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Cogeco Won’t Lower Your Bill; Warns Customers Not to Be “Victims” of Landline Cutting

Phillip Dampier April 14, 2014 Canada, Cogeco, Competition, Consumer News No Comments

cogecoDespite growing competition from Bell’s fiber-to-the-neighborhood service Fibe, now expanding into many of Cogeco’s outer suburban service areas, Cogeco will not negotiate a better deal for customers, preferring to emphasize its customer service and “right-sizing” bundles of services to best meet customer needs.

As a result of higher prices, Cogeco’s earnings and profits are up for the second quarter of 2014. In the quarter profits rose to $58.5 million — up from $48.9 million during the same quarter a year ago. Revenue rose to $518.4 million from $458.5 million.

“We don’t like competing on price,” said Cogeco CEO Louis Audet said. “I’m not saying it’s zero, but we really don’t like competing on price.”

Audet

Audet

Customers have been offered sign up discounts from Cogeco’s most aggressive competitor on pricing – Bell. But when customers in parts of Ontario and Quebec call Cogeco to negotiate for a lower price, they are largely being turned down.

Audet said Cogeco instead emphasizes that customers will receive better customer service from the cable company, and customer retention specialists are trained to adjust packages to emphasize the services customers want without cutting their cost.

“It’s a right-sizing exercise,” Audet said. “Maybe the person wants a little less video, but they want higher Internet speeds.”

Cogeco isn’t winning the battle to keep its price-sensitive customers, however. The company lost 10,305 subscribers in the second quarter, nearly double the amount lost in the same quarter a year ago. Cogeco now serves 1.96 million Canadian cable television customers.

Customers are also dropping their Cogeco phone service, a decision Audet said makes them “victims” of cell phones. Cogeco permanently disconnected 6,000 landlines in the quarter, up from 5,550 a year ago. It still serves 473,000 phone customers.

The company lost almost 6,000 telephone customers in the quarter compared with additions of 5,550 in the same quarter last year. It had more than 473,000 residential phone customers left.

Despite the customer losses, rate increases more than made up for lost revenue, giving the company a nearly $10 million boost in profits during the second quarter alone.

HissyFitWatch: Canadian Telecom Companies Annoyed Consumers Getting The Upper Hand

Canadians are demanding a better deal from their cable and phone companies and they are forced to respond.

Canadians are demanding a better deal from their cable and phone companies and they are forced to respond.

As the United States battles back against the introduction of usage caps and rising prices for broadband service, increased competition and regulated open wholesale access to some of Canada’s largest broadband providers have given Canadians an advantage in forcing providers to cut prices and improve service.

Canadians can now easily get unlimited broadband access from one of several independent ISPs that piggyback service on cable and phone networks. Some large ISPs have even introduced all-you-can eat broadband options for customers long-capped by the handful of big players. As customers consider switching providers, cable and phone companies have been forced to cut prices, especially for their best customers. Even cell service is now up for negotiation.

The more services a customer bundles with their provider, the bigger the discount they can negotiate, say analysts who track customer retention. Bell, Rogers, Telus, and others have a major interest keeping your business, even if it means reducing your price.

“It’s far more lucrative for the telecom company to keep you there for the third or fourth service,” telecom analyst Troy Crandall told AP. It cuts down on marketing, service and installation calls, he added.

Getting the best deal often depends on your services, payment history, and how long you have been a customer. Cellphone discounts are the hardest to win, but customers are getting them if they have been loyal, carry a large balance and almost never pay late.

telus shawBigger discounts can be had for television and Internet service — cable television remains immensely profitable in Canada and broadband is cheap to offer, especially in cities. Americans often pay $80 or more for digital cable television packages, Canadians pay an average of $60.

Internet service in Canada now averages $45 a month, but many plans include usage caps. It costs more to take to the cap off.

Because of Canada’s past usage cap pervasiveness, online video is not as plentiful in Canada as it is in the United States. There has been considerably less cord-cutting in the north. Despite that, Canadians are ravenous online viewers of what they can find to watch (either legally or otherwise). As usage allowances disappear or become more generous, online video and the Internet will continue to grow in importance for service providers.

Customers should negotiate with their provider for a better deal, particularly if Bell’s Fibe TV is in town. Bell has been among the most aggressive in price cutting its fiber to the neighborhood television service for new customers ready to say goodbye to Rogers or Vidéotron.

Shaw and Telus battle for market share in the west and also have room to cut customer bills and still make a handsome profit.

Quebec’s Cogeco Shopping for U.S. Cable Companies to Buy

Phillip Dampier February 6, 2014 Atlantic Broadband, Canada, Cogeco, Competition No Comments

cogecoWith the Canadian cable business locked up by Shaw, Rogers, and Vidéotron, Ltd., suburban Ontario and Quebec cable operator Cogeco announced intentions to acquire at least one small U.S. cable company later this year after it pays down more debt.

CEO Louis Audet told shareholders that cable operators in Canada are large, very profitable, and absolutely not for sale. That leaves few growth opportunities for the fourth largest cable operator in Canada. Instead of spending money to expand its current footprint into unserved areas, the company will look south of the border for buying opportunities.

Audet

Audet

“What you see is pretty much what you get unless something really special comes out of left field,” Audet said. “The potential exists in the U.S. where it doesn’t in Canada.”

Cogeco’s financial resources are too limited to challenge the three largest cable operators in the country, and Audet said Cogeco has no intention of selling its own business. In eastern Canada where Cogeco provides service, Rogers Communications would be the most likely to buy Cogeco. Rogers tried, and failed, to acquire Quebec-based Vidéotron in 2000 — losing out to media conglomerate Quebecor. But Rogers did succeed in picking up Shaw’s Ontario-based Mountain Cablevision, Ltd. last January.

Cogeco has pursued other cable companies outside of Canada in the past. Its acquisition of Portugal’s Cabovisao in 2006 was widely panned, and after Portugal’s economy crashed in the Great Recession, Cogeco ended up writing off its net investment, taking a $56.7 million loss. Cogeco acquired Cabovisao for $660 million and sold it to ALTICE six years later for the fire sale price of $59.3 million.

atlanticIn 2012, Cogeco acquired rural and small city cable operator Atlantic Broadband for $1.36 billion. Atlantic offers service in Pennsylvania, Florida, Maryland, Delaware, and South Carolina — mostly in communities ignored by Comcast and Time Warner Cable.

Possible Cogeco acquisition targets include Cable ONE, WOW!, Wave Broadband, SureWest/Consolidated Communications, Midcontinent Communications, Buckeye Cable, and/or Blue Ridge Communications, to name a few.

In the meantime, Cogeco is following the lead of U.S. cable operators by intensifying service expansion in commercial areas, particularly industrial parks and office complexes. Selling larger businesses cable broadband could net Cogeco $600-1,200 a month per account.

Cogeco Asks New Tenant to Cover Old Renter’s $1,500 Cable Bill Before Connecting Service

Phillip Dampier February 28, 2013 Canada, Cogeco, Consumer News Comments Off
Cogeco red-flags addresses where its deadbeat customers live.

Cogeco red-flags addresses where its deadbeat customers live.

An Ontario cable company is refusing to hook up service for a new renter until the former tenant’s $1,500 past due balance is paid in full.

Cogeco Cable told its would-be customer it could not install his broadband, phone, and cable-TV service, even though the renter offered to provide a letter from his landlord asserting he had no relationship to the earlier tenant.

The cable operator’s “skip” policy, which flags accounts disconnected for non-payment, can make life difficult for the new renter or property owner. Cogeco’s policy is designed to stop disconnected customers from restarting service under someone else’s name.

In some cases, Cogeco has reportedly even disclosed personal details about the owner of the past due account, along with a detailed breakdown of the services and charges they incurred.

Customers who have encountered a red flag from Cogeco when attempting to sign up for service have been asked for a notarized letter, preferably from a personal attorney, disavowing any relationship to the former account-holder, along with copies of property transfer documents.

A Cogeco representative tells Stop the Cap! the potential customer was misinformed. Cogeco will not hold a new customer accountable for another customer’s past due balance.

Customers who encounter problems because of “flagged” accounts or addresses should ask to speak to a supervisor. Some supporting documentation may be required in some instances. But usually the supervisor can approve the order and help the customer set up service over the phone.

Cogeco Boosts Speeds, Monthly Usage Allowances for Customers in Québec

Phillip Dampier February 11, 2013 Broadband Speed, Canada, Cogeco, Internet Overcharging 3 Comments

cogecoCogeco customers in Québec will find faster speeds and a larger usage allowance for most of the company’s broadband packages.

The changes took effect Feb. 1. Customers can get the new speeds by briefly unplugging their cable modem, resetting it.

  • Express 5 now offers 5/1.5Mbps service with a 25GB monthly cap;
  • Express 10 now offers 10/1.5Mbps service with a 60GB monthly cap;
  • Turbo 14 now offers 14/2Mbps service with a 80GB monthly cap;
  • Turbo 20 now offers 20/2Mbps service with a 100GB monthly cap;
  • Ultimate 60 now offers 60/2Mbps service with a 300GB monthly cap.

“Internet needs are rapidly evolving,” said Ron Perrotta, vice president of marketing and strategic planning at Cogeco Cable. “We have taken into consideration the feedback received from our current residential customer base, and made the necessary changes in order to meet the needs of the vast majority of our customers and provide them with more competitive internet offerings.”

If Cogeco surveyed their customers regarding getting rid of usage caps altogether, the answer would likely be yes. But that is a question Cogeco does not seem willing to ask.

Cogeco offers different plans for customers in Ontario:

cogeco plans

Canada’s Cogeco Cable Buying Atlantic Broadband in USA

Montreal-based Cogeco Cable has announced it is acquiring Atlantic Broadband, a cable operator serving small communities in Pennsylvania, Florida, Maryland, Delaware and South Carolina for $1.36 billion, raising investor fears the company is once again on a spending spree.

Cogeco’s tarnished record of cable acquisitions was highlighted last year when it was forced to write off almost $250 million in losses racked up by its Portuguese acquistion Cabovisao. The company finally sold the money-losing operation at a loss in February.

Cogeco stock plummeted more than 17 percent on today’s news, and investors are concerned Cogeco’s entry into the U.S. market is competitively risky.

Atlantic Broadband’s cable systems were acquired from Charter Communications in 2003. Charter was consolidating its operations into larger markets, and the systems along the eastern seaboard were deemed too small to create the kind of large, regional clusters cable operators prefer today. Atlantic only serves around 252,000 customers nationwide, almost all in smaller communities and cities. That mirrors the way Cogeco operates in Ontario and Quebec — primarily in smaller cities bypassed by larger operators Rogers Cable and Vidéotron.

Cogeco CEO Louis Audet believes growth opportunities in Canada are limited at best. He defended the acquisition as an entry point in the United States, signaling Cogeco was going to continue shopping for other small U.S. cable operators.

Cogeco is paying about $5,400 per subscriber, according to Bloomberg News. That compares with $4,418 Time Warner Cable paid per subscriber for Insight Communications, and $5,486 for each Knology customer acquired by WideOpenWest LLC.

Cogeco acquired Atlantic Broadband from private-equity firms Abry Partners and Oak Hill Capital Partners.

Cogeco’s ‘Value Plan’ Doesn’t Offer Much Value: $19.95 for 4Mbps With 15GB Cap

Cogeco Cable is mailing flyers to residents in eastern Canada promoting the company’s ‘value’ option:

  • 4Mbps download speed
  • 12 Month Contract with $75 early termination fee
  • Increases to $32.95/mo off contract
  • “Generous” 15GB usage cap with $1.50/GB overlimit fee (maximum penalty: $50)

Cogeco calls this plan ideal “for anyone who uses the Internet to exchange emails with friends, search sites and download pictures.”

In other words, it’s barely broadband for those who barely use the Internet.

Many Ontario and Quebec phone companies can offer even faster speeds through traditional DSL service. In Bell Fibe areas, for $6 more a month, customers can get a 15/10Mbps package for $26.97/mo for six months, which includes a safer 75GB allowance. At the end of six months, threaten to walk and Bell will extend the offer an extra six months.

Customers bundling services with either Bell or Cogeco may be able to negotiate for a package with better speeds and a more generous allowance. While Cogeco has cracked down on promotions, Bell has not, so customers served by Cogeco are advised to ask about all available deals before committing to either provider.

 

Shaw, Cogeco Customers Exposed to Gay Porn During CHCH-TV’s Morning News

Phillip Dampier April 26, 2012 Canada, Cogeco, Consumer News, Shaw Comments Off

CHCH-TV in Hamilton, Ontario.

The cable industry seems to have an increasing problem keeping adult entertainment on the right channels.  Just a week after Colorado viewers were treated to an XXX-rated wakeup call during Good Morning America, cable viewers across western Canada and parts of Ontario got an eyeful of gay hardcore porn for several minutes Friday during CHCH-TV’s News Now AM morning news.

The unwanted programming, which also turned up in public viewing areas such as airports and diners, caused more than a few to put down the Tim Horton’s coffee and pick up the phone.

The Hamilton, Ont. television station initially got the blame. So many Canadians were talking about it, the station became a trending topic on Twitter.

“Just eating some pancakes this morning watching #CHCH … I no longer like pancakes or the news,” wrote Twitter user @derek1913.

“We were stunned at first, and those of us who could see it just stopped talking and tried to absorb what we were seeing,” says Joan Kelling, a Stop the Cap! reader who saw the spectacle on an airport restaurant’s televisions. “A few moments later, people were pointing and laughing nervously, everyone was getting on their phones, and some employees were hurriedly trying to switch off the sets.”

Kelling says the scene she saw was particularly explicit.

“It went on and on,” Kelling says. “Gay or straight aside, parents will be answering questions over this one.”

So will Shaw and Cogeco Cable, who were responsible for treating viewers to the racy movie in the morning.  CHCH didn’t wait for a blow by blow explanation from either company before taking to the air with an apology.

“First of all, we would like to apologize to our viewers,” said CHCH news director Mike Katrycz. “This was a problem that originated, not at CHCH, but at a cable company. Apparently some cable lines had been cut, and in the splicing back together some inappropriate content went to air. Again it was beyond the control of CHCH, but we do apologize to our viewers.”

Cogeco, Shaw Cable, and the Canadian Broadcast Standards Council have all launched independent investigations into the matter.

Cogeco Cable Cracks Down on “Promotion-Hopping, Undesirable Customers”

Phillip Dampier April 16, 2012 Canada, Cogeco, Competition, Consumer News 6 Comments

Cogeco Cable is cracking down on customers who shop around for a better deal.

After dumping its money-losing Portuguese Cabovisao operation earlier this year, the company is looking to recoup its losses, and Canadian consumers are paying the price.

Chief Executive Louis Audet told investors Cogeco has tightened up promotions, giveaways, and credit standards to weed out bargain hunters and those who ultimately never pay their cable bill.

“If somebody else wants these undesirable customers, they’re theirs for the taking,” Audet said. “There’s too many promotion hoppers out there who are jumping from one supplier to the other.”

Audet

At least 9,000 customers left Cogeco during the second quarter, but that did nothing to hurt Cogeco’s bottom line.  Profits nearly quadrupled to $81.5 million according to Audet, but much of that is due to changes in accounting related to its sold-off Portuguese operation. Closer to home, Cogeco revenue inside Canada grew 12.4% from one year ago to $345.6 million.

Cogeco bought Televisao in 2006 for $465 million.  It sold it in February for just over $59 million.

Cogeco Cable, which serves subscribers in smaller cities and suburbs in Ontario and Quebec, is Canada’s fourth largest cable operator with more than 875,000 cable subscribers. Its biggest competitors are Bell (in Ontario and Quebec) and Telus, which has some landline operations on the Gaspé Peninsula in eastern Quebec.

Most of Cogeco’s promotions and retention offers appeal to customers threatening to take their business to the phone companies. But Audet signaled the promotional pricing had become so aggressive, some customers have learned to bounce back and forth between providers to maintain lower pricing indefinitely.

By tightening up customer promotions, Audet said, the company can achieve a “stable” customer base that pays regular Cogeco prices.

Usage-Based Billing Nightmare: $689 In Overlimit Fees Shocks Ontario Cogeco Customer

A Burlington, Ontario customer of Cogeco Cable, convinced by the company to upgrade his broadband service to a usage plan with a higher allowance, has been billed nearly $700 in broadband usage overlimit fees in a single month after the company quietly removed the cap on overlimit fees associated with the plan.

The customer first learned about the change in Cogeco’s usage-based billing policies when the company’s “auto pay” billing service deducted nearly $900 from his checking account to pay his cable bill, he told Broadband Reports.

Further charges and late fees have now racked up to almost $1,200 and so far Cogeco has only been willing to provide its customer with a $50 “courtesy credit.”

Cogeco claims it notified customers last fall it was removing the maximum overlimit penalty cap from two of its broadband plans, including the one the Burlington customer was persuaded to choose by a company representative.  Prior to October, The Ultimate 30 plan, designed for so-called “heavy users,” included a 125GB usage allowance with an overlimit fee of $1/GB, capped at a maximum of $50.

Canadian broadband users likely to exceed a broadband usage allowance typically upgrade to a service plan with a higher allowance or factor the capped, fixed overlimit fee into their assumed monthly cost for service.  But when providers like Cogeco quietly increase the maximum overlimit fee, or remove it altogether, usage-based billing shock often follows.

The customer claims he never received any change of terms notification until the first bill with unlimited overcharges arrived, and Cogeco admits it cannot assert every customer received the notification much less absorbed its meaning.  According to the Burlington man, Cogeco told him customers often don’t read the letters or throw them out, unopened, assuming it is advertising.

Even if Cogeco did send a letter, the man believes the company has gone out of its way to avoid prominently alerting customers about the possibility of explosive increases in broadband usage expenses.  Instead, they have framed the changes as an “enhancement” that will “help you get more from the Internet.”

When bill shock becomes an enhancement -- An informational message included on a recent Cogeco billing statement.

Cogeco customers upset about the change say it is easy for people to miss the implications buried in a rate chart that the maximum overlimit penalty has been removed.

“A Cogeco salesperson called me to change my service based on my usage,” said the Burlington man. “[The Ultimate 30 Plan] would cost me less money and in return I would receive faster internet and an increased data transfer capacity.”

Now the customer also gets hundreds of dollars in overlimit fees, too.  Even worse, the man complains, he was never given an opportunity to adjust his usage or service plan to avoid the enormous bills he has since received.

“I would have stepped down to the Turbo 20 package that has a maximum of $50 for usage or the Business Ultimate 50 package which [has] unlimited data transfer,” the man complains. “Either option would have saved me hundreds of dollars.”

The cable bill in your future?

Cogeco’s unwillingness to forgive overlimit usage charges seems strange to the Burlington man because several other Cogeco plans retain a fixed limit on overlimit fees.  Other Cogeco customers have begun to question the company’s logic in usage billing more generally, because hundreds of gigabytes consumed on a slightly slower usage plan would result in a bill a fraction of the cost the Burlington man now faces.

“Why does Cogeco’s bandwidth cost a ridiculous $1 per gigabyte on one plan, and considerably less on others with capped overlimit fees,” asks Stop the Cap! reader Jeff, another Cogeco customer who shared the story. “It’s a usage shell game and it’s all about the money because they won’t give a decade-long customer a break on fees they would never have charged many of their other customers.  The bandwidth costs to Cogeco are the same no matter what plan you are on.”

Jeff wonders whether customer goodwill matters anymore at telecommunications companies.

“They’d rather harass this man for hundreds in phantom ‘costs’ and destroy their reputation in the process.”

The customer says he can’t even be sure the bill is correct.

“Internet usage based billing is flawed,” he says.

He points out the methodology and devices that determine the bandwidth are not certified or regulated by Measurement Canada. There is no recourse for customers to ensure the integrity and accuracy of the bandwidth measurements. Cogeco customers must rely on an ‘Internet Usage’ meter Cogeco has on the website. The meter is not always up to date and has frequent outages, customers report.

Against this backdrop, the Canadian Radio-television and Telecommunication Commission new rules governing the practice of usage-based billing are set to take effect tomorrow, Feb. 1st.

“We are moving ahead with the implementation as planned to ensure that independent ISPs will continue to offer competitive and innovative services to Canadians,” said Leonard Katz, the CRTC’s acting chairman and vice-chairman of Telecommunications. “Some temporary adjustments have been made to ensure a smooth transition to the new billing regime and to ensure consumers are not inconvenienced.”

As an interim measure, independent ISPs who are customers of the Bell companies will have the flexibility to either merge their business and residential Internet traffic, or keep them separate.

In November 2011, the CRTC established how large telephone and cable companies should charge independent ISPs for the use of their networks.

In turn, cable and telephone company Internet Service Providers can continue to use usage-based billing practices similar to what Cogeco uses, or switch to a combination of flat-rate and usage-based billing.  But with the revenue potential Cogeco has illustrated it can earn from UBB, few large providers are anticipated to sell residential customers flat use plans.

“Caveat emptor,” says our reader Jeff.

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