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Thoughts on the NY Public Service Commission’s Information Meeting in Buffalo on Comcast-TWC Merger

Phillip "The new unofficial spokesman of Time Warner Cable?" Dampier

Phillip “The new unofficial spokesperson for Time Warner Cable?” Dampier

I testified last evening at the Buffalo Public Information Meeting held by the New York Public Service Commission on the merger of Comcast and Time Warner Cable.

The regulator invited four witnesses to testify about the merger last evening. The other three:

  • Mark E. Reilly, Comcast’s senior vice president of government affair, northeast division (for);
  • Aaron Bartley, executive director of PUSH Buffalo (against);
  • Christine Carr, executive director of Computers for Children (neutral).

The meeting was sparsely attended with only about two dozen in the audience, a good number of those arriving from Rochester. Also in attendance were groups with direct financial connections to Comcast, some partly disclosed during the evening, others not. Readers will not be surprised they were strongly in favor of the merger. Common Cause was represented and was clearly against the merger, although their representative also had harsh words for Time Warner Cable.

Niagara County Legislator David E. Godfrey (R-Wilson) and Orleans County Legislator Lynne M. Johnson (R-Lyndonville), representing the Niagara Orleans Regional Alliance, spoke on behalf of rural New Yorkers who lack broadband service. Neither went on record opposing the merger but seemed to suggest its approval be tied to a rural broadband solution. The record on successfully pulling that off in earlier deals has been mixed at best. The cable industry treats its Return On Investment formulas like a biblical text. If expanding service isn’t going to make the companies money in the short term, it is very unlikely to happen. We believe New York’s broadband subsidy program is a better deal for consumers if it means keeping Comcast out of New York.

The audience was almost entirely silent during the event and it wrapped up earlier than originally planned. Buffalo seemed less engaged on broadband issues than I would have expected. Had the hearing been held in Rochester, I have no doubt the audience would have been far larger. Broadband matters in Rochester have always drawn crowds and significant news coverage. One Buffalo resident offered that the PSC chose its meeting location poorly — on “an out of the way” college campus in Amherst now in summer session that charges for parking (although we did park for free). Others have told us the meetings were poorly advertised. Thankfully, the PSC is keeping the record open for comments in writing and by phone.

The strongest contrast of views came from testimony from Mr. Reilly and myself, although the meeting was not configured as a debate.

Reilly

Reilly

Mr. Reilly did not seem well-informed about specifics regarding Comcast’s products and pricing. He stumbled through incomplete answers when asked directly (twice) to compare Comcast’s prices against Time Warner Cable. Unfortunately, the question and answer session did not allow for interjection from other witnesses, because if it did, I was more than ready to help Mr. Reilly answer that question because I brought the rate cards for both companies with me. Perhaps he did not want to answer, because as the evidence clearly shows, Comcast costs more.

He also implied Comcast had widely deployed up to 505Mbps broadband service in its service area. Speeds of 300-500Mbps are offered only to a limited number of customers that can, number one afford the high asking price ($300/month plus installation fee) and second are passed by Comcast’s fiber or Metro Ethernet networks.

We also disagreed over usage caps. Reilly claimed the average Comcast customer used just 17GB a month. Comcast’s own website claims median monthly data usage is 20-25GB per month. But according to Digital Trends, the average family with Internet-only service uses 212GB of data each month — more than seven times those who watch traditional television. That is because after cutting cable-TVs cord, they are watching shows over their broadband connection. That number is rising, and fast. Over the four years Comcast had a nationwide cap, it did not adjust it upwards even once to account for broadband growth.

Independent analysis from Sandvine found that Internet users, in general, are accessing increasingly larger amounts of data. The overall mean usage on North American fixed-access networks (as opposed to mobile networks) was 51.4 GB in March, which is up from the 44.5 GB noted in Sandvine’s most recent previous study. Cord-cutters as a whole now dominate network usage, accounting for a 54-percent majority of total monthly network traffic. Cord-cutters are also responsible for some of the cable industry’s biggest revenue challenges with their television packages.

The old industry meme that usage caps affect only a tiny minority of customers was also trotted out. We did not have the opportunity to ask, “if only a tiny percentage of customers exceed their allowance, why bother with usage caps at all?”

Time Warner Cable was not represented at the meeting, and in an ironic twist, that left me as their unofficial spokesbooster. In fact, nobody seemed aware of Time Warner Cable’s Maxx upgrade program which is delivering faster, more affordable Internet access than Comcast offers over its cable broadband network without the threat of looming usage caps.

Jump through hoops for $9.95 Internet

Jump through hoops for $9.95 Internet

Internet affordability emerged as a major topic last evening. Predictably Comcast touted its $9.95 Internet Essentials program without mentioning its highly restrictive pre-qualification requirements:

The program is only available to households that (i) are located where Comcast offers Internet service; (ii) have at least one child who receives free/reduced rate school lunches through the National School Lunch Program (the “NSLP”) and as confirmed annually while enrolled in the program; (iii) do not have an overdue Comcast bill or unreturned equipment; and (iv) have not subscribed to any Comcast Internet service within the last ninety (90) days (sections 1(i)-(iv) collectively are defined as “Eligibility Criteria”). The program will accept new customers for three (3) full school years, unless extended at the sole election of Comcast. Comcast reserves the right to establish enrollment periods at the beginning of each academic year in which it accepts new customers that may limit the period of time each year in which you have to enroll in the program.

2. In order to confirm your eligibility for the program, Comcast will need to verify that your children receive free/reduced rate school lunches through the NSLP in the initial enrollment year and each subsequent year you are enrolled in the program. In order to confirm eligibility, participants in the program will be required to provide copies of official documents establishing that a child in the household is currently receive free/reduced rate school lunches through the NSLP. Each year you will be required to reconfirm your household’s current eligibility by providing Comcast or its authorized agent with up-to-date documentation. If you fail to provide documentation proving your eligibility in the program, you will be deemed no longer eligible to participate in the program.

3. You will no longer be eligible to participate in the program if (i) you no longer have at least one child living in your household who receives free/reduced rate school lunches under the NSLP; (ii) you fail to maintain your Comcast account in good standing; (iii) Comcast ceases to provide the Covered Service to your location; or (iv) your account opened under the program is closed. A change in address may result in your account being closed, even if you continue to receive Comcast services at a different address. Program participation also may be terminated if the Covered Service is upgraded, altered or changed by you for any reason. If you are no longer eligible for the program, but continue to receive the Covered Service from Comcast, regular rates, and any other applicable terms and conditions will apply to the Covered Service.

In brief, you can only qualify if you don’t have Comcast Internet service already. If you do, Comcast demands you stay without Comcast Internet service for at least 90 days before applying (good luck making that work). This is nothing more than a revenue protection mechanism for Comcast so that customers don’t downgrade to discounted Internet. Only poor families with school age children qualify and Comcast intrusively re-verifies eligibility regularly. Had a past due bill in the past or loss/stolen equipment? You are not qualified. Miss a payment? Comcast can kick you off the program. Try to upgrade any part of your Comcast package? You are done with Internet Essentials. Move to a new address? Your Internet discount isn’t going with you.

John Randall from the Roosevelt Institute came to a similar conclusion:

Comcast’s Internet Essentials program does more to benefit Comcast’s customer acquisition, public relations, and lobbying departments than to help people in America who need high-speed Internet access at a reasonable price. The reality is that the program is a cleverly designed customer acquisition program that benefits Comcast’s bottom line.

It was also a cynical way to help Comcast win approval of its merger with NBCUniversal. Comcast held back the program until they could use it as a political chip in their merger lobbying campaign. As we reported back in 2012:

In 2009, Comcast insiders were hard at work on a discount program for the disadvantaged who could not afford Comcast’s regular prices for broadband service. But the program was stalled at the direction of Cohen, who wanted it to be a chip with regulators to win approval of its acquisition of NBC-Universal. The program, sure to be popular among advocates of the digitally disadvantaged, was a key part of approving the $30 billion deal.

“I held back because I knew it may be the type of voluntary commitment that would be attractive to the chairman [of the FCC],” Cohen said in a recent interview.

You would probably take this used car to a mechanic before deciding whether to buy. Why doesn't Comcast know the state of Time Warner's cable systems before they made an offer?

You would probably take this used car to a mechanic before deciding whether to buy. Why doesn’t Comcast know the state of Time Warner’s cable systems before they made a $45 billion offer?

Lastly, Mr. Reilly repeatedly confessed Comcast did not know the state of Time Warner Cable’s system and equipment and could not answer questions about precisely how much Comcast would invest in upgrades. He admitted Comcast’s part-acquisition of Adelphia Cable (its systems were largely divided up between Comcast and Time Warner) resulted in a major under-estimate of repair and upgrade work required.

If I buy a used car, I take it to an expert who can describe its current condition, alert me to likely service required both now and in the near future, and predictions about the vehicle’s anticipated lifetime. Apparently Comcast buys cable systems sight-unseen.

It was widely known in the industry at the time that troubled Adelphia Cable properties were neglected as the company neared bankruptcy. Imagine Adelphia as a metaphor for the state of Sears or K-Mart these days.

Two members of the Rigas family that founded Adelphia were convicted on multiple charges of securities fraud, conspiracy to commit bank fraud and bank fraud. Prosecutors said the Rigases hid the fact the company was dangerously overextended with $2.3 billion in unreported debts. The family used the company’s bank accounts to finance a range of personal follies, including 100 pairs of slippers for Timothy Rigas and more than $3 million to produce a film by John Rigas’ daughter. We don’t know if the film was actually any good.

At the end of the evening in Buffalo, we were still left with the impression Comcast’s promises and commitments were vague and the much-touted benefits were much to be desired as soon as you began reading the fine print.

But frankly, I was disappointed by the low turnout. Consumers who do not want Comcast to be their next Internet provider -must- make their feelings known or that is precisely what is going to happen. We need all New Yorkers within travel distance of Albany or New York City to pack the PSC’s meeting rooms and have the courage to get up and speak. You can talk for 30 seconds or 3-5 minutes. You can also write or call the PSC if you want to extend your remarks in writing. New Yorkers have the power to throw a major wrench into a deal very few of us wants. But only if they make their voices heard:

Wednesday, June 18

SUNY Albany
Performing Arts Center
1400 Washington Avenue
Albany

6:00 pm: Informational Forum
7:30 pm: Public Statement Hearing

Thursday, June 19

NYS DPS Office
90 Church Street
New York

Please bring ID with you.

6:00 pm: Informational Forum
7:30 pm: Public Statement Hearing

Those who cannot attend or prefer not to speak at a public statement hearing may comment electronically to Hon. Kathleen H. Burgess, Secretary, at [email protected] or by mail or delivery to the Secretary at the Public Service Commission, Three Empire State Plaza, Albany, New York 12223-1350. Comments should refer to “Case 14-M-0183, Petition of Comcast Corporation and Time Warner Cable Inc.”

Toll-Free Opinion Line: You may call the Commission’s Opinion Line at 1-800-335-2120. This number is set up to take comments about pending cases from in-state callers, 24 hours a day. Press “1″ to leave comments, mentioning the Comcast/Time Warner merger.

All comments provided through these alternative methods should be submitted, or mailed and postmarked, no later than July 31, 2014. All such statements and comments will become part of the record and be reported to the Commission for its consideration.

All submitted comments may be accessed on the Commission’s Web site at www.dps.ny.gov, by searching Case 14-M-0183.

N.Y. Regulator Rules Details About Verizon’s Landline Network Are Not Confidential Company Secrets

Phillip Dampier November 6, 2013 Consumer News, Public Policy & Gov't, Rural Broadband, Verizon, Wireless Broadband Comments Off
Verizon gets out the black marker to redact information in declares "confidential."

Verizon gets out the black marker to redact information it considers “confidential.”

The New York Public Service Commission Monday rejected most of Verizon’s request to keep secret the state of its landline network and details about the company’s plans to distribute Voice Link as an optional wireless landline replacement in the state.

Nearly two months after Verizon announced it was abandoning its original plan to replace defective landlines on Fire Island with Voice Link, Verizon is bristling over a Freedom Of Information Law (FOIL) request from consumer advocates and a union for disclosure of reports filed with the PSC regarding Verizon’s network and its upkeep — information the company considers confidential trade secrets. To underline that belief, Verizon provided the PSC with edited versions of documents it filed with the state considered suitable for public disclosure, one consisting of 330 pages of blanket redactions except for the page headings and page numbers.

“[These discovery requests] are designed solely to advance the Communications Workers of America’s self-serving efforts to prevent Verizon from offering its Voice Link product, even on an optional basis, and to investigate the relationship between Verizon and Verizon Wireless — matters that are beyond the scope of this or any other pending Commission proceeding,” wrote Verizon deputy general counsel Joseph A. Post. “On September 11, 2013, Verizon announced that it had decided to build out a fiber-to-the-premises (“FTTP”) network on western Fire Island, and targeted Memorial Day 2014 for the completion of construction and the general availability of services over the new network.”

The PSC disagreed with Post, ruling the majority of documents labeled “confidential” by Verizon were, in fact, not.

“[…] The information claimed by Verizon to be trade secrets or confidential commercial information does not warrant an exception from disclosure and its request for continued protection from disclosure is denied,” ruled Donna M. Giliberto, assistant counsel & records access officer at the Department of Public Service.

Verizon has until Nov. 14 to file an appeal.

Common Cause New York, the Communications Workers of America-Region 1, Consumers Union, the Fire Island Association, and Richard Brodsky used New York’s public disclosure laws to collectively request documents shedding light on their suspicion Verizon has systematically allowed its landline facilities to deteriorate to the point a wireless landline substitute becomes a rational substitute. They also suspect Verizon diverted funds intended for its landline network to more profitable Verizon Wireless.

“In spite of its obligations under New York law, in spite of the investment by ratepayers in the FIOS wireline system, in spite of the needs and expectations of the people, businesses and economy of the state, Verizon is intending to and has begun to shut down its wireline system,” declared the groups.

Many involved took note of Stop the Cap!’s report in July 2012 that warned then-CEO Lowell McAdam had plans to decommission a substantial part of Verizon’s copper landline network, especially in rural areas, where it intended to replace it with wireless service:

Verizon-logo“In […] areas that are more rural and more sparsely populated, we have got [a wireless 4G] LTE built that will handle all of those services and so we are going to cut the copper off there,” McAdam said. “We are going to do it over wireless. So I am going to be really shrinking the amount of copper we have out there and then I can focus the investment on that to improve the performance of it. The vision that I have is we are going into the copper plant areas and every place we have FiOS, we are going to kill the copper. We are going to just take it out of service and we are going to move those services onto FiOS. We have got parallel networks in way too many places now, so that is a pot of gold in my view.”

Some consumer groups suspect Fire Island represented an opportunity to test regulators’ tolerance for a transition away from copper landlines in high cost service areas. As Stop the Cap! reported this summer, New Yorkers soundly rejected Verizon Voice Link, with more than 1,700 letters opposing the wireless service and none in favor on record at the PSC.

In early September, a well-placed source in Albany told Stop the Cap! Verizon’s request to substitute Voice Link where it was no longer economically feasible to maintain landline infrastructure was headed for rejection after a constant stream of complaints arrived from affected customers. Verizon suddenly withdrew its proposal on Sept. 11 and announced it would bring FiOS fiber optics to Fire Island instead.

Although Verizon now insists it will only offer Voice Link as an optional service for New York residents going forward, public interest groups still believe Verizon has allowed its landline network to deteriorate to unacceptable levels.

Verizon originally claimed 40% of its facilities on Fire Island were damaged beyond repair when they were assessed after Hurricane Sandy. But residents claim some of that damage existed before the storm struck last October. Some fear Verizon is engaged in a self-fulfilling prophecy, allowing its unprofitable copper wire facilities to fall apart and then point to the sorry state of the network as their principle argument in favor of a switch to wireless service.

Herding money, resources, and customers to Verizon Wireless

Herding money, resources, and customers away from landlines to Verizon Wireless

“In fact, the vast majority of defective lines are a consequence of the failure and refusal of Verizon to maintain and repair the system over time,” the groups assert. “The Commission must make a factual determination of the cause of the 40% defect allegation as part of this proceeding. If, as asserted herein and elsewhere, the evidence shows a pattern of inadequate repair, maintenance and capital investment, the Commission can not and should not approve any loss of wireline service to any customer, as matters of law and sound policy.”

“We assert that Verizon has systematically misallocated costs thereby distorting the extent to which the wireline system has suffered losses, if any. […] It is fair to say that substantial losses in the landline system are repeatedly used by the Commission and the Company as a justification for rate increases and regulatory decisions affecting the scope, cost, adequacy and nature of telephone service provided to customers of Verizon NY.”

Verizon would seem to confirm as much.

In 2012, Verizon’s chief financial officer Fran Shammo told investors the company was diverting some of the costs of Verizon Wireless’ upgrades by booking them on Verizon’s landline construction budget.

“The fact of the matter is wireline capital — and I won’t get the number but it’s pretty substantial — is being spent on the wireline side of the house to support the wireless growth,” said Shammo. “So the IP backbone, the data transmission, fiber to the cell, that is all on the wireline books but it’s all being built for [Verizon Wireless].”

Funds diverted for Verizon Wireless’ highly profitable business were unavailable to spend on Verizon’s copper wire network or expansion of FiOS. In 2011, Verizon diverted money to deploying fiber optics to 1,848 Verizon Wireless cell towers in the state. In 2012, Verizon deployed fiber to an extra 867 cell tower sites in New York and Connecticut. Public interest groups assert the costs for these fiber to the cell tower builds were effectively paid by Verizon’s landline and FiOS customers, not Verizon Wireless customers.

lightningSince 2003, Verizon has been subject to special attention from the New York Public Service Commission because of an excessive number of subscriber complaints about poor service. As early as a decade ago, the PSC found Verizon’s workforce reductions and declining investment in its landline network were largely responsible for deteriorating service. Each month since, Verizon must file reports on service failures and its plans to fix them.

In September alone, Verizon reported significant failures in service in rural areas upstate, almost entirely due to the weather:

  • Heuvelton: A summer filled with significant thunderstorms resulted in downed poles and service disruptions. Verizon reported the central office serving the community was in jeopardy in June. By mid-July, 7% of customers reported major problems with their landline service.
  • Amber: Nearly 11% of customers were without acceptable service in May because a 100-pair cable serving many of the community’s 274 customers was failing.
  • Chittenango: Nearly 9% of the community’s 1,059 landline customers had significant problems with service because Verizon’s central office switching system in the exchange was failing.
  • Sharon Springs: Almost 11% of Verizon’s customers in this small rural office of 417 lines were knocked out of service in July.
  • Elenburg Dept.: More than 8% of Verizon’s 324 lines in this rural Adirondack community were out of service, usually as a result of a thunderstorm passing through.
  • Hartford: When it rains hard in this Adirondack community, landline service fails for a substantial number of customers. In September, 2.43 inches of rain left 12.4% of customers with dysfunctional landline service.
  • Valley Falls: Nearly one-third of Valley Falls’ 722 landlines were out of service in September after lightning hit several Verizon telephone cables. Problems only worsened towards the end of the month.
  • Kendall: Almost 9% of Verizon customers in the Rochester suburb of Kendall were without service after a rain and wind storm. When a cold front moves through the community, landlines service is threatened.
  • Bolivar: More than 20% of customers lost service July 19th after heavy rain, winds, and power outages hit.
  • Cherry Valley: Verizon blamed seasonal service outages in Cherry Valley on farmers that dig up or damage buried telephone cables. More than 7% of customers were knocked out by harvested phone lines in July.
  • Edmeston: More rain, more service outages for the 801 landlines in this small community in area code 607. More than 13.5% of customers called in with complaints in July. Verizon blamed heavy rain.
  • Clinton Corners: Service failures come after nearly every heavy rainfall due to multiple pair cable failures in the aging infrastructure. More than 9% of customers reported problems in June, 13.2% in July, 8.2% in August, and 12.5% in September.

Verizon’s landline trouble reports disproportionately come from rural communities, exactly those Verizon’s former CEO proposed to serve by wireless. Weather-related failures are often the result of deteriorating infrastructure that results in outages, especially when moisture penetrates aging cables. Rural communities are also the least-likely to be provided fiber service, exposing customers to a larger percentage of the same copper wiring critics charge Verizon is allowing to deteriorate.

Time Warner Cable Introduces New 30GB Usage-Capped Billing Plan in Rochester, N.Y.

twc logoIn addition to an August broadband rate increase for western New York’s Time Warner Cable customers, those in Rochester will also be among the first to experience a new 30GB usage-capped billing option for broadband service.

The subject of usage-based billing is a major sore spot for customers in the Flower City, who joined forces with customers in Greensboro, N.C., and San Antonio and Austin, Tex. to force the cable company to shelve a mandatory usage billing scheme announced in 2009. Stop the Cap! was in the middle of that fight, although this group was founded after Frontier Communications proposed a 5GB usage cap the summer before.

Time Warner Cable CEO Glenn Britt personally promised Sen. Charles Schumer (D-N.Y) that the cable company would yank its planned experiment with usage caps and consumption-based billing after it became clear Rochester and other cities were being singled out where Verizon FiOS would never offer competition, making it seem Time Warner was taking advantage of a lack of broadband competition to charge dramatically higher prices.

In 2009, Time Warner Cable planned to implement mandatory usage pricing starting in Rochester, N.Y., Greensboro, N.C., and San Antonio and Austin, Tex.

In 2009, Time Warner Cable planned mandatory broadband usage pricing starting in Rochester, N.Y., Greensboro, N.C., and San Antonio and Austin, Tex.

But Britt has never stopped believing in usage pricing, and Time Warner has since switched to a more gradual introduction of the pricing scheme, this time offering discounts to customers that agree to limit their Internet usage.

Time Warner’s current usage billing plan offers a meager $5 discount to those who limit consumption to less than 5GB per month. That plan was originally introduced in Texas and Time Warner Cable employees confidentially tell Stop the Cap! it has attracted almost no interest from customers.

Now Time Warner Cable plans to introduce a second usage limited plan, with a yet to be disclosed discount for subscribers who keep Internet usage under 30GB a month.

“Those who use the Internet for e-mail or to surf the web need not pay the same rates as those who download games and the like,” said company spokesperson Joli Plucknette-Farmen.

As far as we can tell, the 30GB capped plan is new for Time Warner Cable and Rochester will be among the first communities to experience it. Unless the company chooses to more aggressively discount both the 5GB and 30GB plans, we expect few customers will take Time Warner Cable up on their offer.

For now, Time Warner says the usage capped plans are optional and that flat rate Internet service will continue. But company executives have not said for how long or what the company might choose to eventually charge for unlimited broadband usage.

Britt has stressed repeatedly he wants customers to get re-educated to accept “a usage component as part of broadband pricing.” But customers may not accept that, particularly considering the cable company already enjoys a 95% gross margin on flat rate broadband service.

Time Warner Cable Converting PEG Channels to Digital-Only Viewing in Upstate NY

Phillip Dampier July 2, 2013 Consumer News, Time Warner Cable Comments Off

timewarner twcTime Warner Cable subscribers in New York and New England are receiving letters notifying them their local public access, educational, and government (PEG) channels are being removed from the analog television lineup and switched to a digital-only format.

Time Warner Cable is moving towards a higher quality, digital only experience to provide better picture and sound, more HD channels, and more robust Internet speeds. Delivering channels in digital format is one way we continue to improve the quality of our service.

Starting on or about July 23, local Public, Educational, and Government access programming will be delivered in digital format only. These channels will remain in your existing package, however they will only be viewable with digital equipment, such as a TWC supplied digital set-top box, Digital Adapter or CableCARD.

If you want to view these channels on a TV without digital equipment, you may request Digital Adapters and remote controls free of charge through Sept. 23. Beginning Jan. 1, 2015 each Digital Adapter will cost 99 cents a month.

Time Warner has since had to stress the forthcoming changes will not affect local public television (PBS) affiliates.

QAM-capable sets will be able to continue accessing the channels, although Time Warner provides only basic information about how to find them. If customers want a Time Warner technician to install a Digital Adapter, there is a fee of $39.99.

Time Warner Cable is not following other cable operators that have switched most of their channels to digital-only service. Instead, it is gradually moving a handful of channels at a time and moving others to a bandwidth-saving “Switched Digital Video” format that only delivers certain networks in neighborhoods where those channels are actually being watched. Unfortunately, SDV technology is not currently compatible with Time Warner’s Digital Adapters, so customers without full-featured digital set-top boxes will still lose more than a dozen channels on older sets.

Location Impacted
Date
New England 7/23/13
Central NY, Southern Tier, North Country 7/23/13
Albany, NY (Capital Region and Berkshires) 7/23/13
Western NY (Rochester, Buffalo and surrounding areas) 7/23/13

Frontier’s Latest Gambit: Frank the Buffalo Is Company’s First-Ever Mascot

Frontier's new mascot

Frontier’s new mascot

I’m sure more than a few readers work for a company with a marketing department that churns out advertising and imagery that leaves you shaking your head wondering what they were thinking.

There are some employees at Frontier Communications who are head-scratching this week as the company unleashes “Frontier’s First Ever Spokesman.”

His name is Francis Abraham Buffalo (his friends get to call him “Frank.”) He’s a… buffalo.

An internal memo obtained by Stop the Cap! informs employees Frank is prepared to bulldoze his way through “the clutter and get consumers buzzing.”

“Think of the Aflac duck and the Geico gecko,” a Frontier executive writes. “People have a truly positive association with them that translates into a positive feeling for those companies.”

But can a new mascot really change perceptions about a company more than the quality of the products or services a company provides (or doesn’t)?

For the record, your editor has never been particularly moved by either the duck or the gecko, and I, along with many other Americans, stopped watching television commercials years ago with the advent of the DVR. I have also never bought a product or service based on anything other than its merits and price. Frontier’s buffalo will not change that.

The mascot search involved a nationwide focus group of at least 800 customers and non-customers who were shown a series of “try-outs” involving lip-synched ducks, pigs, and various other creatures you may have last encountered as roadkill.

“Frank was the top choice, lifting our preference rating over the competition by 8 points and decreasing the competition by 3 points.  That’s a net 11 point increase for Frontier and solid support that we’re on the right path,” the company trumpets.

frontierOf course, their cable competitors can always suggest while Frontier is busy playing with animals, they are delivering far faster broadband service and a better package of phone, broadband, and television service that does not involve a third-party satellite dish stuck on your roof.

Even some Frontier employees were less than enthusiastic about the endeavor, already predicting the response ads from the competition.

“I thought the pig would’ve been a better choice,” writes one. “I can just see the competition running ads about not getting ‘Buffaloed’ by Frontier!”

Most of the excitement among employees seems to emanate from the office that envisioned the campaign and spent a lot of money to make it happen.

“A landmark decision in the continuing evolution of Frontier,” jokes a Frontier worker less than thrilled with the result.

Even Frontier executives admit that Frank might be a big, fat target:

“We have also heard some concerns from our employees that we are proactively addressing in the campaign so our competitors won’t take advantage of our new brand spokesperson.”

“Frank will be a boffo buffalo. A solid, truth-talking machine that doesn’t like fuss or tricks – and neither do we.   We play it straight — price guarantees and no contracts make it easy for consumers to understand our products and services.  So if anyone asks, Frank is not here to “buffalo” or trick anyone (call Cable if you want that!).  He doesn’t deal with BS or malarkey, and that means no hidden fees, no surprises.”

Phillip "It's actually an American bison" Dampier

Phillip “It’s actually an American bison” Dampier

Frontier is asking for advice on how to make Frank a better buffalo and offer any additional feedback. At Stop the Cap! we are always willing to help, so we publicly offer advice for our hometown phone company.

  1. The American buffalo is actually the American bison, but that probably sounds too French (it is actually Greek, but nobody wants to get too close to Greece these days). The bison’s story is remarkably similar to phone companies like Frontier. It once roamed across the American landscape in great herds but was targeted to near extinction. Just like your landline. It still maintains “near threatened” status, and is only gradually making a comeback with the help of conservation efforts. While our ancestors shared their lives with the bison, most people today will only meet one in a zoo or park. We are unsure why Frontier would want to associate itself with an animal best known in the past and unlikely to be seen today.
  2. Lip-synching animals (and babies) has become cliché. We were not too impressed with the voice talent Frontier decided to use for their animals either. Instead, check out Telus, western Canada’s biggest phone company. They turn animal wrangling into an art form, using various critters in their ads for phone, broadband, and wireless service. Telus compliments their animal friends with Canadian musicians to visually and musically deliver whatever message the company wants to share.
  3. While Frontier may have eliminated some of its old tricks like contract termination, equipment, service protection, and surcharge fees from customer bills, many of us have long memories of the surprise steep cancellation fees charged when dropping landline service that we kept for 20+ years. Others found Frontier’s inadequate DSL only slightly less annoying than the $100+ service termination fee thrown on the last bill. Some of those fees are still being charged to customers, including a particularly silly broadband account service order charge that still stings departing customers. It is hard to accept Frontier’s new marketing messages when the company is still baiting the traps.
  4. Frontier’s reputation problem does not come from poor advertising. It comes from a poor selection of products and services. Frontier until recently has simply refused to keep up with the reality of today’s broadband market. Sorry, basic DSL will no longer cut it, particularly when a competitor arrives. Cable can still out-class Frontier’s broadband products even after upgrades to ADSL2+ and VDSL. Frontier bills are still loaded with surprise surcharges and extras that raise the out-the-door price, sometimes even higher than what cable charges. The more important question to ask focus groups is why people do business with Frontier. Is it because they have to or they want to?

Frontier still does not evoke “cutting edge” anything. Frontier FiOS, inherited from Verizon, is the child nobody wants to talk about.

For years, Frontier only offered ADSL at speeds that stopped keeping up with cable a decade ago, even in large metro areas like Rochester, N.Y. When the company advertised “up to” in association with broadband speeds, it meant it: advertise up to 12Mbps but deliver service as slow as 3.1Mbps. With VDSL, 25Mbps might be doable, but cable already offers 30/5 or 50/5Mbps that is a sure thing.

Frontier’s landline service is generally reliable and works even with a power outage if you have a wired phone. But the company charges too much for a phone line many people are now jettisoning in favor of their cell phone and the company is still pushing long distance calling plan bundles that are now irrelevant. Does anyone under 35 know what a toll-call is?

Frontier’s “television” service for most customers is a third-party reseller agreement with a satellite provider with its own contract and conditions. Exciting? Not exactly.

There isn’t much to see here. AT&T and Verizon have spent money to earn money. The only major success story from AT&T’s landline business is its U-verse platform. Verizon FiOS delivers the most formidable competition cable operators like Time Warner Cable and Cablevision have seen. Even CenturyLink has invested in Prism, a fiber to the neighborhood system that can deliver a true triple-play package of services that give customers a reason to stay.

Frontier has Frank the Buffalo and some long-overdue technology upgrades that probably won’t win back a lot of customers.

So what are the strengths Frontier can sell?

  1. In most markets, Frontier has no hard limit on broadband usage. That is an attractive selling point where cable operators slap usage caps on customers. Usage caps can and do trigger customer defections;
  2. Frontier phone service is generally more reliable than cable or Voice over IP. Talk to customers in storm-struck areas who lost power and cable, but their phone line kept on working;
  3. Frontier ADSL2+ and VDSL can outperform rural cable operators who have either oversold their shared network or don’t offer higher DOCSIS 3 speeds yet;
  4. Frontier Wi-Fi, if vastly expanded, can be a useful free add-on and selling tool in areas served by cable operators that do not offer the service. But Frontier Wi-Fi hotpots have to be more commonly encountered to make a difference.

Above all, Frontier must keep upgrading its network to stay competitive. Once you lose customers, they can be extremely hard to get back. For many of us, establishing an account with the phone company meant significant installation fees and several days before a crew would turn up to connect service. Frontier knows perfectly well going back to the phone company after leaving is a high hurdle many never attempt.

The best mascot a company like Frontier can adopt are real customers and employees talking about their satisfaction with the changes Frontier is making. Without that, the customers that left will probably always think of Frontier as yesterday’s news. Using an American buffalo that neared extinction itself is probably not going to change that perception.

http://www.phillipdampier.com/video/Frontier Animal Mascot Tryouts 4-13.flv

Here are Frontier’s animal mascot tryouts. (1 minute)

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