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Cox Upgrading to Fiber-to-the-Node, DOCSIS 3.1 Broadband Platform

COX_RES_RGBCox Communications will push broadband speed upgrades as high as a gigabit to customers over an upgraded network heavy on fiber and much lighter on copper coaxial cable.

In an effort to stay competitive and reduce operational and maintenance costs, Cox will begin major upgrades of its cable plant, removing as much copper and as many signal amplifiers as possible to simplify upkeep and make future upgrades simpler.

Cox chief technology officer Kevin Hart told Light Reading he wants to push fiber optics deeper into Cox’s network, bringing optical fiber closer to the neighborhoods where customers live and work. This will allow Cox to reduce the number of customers sharing the same bandwidth. It also eases Cox’s forthcoming upgrade to DOCSIS 3.1 technology.

“We’re […] taking fiber deeper as a part of our multi-year network transformation plan, working towards a node-plus-zero architecture that allows us to take fiber to the home, and allows us to bring gigabit speeds on demand. And of course we’re aligning around DOCSIS 3.1,” Hart said.

Cox is planning its first rollout of DOCSIS 3.1, which gives cable companies to ability to offer gigabit download speeds, in the fourth quarter of this year. It will choose one of the smaller communities it serves as a test market. If all goes well, Cox will push DOCSIS 3.1 across all of its markets between 2017-2020, likely focusing on Phoenix and San Diego first.

Cox is evaluating DOCSIS 3.1 cable modems from a number of vendors, with Arris and Technicolor likely contenders.

Cox continues to support data caps and usage-based billing in some of its markets and has become one of the stingiest with data allowances:

Package Usage Cap Speeds
Download / Upload
Starter 150 GB 5 Mbps / 1 Mbps
Essential 250 GB 15 Mbps / 2 Mbps
Preferred 350 GB 50 Mbps / 5 Mbps
Premier 700 GB 100 Mbps / 10 Mbps
Ultimate 2000 GB 200 Mbps / 20 Mbps
Gigablast (Where Available) 2000 GB 1 Gbps / 1 Gbps

Customers in Cleveland, Ohio are the unluckiest of all, because they also face an overlimit fee when they exceed their allowance: $10 for each additional 50GB block of data. Some customers in Cleveland’s downtown area have found a loophole around the data cap, however. If they access the Internet over Cox WiFi and Cable WiFi hotspots, it does not count against one’s allowance at this time.

Charter Completes Time Warner Cable/Bright House Merger Today

charter twc bhAmerica has a new second largest cable conglomerate with 17 million customers and a new name.

Charter Communications formally completed their $55 billion acquisition of Time Warner Cable and Bright House Networks today, creating a new cable giant that more closely rivals number one Comcast in size and scope.

The approval came despite warnings from a team at the FCC assigned to review the impact of the merger.

The Deal is Likely to Trigger an Abusive Money Party at the Expense of Customers… Merger Approved

“We conclude that the transaction will materially alter [Charter’s] incentives and abilities in ways that are potentially harmful to the public interest,” an FCC report about the impact of the merger states.

The FCC concluded the deal could become an enormous money-maker for Charter and its investors through the eventual metering of online usage. There are strong incentives, according to the FCC, for Charter “to impose data caps and usage-based prices in order to make watching online video more expensive, and in particular more expensive than subscribing to a traditional pay-TV bundle” after its voluntary commitment not to impose data caps expires.

Existing Charter customers warn this isn't the cable company you are looking for.

Existing Charter customers warn this isn’t the cable company you are looking for.

The FCC is also certain Charter will enjoy considerable pricing power with its near broadband monopoly at speeds of 25Mbps or higher. That means one thing: substantial rate increases unchecked by competition.

Despite the gloomy prospects, FCC commissioners found a “compromise” that will impose consumer-friendly conditions on the merger, but will expire between 5-7 years from today. After that, in the absence of robust competition from a player like Google Fiber, it will be open season on broadband customers.

Consumer advocates were less than pleased.

“There’s nothing about this massive merger that serves the public interest. There’s nothing about it that helps make the market for cable TV and Internet services more affordable and competitive for Americans,” said Free Press president and CEO Craig Aaron. “Customers of the newly merged entity will be socked with higher prices as Charter attempts to pay off the nearly $27 billion debt load it took on to finance this deal. The wasted expense of this merger is staggering. For the money Charter spent to make this happen it could have built new competitive broadband options for tens of millions of people. Now these billions of dollars will do little more than line the pockets of Time Warner Cable’s shareholders and executives. CEO Rob Marcus will walk away with a $100 million golden parachute.”

[Image: WSJ.com]

In fact, the golden parachutes will extend far beyond retiring Time Warner Cable CEO Rob Marcus. According to a regulatory filing, Marcus’ contract was written to allow him to sell the company and effectively be “terminated without cause,” which activates the equivalent of a Powerball Powerplay. Marcus will automatically qualify to receive several years’ worth of his original salary, expected bonuses, and compensation in stock for showing himself to the exit. That alone is expected to exceed $100 million. Marcus’ ancillary benefits also add up, and will be eventually disclosed in future filings with the Securities & Exchange Commission.

Marcus’ colleagues won’t leave empty-handed either. The chief operating officer and chief financial officer of Time Warner Cable could each get $32 million in compensation. The general counsel of Time Warner will retire with around $22 million and some mid-level executives could leave with around $18 million each.

Familar names on Wall Street will also enjoy proceeds worthy of Donald Trump Lotto. Everyone’s favorite financial casino Goldman Sachs is sitting pretty with millions in fees advising Charter on both its acquisitions of Bright House and Time Warner Cable. UBS helped lead the financing of the whopping $55 billion deal on behalf of Charter and is the sole financial adviser to Advance/Newhouse, which owns Bright House. That means big bucks for the Swiss bank.

fishThe Small Swallow the Big

Charter was a much smaller, and not well-regarded cable company before it financed the acquisition of two of its non-competing rivals. In fact, Time Warner Cable was already the country’s second largest cable operator before the acquisition, and Charter will have to contend with managing a cable operator much larger than itself. Charter executives have hinted it will take many months to manage that transition, with the eventual retirement of both the Time Warner Cable and Bright House brands, in favor of Charter and its Spectrum product suite.

Those not already Charter customers will be subjected to a publicity campaign to manage the introduction of Charter in the best possible light, despite the fact current Charter customers rate the cable operator as mediocre in consumer surveys. Its reputation is well-known, especially in the middle of the country where many Charter systems operate.

Charter will continue to be led by CEO Thomas Rutledge, who will also hold the titles of president and chairman of the board. But the man behind-the-scenes expected to have a substantial amount of influence in how Charter is run in the future is ex-Tele-Communications, Inc. (TCI) CEO Dr. John Malone through his entity Liberty Broadband, which will control three seats on Charter’s board of directors, including one for Malone himself. Malone advocated for Rutledge to become CEO of Charter after the cable company emerged from bankruptcy reorganization in 2009.

makeoverHow to Remake Your Image: Change the Name

Renaming Time Warner Cable isn’t likely to fix the scandalously low regard its customers hold the company. But it couldn’t hurt either.

“It’s not surprising Charter wants to rebrand Time Warner Cable,” said David VanAmburg, managing director of the American Customer Satisfaction Index, which regularly rates Time Warner Cable (and often Comcast trading places) the worst companies in the country. “Charter has scored better than Time Warner Cable in recent years, so it could bode well for Time Warner Cable customers. But the data suggests leaps-and-bounds improvement could be difficult.”

ACSI graded Charter 57 in 2015. Time Warner Cable managed a 58 — both effectively failing grades on a scale of 0-100.

What kinds of services Charter is now compelled to offer is dependent on the state of the cable system serving each area and if regulators extracted concessions on the state level to guarantee better service. The state that worked the hardest to compel upgrades and insist on a more customer-friendly transition is New York, where the Public Service Commission forced concessions to upgrade all of the state and allow customers to keep their current Time Warner Cable plans if they wished.

“On Day One, customers of (Time Warner) won’t really see any changes,” Charter spokesman Justin Venech told the Albany Times Union. “Time Warner Cable and Charter Spectrum will continue offering their current suite of advanced products and services to customers in their markets.”

“As we go all digital market by market, we will launch the Spectrum brand product, pricing and packaging, and Charter will also launch Spectrum in those markets in which (Time Warner has) already gone all digital,” Venech said. “We will be communicating directly with customers, letting them know when they will start seeing the Spectrum brand. In addition, when our Spectrum packages launch, if a customer likes the package they are currently in, they will be able to stay in that package.”

Financial Mess for Altice Abroad, U.S. Cable Customers Will Help Cover the Losses

altice debtAs Patrick Drahi’s telecom empire continues to strain under massive debts, a customer exodus in France, and cut throat competition in Europe that has reduced prices of some plans to less than $5 a month, the one thing his parent company Altice can count on is the deep pockets of the American cable subscriber.

The two cable companies that could make all the difference in helping Mr. Drahi keep the proverbial lights on at Empire Altice are his American acquisitions: Suddenlink and, if regulators ultimately approve, Cablevision. The French newspaper Les Echos notes Suddenlink customers are already helping cover Altice’s terrible financial performance in Europe, thanks to that cable company’s 42.5% profit margin. Suddenlink customers will be doing even more to help bail out Drahi’s difficult situation in France, thanks to future rate increases and the continued implementation of broadband usage plans that will push customers towards upgrades. But there is more to come.

“Cablevision will complete the ‘desensitization’ of France’s turbulent [telecom] marketplace for Altice,” reports the newspaper. Cablevision gives Altice an opportunity to cut costs and rely on New York, New Jersey and Connecticut customers to squeeze money out of the New York-based cable operator, validating Drahi’s “American adventure” — acquiring barely competitive cable companies to bolster revenue and profits. Customers are not expected to see lower cable bills, despite the cost cutting.

Overleveraged

Overleveraged

Altice’s troubled SFR-Numericable, which provides cable and mobile service in France, continues to endure a wholesale customer exodus, losing another 272,000 wireless customers during the first three months of 2016. Another 61,000 customers canceled cable and broadband service at the same time, despite price cuts. Even with cut-rate promotions, more than 1.4 million customers asked SFR-Numericable for a divorce over the last 15 months.

“They can’t give the service away for free,” says François Beauparlant, who dropped SFR-Numericable in January. “The company specializes in broken promises and shady deals. They promised upgrades and left us with service that regularly fails or Internet speeds only a small amount of what they promoted.”

Beauparlant rebuffed SFR despite its well-publicized offer of a wireless service package with 20GB of data and unlimited calls and text messages for $4.50 a month for a year.

Meanwhile, in Bethpage, N.Y., the neighbors are hopeful that quieter skies are in their future as the long-predicted Great Slash-a-thon at Cablevision is reportedly about the begin, starting with the permanent grounding of the cable company’s fleet of four executive helicopters which regularly fly in and out of Cablevision’s corporate headquarters.

The executives that relied on them won’t have much time to lament the loss, as the New York Post reports Drahi is ready to show Cablevision’s top-10 executives the door within weeks. Drahi wants everyone earning $300,000 or more out of the company as soon as possible.

Altice's cost-cutting Huns arrive.

Altice’s cost-cutting warriors arrive.

“I do not like to pay salaries. I pay as little as I can,” Drahi told investors at a conference last year.

Drahi also said he prefers to pay minimum wage wherever possible, a fact lesser Cablevision employees are likely to find out this summer. While those in lower level positions are likely to get “take it or leave it” offers, the top echelon of well-paid Cablevision executives will be paid even more in golden parachute exit packages, expected to be worth millions.

Among the recipients will likely be CEO James Dolan, general counsel David Ellen and vice-chairmen Hank Ratner and Gregg Seibert. Dolan’s wife Kristen, appointed chief operating officer several years ago, is still up in the air. She won’t be working at Altice’s pay scale, but may form a data-oriented joint venture with Altice later, according to the Post.

Drahi still insists he can find $900 million to cut from Cablevision’s annual budget. Critics of Altice’s acquisition of Cablevision insist those savings will come at the cost of customers, who could end up with the consequences of a dramatically reduced budget to manage upgrades, outsourced customer service, and dubious subcontractors.

Drahi’s willingness to withhold payments from vendors and suppliers to extract discounts is also likely to affect Cablevision’s relationships with cable programming networks and TV stations. The Post reports he is looking to offer slimmed-down cable TV packages, which means confronting powerful entertainment conglomerates like Disney, Viacom, Discovery, Comcast, and News Corp. Playing hardball with Viacom has not gone well for smaller cable conglomerates like Cable One, which dropped Viacom-owned channels from its lineup when it could not win enough price concessions. Disney’s ESPN has shown a willingness to sue if its expensive sports network is shunned from discounted cable TV packages.

Drahi concedes Altice and SFR-Numericable may not be the most popular companies in France, but ultimately it may not matter if he owns and controls the content customers want to watch. He is pouring money into French media acquisitions, including newspapers, launching his own Paris-based news channel, and acquiring TV networks and the exclusive rights to show popular sports like English football on them.

TDS Gets Tedious With 250GB Usage Cap

tds cap

TDS DSL customers have a 250GB data cap in their future.

Arch, a Stop the Cap! reader in eastern Kentucky, just received a notification letter informing him his Internet access is about to be rationed, and unless he buys additional usage before June 1, TDS is likely to charge him penalty overlimit rates.

tds cap optionsLike some data caps of the past, TDS is giving customers a small break by remaining unlimited during the overnight hours, but for many customers, it won’t be enough to prevent a higher broadband bill.

“We are writing to you inform you TDS s implementing data-usage allowance plans in your area,” reads TDS’ letter. “Beginning with the June billing period, data usage will be measured during peak time (6am-midnight CST). Data usage during non-peak time will be unlimited. In June and thereafter, if your monthly data usage exceeds the 250GB allowance you will be assessed a $20 overage fee for every 250GB exceeded (up to $60).”

TDS advises Arch that based on his prior usage, he’s very likely to exceed his cap and face overlimit fees.

“My mother got a similar [letter],” writes Arch. “Mine states I am likely to be affected by the cap and my mother’s letter says she will likely not be affected.”

Of course, customers can make the usage cap less of an issue by agreeing to buy more usage up front:

  • a 500GB Data Allowance runs $10 extra a month;
  • 750GB costs an extra $20 a month;
  • 1TB (1,000GB) is priced at an additional $30 a month.

TDS does not offer any justification for their data caps, but it doesn’t have a lot to fear imposing them.

“TDS has no competition at all in my area except for fraudband satellite,” Arch reminds us.

That is also likely true across many other TDS service areas, where the company’s 1.2 million customers live in more than 150 different communities, many rural or suburban.

California Dreamin’: Will Regulators Approve Tougher Charter/Time Warner Merger Conditions Today?

charter twc bhAll signs are pointing to a relative cake walk for Charter Communications’ executives this afternoon as they seek final approval from the California Public Utilities Commission to acquire Time Warner Cable systems in the state, with the help of an Administrative Law Judge that is recommending approval with a minimum of conditions.

In fact, the strongest condition Charter may have to accept in California came by accident. As part of Charter’s lobbying effort, it proposed a set of voluntary conditions it was prepared to accept, claiming to regulators these conditions would represent benefits of approving the transaction. One of those was a temporary three-year commitment to abide by the FCC’s Open Internet Order, which among other things bans paid prioritization (Internet fast lanes), intentionally blocking lawful Internet content, and speed throttling your Internet connection.

Somewhere along the way, someone forgot to include the language that sunsets (or ends) Charter’s voluntary commitment after three years.

Without it, Charter will have to abide by the terms of the FCC’s Open Internet Order forever.

cpucSoon after recognizing the change in language, Charter’s lawyers appealed to the CPUC to correct what it called a “drafting error.”

“[New Charter does] not seek modification of the second sentence, which matches their voluntary commitments, but believe[s] that the three-year limitation in the second sentence was intended to— and should—apply to the first sentence as well,” Charter’s lawyers argued two weeks ago.

In other words, the Administrative Law Judge’s apparent attempt to ‘cut and paste’ Charter’s own press release-like voluntary deal commitments into his personal recommendation went horribly wrong. Charter’s lawyers prefer to call it an “intent to track” the company’s voluntary commitments. Either way, Charter’s lawyers all call the new language unfair.

“Holding New Charter indefinitely to FCC rules even after the FCC’s rules are invalidated or modified, and irrespective of future market conditions or the practices or rules governing New Charter’s competitors, would be a highly unconventional requirement,” the lawyers complained.

That provides valuable insight into how “New Charter” is likely to feel about Net Neutrality three years from now. Charter’s lawyers argue it would be unfair to hold them to “invalidated” rules — the same ones the company itself has voluntarily embraced as a condition of approval, but only for now.

Remarkably, in the final revision of the Administrative Law Judge’s recommendations to the CPUC recommending approval, the language that is keeping Charter’s lawyers up at night is still there:

New Charter shall fully comply with all the terms and conditions of the Federal Communications Commission’s Open Internet Order, regardless of the outcome of any legal challenge to the Open Internet Order. In addition, for a period of not less than three years from the closing of the Transaction, New Charter (a) will not adopt fees for users to use specific third-party Internet applications; (b) will not engage in zero-rating; (c) will not engage in usage-based billing; (d) will not impose data caps; and (e) will submit any Internet interconnection disputes not resolvable by good faith negotiations on a case-by-case basis.

Charter's new service area, including Time Warner Cable and Bright House customers.

Charter’s new service area, including Time Warner Cable and Bright House customers.

If it remains intact through the vote expected this afternoon, New Charter will have to permanently abide by the FCC’s Open Internet Order, with no end date. That condition will apply in California, and because of most-favored state status, also in New York.

Stop the Cap!’s recommendations to the CPUC are also in the same document, although our views were not shared by the judge:

Stop the Cap! objects to [New Charter’s] 3-year moratorium on data caps and usage based pricing for broadband services. It argues that such bans should be made permanent or, if not permanent, should last at least 7 years in parallel with the lifespan of the conditions imposed in the FCC’s approval of the parent company merger. In addition, Stop the Cap! objects to what it asserts will be a major price increase for existing Time Warner customers when Charter’s pricing plans replace Time Warner’s pricing plans.

More broadly, Stop the Cap! president Phillip Dampier called the revised recommendations to approve the deal underwhelming and disappointing.

“By window-dressing what is essentially Charter’s own voluntary offer to the CPUC, the commission is continuing to miss a golden opportunity to win deal conditions that will meaningfully benefit Californian consumers that will otherwise get little more than higher cable and broadband bills,” Dampier told Communications Daily. “Virtually everything Charter is promising customers is already available or soon will be from Time Warner Cable, often for less money. Time Warner Cable committed to offering its customers 300Mbps speeds, no usage caps or usage billing, and all-digital service through its Maxx upgrade program, expected to be complete by the end of 2017 or 2018. The CPUC is proposing to allow New Charter to wait until 2019 to provide 300Mbps service and potentially cap Internet service three years after that, four years less than what the FCC is demanding.”

Among the conditions Charter will be expected to fulfill in return for approval of its merger in California:

  • Within a year of the closing of the merger deal, New Charter must boost broadband download speeds for customers on their all-digital platform to at least 60Mbps, an upgrade that is largely already complete.
  • Within 30 months, New Charter must upgrade all households in its California service territory to an all-digital platform with download speeds of not less than 60Mbps, an upgrade that has already been underway for a few years.
  • By Dec. 31, 2019, New Charter shall offer broadband Internet service with speeds of at least 300Mbps download to all households with current broadband availability from New Charter in its California network. Time Warner Cable essentially promised to do the same by early 2018, with many of its customers already getting up to 300Mbps in Southern California.
  • While Charter talks about a bright future for the Time Warner customers joining its family, the company has not done a great job maintaining and upgrading its own cable systems in parts of California. Many smaller communities still only receive analog cable TV from Charter, with no broadband option at all. Therefore, the CPUC is giving New Charter three years to deploy 70,000 new broadband “passings” to current analog-only cable service areas in Kern, Kings, Modoc, Monterey, San Bernardino and Tulare counties. But the CPUC is giving New Charter a break, only requiring them to offer up to 100Mbps service in these communities.
  • Time Warner Cable and Bright House customers in California will be able to keep their current broadband service plans for up to three years. Customers will also be allowed to buy their own cable modems and set-top boxes, but there is no requirement New Charter compensate customers who do with a service discount.
  • Within six months of the deal closing, New Charter must offer Lifeline phone discounts within its service territory in California.
  • New Charter must print and distribute brochures explaining the need for backup power to keep phone service working if electricity is interrupted. Those brochures must be available in multiple languages including, but not limited to, English, Spanish, Chinese and Vietnamese, as well as in accessible formats for visually impaired customers.

The CPUC is also expected to adopt Charter’s own voluntary commitments not to impose usage caps, usage billing, modem fees, and other customer-unfriendly practices for three years, a point that drew strong criticism from Stop the Cap! and the California Office of Ratepayer Advocates for being inadequate.

Both groups proposed that bans on data caps and usage billing should stay in place “until there is effective competition in Southern California, or no shorter than seven years after the decision is issued, whichever is later.”

ORA’s program supervisor Ana Maria Johnson believes the proposed changes don’t go far enough to “mitigate the harms that the merger will likely cause, especially in Southern California.”

Dampier was surprised how little the CPUC seemed to be asking of New Charter, especially in comparison to regulators in New York.

“The New York Public Service Commission did a more thorough job protecting consumers by insisting on faster and better upgrades, including readiness for gigabit service, and the same level of broadband service for all of New Charter’s customers in New York,” Dampier argued. “It also demanded and won meaningful expansion in rural broadband, low-cost Internet access, protection of New York jobs, and improved customer service. It is remarkable to us the CPUC did not insist on at least as much for California.”

The CPUC is expected to take a final vote on the merger deal this afternoon, starting at 12:30pm ET/9:30am PT and will be webcast. It is the 20th item on the agenda.

Stop the Cap! Still Fighting Charter-Time Warner Cable Merger in California

stop-the-capStop the Cap! continues the fight for a better deal for Time Warner Cable customers that could soon end up as Charter Communications customers, if the California Public Utilities Commission (CPUC) approves the merger.

While the Federal Communications Commission formally approved the deal last week, California has yet to sign off on the transaction, giving consumer advocates like Stop the Cap! an opportunity to recommend the state regulator impose stronger consumer-friendly deal conditions that guarantee customers their share of the anticipated windfall in “deal benefits” that shareholders and executives of the companies involved are likely to receive.

Our California coordinator Matthew Friedman has been educating the CPUC about the true nature of data caps and usage-based billing, and sharing our view that Charter’s promised merger deal benefits are illusory, offering little more than what Time Warner Cable already offers its Maxx-upgraded service areas. In fact, Time Warner’s ongoing commitment to not impose compulsory data caps or usage billing is likely to be canceled by Charter Communications, which has only agreed not to impose such billing schemes on customers for three years.

Even worse, future Charter customers are likely to pay higher broadband bills after Charter imposes its regular prices on Time Warner Cable customers — prices often higher than what Time Warner charges for similar services. Although Time Warner customers have been able to negotiate a better deal for themselves after threatening to cancel, Stop the Cap! anticipates Charter will not be as generous with those customers in the future.

At the minimum, Stop the Cap! is recommending the CPUC either permanently ban compulsory usage caps and usage billing from Charter, or add a competition test that will allow such billing only where consumers can switch to a competitor that offers comparable unlimited broadband service.

Charter's broadband "deal"

Charter’s broadband “deal”

The loss of [Time Warner’s] commitment [to always offer unlimited broadband options to consumers] could result in the following harms, according to Friedman:

  1. New Charter’s commitment to provide low cost broadband will become completely voluntary and unenforceable;
  2. increased broadband pricing resulting in decreased demand for broadband;
  3. New Charter will be able to circumvent Net Neutrality rules;
  4. New Charter will be able to engage in a multitude of anticompetitive behaviours, increasing the cost and reducing the attractiveness of competing video content from edge providers, thus lessening the demand for high-speed broadband access to the Internet, and thus running counter to Section 706(a)’s mandate to promote competition in broadband services;
  5. innovation and investment will potentially decrease significantly;
  6. network security can be adversely affected; and,
  7. Californians, especially low-income Californians, may lose access to education opportunities.
We're not drinking "New Charter's" Kool-Aid

We’re not drinking “New Charter’s” Kool-Aid

Stop the Cap! (and the Office of Ratepayer Advocates as well) has offered a reasonable option of requiring a competition test to sunset the prohibition on data caps and usage based pricing,” wrote Friedman. “This suggestion is based on Charter’s own expert testimony and [the conditions] must be rewritten per these suggestions if it is to fulfill multiple statutory requirements.”

Stop the Cap! also advocates that Time Warner Cable customers that purchased their own cable modems to avoid Time Warner’s modem fees deserve an ongoing bill credit for providing their own equipment, because Charter builds the cost of its modem into the price of broadband service.

“Charter already bakes the price of the modem rental into the monthly cost of the plan,” Friedman noted. “New Charter [should be required] to offer a discount to customers who bring their own modems. Charter currently allows customers to bring their own modems… they just continue to charge those customers for a Charter modem that the customer never uses.”

Although Charter’s pledge to increase broadband speeds for Time Warner customers seems laudatory, in fact Charter’s proposed service offerings also represent a significant rate increase for broadband customers who don’t need or want 60Mbps service. They won’t have much choice after Charter imposes its own plans and pricing, which are now limited to 60 or 100Mbps options for most customers, at prices starting at $60 a month.

charter twc“Clearly these TWC customers are materially much worse off under New Charter than TWC,” Friedman told the CPUC. “Equally clear is that Charter’s ‘Simplified Pricing’ (perhaps more accurately described as ‘Fewer Options and Higher Prices’) is far from a public benefit. This massive price increase will affect literally every stand-alone-broadband TWC customer other than the few who qualify for the School Lunch/Senior Assistance plan. While the low-cost School Lunch/Senior Assistance plan is great for the narrowly targeted group of consumers who manage to qualify, roughly doubling the cost of broadband for every other standalone customer more than offsets the combined value of every other ‘benefit’ that the applicants allege will come from this transfer.”

Stop the Cap! also advocates that the CPUC guarantee Charter customers have a choice about the broadband speeds they need and the amount they have to pay for Internet access.

“New Charter should be required to retain TWC’s pricing and plan structure in perpetuity, for both new and existing TWC customers. TWC customers should retain the ability to switch back and forth between TWC’s cheaper, larger variety of plans,” Friedman wrote. “New Charter should be required to continue TWC’s practice of increasing customer speeds as technology advances with no
accompanying price increase.”

Although Charter’s lobbying efforts promote improved service for Time Warner Cable customers, it is our view that once one examines the full scope and impact of Charter’s proposal, customers will be worse off under Charter than they would be staying with Time Warner Cable.

“TWC stands out in its field for its customer-friendly policies such as providing discounts for those who own their own modems, its public commitment to refuse to impose data caps or
usage based pricing even in the face of pressure from Wall Street to do so, and the creation of its TWC Roku App to allow customers to avoid set-top box rental fees,” argued Friedman. “This transfer, as currently conditioned, creates a net public benefit harm, not a benefit, or even a status quo.”

Time Warner Cable Begins Maxx Upgrades for Wisconsin

twc maxxTime Warner Cable Maxx upgrades are on the way for customers in several Wisconsin cities, bringing all-digital cable television service later this year in preparation of boosting broadband speeds up to 300Mbps.

The company has begun notifying customers in the Fox Cities – including Green Bay, Appleton and Oshkosh as well as in southeast Wisconsin, including Milwaukee, Kenosha, Waukesha and Racine that analog television service will be switched off in the next several months.

“Going all-digital brings the benefit of better picture and sound immediately, and will enable us to offer customers faster Internet speeds and additional services in the future,” said Jack Herbert, regional vice president of Time Warner Cable.

The transition to an all-digital network will require video customers without TWC digital equipment (customers who plug their cable line directly into the TV, VCR or similar device) to order a TWC digital adapter.

TWC will offer existing TV customers one or more digital adapters at no charge through at least October 6, 2017. To qualify, customers must order their digital adapters by January 29, 2017. After this free period, each adapter will be billed at the prevailing price, now around $3 a month. Customers can visit www.TWC.com/digitaladapter to place an order or call toll-free 1-844-841-5085 to request equipment. Digital Adapters are also available at most Time Warner Cable stores.

After the free equipment period ends, Stop the Cap! recommends customers return the digital adapters and consider purchasing an online video console such as a Roku device, which supports the Time Warner Cable lineup without recurring equipment rental charges.

Customers can expect free broadband speed upgrades after the digital conversion is complete, with faster Internet access likely available late this year or in early 2017.

Only 34% of Broadband Customers Would Recommend Their ISP to Others

Usage caps and usage billing are especially unpopular.

Usage caps and usage billing are especially unpopular.

Americans do not have a love affair with their phone or cable company, according to a new study that found most customers either wouldn’t recommend or are neutral about their Internet Service Provider (ISP).

A survey conducted by Incognito Software Systems unintentionally stumbled on the fact consumers deal with either a monopoly or duopoly for broadband service, giving them few alternative options if they do not like the service they are getting. Despite the mediocre ratings many customers give their ISP, only 10% have switched providers in the last year.

“This could reflect a lack of choices in certain regions, or it may be indicative of subscriber apathy toward Internet Service Providers,” the survey found.

Urban and suburban residents hold slightly more favorable views about their broadband service than their rural counterparts. The report found rural residents were less satisfied with service speeds and pricing options, which in most cases involve traditional DSL service from the local phone company.

broadband reportIncognito’s findings show broadband providers are reducing initiatives to acquire new customers as broadband penetration in the United States approaches 90%. Instead, they want current subscribers to pay more to satisfy demands for higher average revenue per customer. Customers already believe their current ISP is charging too much for too slow service.

“In this era of subscriber monetization, it’s essential that broadband providers clearly grasp what’s important to their existing subscribers,” Stephane Bourque, president and CEO of Incognito, said in a statement. “As our survey shows, providers are expected to do more than ever before: provide faster speeds, lower prices and superior WiFi capabilities to live up to their subscribers’ demands.”

“Most subscribers want to pay less (39%) for faster Internet services (24%),” the survey found. At least 33% want faster speeds and 28% are looking for better Wi-Fi reliability. An additional 32% want more choice in Internet plans at different prices.

The survey also found one thing customers absolutely do not want from their ISP: usage-based pricing. The fact that 58% of respondents didn’t want a usage-based billing plan might seem low until the report explains another 27% did not know what usage-based plans were. Only 15% of consumers would prefer a usage-based plan, assuming it would save them money. Most usage billing plans available to customers today do not, unless a customer is willing to cut their usage to 5GB or less per month.

In an effort to appease disappointed cable and phone company executives, the report’s authors optimistically suggest “further education could go a long way into changing the subscribers’ perception” about usage pricing.

Besides raising speeds and reducing prices, the value-added feature customers want their ISP to offer the most in the future is a robust network of accessible Wi-Fi hotspots.

York Councillor Objects to Fiber Upgrade Claiming It Will Harm Area’s Daffodils

DaffodilsA fiber upgrade offering 17 million homes in the United Kingdom broadband speeds up to 200Mbps is proving controversial in parts of York because a local councillor is concerned the project will wreak havoc with the area’s daffodils.

“Having seen the disruptive and shoddy way these works have been carried out in the rest of York, I will not let that situation arise in this ward unchallenged,” said Osbaldwick and Derwent councillor Mark Warters (Ind.). “Given that Osbaldwick is currently covered in daffodils, most of which I planted with the local scouts over the years, as well as many other parts of the ward, I most certainly want to know which areas of verge are to be destroyed and what reinstatement/compensation plans are in place for local communities.”

Warters also questioned the need for Virgin Media’s $4.4 billion national cable broadband upgrade, especially since BT has already improved its DSL service in England.

“Assuming this is a competing system, what then is to stop ‘XYZ super, super fast broadband’ coming along and digging up the streets in a few years time for yet another competing system?” he asked. “The whole issue seems to be getting out of control with utility companies.”

Warters has long objected to telecommunications competition.

Warters (Ind.)

Warters (Ind.)

“I can well remember the disruption caused across the city in the 1990s when the cable TV systems were installed, which very few people needed due to [satellite provider] Sky TV,” Warters told The Press.

Some constituents were unimpressed with Warters’ Luddite views.

“That’s right Mr. Warters, keep your peasants in the dark ages,” responded one local. “After all there are plenty carrier pigeons around aren’t there.”

Some portrayed the issue as generational, noting York’s industrial base is rapidly being replaced with an information age economy that requires high quality broadband to compete.

“This is so typical of the attitudes that drag York down,” wrote Dillan York. “The days when northern blokes who were thick of arm and thicker of head could scrape a living from hitting lumps of metal with big hammers have gone. Shame there is an aging population who lives in hope that such ‘good times’ will return.”

But some residents acknowledge the project, which requires considerable underground digging, has made a mess of roads and sidewalks in other areas and utility company restoration efforts are lacking.

“It makes absolutely no difference which utility company digs up the road or pavement,” wrote another York resident. “They all leave them in a mess.”

Analysis: FCC, Justice Dept. Ready to Approve Charter-Time Warner Cable-Bright House Merger

charter twc bhThe Justice Department and FCC Chairman Thomas Wheeler are prepared to accept a massive $55 billion merger between Charter Communications, Time Warner Cable, and Bright House Networks, but at a cost of stringent conditions governing the creation of America’s second largest cable conglomerate.

In a joint agreement with the U.S. Department of Justice and the FCC, Charter executives have agreed to do nothing to harm online video competition or implement usage caps or usage-based billing for at least seven years. Charter will also be forced to broaden its cable service to reach at least two million additional homes, some already served by other providers, setting the stage for potential head-to-head competition between two closely-matched competitors.

The deal will directly affect 19.4 million customers of the three companies, which will eventually combine under the Charter Communications brand name and marketing philosophy — selling customers simplified television, phone, and broadband packages that reduce customer options. Little is expected to change for the rest of 2016, however, with Time Warner Cable and Bright House likely to continue operations under existing packaging and pricing until sometime in 2017. Technicians told Stop the Cap! earlier in April they were told not to acquire new outfits with the Time Warner Cable logo and branding, and the cable company is also making preparations to gradually repaint its massive fleet of vans and service vehicles with the Charter logo.

President Obama Expected To Nominate Rep. Mel Watt For Director Of The Federal Housing Finance Agency

Wheeler

Most of the concessions seemed to have originated from FCC Chairman Thomas Wheeler, who has been one of the strongest proponents of online video competition, improved broadband, and direct head-to-head competition between cable operators. The Justice Department focused its attention on challenging the cable industry’s almost-united front against online video competition. Under former CEO Glenn Britt’s leadership, Time Warner Cable was considered “the industry leader” in contract language that guaranteed it would share the lowest price negotiated by any other cable, satellite, telephone company or online video provider. Those agreements also often included clauses that restricted programmers from putting streamed programming online for non-subscribers. That explains why cord-cutters frequently run into barriers watching networks online unless they can prove they are already a pay-TV customer.

Under conditions from the Justice Department, those sections of agreements with Charter, Time Warner Cable and Bright House Networks will become invalid and unenforceable. But that doesn’t mean restrictions will disappear overnight. Comcast, Cox, Cablevision, and other cable companies also enforce similar conditions which will be unaffected by the Justice Department decision, at least for now. But the precedent has sent shudders across an industry concerned about protecting its still-profitable cable TV business, under assault from increased programming costs and a greater reluctance by consumers to tolerate annual rate increases.

analysisGene Kimmelman, chief executive of consumer interest group Public Knowledge, told the Wall Street Journal the conditions were “a clear signal to the content industry and entertainment companies that the enforcement agencies are giving them a green light to grow online video and experiment as a direct competitor to cable, and they will prevent cable from interfering.”

Of greater interest to consumers are the deal conditions proposed by Chairman Wheeler. As Stop the Cap! reported almost a year ago, sources told us the FCC would “get serious” about data caps if companies like Comcast imposed them on customers nationwide. At the moment, Comcast is testing caps affecting just under 15% of their total customer base, already generating thousands of customer complaints with the FCC in response. Although Charter promised three years of cap-free service, Wheeler and his staff obviously felt it was important to send a message that they agree with cap opponents that data caps are more about preventing competition than technical need. By making long term data cap prohibition a core part of a settlement agreement with Charter, Wheeler sends a strong message to Comcast that the FCC isn’t drinking cable industry Kool Aid about the rationale for usage caps and usage billing.

Some consumer groups worry Charter has overextended itself in debt over-acquiring other cable companies.

Some consumer groups worry Charter has overextended itself in debt over-acquiring other cable companies.

“New Charter will not be permitted to charge usage-based prices or impose data caps,” Wheeler said in a statement. “Second, New Charter will be prohibited from charging interconnection fees, including to online video providers, which deliver large volumes of internet traffic to broadband customers. Additionally, the Department of Justice’s settlement with Charter both outlaws video programming terms that could harm online video distributors (OVDs) and protects OVDs from retaliation– an outcome fully supported by the order I have circulated today. All three seven-year conditions will help consumers by benefitting OVD competition. The cumulative impact of these conditions will be to provide additional protection for new forms of video programming services offered over the Internet. Thus, we continue our close working relationship with the Department of Justice on this review.”

Wheeler is also intent on proving there is a viable market for cable operators overbuilding into new territories. To prove that point, Wheeler has gotten an agreement that Charter will introduce service to one million new customers where it will intrude on another operator’s service area and directly compete with it. The other provider has to already offer service at 25Mbps or greater. That could mean Charter competing directly with a cable company like Comcast or building service into an area already served by Verizon FiOS, AT&T U-verse, or another provider offering something beyond traditional DSL.

Copps

Copps

Another million customers just outside of areas served by the three cable companies may also finally get service, as Charter will be compelled to wire at least another million homes for cable service for the first time.

Despite the conditions, many consumer groups and former public officials remain unhappy the merger won approval.

“Creating broadband monopoly markets raises consumer costs, kills competition, and points a gun at the heart of the news and information that democracy depends upon,” said Michael Copps, a former Democratic commissioner at the FCC and a special adviser to the Common Cause public interest group. “FCC approval of this unnecessary merger would be an abandonment of its public interest responsibilities.”

“There’s nothing about this massive merger that serves the public interest. There’s nothing about it that helps make the market for cable TV and Internet services more affordable and competitive for Americans,” said Craig Aaron, president and CEO of Free Press. “Customers of the newly merged entity will be socked with higher prices as Charter attempts to pay off the nearly $27 billion debt load it took on to finance this deal. The wasted expense of this merger is staggering. For the money Charter spent to make this happen it could have built new competitive broadband options for tens of millions of people. Now these billions of dollars will do little more than line the pockets of Time Warner Cable’s shareholders and executives. CEO Rob Marcus will walk away with a $100 million golden parachute.”

Wheeler’s draft order is likely to receive a final vote in the coming days before the Commission. The only remaining holdout is California’s telecom regulator, which is expected to reach a decision by May 10.

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