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Drahi Readies His Next Move: “If I Buy Five Smaller Cable Companies, I Am as Big as Time Warner Cable”

Drahi

Drahi

Patrick Drahi, the billionaire ruthless cost-cutting owner of Altice SA told a French parliamentary hearing he didn’t go ahead with a serious bid for Time Warner Cable because he lacked enough management talent to run a huge cable company in a country he only recently entered.

“I didn’t follow up on the exchanges we had on Time Warner Cable that were mentioned in the media because we were not ready,” Drahi told a French parliamentary hearing on Wednesday.

Drahi testified French-owned banks were ready to help finance a deal that would have stolen Time Warner Cable away from Charter Communications. Instead, Drahi has decided to spend a little time digesting his acquisition of Suddenlink to gain experience in the U.S. cable market before he moves on other cable operators. Drahi believes he will be the only buyer left to cut major cable consolidation deals.

“Time is on our side” for the U.S. expansion,” Drahi said. “The two leaders Comcast and Charter will not be able to buy anything else because of their size so we will have an open boulevard ahead of us. If I buy five small operators, I can be as big as Time Warner Cable.”

The five most-likely cable operators Drahi will pursue, according to a business editor at RFI, the French overseas broadcaster: Cablevision, Cox, Mediacom, WOW!, and Cable One. Cox and Mediacom are privately held and Cablevision is tightly controlled by its founding Dolan family, so Drahi will likely have to sweeten deals to convince all three to sell.

Reuters reports Drahi is especially interested in the smaller, less profitable operators because they are ripe for his brand of cost management and consolidation-related savings.

“Even better, that means we will have room to improve them,” Drahi said.

Drahi remained enthusiastic about Cablevision, despite the fact it serves one of the most competitive markets blanketed by Verizon FiOS in the United States.

“It’s good actually since it means they know how to compete,” Drahi said.

Drahi’s reputation is well-known in Europe based on his earlier acquisitions. Altice favors telecom and cable companies seen as poorly managed or undervalued which Drahi targets for massive cost-slashing to improve profitability. The investments he does make are largely to benefit high-end customers he values the most.

“The French Slasher” Patrick Drahi/Altice Likely to Target Cablevision, Cox, Mediacom Next for Quick Buyouts

THE FRENCH SLASHER: Patrick Drahi's cost-cutting methods are legendary in Europe. He could soon be bringing his style of cost management to America.

THE FRENCH SLASHER: Patrick Drahi’s cost-cutting methods are legendary in Europe. He could soon be bringing his style of cost management to America.

Patrick Drahi and his Luxembourg-based Altice SA appears to be out of the running to buy Time Warner Cable, but are likely to quickly turn their attention to acquiring several of America’s remaining medium-sized cable companies: Cablevision, Cox, and Mediacom.

“While it is still possible that Altice counters on TWC, we do not believe that it can match Charter [and backer John Malone’s] funding firepower and will ultimately lose out,” wrote Macquarie Capital’s Kevin Smithen. “In our opinion, Altice is more likely to turn its attention to Cablevision or privately held Cox or Mediacom, in an effort to gain more fixed-line scale in order to compete against Charter and Comcast.”

Last week, cable analysts were surprised when Drahi swooped in to acquire Suddenlink, one of America’s medium-sized cable operators.

“Altice’s decision to buy Suddenlink (at an unsupportably high price) creates even more uncertainty in an industry where virtually every element of the story is now in flux,” said MoffettNathanson analyst Craig Moffett.

Cablevision recently seemed to signal it was willing to talk a merger deal with Time Warner Cable, but that now seems unlikely with the Charter acquisition heading to regulator review. Drahi met last week with Time Warner Cable CEO Robert Marcus about a possible deal with the second largest cable company in the U.S., which seems to indicate he is serious about his plans to enter the U.S. cable market.

“On paper, Cablevision was already overvalued,” Moffett said. “And Altice’s acquisition of Suddenlink, which has no overlap with Verizon FiOS, would suggest that they are quite cognizant of the appeal of a carrier without excessive fiber competition. The spike in Cablevision’s shares only makes that overvaluation worse. Then again, if Altice is willing to overpay for one investment, might they not be willing to overpay for another?”

Drahi has been topic number one for the French telecom press for months after his aggressive acquisition and cost-cutting strategies left a long trail of unpaid vendors and suppliers, as well as employees forced to bring their own toilet tissue to work. Customers have also started leaving his French cable company after service suffered as a result of his investment cuts.

As a new wave of cable consolidation is now on the minds of cable executives, several Wall Street analysts have begun to call on the cable industry to consolidate the wireless space as well, buying out one or more wireless companies like Sprint or T-Mobile to combine wired and wireless broadband.

“Unlike Europe, we continue to believe that the U.S. is not yet a ‘converged’ market for wireless and wireline broadband services but that this trend is inevitable in the U.S. due to increasing need for small cells, fiber backhaul and mobile video content caching closer to the end user. In our view, Altice believes in convergence and so mobile will be a strategic objective in the long-term,” Smithen wrote.

Other Wall Street analyst/helpers have pointed out there are other cable targets ripe for acquisition: WideOpenWest Holding Cos (a/k/a WOW!) and Cable One have a combined 1.92 million video subscribers.

Cable Stock Fluffer Craig Moffett Encourages Cable Operators to Add Usage Caps Before Title II Takes Effect

"More Caps" Moffett

“More Caps” Moffett

If you are a cable executive looking to further gouge customers captive to your “only game in town” broadband speeds, now is the time to slap around customers with usage caps and overlimit fees, because your company may no longer be able to do that after June 12, when the FCC’s new Title II regulations officially take effect.

“If you’re a cable operator, you might want to strike while the iron is hot,” said MoffettNathanson principal and senior analyst Craig Moffett, who has shared his love for all-things-cable with investors for years.

Moffett regularly asks cable industry executives about when they plan to introduce usage limits or usage-based billing for customers who often have no other choice for 25Mbps service, the lowest speed that now qualifies as broadband.

But tricking customers into accepting industry arguments about “fair pricing” must be handled carefully, because making a mistake with customers could cost your executives their summer bonuses if the pocket-picking policies cause a revolt.

Multichannel News reminds its cable industry readers Time Warner Cable failed to start their usage cap experiment in 2009 due to a “furor” by customers (often led by us). Instead of filling their coffers with the proceeds of overlimit fees, “the cable giant [was forced] to rethink its pricing strategy, keeping prices the same for heavy users of bandwidth but offering discounts to customers whose usage was lighter.”

Image: schvdenfreude

Image: schvdenfreude

Unable to get its definition of “fairness” across to customers, Time Warner Cable never had to look back, raking in greater and greater unlimited broadband profits quarter after quarter, even as their costs to deliver service continued to drop.

Faced with the prospect of a newly empowered FCC to keep cable industry abuses in check, Multichannel News tells cable executives the money party may be over before it begins if they wait too long:

Title II regulations, which reclassify broadband as a common- carrier service, are about to take effect June 12, and the Federal Communications Commission has said it would look closely at any usage-based pricing plans to determine if they discriminate against online video providers. That could force some Internet service providers to move to implement their version of usage-based pricing before the deadline.

To “soften the blow,” the trade journal reported Cox significantly increased usage caps and are setting the overlimit fee at $10 for each 50GB of excessive usage, much lower than wireless plan overlimit fees. Multichannel News suggests this will help customers “get accustomed to overage charges.”

But Cox customers in the Cleveland area may be able to turn the table on Cox.

“Let them get accustomed to the fact I am dumping them for WOW! the moment I receive official notification about the caps,” said Stop the Cap! reader Dave, who has a choice between Cox, AT&T, and WOW! — a competing cable operator without usage caps. “AT&T isn’t enforcing its cap around here either, so I am definitely canceling my service and have two other choices. People have to be willing to send a clear message usage caps are an absolute deal-breaker.”

Although usage caps are not affected by Net Neutrality regulations, the fact the cable industry faces added regulator scrutiny under Title II allows the FCC to put an end to practices it considers to be anti-competitive. Introducing usage caps for customers trying to find an alternative to Cox’s cable television package by watching online video instead may qualify.

WOW! Boosts Broadband Speeds to 110Mbps in Ohio and Alabama

wowWOW! broadband customers in Ohio and Alabama can now sign up for Internet speeds as high as 110Mbps.

The communities getting the upgrades include parts of Columbus, Oh. and the Alabama cities of Auburn, Valley, Huntsville and Montgomery.

WOW! previously upgraded customers in Chicago, Detroit, part of Columbus and Cleveland, Evansville, Ind., Lawrence, Kan., and Pinellas, Fla.

“We recognize and embrace that consumers are increasingly using their Internet connection to stream video content to multiple devices,” Cathy Kuo, WOW! chief operating officer, said in a statement.

Many of the customers getting this week’s speed boost were former Knology customers. All are now free of usage caps that some used to endure under the systems’ former owners.

WOW! receives top customer approval ratings among cable companies in the United States, in part because it maintains a list of values drummed into employees that are lacking at other cable companies:

  1. Courage: Act on your beliefs with pure intention in spite of your fears.
  2. Respect: Treat others as you wish to be treated.
  3. Integrity: Choose to do what’s right.
  4. Accountability: Own your part of any situation and work towards a solution.
  5. Servanthood: Embrace the attitude and honor of serving others rather than being served.

Most customers can upgrade from the company’s old top-tier of 50/5Mbps to 110/5Mbps for about $13 extra a month.

J.D. Power & Associates Tie Vote! Hemorrhagic Fever vs. Comcast vs. Time Warner Cable

jd powerLove can be a fickle thing.

Take Comcast’s affair with J.D. Power & Associates, for example. In Comcast’s filings with regulators, it is very proud that J.D. Power cited Comcast for the most improvement of any cable operator scored by the survey firm. Comcast touted the fact it had managed to increase its TV satisfaction score by a whopping 92 points and Internet satisfaction was up a respectable 77 points. (Comcast didn’t mention the fact J.D. Power rates companies on a 1,000 point scale or that it took the cable company four years to eke out those improvements.)

Last month, J.D. Power issued its latest ranking of telecommunications companies and… well, the love is gone.

If customer alienation was an Olympic event, J.D. Power awarded tie gold medals to both Comcast and Time Warner Cable for their Kafkaesque race to the bottom.

The survey of customer satisfaction largely found only dissatisfaction everywhere in the country J.D. Power looked. While Comcast likes to cite its “customer-oopsies-gone-viral” blunders as “isolated incidents,” J.D. Power finds them epidemic nationwide.

skunkThe highest rating across television and broadband categories achieved by either cable company was ‘Meh.’ J.D. Power diplomatically scored both cable companies on a scale that started with “among the best” as simply “the rest.” Customers in the west were the most charitable, those in the south and eastern U.S. indicated they were worked to their last nerve.

“The ability to provide a high-quality experience with all wireline services is paramount as performance and reliability is the most critical driver of overall satisfaction,” said Kirk Parsons, senior director of telecommunications, in a statement.

Having competition available from a high-scoring provider also demonstrates what is possible when a company actually tries to care about customer service. In the same regions Comcast fared about as popular as hemorrhagic fever, WOW! Cable and Verizon FiOS easily took top honors. Even AT&T U-verse scored far higher than either cable company, primarily because AT&T offers very aggressive promotional packages that include a lot for a comparatively low price.

Other cable and smaller phone companies didn’t do particularly well either. Frontier and CenturyLink both earned dismal scores and Charter Cable only managed modest improvement. The two satellite television companies did fine in customer satisfaction for television service, but it was the two biggest phone companies that managed the best scores for Internet service. Among cable operators, only independents like WOW! (and to a lesser extent Cox) did well in the survey.

If J.D. Power is the arbiter of good service Comcast seems to claim it to be, the ratings company just sent a very clear message that when it comes to merging Comcast and Time Warner Cable, anything multiplied by zero is still zero.

J.D. Power ranking (Image courtesy: Reviewed.com)

J.D. Power ranking (Image courtesy: Reviewed.com)

WOW! Cable Expands in Ohio, Michigan; Local Officials Appealed for More Competition

Better

Efforts by local officials to attract more cable competition are paying off in suburban Cleveland, Ohio and Detroit, Mich. where customers will soon be able to choose between two cable companies or AT&T for cable service.

WOW!, a Denver-based cable overbuilder, has announced it will expand service to Lathrup Village, Mich. and Sheffield Lake, Brunswick, and North Ridgeville, Ohio between now and the middle of next year.

North Ridgeville City Council president Kevin Corcoran last week announced WOW! would begin head-to-head competition with Time Warner Cable starting in 2014. Corcoran told The Chronicle Telegram the city began looking for a competing cable provider after hearing complaints from residents about Time Warner Cable’s poor customer service and reliability. He approached WOW!, which has provided competitive service in parts of the greater Cleveland area, about expanding in North Ridgeville.

north ridgeville“My only pitch was that people are dying for some competition,” Corcoran told the newspaper.

Corcoran met informally with WOW! officials to discuss the prospects of expanding into North Ridgeville before more formal meetings were held with city officials including the mayor and the safety-service director.

Making life easier for WOW!’s entry is the presence of existing utility easements, which means WOW! can run cable on existing utility poles without formal approval by the city council. But WOW! will still need certain permits from the Building Department to move forward with wiring. The company will use Ohio’s statewide video franchising law, originally pushed by AT&T for U-verse, to obtain video service permits and a franchise agreement with the Ohio Department of Commerce.

WOW!’s regular prices are much lower than Time Warner Cable’s promotional prices for new customers:

  • Standard triple play (15/1Mbps Internet, Cable TV, phone) costs $105.98/month from Time Warner ($118.97 with DVR), $85/month from WOW! ($92 with DVR);
  • Standard double play (15/1Mbps Internet, Cable TV) still costs $105.98/month from Time Warner ($118.98 with DCR), $75/month from WOW! ($82 with DVR);
  • Internet-only service (15/1Mbps) costs $40.98/month from Time Warner Cable, $30/month from WOW! (promotional pricing expires after 12 months).

Time Warner Cable said it welcomes the competition.

NORTH RIDGEVILLE – Residents who have long griped about poor cable television service can look forward to some competition next year.

City Council President Kevin Corcoran on Friday that

WOW! Cable TV is planning to begin giving Time Warner Cable, the city’s current cable TV provider, some competition starting in 2014.Talks between the city and WOW! Cable began in late summer and continued into September where the company announced it would go ahead with plans to begin offering digital and HDTV cable service to residents next year.

WOW! Cable’s Matthew Harper, who serves as the company’s systems manager for the Cleveland market, confirmed the Denver-based firm’s plans to begin serving a portion of the city by the end of 2014.

“We’re in the process of doing a walk-out, which involves gathering information about the number of (utility) poles and distances between them, and the number of homes we are able to get built out for next year,” Harper said. “Our goal is to build out the entire city over the next few years.”

Because the company will use existing utility easements to run wiring over utility poles, its plans do not require formal approval by City Council, according to both Corcoran and Harper.

Permits for construction of equipment and attaching wiring to power poles will need to be obtained from the city Building Department.

WOW! Cable will obtain required video service and state franchise agreements through the Ohio Department of Commerce, Harper said.

Under the firm’s universal pricing structure, North Ridgeville customers can expect to pay $60 a month for any two services such as cable TV and phone service, or $70 a month for three services including cable TV, phone, and high-speed Internet service, according to Harper.

More specific details and pricing for the company’s numerous packages of services can be found at www.wowway.com, Harper said.

Wow! Cable currently serves about 4,300 customers in AvonLake, and just completed work on a system to serve SheffieldLake, Harper said.

Cost figures for the North Ridgeville project were not disclosed.

Corcoran said he began to investigate prospects for bringing another cable TV provider to town after he and others heard periodic complaints from residents about the cable TV service they had from Time Warner.

“We’d heard that Time Warner doesn’t always have the greatest reputation for customer service and reliability, and that people were going off to Dish and DirecTV,” Corcoran said. “My only pitch was that people are dying for some competition.”

Realizing that “a lot of people like to stick with cable for various reasons,” Corcoran met informally with WOW! officials before more formal meetings were held with city officials including Mayor David Gillock and Safety-Service Director Jeffry Armbruster.

Time Warner spokesman Mike Pedelty said the company has been aware of WOW! Cable’s plans to enter North Ridgeville.

“We are well aware of them coming in and compete with them in other locations,” Pedelty said.

When asked about Corcoran’s comments concerning Time Warner’s poor service, Pedelty said “it’s hard to respond to that comment.”

“We respect all competitors, but are really driven by making sure we provide the type of services our customers expect at a good value,” he said.

– See more at: http://chronicle.northcoastnow.com/2013/10/11/new-cable-company-offering-service-in-north-ridgeville-in-2014/#sthash.L6ciWB1H.dpuf

Verizon FiOS Wins PC Magazine’s ISP Award: “FiOS Is the Absolute Fastest Nationwide Broadband”

fastest isp 2013Verizon FiOS is the fastest nationwide broadband service available.

That was PC Magazine’s assessment in its ranking of the fastest Internet Service Providers of 2013. It’s not the first time Verizon FiOS has taken top honors. In fact, the fiber to the home broadband service has consistently won excellent rankings not only for its speed, but also for its value for money and quality of service. The worst thing about FiOS is that many Verizon customers cannot buy the service because its expansion was curtailed in early 2010.

Verizon FiOS has seen its national speed rankings increase this year. In 2012, the provider’s nationwide download speeds averaged 29.4Mbps; this year FiOS average downstream speeds jumped to 34.5Mbps. Upstream speeds are also up from 26.8Mbps to 31.6Mbps. In part, this is because a growing number of customers have moved away from Verizon’s entry-level 15/5Mbps package with a $10 upgrade to Quantum FiOS 50/25Mbps service. FiOS TV customers can upgrade themselves with their remote control.

Frontier Communications made the top five in the Pacific Northwest, thanks to FiOS infrastructure the company inherited from Verizon.

Other high-ranking ISPs included Midcontinent Communications, a small cable provider serving the north-central states. Midco’s DOCSIS 3 upgrade allows the company to offer most customers up to 100Mbps service. The average download speed for Midco customers is 33.1Mbps; average upload speed is 6.4Mpbs.

Where cable operators face head-on competition from Verizon FiOS, the usual competitive response is speed increases. Cablevision is a good example. It came in fourth place nationally with average speeds of 25.9/5.9Mbps. Comcast has also been boosting speeds, especially in the northeast where it faces the most competition from fiber. It came in third place with average speeds of 27.2/6.8Mbps and offers Internet speeds up to 505Mbps in some areas.

There were companies that performed so poorly, they barely made the regional rankings. The most glaring example largely absent from PC Magazine’s awards: Time Warner Cable, which has lagged behind most cable operators in the speed department. It scored poorly for the second largest cable company in the country, beaten by Charter, Mediacom, and CableONE — which all usually perform abysmally in customer ratings. The only regional contest where Time Warner made a showing at all was in the southeast, where it lost to Verizon FiOS, Comcast, and Charter. Only TDS, an independent phone company, scored worse among the top five down south.

Even more embarrassing results turned up for AT&T U-verse, which performed so bad it did not even make the national rankings. AT&T has promised speed upgrades for customers this year, and has implemented them in several cities. Unfortunately for AT&T, its decision to deploy a fiber to the neighborhood system that still depends on copper to the home is turning out to be penny wise-pound foolish, as it continues to fall further behind its cable and fiber competitors. At the rate its competitors are boosting speeds, U-verse broadband could become as relevant as today’s telephone company ADSL service within the next five years.

Other players scoring low include WOW!, a surprising result since Consumer Reports awarded them top honors for service this year. Also stuck in the mud: Atlantic Broadband (acquired by Canada’s Cogeco Cable, which itself is no award winner), Suddenlink, Wave Broadband and Metrocast, which serves smaller communities in New Hampshire, Maine, Pennsylvania, Maryland, Virginia, Connecticut, South Carolina, Mississippi and Alabama.

The magazine also ranked the fastest U.S. cities, with top honors going to the politically important Washington, D.C., and its nearby suburb Silver Spring, Md, which took first and second place. Alexandria, Va., another D.C. suburb, turned up in eighth place. No cable or phone company wants to be caught delivering poor service to the politicians that can make life difficult for them.

Brooklyn, N.Y., took third place because of head-on competition between Cablevision and Verizon FiOS. Time Warner’s dominance in Manhattan and other boroughs dragged New York City’s speed rankings down below the top ten. Among most of the remaining top ten cities, the most common reason those cities made the list was Verizon FiOS. Florida’s Gulf Coast communities of Bradenton (4th place) and Tampa (6th place) have fiber service. So does Plano, Tex. (5th place) and Long Beach, Calif. (7th place). The other contenders: Hollywood, Fla. takes ninth place and Chandler, Ariz. rounds out the top 10.

Lawrence, Kansas Finally Has Cap-Free Broadband (No Thanks to Sunflower/Knology)

Phillip Dampier August 12, 2013 Broadband "Shortage", Broadband Speed, Competition, Internet Overcharging, WOW! Comments Off on Lawrence, Kansas Finally Has Cap-Free Broadband (No Thanks to Sunflower/Knology)
Worst

Worst

Broadband customers in Lawrence, Kan. have been liberated from Internet Overcharging schemes after years of usage-capped Internet access from Sunflower Broadband and Knology.

WideOpenWest’s (better known as WOW!) acquisition of Knology, which in turn purchased Sunflower Broadband from the local newspaper, means usage limits are a thing of the past.

Consumer Reports has top-rated WOW! for customer friendly service, and banishing usage caps is an example of why the cable company earns such high marks.

The company reminds customers that “all WOW! Internet speeds have no usage caps.”

Sunflower Broadband originally offered four different broadband plans, only one without usage caps. Lawrence customers did get speed upgrades faster than many other cable broadband customers, but most were accompanied with draconian usage limits.

Bad

Bad

Bronze: Originally offering 3Mbps/256kbps service, Sunflower’s “lite” usage plan included a 3GB monthly usage limit boosted by Knology in 2012 to $22.95/month offering 3/1Mbps service and a still ridiculously low 5GB usage limit. WOW! has kept the lite plan but removed the usage cap.

Silver: Sunflower’s equivalent of Standard Internet service offered 10/1Mbps broadband with a 50GB usage cap. Knology raised the price to $37.95, left the 50GB cap intact and increased speeds to 18/2Mbps. WOW! dropped the cap.

Gold: Sunflower’s premium 50/1Mbps service offered 250GB of usage for under $60 a month. When Knology took over, speeds were boosted to 50/5Mbps along with the price: $62.95 a month. But the usage cap stayed the same. Today WOW! continues the plan without any caps.

Better

Much Better

Palladium: Sunflower responded to customer complaints about metering Internet usage by offering residents a trade — an unlimited use plan with no speed promises. Palladium could be as slow as 2Mbps during peak usage, 25Mbps when traffic was very low. Knology kept the plan and its 1Mbps upload rate, but raised the price to $47.95 a month. WOW! dumped Palladium altogether, replacing it with a 30/2Mbps unlimited use plan for customers who don’t want to pay $63 a month for the Gold plan.

A number of Lawrence customers annoyed with Sunflower and Knology switched to AT&T U-verse when it was introduced locally. Although U-verse has a 250GB usage cap, Lawrence residents report it remains unenforced.

Stop the Cap! reader Mike, who shared the news WOW! had recently shelved the caps, tells us he switched to AT&T years ago and is happy with their service.

“So far, their cap is not enforced at all here,” Mike writes. “The minute they start enforcing it, I’ll switch to WOW!”

WOW! Prices Up $8/Month As Operator Adds Broadcast TV ‘Surcharge’

Phillip Dampier January 31, 2013 Competition, Consumer News, WOW! Comments Off on WOW! Prices Up $8/Month As Operator Adds Broadcast TV ‘Surcharge’
Experiencing a higher bill.

Experiencing a higher bill.

WOW!, formerly WideOpenWest, is informing many of its customers it is raising rates $8-9 a month — $5 for bundled customers and a new $3-4 a month “Broadcast TV Surcharge” the company claims covers the increasing amount of fees charged by local broadcasters in return for permission to carry their signals on the cable system. The amount of the surcharge varies depending on costs in a particular market.

The excuse for the increase: increased programming costs.

WOW! equipment fees have also increased. The HD-DVR box that used to cost $9.99 will now be priced at $13 a month. A standard HD set top box is only increasing a penny — $4.99 to $5.

Customers complain WOW!’s prices are now approaching parity with competitors including Time Warner Cable and AT&T U-verse. Both competing providers have increased promotional mailings in areas where WOW! is increasing prices.

3 Owners in 3 Years And Lawrence, Kansas Still Stuck With Harshly-Capped Cable Broadband

Phillip Dampier December 4, 2012 Broadband Speed, Consumer News, Internet Overcharging, WOW! 2 Comments

Top-rated WOW! only delivers service in a handful of cities in the midwest, but is getting larger after acquiring Knology.

Lawrence, Kansas can’t catch a break. While their neighbors in Kansas City are preparing for Google’s unlimited-use gigabit broadband, the three different owners of the area’s cable operation in the last three years have stuck local residents with usage caps as low as 5GB per month.

What began as Sunflower Broadband, formerly owned by the The World Company, which publishes the daily Lawrence Journal-World, has now been sold to a new owner that plans to leave the current caps in place.

Knology of Kansas Inc., a division of West Point, Ga.-based Knology acquired the Sunflower operation for $165 million in 2010. This week, WideOpenWest (WOW) announced it had completed a system-wide acquisition of Knology, including the former Sunflower system for $1.5 billion.

Consumers in Lawrence hoping for something better from one the nation’s top-consumer-rated cable operators will apparently have to wait. The company announced it was planning no immediate changes to its services or rates, said Rod Kutemeier, who currently remains general manager of the operation.

“Which means while Kansas City becomes a gigabit broadband city with unlimited-use broadband ranging in price from free to $70 a month, we’re stuck with this lousy cable operation that wants $53 a month for 18/2Mbps service with a nasty 50GB data cap and up to $1/GB overlimit fee,” says former Knology customer Sam. “I switched to U-verse, which is only mildly less criminal with their 250GB cap.”

Sam’s price represents standalone broadband service and includes Knology’s $5 monthly modem rental fee. If he purchased video service from the company, his broadband rate would be $10 lower.

Sunflower Broadband introduced one of the country’s first broadband Internet Overcharging schemes, limiting customers on the company’s lowest speed tier to 5GB of usage per month. The company later introduced devotees of unlimited, flat rate access to a reduced priority unlimited option for just shy of $60 a month, with no quoted speed or promise of performance.

Lawrence cable subscribers were hopeful the new owners would adopt pricing and service similar to what WOW offers elsewhere. WOW tells its other customers it does not impose usage limits or consumption-based billing of any kind. But that doesn’t hold true in Lawrence.

“They need to get rid of the current management which continues this ripoff scheme and bring in the same WOW mindset that gave them top ratings in magazines like Consumer Reports,” shares Stop the Cap! reader Sam.

WOW currently offers most customers broadband speeds of 2/1, 15/1, 30/3, and 50/5Mbps. Knology of Kansas offers service at speeds of 5/1, 18/2, and 50/5Mbps — all usage capped.

Pricing and packages for Lawrence, Kansas’ local cable company will remain the same… for now.

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