contributed $25,000 to the National Council of La Raza (NCLR) in honor of the “Gang of Eight” senators who passed a comprehensive immigration reform bill in June 2013. TWC previously contributed a total of $45,000 between 2011 and 2012 to NCLR.

Stop the Cap! will continue to expose the names of elected officials and non-profit and civil rights groups that have thrown their support behind Comcast, which in turn delivers contributions, free exposure, and in some cases future employment with the cable operator.

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Syracuse Wants More Choices Than Comcast and Verizon: Considers Building Publicly-Owned FTTH Alternative

Downtown Syracuse (Image: Post-Standard)

Downtown Syracuse (Image: Post-Standard)

The city of Syracuse is facing an unpleasant broadband reality: the current cable company is about to be bought out by Comcast (which has usage caps in store for broadband customers) and the phone company has thrown in the towel on further expanding FiOS — fiber to the home broadband.

Mayor Stephanie Miner isn’t willing to let the city get trapped by a lack of broadband options from Comcast and Verizon, so she’s developing a plan to build a publicly owned alternative.

“I’m putting together a plan that we can do it ourselves, as a community,” Miner told the Post-Standard

If approved, Syracuse would join Chattanooga, Lafayette, La.,  Wilson and Salisbury, N.C., and several other cities providing local citizens with broadband speeds up to 1,000/1,000Mbps.

“Would we have to do that in phases? What would that look like? How would we pay for it? What would the model be? Those are all things that we are currently looking at, ” Miner noted.

Many of those questions have already been worked out by the best clearinghouse Stop the Cap! knows for excellent community broadband project development: the team at the Institute for Local Self Reliance.

The Community Broadband Networks Initiative of the Institute for Local Self-Reliance, works with communities across the United States to create the policies needed to make sure telecommunications networks serve the community rather than a community serving the network. The Institute for Local Self-Reliance is a non-profit organization that started in Washington D.C. in 1974.

ILSR’s Mission:

The Institute’s mission is to provide innovative strategies, working models and timely information to support environmentally sound and equitable community development. To this end, ILSR works with citizens, activists, policymakers and entrepreneurs to design systems, policies and enterprises that meet local or regional needs; to maximize human, material, natural and financial resources; and to ensure that the benefits of these systems and resources accrue to all local citizens.

No community should attempt to build a community broadband network without first consulting with ILSR. They are particularly effective at helping combat the misinformation campaigns that often arise when an incumbent duopoly discovers they are about to get serious competition for the first time.

If your community wants something better than the local cable and phone company, have your local official(s) E-mail or call Christopher Mitchell at ILSR: 612-276-3456 x209

With entrenched providers unwilling to meet the needs of communities for affordable fast Internet, more American communities are providing the service themselves, much as they take care of local roads, bridges, and other public infrastructure. Comcast’s toll information superhighway may work wonders for shareholders, but it leaves most customers cold. Syracuse, like most upstate New York cities, has also watched Verizon flee from investments in FiOS expansion beyond a handful of wealthy suburbs. Verizon has diverted much of its investment away from wired networks in favor of wireless, a much more profitable business.

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Rochester City Councilman Adam McFadden’s Love for Comcast (and the $50k)

McFadden

McFadden

Rochester city councilman Adam McFadden wrote a gushing letter in support of the merger deal between Comcast and Time Warner Cable published today on the N.Y. Public Service Commission website that doesn’t come close to fully disclosing the financial ties between Comcast and a lobbying group he presides over, funded in part by Comcast.

I write to you today from one of our state’s and the country’s oldest centers for enterprise and industry, Rochester. I am proud to represent my lifelong home as City Councilman for the South District. The proposed transaction between Time Warner Cable and Comcast has attracted a lot of attention here in New York, and deserves to be fully considered. I write to you today to urge your approval of the transaction so that Rochester residents, and New Yorkers across the state, can be empowered by Comcast’s innovative and dedicated service.

My area is currently served by Time Warner Cable, but would receive Comcast coverage following the approval of the transaction. I am lucky to represent my community not just locally, but on the national stage. Through my experience with the National League of Cities, and as the vice president of the National Black Caucus of Local Elected Officials, I’ve heard about Comcast’s track record of serving the public good in communities like mine.

We don’t doubt for a moment McFadden has “heard” about Comcast. McFadden is listed as president of the National Black Caucus of Local Elected Officials’ Board of Directors, a group whose website is emblazoned with Comcast’s logo as a generous “capstone partner” of the NBC-LEO and National League of Cities. Capstone partners must give an “annual investment” of at least $50,000. In fact, Comcast isn’t just a passive member of the group McFadden helps to run. Ron Orlando, senior director of Comcast’s lobbying/government affairs department sits on the group’s “Corporate Partners Leadership Council Roster.”

“The Council shares the perspectives of the corporate and not-for-profit sectors and makes recommendations for activities that promote the exchange of ideas between corporate and city leaders,” claims the website.

That is a nice way of saying corporate sponsors can use the group as a front to insert its corporate agenda into the public dialogue, while avoiding disclosure it is, in fact, pulling the strings. Capstone members get plenty of face time with the group… in private, through “exclusive access to the voluntary leadership and targeted member groups at NLC conferences and special VIP events.

But our favorite is allowing corporate members access to discounted mailing lists maintained by the NLC that left companies directly target elected and career officials in all cities with a population greater than 10,000 to spread their talking points.

McFadden’s constituents might be wondering whether he represents their interests or Comcast when he pens a letter to New York regulators urging them to allow an unpopular merger between two colossal cable companies. McFadden didn’t write his letter under the name(s) of the two groups that have direct financial ties to Comcast. He wrote it in his role as a city councilman.

We consider it highly unethical that McFadden did not disclose the strong direct financial ties between Comcast and the organizations he represents and has not exactly trumpeted his full-throated support for the cable merger deal among his constituents, who probably like Time Warner Cable and Comcast a lot less than he does. But then, $50,000 a year can bring a lot of goodwill if your group is getting the check.

[Update 1:30pm 8/12: We are told Mr. McFadden has denied knowledge of the $50k and claims he wrote the letter because he "hates Time Warner Cable." Nice try. Follow the links and get back to us about how we could find this information in about 10 minutes and you couldn't. If you hated Time Warner, you will despise Comcast... but then there is that $50,000 annually to think about.... - PMD"]

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Another Comcast Customer Service Catastrophe: $182 in Surprise Charges for a Service Call

The Don't Care Bears

The Don’t Care Bears

While regulators contemplate forcing 11 million Time Warner Cable customers to endure the hell on earth that is Comcast customer service, another horror story emerged this week from a California man who faced $181.94 more on his cable bill than he expected, all because of a service call to check on an Internet service problem that turned out to be Comcast’s fault.

While Time Warner Cable customers usually get an American customer call center to handle these problems, Comcast relies on English-challenged, underpaid offshore customer care dens staffed by “screen readers” that refuse to go off-script to handle the problems of Comcast customers like Tim Davis.

Before digging into the specifics of Davis’ $182 debacle, The Consumerist noted a critical admission from the Comcast call center agent – a word to the wise about getting your complaints about Comcast’s billing errors and inaccurate charges addressed: If you don’t record all of your calls with Comcast customer service to keep a complete audible record of their promises and commitments, you have absolutely no recourse to get invalid charges and other billing mistakes removed from your bill.

“[...]Since I advised my manager that there is a recording and you were misinformed, then she’s the one who can approve that $82,” said Comcast’s customer service representative.

Seemingly flabbergasted, Davis asks to confirm, “You’re telling me that if I didn’t have a recording of that call, you wouldn’t have been able to do it?”

“Yes, that is correct,” answers the rep, confirming that the only way to get Comcast to erase a bogus charge from your account is to have recorded evidence that you were promised in advance that the call would be free.

Davis decided to turn his Comcast nightmare into a NSFW YouTube video.

http://www.phillipdampier.com/video/Comcast Doesnt Do Service Credits Without a Recording Saying Otherwise 8-11-14.mp4

‘You want a service credit? Who the heck do you think you’re talking to. This is Vasee – Employee 5#$ at Comcast’s English-challenged offshore customer call center. We don’t do service credits. Oh wait, you have a recording?’ (Only Comcast would put $$$-signs in the ID numbers of their employees.) (Warning: Strong Language) (13:56)

Although initially promised there would be no charge for the service call because it was an “outside issue,” when Davis’ monthly Comcast bill arrived, there were several mystery charges totaling $181.94 for service call work that Davis said was never done.

fail

The charges represent a “failed video self-install kit,” a “failed Internet self-install kit,” and a wireless network set up charge for work Davis claims was neither sought or provided. Comcast automatically credited back the Wi-Fi setup fee and a portion of the other charges, still leaving Davis with $82 in fees to argue about for a “free service call.”

The representative insisted that Comcast charges $50 for every service call for any reason. That will be unpleasant news to Time Warner Cable customers who pay no fees for service calls that address technical issues that are not the fault of customers.

The Consumerist details the rest of the painful experience:

After being put on hold for an hour, Davis hung up and tried again, this time reaching a supposed “supervisor,” who points out that the $49.95 WiFi setup charge is offset by a $49.95 “service discount,” so that’s free… even though it shouldn’t have been charged to begin with.

She also says there is a $49.99 discount on the supposed “Failed Self Install,” meaning Davis is being charged $50 for the nonexistent failed install, plus the remaining $32 for the failed self-install kit charge. A total of $82 that is still being disputed at this point.

She then offers to give him “BLAST+” Internet service for 12 months free of charge instead of simply taking off the remainder of the questionable charges. This semi-upgrade only has a retail value of $60, meaning he’d still be on the hook for $22 for a call that he’d been told would be free.

Davis, understandably, doesn’t want a cheap Internet service upgrade spread out over 12 months. He wants and asks to have the full $82 refunded.

The rep balks, saying she can’t issue him the credit because it is a “valid charge.”

“Every time we send out a technician there’s a $50 charge for that,” she explains.

“Well, I have a call recorded where the agent tells me in no uncertain terms that there will be no charge,” counters Davis. “You can not bill me for something that I did not authorize. You can not tell me that it’s free, then bill me anyway and then tell me that you can not un-bill me or credit me for the bill.”

“I apologize for that, but there’s no way that I can credit the account,” says the rep, desperately trying to jump back on to her script. “We value you as a customer, that’s why I am trying to check what I can give you.”

As soon as Davis produced the recording that indicated there would be no charge, a senior supervisor quickly approved a credit — several calls and hours later.

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Stop the Cap!’s Letter to N.Y. Public Service Commission on Comcast/TWC Merger Deal

psctest

August 6, 2014

Hon. Kathleen H. Burgess
Secretary, Public Service Commission
Three Empire State Plaza
Albany, NY 12223-1350

Dear Ms. Burgess,

The country is watching New York to learn if our state regulators believe a merger between two unpopular cable operators is in the best interest of New York residents.

For the first time in a long time, the Public Service Commission has been empowered to provide much needed oversight over two companies that have enjoyed both deregulation and a near-monopoly across the region, particularly for High Speed Internet service at speeds above 10Mbps.

New Yorkers, like the rest of the country, consistently rank both Comcast and Time Warner Cable as some of the worst companies around.[1] The PSC has the power to facilitate franchise transfers that would effectively combine the two into one giant monolithic cable company dominating the northeastern U.S., or it can reject the proposed assignment of franchises to Comcast, letting both companies know “in the public interest” means something in New York State.

Section 222 of the New York Public Service law[2] provides the PSC with the authority to reject the application for a transfer of a franchise, any transfer of control of a franchise or certificate of confirmation, or of facilities constituting a significant part of any cable television system unless, and I paraphrase, the transfer is in the public interest.

The Commission is on record partly articulating its standard for determining the public interest. In 2013, the Commission stated several principles it considered in the matter of the acquisition of Central Hudson Gas and Electric by Fortis, Inc., to determine if the transaction would provide customers positive net benefits.[3] The Petitioners in that case were held to a standard requiring them to demonstrate the expected intrinsic benefits of the transaction exceeded its detriments and risks.

However, there are considerable differences between energy utilities and the largely deregulated marketplace for multichannel video distributors and broadband providers. While legacy telephone regulations still provide for significant oversight of this vital service, cable operators have won the right to set their own rates, service policies, and broad service areas.

Although many of us believe broadband has become an essential utility service, federal regulators do not, especially after telephone and cable companies have successfully lobbied on the federal level to weaken or eliminate regulation and oversight of television and broadband service with arguments they do business in a fiercely competitive marketplace.[4]

Regulators cannot compel cable operators to provide service in communities where they have chosen not to seek a franchise agreement, and broadband expansion programs in rural, unserved areas have largely only been successful when communities elect to construct their own broadband networks or federal funds (tax dollars and subsidies funded by ratepayers) defray the expense of last-mile networks.  While it is enticing to seek a voluntary agreement from the applicant to expand its rural service area, the public interest benefit to the relatively small number of New Yorkers getting broadband for the first time must be weighed against the interests of millions of existing subscribers in New York who are likely to see further rate increases, usage-limited broadband service, and worse service from Comcast.

New Yorkers will remain captive in most areas to choosing between one telephone and one cable company for packages of phone, television, and Internet access.[5] Promises of competition have never materialized for vast numbers of state residents, particularly those upstate who have been left behind after Verizon ceased its FiOS fiber to the home expansion project.

Unless Comcast was compelled to wire the entire state, any proposal seeking a voluntary agreement to expand Comcast’s service area in New York is likely to be insufficient to solve the pervasive problem of rural broadband availability. It would also saddle millions of New Yorkers with a company unwelcomed by consumers, with no alternative choice.

As you will see in our filing, Comcast has often promised improvements it planned to offer anyway, but held back to offer as a “concession” to regulators.

The result of past deals is one monopolistic cable operator is replaced by another, and as the American Consumer Satisfaction Index reported, bigger is not better for consumers.[6]

The nation’s two largest cable operators, Comcast and Time Warner Cable, now seek further “value creation” for their already very profitable businesses by merging.[7]

News reports indicate further consolidation is likely in the telecommunications marketplace, largely in response to this merger proposal. Soon after Comcast made its announcement, AT&T announced its desire to acquire DirecTV,[8] and Charter Communications’ efforts to bolster its size are likely to be realized acquiring Time Warner Cable customers cast off as part of the Comcast-Time Warner Cable transaction.[9]

How does this benefit New Yorkers? In our attached statement, we go far beyond the testimony offered by Comcast’s representative at the public information meeting we attended in Buffalo. It is vital for any merger review to include a careful analysis of exactly what Comcast is proposing to offer New York. But it is even more important to consider the costs of these improvements. As you will see, many of the promised upgrades come at a steep price – set top box platforms that require a $99 installation fee, the prospect faster broadband speeds will be tempered by broadband usage limits and usage penalties largely unfamiliar to New Yorkers, and other technology upgrades that are accompanied by subscriber inconvenience and added costs.

Comcast’s promised commitments for customers must also be carefully weighed against what it promised shareholders. While Comcast claims it will spend millions to upgrade acquired Time Warner Cable systems (many already being upgraded by Time Warner Cable itself), the merger announcement includes unprecedented bonus and golden parachute packages for the outgoing executives at Time Warner Cable, including a $78 million bonus for Time Warner Cable CEO Rob Marcus, announced less than 60 days after taking the helm.[10] Comcast’s biggest investment of all will be on behalf of its shareholders, who will benefit from an estimated $17 billion share repurchase plan.[11]

The PSC should be aware that previous efforts to mitigate the bad behavior of cable companies have nearly always failed to protect consumers.

Professor John E. Kwoka, Jr., in his study, “Does Merger Control Work? A Retrospective on U.S. Enforcement Actions and Merger Outcomes,[12]” found past attempts at behavioral remedies spectacularly failed to protect against rapacious rate increases after  mergers are approved.[13]

In short, it is our contention that this merger proposal offers few, if any benefits to New York residents and is not in the public interest even if modestly modified by regulators.

The implications of this transaction are enormous and will directly impact the lives of most New Yorkers, particularly for broadband, now deemed by the industry (and consumers) its most important product.[14]

We have attached a more detailed analysis of our objections to this proposal and we urge the New York Public Service Commission to recognize this transaction does not come close to meeting the public interest test and must therefore be rejected.

 

Yours very truly,

 

Phillip M. Dampier

[1]http://arstechnica.com/business/2014/05/comcast-time-warner-cable-still-have-the-angriest-customers-survey-finds/
[2]http://codes.lp.findlaw.com/nycode/PBS/11/222
[3]http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={A55ECCE9-C3B2-4076-A934-4F65AA7E79D1}
[4]http://www.mi-natoa.org/pdfs/The_Ten_Disappointments_of_Cable.pdf
[5]http://www.newyorker.com/news/daily-comment/we-need-real-competition-not-a-cable-internet-monopoly
[6]http://www.theacsi.org/component/content/article/30-commentary-category/179-acsi-quarterly-commentaries-q1-2008
[7]http://corporate.comcast.com/images/Transaction-Fact-Sheet-2-13-14.pdf
[8]http://www.usatoday.com/story/money/business/2014/05/13/att-directv-deal-analysis/9044491/
[9]http://www.reuters.com/article/2014/04/28/us-charter-communi-comcast-idUSBREA3R0N620140428
[10]http://money.cnn.com/2014/03/21/news/companies/time-warner-cable-golden-parachute/
[11]http://www.cleveland.com/business/index.ssf/2014/02/comcast_agrees_to_purchase_of.html
[12]John E. Kwoka, Jr., “Does Merger Control Work? A Retrospective on U.S. Enforcement Actions and
Merger Outcomes,” 78 Antitrust L.J 619 (2013)
[13]7 John E. Kwoka, Jr. and Diana L. Moss, “Behavioral Merger Remedies: Evaluation and Implications for
Antitrust Enforcement,” at 22, available at
http://antitrustinstitute.org/sites/default/files/AAI_wp_behavioral%20remedies_final.pdf
[14]http://online.wsj.com/news/articles/SB10001424052702303657404576359671078105148
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Stop the Cap’s Formal Written Submission Opposing Comcast-Time Warner Merger Filed With N.Y. PSC

(Ed. Note: Our formal written submission to the New York Public Service Commission is presented in this series of articles. Please note that any graphics included on Stopthecap.com were not included in the formal filing, but are presented here to make the material more reader-friendly. — PMD)

psctest

STATE OF NEW YORK

PUBLIC SERVICE COMMISSION


Joint Petition of Time Warner Cable Inc. and

Comcast Corporation For Approval of a                                       Case 14-M-0183

Holding Company Level Transfer of Control.


 

 

Statement of Opposition to Joint Petition
Phillip M. Dampier, Director and Founder: Stop the Cap!
Rochester, New York
August 1, 2014

Stop the Cap! is a not-for-profit group founded in Rochester in 2008 to fight against the introduction of artificial limits on broadband usage (usage caps, consumption billing, speed throttling) and for better broadband speeds and service for consumers. Our group does not solicit or accept funding from lobbyists, companies, or others affiliated with the telecommunications industry. We are entirely supported by individual donors who share our views.

telecompromising

Regulators cannot outsmart multi-billion dollar corporate giants with temporary merger mitigation strategies that end up not helping consumers for very long, if it all.

Introduction

Our opposition to the Joint Petition is based on our belief it does not meet the “public interest”  test established in Section 222 of the New York Public Service law, and must therefore be denied.

We are concerned the Commission may attempt a mitigation of Comcast’s failure to demonstrate a public interest benefit for New York residents in its application. The Commission may even attempt to negotiate a monetary public benefit adjustment to afford Comcast the opportunity to pay its way to approval of a merger the overwhelming majority of New Yorkers who have shared their views with the Commission ardently oppose. We submit that the recent change in New York law obligates the applicant alone to demonstrate its proposal is in the public interest. It is not the Commission’s responsibility to propose mitigation formulas that tip the balance in favor of an applicant.

Also lacking in the discussion is a careful analysis and comparison of Time Warner Cable’s existing products and services in contrast with Comcast and, more importantly, the impact of its own upgrade program now underway. It is our contention New York will be better served by retaining Time Warner Cable as the dominant cable provider and rejecting Comcast’s attempt to transfer Time Warner’s franchise agreements to itself. We are not opposed to Comcast independently entering New York and competing head-to-head with Time Warner Cable, although we believe it is unlikely.

Ultimately, we believe Comcast’s executive vice-president David Cohen made one of the strongest arguments why this merger simply does not make sense for New York:

“We are certainly not promising that customer bills will go down or increase less rapidly.”[1]

[1]http://arstechnica.com/tech-policy/2014/02/comcast-no-promise-that-prices-will-go-down-or-even-increase-less-rapidly/
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Comcast’s “Improvements,” Including Digital TV, Come at a High Cost for Customers

psctest

Comcast has offered the Commission a vague preview of how it intends to improve cable television service for New York customers, but rarely discloses important details about the costs and limitations their “improvements” will bring.

comcast octupusWhile Comcast is excited about the proposition of transitioning Time Warner Cable customers away from the current mixed analog-digital platform to an all-digital lineup, Time Warner Cable customers have paid less and avoided costly, unwanted extra equipment as a result of the choices consciously made by Time Warner Cable.

Comcast and Time Warner Cable have different philosophies about how to best deliver the bulging cable television packages most cable systems now offer:

  • Time Warner Cable adopted “Switched Digital Video” from BigBand Networks, a technology that lets Time Warner deliver only the digital signals that are being watched in a service group or node, instead of the entire lineup.[1] Since it is unlikely subscribers are watching every niche channel on offer, Time Warner has been able to reclaim unused bandwidth. As a result, customers using older cable-ready televisions can continue to access analog television channels without the use of a costly, often unwanted set top box.
  • Comcast has more aggressively chosen a  path to all-digital television service, moving most of their television channels to encrypted digital technology that requires a Comcast set top box, a less costly Digital Transport Adapter (DTA) designed for secondary-use televisions, or a CableCARD. Customers must choose one of these technologies, usually at an added-cost to access their cable television service.[2]

Time Warner Cable also began deploying DTA equipment in certain areas to free up additional bandwidth on its cable systems while still leaving most analog channels intact. The DTA boxes are supplied free of charge during an introductory phase lasting up to a year, after which a $0.99 monthly charge for each box is imposed.[3] (That fee has recently been raised in certain markets, including New York City, to $1.50/mo.[4] [5])

In contrast, Comcast customers were initially entitled to receive up to three no-cost DTAs to install on televisions not equipped with a Comcast set top box.[6]

comcast-cisco-dtaOn January 1, 2013 Comcast began informing subscribers a new $1.99/month “additional outlet service charge,” now applied for each DTA installed. [7]

Public officials in Eagan, Minn., responding to consumer complaints about the new charge, suspected Comcast was attempting an end run around the Federal Communications Commission’s prohibition of “excessive fees for cable equipment.”[8] The additional outlet fee was deemed by Comcast to be a service fee, not an equipment charge.[9]

Attorney Mike Bradley was hired by a group of suburban Minneapolis cable commissions to investigate the legitimacy of Comcast’s new DTA service charge. If the fee were classified as an equipment charge, Comcast would charge 50 cents per DTA based on rate forms filed with the Minnesota cable commissions he represents, Bradley told The Pioneer Press.[10]

For the average Comcast subscriber, the result was another rate increase in return for digital television service. Subscribers with three DTA’s now pay up to $5.97 extra per month in order to continue to receive the exact same programming on the same number of televisions within their household – a $25 annual surcharge per DTA, $75 if the customer uses three DTA’s, complained Eagan, Minn. Mayor Mike Maguire in a letter to Sen. Amy Klobuchar.[11]

Comcast’s fees, in addition to being well in excess of the actual cost of the equipment, will earn the company at least $550 million annually in new revenue – all for equipment that costs the company around $50 per unit.[12] Because Comcast is encrypting its lineup, even televisions equipped with QAM tuners, capable of receiving digital television signals without a set top box, will also eventually need the new equipment to unscramble television signals.

[1]http://www.cedmagazine.com/news/2009/09/time-warner-cable-serves-up-sdv-in-n.y.,-dallas,-l.a.
[2]http://customer.comcast.com/help-and-support/cable-tv/how-bill-will-change-with-digital-migration
[3]http://www.cedmagazine.com/news/2012/01/time-warner-cable-wraps-up-all-digital-conversion-pilot-in-maine
[4]http://www.twcableuntangled.com/2013/04/were-converting-analog-signals-to-digital-across-the-new-york-region/
[5]http://www.timewarnercable.com/en/residential-home/support/faqs/faqs-tv/basictvencryption/what-will-the-digital-adapter-cost.html
[6] http://www.twincities.com/ci_22617153/comcast-fee-plan-cause-confusion-controversy
[7]http://customer.comcast.com/help-and-support/cable-tv/how-bill-will-change-with-digital-migration
[8]http://transition.fcc.gov/Bureaus/Cable/News_Releases/nrcb4009.txt
[9]http://stopthecap.com/2013/02/21/comcast-calls-1-99-charge-for-digital-adapters-a-service-fee-to-avoid-fcc-complications/
[10]http://www.twincities.com/ci_22617153/comcast-fee-plan-cause-confusion-controversy?IADID=Search-www.twincities.com-www.twincities.com
[11]https://dl.dropboxusercontent.com/u/9008/pioneerpress/yourtechweblog/Eagan%20-%20Sen%20Klobuchar%20ltr%20re%20Cable%20Rate%20Concerns%203-5-13.pdf
[12]http://cisco-news.tmcnet.com/news/2011/04/25/5464600.htm
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Comcast’s Much-Touted “X1” Platform Includes a Steep $99 Installation/Upgrade Fee

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The most expensive set top box you will ever rent.

The most expensive set top box you will ever rent.

At all three public informational meetings, a Comcast representative promoted the benefits of Comcast’s new X1 set-top box/platform which can provide enhanced features and integrate with the Internet to provide more detailed programming information and social media interaction.

The Comcast representative did not mention that customers must pay up to a $99 upgrade fee for the privilege of renting Comcast’s X1 platform.[1] That is well in excess of the cost of an entire month of cable TV service.

Time Warner Cable does not charge an upgrade fee for its set top boxes, including the latest models.

[1]http://www.multichannel.com/news/content/comcast-details-x1-upgrade-fee/356207
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How Comcast’s Volume Discounts Will Kill Cable-TV Competition

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You can still read a book instead of everything else.

You can still read a book instead of everything else.

Allowing Comcast to dominate New York’s cable television marketplace will deter future competitors from entering the market, particularly for television programming.

One of the arguments made by proponents of the merger is the possibility of decreased wholesale television programming costs won through volume discounts available to the largest nationwide providers. Unfortunately for consumers, Comcast has already declared customers will not benefit from those discounts in the form of lower cable bills.

A prospective new entrant considering providing cable television service will face competition with Comcast without any benefit of volume discounts on programming.[1] That makes it unlikely a provider will offer a competing television package.

This is not a theoretical problem.

In Ohio, independent cable company MCTV discovered that while large cable operators like Comcast were benefiting from volume discounts, it faced contract renewal prices more than 40 times the rate of inflation.[2] Cable ONE, owned by the Washington Post, had to drop more than a dozen Viacom owned channels for good because it could not afford the asking price.[3]

MCTV president Bob Gessner reminds us of just how concentrated the entertainment business has become, noting that nine media companies (Comcast is one of them) now control 95% of all paid video content consumed in the United States.[4]

MCTV’s survival plan includes membership in the 900-member National Cable Television Cooperative, the only way smaller providers can pool resources and win discounts of their own. It is no longer effective as mergers and acquisitions continue to consolidate the cable and telco-TV business. All 900 NCTC members serve a combined five million customers. Comcast has 21 million, DirecTV: 20 million, Dish Networks: 14 million, and Time Warner Cable: 11 million.[5]

media_consolidation

AT&T confesses it cannot compete effectively with Comcast and other larger competitors for the same reason. AT&T’s solution, like Comcast, is to buy a competitor, in this case DirecTV.[6]

Frontier Communications faced a similar problem after adopting Verizon FiOS franchises in Indiana and the Pacific Northwest after purchasing Verizon landline networks in several states. When Frontier lost Verizon’s volume discounts on programming, Frontier’s solution was to begin a marketing campaign to convince its fiber customers to abandon the technology and switch to one of its satellite television partners.[7]

[1]http://www.fiercecable.com/story/comcast-twc-deal-will-squeeze-programming-and-technology-vendors/2014-02-13
[2]http://stopthecap.com/2014/06/05/independent-cable-companies-unify-against-cable-tv-programmer-rate-increases/
[3]http://online.wsj.com/articles/viacom-60-cable-firms-part-ways-in-rural-u-s-1403048557
[4]http://stopthecap.com/2014/06/05/independent-cable-companies-unify-against-cable-tv-programmer-rate-increases/
[5]http://stopthecap.com/2014/06/05/independent-cable-companies-unify-against-cable-tv-programmer-rate-increases/
[6]http://www.bloomberg.com/news/2014-05-02/dish-or-directv-need-deal-most-in-at-t-love-triangle-real-m-a.html
[7]http://stopthecap.com/2011/08/16/frontiers-fiber-mess-company-losing-fios-subs-landline-customers-but-adds-bonded-dsl/
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