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Internet Slowdown Day is Here: Tell the FCC to Classify ISPs as Common Carriers

Phillip "It's common sense" Dampier

Phillip “It’s common sense” Dampier

The concept is so simple one might think there was nothing controversial about the common sense idea of requiring Internet Service Providers to handle Internet traffic equally.

But that would throw a wrench into the money-making plans of some of America’s top cable and phone companies looking for new ways to collect more money and bigger profits from selling Internet access.

Wireless phone companies have already got the Money Party started, throttling certain traffic while exempting partnered apps and websites from counting against your monthly usage allowance. Americans pay some of the highest prices in the world for broadband service, but it is never enough for some executives who believe the increasing necessity of having Internet access means companies can charge even more for access. With few competitive alternatives, where are you going to go?

With most Americans confronted with just two Internet providers to choose from, the stage is set for mischief. The normal rules of competition simply don’t apply, allowing companies to raise prices while limiting innovation to finding new ways to improve revenue without improving the service. That has worked well for stockholders and executives that green-light these schemes, but for all the money Americans pay for service, broadband in the United States is still way behind other nations.

A few years ago, the CEO of AT&T decided that collecting money from customers to provide Internet access wasn’t enough. The company now wanted compensation from websites that generate the traffic ISPs handle for their customers. In other words, they wanted to be paid twice for doing their job.

If you listen to some of America’s largest cable and phone companies talk, you would think that traffic from Netflix and other high-volume websites was sucking them dry. But in fact their prices and profits are up and their costs are down… way down. But that doesn’t stop them from contemplating usage-based billing and reducing investment in upgrades to keep up with demand. Netflix learned that lesson when Comcast refused to upgrade some of its connections which left Netflix streaming video constantly buffering for Comcast customers. Those problems magically disappeared as soon as money changed hands in a deal that leaves Netflix dependent on paying Comcast protection money to make sure customers can actually enjoy the service they already paid to receive.

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Former FCC chairman Kevin Martin believed competition would keep ISPs honest, but since he left at the end of the Bush Administration, competition has barely emerged for most of us. Julius Genachowski, the FCC chairman under President Obama’s first term gave some strong speeches about protecting Net Neutrality but caved to provider demands the moment he met with them behind closed doors. Today, FCC chairman Tom Wheeler presides over an agency that has repeatedly had its regulatory hat handed to them by the D.C. Court of Appeals, which has ruled time and time again that the current regulatory foundation on which Internet-related policies are enforced is completely unsound.

We can thank former FCC chairman Michael Powell for that. His decision to classify broadband as an “information service” during the first term of the Bush Administration carries almost no legacy of court-upheld authority the FCC can rely on to enforce its regulations. Powell’s innovation was warmly received by America’s biggest cable companies who quickly realized the FCC had regulatory authority over the broadband business in name-only. Powell’s reward? A cushy job as head of America’s biggest cable lobby – the National Cable and Telecommunications Association (NCTA).

Don't allow Comcast and others to slow down your favorite cat videos.

Don’t allow Comcast and others to slow down your favorite cat videos.

Wheeler used to hold that position himself, and his trip through D.C.’s revolving door connecting regulators with the regulated makes it unsurprising that Wheeler’s own Net Neutrality proposal is not far from what Big Telecom companies want themselves — permission to create paid “fast lanes” on highways that currently lack enough capacity to protect other traffic from suffering the speed consequences of prioritized traffic.

It reminds me of those highway projects where cars dutifully change lanes well in advance of lane closures while other cars blow past only to merge at the last possible minute, saving them time while slowing cars behind them to a crawl as they wait to move ahead.

Make no mistake – paid fast lanes will compromise unpaid traffic, reducing the quality of your Internet experience.

The best solution to this problem would be for providers to devote more revenue to regular network upgrades that benefit everyone, not create new ways to ration the Internet for some while letting others pay to avoid speed bumps and congestion issues that are easy and inexpensive to solve. But if your provider was already delivering that kind of capacity, there would be no market for Internet fast lanes, would there? Without Net Neutrality, providers have a financial incentive not to upgrade their networks and have little fear unhappy customers will switch to the other competitor likely trying the same thing.

Net Neutrality cannot just be a policy, however. A strong regulatory foundation must exist to allow the FCC to enforce Internet-related policies without having them overturned by the courts. That means one thing: reclassifying broadband as a telecommunications service subject to common carrier regulations.

Net Neutrality opponents like to claim that would saddle Internet providers with decades old telephone regulations that have nothing to do with today’s broadband marketplace. But in fact that regulatory framework was originally established precisely for the reasons we need it again today — a non-competitive, largely unregulated marketplace is exploiting its market power to abuse customers and artificially interfere with traffic just to invent new ways to make more money.

People forget that in the 1920s, AT&T not only monopolized telephone service in most areas (and had a history of refusing to connect calls made from competing telephone companies to its own subscribers even as it hiked rates to pay for “improvements”), it was also attempting to force its for-profit vision on the newly emerging world of radio: “toll-broadcasting.” AT&T insisted that radio stations charge a fee to anyone who wanted access to the airwaves, and imposed the toll system on its own stations, starting with WBAY-AM (later WEAF) in New York on July 25, 1922.

Westinghouse, GE, RCA, and AT&T maintained such strong control over broadcasting and telecommunications in the 1920s, the Federal Trade Commission eventually filed a formal complaint with Congress declaring the four had “combined and conspired for the purpose of, and with the effect of, restraining competition and creating a monopoly in the manufacture, purchase and sale in interstate commerce of radio devices…and in domestic and transoceanic communication and broadcasting.”

It took the Justice Department to finally force a resolution to protect competition and the free exchange of ideas on the airwaves with a 1930 antitrust lawsuit against the four companies. In 1934, Congress passed the Communications Act establishing the FCC as the national regulator in charge of protecting some of the values that monopolies tend to trample.

The thing about history is that those who ignore it are bound to repeat it. Whether we are dealing with railroad robber barons, a Bell System monopoly, or barely competitive cable and phone companies, if the conditions are right to exploit customers on behalf of shareholders looking for bigger returns, companies will follow through. In the first two cases, with little chance that natural competition would bring a solution in a reasonable amount of time, regulators stepped in to restore some balance in the marketplace and protect consumers from runaway abuses. That has to happen again.

  • First, reclassify broadband as a common carrier under Title 2;
  • Second, enact strong Net Neutrality protections under that authority.

And don’t you believe that old chestnut that sensible regulatory policies will impede investment in telecommunications. Other nations that have much better broadband than we enjoy (at lower prices) already have reasonable regulatory protections in place that promote and protect competition instead of protecting incumbent market power and impeding would-be competitors. Investment in upgrades continues to pour in, further widening the gap between the kind of service we receive and what customers in other countries get for a lot less money.

The deadline for FCC comments on Net Neutrality is Sept. 15. Sending one directly is simple, effective, and will take less than five minutes.

  1. Visit fcc.gov/comments
  2. Click on the proceeding 14-28 (usually in the top three)
  3. Complete the form and type your comments in the big box. Tell the FCC you want broadband reclassified as a common carrier under Title II as a telecommunications service and that you want strong Net Neutrality policies enacted that forbid paid fast lanes and provider interference in your Internet experience.
  4. Submit the form and you are finished.
http://www.phillipdampier.com/video/Democracy Now Internet Slowdown 9-10-14.mp4

If your favorite website seems to load slowly today, take a closer look: You might be experiencing the Battle for the Net’s “Internet Slowdown,” a global day of action. The Internet won’t actually be slowing down, but many sites are placing on their homepages animated “Loading” graphics , which organizers call “the proverbial ‘spinning wheel of death,’ to symbolize what the Internet might soon look like.

Large Internet service providers, or ISPs, like Comcast, Time Warner, AT&T and Verizon, are trying to change the rules that govern the Internet. Some of the biggest companies on the Internet — Netflix, Mozilla, Kickstarter, Etsy and WordPress — are joining today’s Internet Slowdown to draw attention to Net Neutrality, the principle that service providers shouldn’t be allowed to speed up, or slow down, loading times on certain websites, such as their competitors.

This comes as 27 online advocacy groups sent a letter to Federal Communications Commission Chairman Tom Wheeler Tuesday, calling on him to take part in town hall-style public hearings on Net Neutrality before ruling on the issue as early as this year. Democracy Now’s Amy Goodman talks with Tim Karr from the group Free Press, one of the main organizers of the Internet Slowdown global day of action. (7:15)

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FCC Chairman Complains About State of U.S. Broadband But Offers Few Meaningful Solutions

FCC chairman Thomas Wheeler doesn’t like what he sees when looks at the state of American broadband.

At a speech today given to the 1776 community in Washington, Wheeler complained about the lack of broadband competition in the United States.

“The underpinning of broadband policy today is that competition is the most effective tool for driving innovation, investment, and consumer and economic benefits,” Wheeler said. “Unfortunately, the reality we face today is that as bandwidth increases, competitive choice decreases.”

faster speed fewer competitors

“The lighter the blue, the fewer the options,” Wheeler said, gesturing towards his chart. “You get the point. The bar on the left reflects the availability of wired broadband using the FCC’s current broadband definition of 4Mbps. But let’s be clear, this is ‘yesterday’s broadband.’ Four megabits per second isn’t adequate when a single HD video delivered to home or classroom requires 5Mbps of capacity. This is why we have proposed updating the broadband speed required for universal service support to 10Mbps.”

But Wheeler added that even 10Mbps was insufficient as households increasingly add more connected devices — often six or more — to a single broadband connection.  When used concurrently, especially for online video, it is easy to consume all available bandwidth at lower broadband speeds.

Wheeler

Wheeler

Wheeler’s new informal benchmark is 25Mbps — “table stakes” in 21st century communications. About 80 percent of Americans can get 25Mbps today or better, but typically only from one provider. Wheeler wants even faster speeds than that, stating it is unacceptable that more than 40% of the country cannot get 100Mbps service. Wheeler seemed to fear that phone companies have largely given up on competing for faster broadband connections, handing a de facto monopoly to cable operators the government has left deregulated.

“It was the absence of competition that historically forced the imposition of strict government regulation in telecommunications,” Wheeler explained. “One of the consequences of such a regulated monopoly was the thwarting of the kind of innovation that competition stimulates. Today, we are buffeted by constant innovation precisely because of the policy decisions to promote competition made by the FCC and Justice Department since the 1970s and 1980s.”

Wheeler said competition between phone and cable companies used to keep broadband speeds and capacity rising.

“In order to meet the competitive threat of satellite services, cable TV companies upgraded their facilities,” Wheeler said. “When the Internet went mainstream, they found themselves in the enviable position of having greater network capacity than telephone companies. Confronted by such competition, the telcos upgraded to DSL, and in some places deployed all fiber, or fiber-and-copper networks. Cable companies further responded to this competition by improving their own broadband performance. All this investment was a very good thing. The simple lesson of history is that competition drives deployment and network innovation. That was true yesterday and it will be true tomorrow. Our challenge is to keep that competition alive and growing.”

But Wheeler admits the current state of broadband in the United States no longer reflects the fierce competition of a decade or more ago.

“Today, cable companies provide the overwhelming percentage of high-speed broadband connections in America,” Wheeler noted. “Industry observers believe cable’s advantage over DSL technologies will continue for the foreseeable future. The question with which we as Americans must wrestle is whether broadband will continue to be responsive to competitive forces in order to produce the advances that consumers and our economy increasingly demand. Looking across the broadband landscape, we can only conclude that, while competition has driven broadband deployment, it has not yet done so a way that necessarily provides competitive choices for most Americans.”

Wheeler recognized what most broadband customers have dealt with for years — a broadband duopoly for most Americans.

antimonopoly“Take a look at the chart again,” Wheeler said. “At the low end of throughput, 4Mbps and 10Mbps, the majority of Americans have a choice of only two providers. That is what economists call a “duopoly”, a marketplace that is typically characterized by less than vibrant competition. But even two “competitors” overstates the case. Counting the number of choices the consumer has on the day before their Internet service is installed does not measure their competitive alternatives the day after. Once consumers choose a broadband provider, they face high switching costs that include early termination fees, and equipment rental fees. And, if those disincentives to competition weren’t enough, the media is full of stories of consumers’ struggles to get ISPs to allow them to drop service.”

Wheeler emphasized that true competition would allow customers to change providers monthly, if a vibrant marketplace forced competitors to outdo one another. That market does not exist in American broadband today.

“At 25Mbps, there is simply no competitive choice for most Americans,” Wheeler added. “Stop and let that sink in…three-quarters of American homes have no competitive choice for the essential infrastructure for 21st century economics and democracy. Included in that is almost 20 percent who have no service at all. Things only get worse as you move to 50Mbps where 82 percent of consumers lack a choice. It’s important to understand the technical limitations of the twisted-pair copper plant on which telephone companies have relied for DSL connections. Traditional DSL is just not keeping up, and new DSL technologies, while helpful, are limited to short distances. Increasing copper’s capacity may help in clustered business parks and downtown buildings, but the signal’s rapid degradation over distance may limit the improvement’s practical applicability to change the overall competitive landscape.”

Wheeler finds little chance wireless providers will deliver any meaningful competition to wired broadband because of pricing levels and miserly data caps. Such statements are in direct conflict with a traditional industry talking point.

In a remarkable admission, Wheeler added that the only hope of competing with cable operators comes from a technology phone companies have become reluctant to deploy.

“In the end, at this moment, only fiber gives the local cable company a competitive run for its money,” Wheeler said. “Once fiber is in place, its beauty is that throughput increases are largely a matter of upgrading the electronics at both ends, something that costs much less than laying new connections.”

Wheeler also continued to recognize the urban-rural divide in broadband service and availability, but said little about how he planned to address it.

Wheeler’s answer to the broadband dilemma fell firmly in the camp of promoting competition and avoiding regulation, a policy that has been in place during the last two administrations with little success and more industry consolidation. Most of Wheeler’s specific commitments to protect and enhance competition apply to the wireless marketplace, not fixed wired broadband:

1. comcast highwayWhere competition exists, the Commission will protect it. Our effort opposing shrinking the number of nationwide wireless providers from four to three is an example. As applied to fixed networks, the Commission’s Order on tech transition experiments similarly starts with the belief that changes in network technology should not be a license to limit competition.

In short, don’t expect anymore efforts to combine T-Mobile and Sprint into a single entity. Wheeler only mentioned “nationwide wireless providers” which suggests it remains open season to acquire the dwindling number of smaller, regional carriers. Wheeler offers no meaningful benchmarks to protect consumers or prevent further consolidation in the cable and telephone business.

2. Where greater competition can exist, we will encourage it. Again, a good example comes from wireless broadband. The “reserve” spectrum in the Broadcast Incentive Auction will provide opportunities for wireless providers to gain access to important low-band spectrum that could enhance their ability to compete. Similarly, the entire Open Internet proceeding is about ensuring that the Internet remains free from barriers erected by last-mile providers. Third, where meaningful competition is not available, the Commission will work to create it. For instance, our efforts to expand the amount of unlicensed spectrum creates alternative competitive pathways. And we understand the petitions from two communities asking us to pre-empt state laws against citizen-driven broadband expansion to be in the same category, which is why we are looking at that question so closely.

Again, the specifics Wheeler offered pertain almost entirely to the wireless business. Spectrum auctions are designed to attract new competition, but the biggest buyers will almost certainly be the four current national carriers, particularly AT&T and Verizon Wireless. Although low-band spectrum will help Sprint and T-Mobile deliver better indoor service, it is unlikely to drive new market share for either. Wheeler offered no specifics on the issues of Net Neutrality or municipal broadband beyond acknowledging they are issues.

3. Incentivizing competition is a job for governments at every level. We must build on and expand the creative thinking that has gone into facilitating advanced broadband builds around the country. For example, Google Fiber’s “City Checklist” highlights the importance of timely and accurate information about and access to infrastructure, such as poles and conduit. Working together, we can implement policies at the federal, state, and local level that serve consumers by facilitating construction and encouraging competition in the broadband marketplace.

competitionMost of the policies Wheeler seeks to influence exist on the state and local level, where he has considerably less influence. Based on the overwhelming interest shown by cities clamoring to attract Google Fiber, the problems of access to utility poles and conduit are likely overstated. The bigger issue is the lack of interest by new providers to enter entrenched monopoly/duopoly markets where they face crushing capital investment costs and catcalls from incumbent providers demanding they be forced to serve every possible customer, not selectively choose individual neighborhoods to serve. Both incumbent cable and phone companies originally entered communities free from significant competition, often guaranteed a monopoly, making the burden of wired universal service more acceptable to investors. When new entrants are anticipated to capture only 14-40 percent competitive market share at best, it is much harder to convince lenders to support infrastructure and construction expenses. That is why new providers seek primarily to serve areas where there is demonstrated demand for the service.

4. Where competition cannot be expected to exist, we must shoulder the responsibility of promoting the deployment of broadband. One thing we already know is the fact that something works in New York City doesn’t mean it works in rural South Dakota. We cannot allow rural America to be behind the broadband curve. Our universal service efforts are focused on bringing better broadband to rural America by whomever steps up to the challenge – not the highest speeds all at once, but steadily to prevent the creation of a new digital divide.

Again, Wheeler offers few specifics. Current efforts by the FCC include the Connect America Fund, which is nearly entirely devoted to subsidizing rural telephone companies to build traditional DSL service into high-cost areas. Cable is rarely a competitor in these markets, but Wireless ISPs often are, and they are usually privately funded and consider government subsidized DSL expansion an unwelcome and unfair intrusion in their business.

“Since my first day as Chairman of the FCC my mantra has been consistent and concise: ‘Competition, Competition, Competition,'” said Wheeler. “As we have seen today, there is an inverse relationship between competition and the kind of broadband performance that consumers are increasingly demanding. This is not tolerable.”

Under Wheeler’s leadership, Comcast has filed a petition to assume control of Time Warner Cable, AT&T is seeking permission to buy DirecTV, Frontier Communications is acquiring the wired facilities of AT&T in Connecticut, and wireless consolidation continues. A forthcoming test of Wheeler’s willingness to back his rhetoric with action is whether he will support or reject these industry consolidating mergers and acquisitions. Wheeler’s FCC has also said little to nothing about the consumer-unfriendly practice of usage caps and usage-based billing — both growing among wired networks even as they upgrade to much-faster speeds and raise prices.

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Comcast-TWC Merger Now Issue in N.Y. Governor’s Race: Secret Meetings, New Questions

Gov. Cuomo

Gov. Cuomo

Does N.Y. Gov. Andrew Cuomo support or reject the merger of Comcast and Time Warner Cable and why has an administration official been meeting behind closed doors with the companies involved?

If the merger is successful, more than 95 percent of upstate New York will be served by a single cable operator – Comcast, with little chance Verizon will mount a major challenge for video, broadband, and phone service customers outside of the areas where FiOS fiber upgrades have been announced. Although the Cuomo Administration promised an in-depth investigation into the merger, the governor has kept his own views close to the vest and has not publicly supported or opposed the transaction. But an administration official has met privately with executives of both cable companies and state regulators behind closed doors according to a new report.

According to public schedules obtained by Capital, Comcast representatives met at least three times in August with PSC members or staff in what one former commissioner called unusual circumstances.

James Larocca, a N.Y. PSC commissioner from 2008-2013, said it is not typical for officials from the governor’s office to meet with state regulators and cable executives in the same closed-door meeting.

“I did not meet with the second floor on pending matters and I’m not aware that other commissioners ever did,” Larocca said.

It is not unusual for companies with business before the Commission to meet with its staff or commissioners in ex parte conversations to set the parameters of hearings, filings, and other regulatory proceedings. All such meetings appear to have been properly disclosed by the PSC staff and the companies involved. But the fact some were held behind closed doors with a Cuomo Administration official and without public disclosure of the subjects discussed bothers some.

corporate-welfare-piggy-bankSusan Lerner, executive director of Common Cause New York, said what was discussed behind closed doors should be disclosed so the public can see what top state officials are saying to the cable executives.

“There are questions as to whether the PSC is a strong enough advocate for the people or the industry,” Lerner told Capital. “The agency has lost sight of its initial mission, which is to serve the public in regulating these absolutely essential services.”

Gerald Norlander at the Public Utility Law Project ponders what would happen if there were two negotiating tables discussing the merger, one public and the other secret.

“If there is a second table where views are exchange and negotiations are occurring, it doesn’t do well for transparency,” he said.

Public statements from both Comcast and the Cuomo Administration did little to clear the air.

“It was an initial meeting to discuss the public interest benefits of the transaction for New York,” a Comcast representative said in a one-sentence statement in response to questions about the meeting.

Not exactly, says the Cuomo Administration.

“The meeting was to explain the new law, the PSC’s new powers and its expanded oversight,” Cuomo spokesman Richard Azzopardi said.

As has been the case during much of the merger debate, Time Warner Cable has remained silent and has refused to comment.

Comcast oregonThe governor himself has avoided taking sides, claiming he will abide by the recommendations made by the PSC. But if true, why involve the governor’s office in the merger or meet privately with either the PSC or the companies involved?

“The state is taking a hands-on review of this merger to ensure that New Yorkers benefit,” Cuomo said in May. “The Public Service Commission’s actions will help protect consumers by demanding company commitments to strong service quality, affordability, and availability.”

Cuomo himself has received at least $200,000 in campaign contributions from Comcast and Time Warner Cable. With customer satisfaction scores for both Comcast and Time Warner Cable in the basement, lobbying has been a necessity and Time Warner Cable is one of the state’s top lobbying forces, spending $500,000 of its subscribers’ money in New York in 2013 alone. Comcast spent $60,000, despite only serving a small sliver of customers in downstate New York.

The two companies also donated a combined $500,000 to a secretive state Democratic party account which Cuomo controls. Ironically, some of that money was used to run ads celebrating Gov. Cuomo’s efforts to get money out of politics.

New York Democratic candidate Zephyr Teachout is seeking to oust Gov. Andrew Cuomo in the fall election. One of the issues she is campaigning on is Cuomo’s significant contributions from Comcast and Time Warner Cable and his apparent lack of interest in stopping the merger. At a campaign stop in Syracuse, Teachout claims Comcast will raise your rates and offer no significant benefits to New Yorkers. She’d strongly oppose the merger and media consolidation in general, if elected. WRVO Radio reports. Aug. 29, 2014 (1:26)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Teachout

Teachout

Cuomo’s Democratic primary opponent Zephyr Teachout and her running mate, Tim Wu (who coined the term “Net Neutrality”) are less murky on the issue. Both strongly oppose the merger and cable industry consolidation generally and have expressed serious concern about the governor’s acceptance of hundreds of thousands of dollars in campaign contributions from both Time Warner Cable and Comcast.

Andrew Letson’s Politics Blog considers the differences between the two campaigns striking.

“It’s a sharp contrast – between the hypocritical man in office taking money from corporate interests and the candidates with integrity who are funding their campaign through largely individual donors,” Letson writes.

“[Both Wu and Teachout] have said that they would work to block the frightening Comcast-Time Warner merger, something that’s certainly on the minds of many New Yorkers,” says Letson. “What’s nice about that is that New York actually has a lot of power when it comes to this merger, so opposition from both the governor and lieutenant governor would go a long way.”

Letson is a Teachout campaign volunteer, so it is no surprise which candidate he supports.

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Frontier Files Opposition to Time Warner Cable/Comcast Merger; Harms Video Competition

Frontier used Time Warner Cable's usage cap experiment against them in this ad to attract new customers in the spring of 2009.

Frontier used Time Warner Cable’s usage cap experiment against them in this ad to attract new customers in the spring of 2009.

Frontier Communications has filed a rare objection with the Federal Communications Commission opposing the merger of Comcast and Time Warner Cable, citing concerns the merger would further harm competition and prevent Frontier and other competitors from getting fair access to programming owned by the combined cable companies.

“Comcast’s appetite for market control threatens the competitiveness of the video market,” wrote Frontier. “Comcast is already the largest Internet provider and largest video provider in the United States. If approved, Comcast’s video subscriber base would be approximately 52-times the size of Frontier’s video subscriber base.”

As Stop the Cap! wrote in its own objections to the merger, would-be competitors can and will be deterred from competing for video subscribers if they cannot obtain reasonable wholesale rates for popular cable programming. Currently, the largest providers extend the best volume discounts to the country’s largest satellite and cable operators. They make up those discounts by charging smaller customers higher rates. Frontier, as we noted in our filing, has already experienced the impact of volume discounting in its adopted FiOS TV areas in Indiana and the Pacific Northwest. Losing volume discounts originally obtained by Verizon, Frontier faced substantially higher programming costs as an independent provider — costs so great the company began asking customers to drop its own fiber television product in favor of third-party partner DISH, a satellite provider.

“Small multichannel video programming distributors (MVPDs) like Frontier cannot achieve the scale necessary to drive down programming costs, which are based upon an MVPD’s subscriber totals, to the same levels that Comcast can with this transaction,” noted Frontier. “Further, Comcast would own an enormous share of the “must have” programming that customers demand and could exercise its market dominance to either outright deny such programming to its competitors or to functionally deny the programming by charging exorbitant rates for content.”

“While Frontier continues to grow its subscriber base organically by delivering a quality product in its markets and also by acquiring AT&T’s wireline assets in Connecticut, the cost of content for video programming remains staggering for new entrants that lack the scale and scope of cable companies like Comcast and Time Warner Cable individually, let alone that of the merged entity,” said Frontier. “It is no mere coincidence that AT&T announced its proposed acquisition of DirecTV shortly after Comcast announced its intention to purchase Time Warner Cable. AT&T recognized the need to improve its subscriber scale in order to compete with Comcast on video programming pricing.”

Frontier noted the Federal Communications Commission also expressed grave concerns over Comcast’s ability to affect video competition during its acquisition of NBCUniversal. That merger was approved only after Comcast agreed to several conditions to avoid anticompetitive abuse in the marketplace. But Frontier complained a further acquisition of Time Warner Cable would only exacerbate competition concerns, even as Comcast argues the FCC should not contemplate any further investigation of the subject during its current merger review.

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Special Report: Big Phone and Cable Companies Are Losing Your Calls to Rural America

Phillip Dampier August 28, 2014 Consumer News, Public Policy & Gov't, Video 7 Comments

aroundtheworldBig cable and telephone companies have opened a new digital divide by losing your long distance calls to rural America to save a buck.

The problems have grown so pervasive, a FCC investigation found some of America’s biggest providers are sending some of their long distance calls destined for rural communities across the U.S. through shady, fly-by-night third-party operators in Russia, the United Arab Emirates, Singapore, Japan, Bulgaria and Romania before the phone ever starts ringing on the other end. If it ever starts ringing on the other end.

In Addison County, Vt., State Representative Will Stevens knows all about it. When not representing the people of rural Shoreham, he is running Golden Russet Farm, highly dependent on his landline to deal with customers.

“Phone calls here get cut off,” he told the Addison County Independent. “Or they don’t go through at all. So many times I’ve called elsewhere and you just don’t know if the call is going through, it goes dead. It rings then goes dead. You can’t tell how many times it’s rung on the other end if at all.”

It’s even worse when callers get a recording stating the number is no longer in service.

That is what happened to Pat Plautz who runs a small map store in the town of Reedsburg, Wis. A caller from Milwaukee trying to place an order first got a recording stating her number had been disconnected. Lucky for her the caller tried again, this time connecting.

“My main concern is that people think we’re out of business,” Plautz said.

As many as one in five long-distance calls to rural communities either aren’t connected to the intended number or are corrupted by issues such as static or garbled sound, according to Communications Data Group, a telephone billing company based in Champaign, Ill.

In rural upstate New York, some callers report nearly 100% of their call attempts to certain rural customers fail.

Stevens has attempted to place calls from his rural Shoreham Tel landline in Vermont across Lake Champlain to his father’s camp – 30 minutes away by car – served by the Crown Point Telephone Corporation in Crown Point, N.Y., with absolutely no success.

Rural call failures have created a number of safety fears for concerned relatives, particularly those trying to reach seasonal residents — often retirees that live in the area part of the year.

“When they can’t get through they’ll call us and ask us to check the lines, and we do and they are working properly, so then they’ll ask us if we can go out and see if the person is OK because they aren’t answering their phone,” said Shana Macey, president of the Crown Point phone company. “And we’ll do that because we’re concerned, too.”

A Nationwide Deterioration of Rural Telephone Service

In rural Wisconsin and Minnesota, even 911 calls can get lost. In west-central Minnesota, particularly those along the I-94 corridor, hard-hit communities like Brainerd and Little Falls find their 911 calls are being dropped or lost and businesses have reported huge drops in incoming long distance calls, costing them business.

Shoreham, Vt. to Crown Point, N.Y. by auto.

Shoreham, Vt. to Crown Point, N.Y. by auto.

In Kansas, home to many rural independent phone companies, long distance call problems have become so pervasive, phone companies are publishing information about the problem in their phone directories and on their websites.

Rural customers complain long distance calls often lose one side of the conversation so both parties cannot hear each other, or the call is lost in static and distortion that make it sound like it originated from the middle of Siberia.

What shocked the FCC into calling this problem “epic” earlier this year was the revelation that long distance calls between people as little as 15 miles away from each other often are routed through Siberia or other distant lands as long distance companies seek the cheapest possible way to route calls to boost profits.

Welcome to the world of “Least Cost Routing,” (LCR) a harmless-sounding phrase that often means the difference between getting a long distance call or not.

You might have experienced LCR if you have encountered any of the following:

  • Someone tells you they tried to call you but your phone never rang;
  • Someone tells you they tried to call you and the phone rang on their end, but didn’t ring on yours;
  • A call came through but the quality was poor;
  • One side of the call cannot reliably hear the other;
  • Phantom touch-tone sounds erupt in mid-conversation or distorted sounds from other phone conversations occasionally break through and can be heard by one or both parties;
  • A call came through but the Caller ID was incorrect.

Nationally, users of Google Voice, MagicJack, and other discount long distance services have probably observed at least one of these, all because the companies involved are looking for the cheapest ways possible to route your call.

But the problems have grown well beyond the deep discount providers and affect Verizon, AT&T, Comcast, Time Warner Cable and other phone and cable company telephone customers. Evidence suggests unregulated cable and wireless phone calls are much more likely to encounter LCR than traditional regulated landlines.

http://www.phillipdampier.com/video/KMSP Minneapolis Dropped Calls 3-5-14.mp4

KMSP in Minneapolis reports Minnesota officials are helpless trying to resolve call completion problems because their oversight powers have been largely stripped away by deregulation and telecom lobbyists want to keep it that way. (3:14)

lcr

Least Cost Routing in action.

Deregulation Implicated in Race for High Profits, Low Call Quality

Wisconsin’s Public Service Commission, perhaps slightly perturbed after watching its oversight powers get largely stripped away by the Walker Administration at the behest of AT&T, explained the reality:

Once upon a time – back in the days of rotary phones – a phone call was carried over copper wires which formed a single circuit from end to end. Those days are gone. Today, the network is almost entirely digital, with calls reduced to bits and sent over a massive web of links provided by telephone, cable, cellular and fixed wireless providers. These networks pass calls using a complex set of computer controls, interfaces and protocols. Rural call completion issues appear to be caused by some error or errors in programming, or incompatibility in the software somewhere in the network, that prevents the call from reaching the rural telephone company at all.

Wisconsin Gov. Scott Walker directed his Republican colleagues to draft a sweeping deregulation bill at the behest of AT&T.

Wisconsin Gov. Scott Walker directed his Republican colleagues to draft a sweeping deregulation bill at the behest of AT&T.

The problem is bad enough in Wisconsin the PSC has devoted a section of its website to address the problem, but that is about all it can do. In 2011, Gov. Walker directed his Republican colleagues to draft a sweeping deregulation measure ghostwritten by AT&T. The bill completely stripped the PSC of its ability to investigate consumer complaints or the problems of rural call completion. The Assembly approved the Republican bill 80-13 and the Senate quickly followed on a 25-8 vote. Walker promptly signed the bill into law.

Consumer advocates and rural officials warned the bill would lead to a deterioration of telephone service in Wisconsin, especially in rural areas — exactly what has happened.

“We’re pitting urban against rural,” said Sen. Kathleen Vinehout (D-Alma). “The consumer has absolutely no recourse under this bill.”

Nonsense, declared Sen. Rich Zipperer (R-Pewaukee). “We’re ready to keep up with the technology. First and foremost, this is a job creation bill,” he said.

In fact, the bill may have indeed created new jobs… for overseas, fly-by-night wholesale call connection companies in places like Bulgaria, the United Arab Emirates, and across Russia.

Hundreds of new and mysterious telecommunications companies, some literally run out of garages with a consumer residential broadband account, jumped into the wholesale call completion marketplace. Telephone and cable companies use sophisticated databases that maintain constantly changing price lists for IP-based call completion services. If a long distance company wants the cheapest possible rate, a computer will automatically choose whatever company offers it, without regard to the reputation of the company or its ability to properly route the call.

Fraud has become a serious problem, with some call connection companies charging below-market rates and then connecting calls to an artificial, never-ending ringing signal or an intercept recording stating the number is out of service. Consumers are generally not charged for unanswered calls or those to disconnected numbers, but phone and cable companies often are.

So why do rural Americans suffer the biggest problems? Because rural telephone exchanges are allowed to charge slightly higher call completion fees to companies sending their customers’ calls into these rural areas. The higher charges help defray the higher costs incurred by rural independent phone companies to maintain service with a much smaller customer base. Verizon has millions of landline customers in New York. Crown Point Telephone has 735.

There are millions to be made in the call completion business and a growing number of cell phone companies and large phone and cable companies have teamed up with third-party call completion discounters to shave costs and increase profits. The more money to be made, the more advanced the call routing schemes have become. In the last few years, LCR has become nearly as frenzied as the stock market, with call completion rates subject to change constantly as capacity increases or decreases and as competitors try to match or beat others’ rates.

pushpollA Race to the Bottom

As flyers know, it is often cheaper to fly into a major city and catch a connecting flight to your final destination instead of booking a direct flight. The same is true for phone calls. Mr. Stevens’ call across Lake Champlain involved two high-cost rural telephone companies. So his long distance carrier (or cell phone company) likely sold the call to a third-party to handle. If that third-party found it cheaper to send the call overseas and then back again (often to avoid connection fees), that is exactly what will happen. If it found it couldn’t make any money on the call, it likely dropped it.

“In some cases, the calls become looped in the network and are never completed. In other cases, the calls are delivered via a low quality network which results in poor sound quality,” the Reedsburg Utility Commission, which also runs a local telephone company, says on its website.

In one case a call from Milwaukee to northeast Wisconsin was routed through carriers in Singapore, Dubai, and parts of Europe including Russia.

“It just kept getting shipped everywhere. It was insane,” Peter Jahn, of the Wisconsin Public Service Commission’s Division of Business and Communications Services, told the Journal-Sentinel.

These third-party operators have no responsibility to guarantee calls will be connected, and when their algorithm discovers it has been saddled with a money-losing call that will cost more to complete than the company is charging, it simply drops it, leaving the caller with dead silence, an artificial busy signal, or a dial tone.

“It’s something that’s been going on for years, and it’s very difficult to identify the bad actors. … Some of them could be fly-by-night operations,” admitted Bill Esbeck, executive director of the Wisconsin State Telecommunications Association, which represents telephone companies.

The Murky World of Grey Routes

special reportIn fact, the industry has a different name for this type of call handling – grey routes.

“The grey route is, literally, a sub-par phone line or phone company who is intentionally selling phone service in areas that should be expensive but is cutting corners to be able to provide the service for less,” says 2600hz, a Voice over IP service provider. “An example of a grey route, in it’s simplest form, might be someone buying 50 phone lines that were on special from the phone company for six months – and putting those phone lines in their garage. Then they buy an Internet connection and funnel calls from the Internet to those cheap phone lines all day long.”

The company says grey routes are responsible for a lot of the problems will call completion and quality.

“They’re most likely using a poor quality Internet connection, poor quality equipment and aren’t interested in debugging or fixing problems with their setup – as long as they can keep you on the line long enough to bill the other party,” says the company.

“How do they achieve that? They pitch the route to the phone company who’s losing money on expensive phone calls and falsely promise them great quality. In essence, the theory goes that if only 5% of your calls go over a ‘grey route’ then phone companies can save literally millions of dollars and most customers will ‘tolerate’ the poor quality because it only occurs on such a small number of calls. Unfortunately, the side effects of such behavior range from broken Caller ID and touchtone transmission to audio quality cut-outs and generally poor sounding calls.”

Fly-by-Night Least Cost Call Routing

Fly-by-Night Least Cost Call Routing

Because many of these providers are unsophisticated, mistakes in call routing are common.

In one instance, all calls intended for an area in northern Wisconsin instead were routed to a car dealership, which was deluged with wrong-number calls.

“It took months and months to figure out who had screwed this up,” Jahn told the newspaper.

Unfortunately, it isn’t just the discount long distance providers that occasionally hand off calls to grey routes. The biggest cell phone and cable companies also use them.

For months, Pat Fretschel of Reedsburg had trouble getting calls from Milwaukee. Her callers would assume she wasn’t home and would hang up, when in fact the phone wasn’t ringing at her end of the line.

The problem only affected callers using Time Warner Cable phone service.

“Time Warner kept trying to tell me the calls were being hijacked out of California. I could never wrap my head around that,” Fretschel told the Journal-Sentinel.

Back in New England, Jackie Ambrozaitis is thankful she has a website to advertise her Falkenbury Farm Guest House, because she has no idea how many long distance calls she is missing.

Molly Worden, Jackie’s daughter who lives in Connecticut, reports to the Addison County Independent that she has problems every month reaching both her mother and a sister who also lives in Benson.

Rural first responders can't respond if they don't get a call.

Rural first responders can’t respond if they don’t get the call.

“I call Shoreham Tel and they test the line and they say it’s my phone; they tell me my phone looks for the cheapest way to send the call,” Worden says. “I’ve had people over to the house and called from several different carriers with their cell phones, I’ve tried Verizon, Sprint, Nextel, and I still can’t get through. It will ring 20 times without answer or it goes to busy. Sometimes five, six days in a row I can’t get through.”

Worden’s young children get frustrated when they can’t talk to their grandparents in Vermont, and Ambrozaitis’s 90-year-old father-in-law in Connecticut gets distressed when he can’t reach the family.

Your Health and Safety at Risk?

But the problem isn’t just annoying for friends and family trying to stay in touch.

Doctors “have been unable to reach patients, hospitals have been unable to reach on-call emergency surgeons, and there is a reported instance in which a 911 call center was unable to make emergency call backs,” the National Exchange Carrier Association, which represents rural telecom companies, said in an Aug. 18 letter to the Federal Communications Commission.

“I’m concerned we’ll have a major event where perhaps a first responder doesn’t know that they were called out,” says Steve Head, engineer at HEADSolutions, consultant to the telecommunications industry. Head is working with Waitsfield Telecom, and has been instrumental in recognizing and revealing the extent of the rural connectivity problem nationwide. “We had at least one incident of a hospital trying to get ahold of a patient to schedule surgery and could not get through, and if they had not been able to get ahold of him for this surgery opening it was not going to be able to be done for some time,” he said. “That was major.”

“I Have Regulatory Authority Over Telegraph Lines” – State Regulators Helpless to Intervene

Trying to resolve this problem has fallen largely on the FCC in Washington as telephone company oversight and consumer protection laws in the states have not kept up with technology or have been wiped off the books in deregulation measures.

Rothman

Rothman

“I have regulatory authority over telegraph lines,” complained Minnesota Commerce Commissioner Mike Rothman. “Currently, wholesale transport providers are not defined in statute, they’re unknown.”

In Minnesota, attempts at wholesale deregulation have not been successful, and landline phone companies still fall under some state regulation. Cell phones are covered by the FCC, and, as Rothman explained, cable is pretty much a free-for-all.

Any attempt to place oversight or regulation on telecom companies rings alarm bells and the lobbyists quickly arrive in Rothman’s office, “all lined up, someone from Verizon, another from Sprint, and a representative from a trade group representing cable.”

“Regulation worked for a long time but customers didn’t have a choice. Now they have a choice, but the quality of calls may have declined,” said Rob Souza, senior vice president of Otelco, the Maine-based communication company that bought Shoreham Tel 13 months ago. “I’ve been in this business 40 years, and the modernization of the telecommunications system has been extraordinary. It’s a good, solid reliable system. But when people don’t play by the rules, you get more service problems. That’s not an indictment of the system, but on some people who are trying to shave every penny out of it.”

Inadequate FCC Fines Are Just the Cost of Maintaining a Very Profitable Business

Among those include Matrix Telecom Inc. of Irving, Tex., fined $875,000 by the FCC to resolve a call-completion investigation. Similar agreements were reached with Level 3 Communications LLC for $975,000 in March and Windstream Corp. for $2.5 million in February.

But those amounts are miniscule in comparison to the potential financial benefits reaped from LCR.

“In the short-term, it’s going to take the FCC cracking down and making those fines larger, so the cost of not doing what the carriers are supposed to do is greater than doing what they’re supposed to,” said Reedsburg Utility Commission general manager Brett Schuppner.

But the FCC isn’t immune to lobbying either, and powerhouse AT&T is at the front of the line fiercely fighting to weaken new FCC rules to a level that would qualify them as homeopathic.

CommLawBlog fingered AT&T as the worst offender. The phone company recently filed a petition to change FCC rules designed to find and track the source of degradation of rural calls. The company also wants waivers for its wireless traffic and intaLATA toll calls (those placed to nearby areas outside of a customer’s local toll-free calling zone). They are also seeking a six month extension of a reporting deadline. This is significant, CommLawBlog says, because AT&T is the largest interexchange carrier with the most traffic sent to many rural areas in the country. Letting them effectively “opt out” could nullify many of the benefits of the new rural call completion rules.

Those suggested changes from AT&T are getting a cold response from groups like the National Association of Regulatory Utility Commissioners, which complain that rural call completion problems have been ongoing for years and now is not the time to weaken FCC rules.

On a separate front, Sen. Tim Johnson (D-S.D.) has introduced a bill requiring the FCC to keep a registry of the companies responsible for routing long-distance calls. It also would set service quality standards for the carriers.

The bill has little chance of being passed because of significant Republican opposition.

http://www.phillipdampier.com/video/KTVM Montana Incomplete Calls Madison County 4-24-14.mp4

In rural Montana, long distance telephone calls often don’t reach homes and businesses. KTVM talks with a business owner in Madison County who thinks it’s unfair rural America is stuck with substandard service. (1:40)

http://www.phillipdampier.com/video/You Might Have to Call Again If I Live in Rural America.flv

David Lewis, CEO of ANPI talks about Rural Call Completion at the IP Possibilities Conference and Expo. Lewis goes into greater detail about how this problem developed, how it affects customers, and what solutions are available to fix it. Because Lewis is speaking to an audience of mostly telecom professionals, we’ve provided a “cheat sheet” to explain some of the jargon. (11:43)

Telco Jargon Translated (in chronological order as it appears in the video)

Tier 1 Carriers – The biggest IP networks
CLEC’s – Competitive local phone companies (Time Warner, Comcast, MagicJack, Vonage, etc.)
ILEC’s – Incumbent local phone companies that have been around for decades
RBOC – A former regional Bell company (eg. Verizon, AT&T, SBC, Qwest, etc.)
Termination – When a call successfully reaches the called party’s phone number
PSTN – The network that powers your traditional landline
Enhanced 911 – 911 operators automatically get your calling location and other pertinent details
PSAPs – a 911 call center
Rate Deck – Essentially a price list showing the cost to complete calls to different areas
Bypassing Access – Getting around the traditional compensation system for calls made to rural telephone companies
Feature Group D – a type of telecommunication trunk used to provide “equal access” capability from telecommunication carriers and central offices (where the switching equipment is located and customer lines are connected and terminated) to the access tandem. The caller’s number is passed along to the next carrier in the call chain for Caller ID and 911.

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Comcast to 2,700+ NY’ers – Your Opposition to Our Merger: Unsubstantive, Should Be Ignored

Phillip Dampier August 26, 2014 Comcast/Xfinity, Time Warner Cable No Comments

psctestComcast told the New York Public Service Commission that the overwhelming majority of the substantive comments submitted to the regulator “express a strong desire and enthusiasm for the improved and expanded voice, data, video, and broadband services” that the merger of Comcast and Time Warner Cable will bring to the state.

new math“Given these many concrete benefits, and the lack of any harm to competition or consumers, it should come as no surprise that the overwhelming majority of the substantive comments (approximately 110 out of a total of about 140 substantive comments) filed in this proceeding support Commission approval of the transaction,” Comcast wrote in its latest submission.[1]

Comcast’s “new math” applies a subjective (and undisclosed) standard about what constitutes “substantive,” but in the end the cable company has urged the Commission to disregard the sentiments of more than 2,700 New York State residents who have filed comments in strong opposition to the merger because their remarks simply fell beneath Comcast’s standards.

“The minority of organizations and individuals who filed substantive comments opposing the transaction largely ignore the significant public interest benefits of the transaction,” writes Comcast. “Instead, these detractors raise issues that are not relevant to the transaction and are factually inaccurate and speculative – such as unfounded concerns about Comcast’s broadband management practices, misplaced criticisms of Internet Essentials, and general fears that ‘big is bad.’ None of these commenters identify any reasonable basis to reject or condition the Joint Petition.”

Comcast did not apply the same rigorous standards of ‘substantiveness’ to comments sent by its supporters, who often used what New York Assemblyman Joe Morelle admitted was a Comcast-supplied template ghost-written by the company itself.[2]

“Supporters of the transaction span a wide range of groups and individuals, including governmental officials (e.g., mayors, town supervisors, county commissioners, city councils, state legislators, and school superintendents); businesses and non-profits; state and local organizations focused on economic development; community service, youth and family, and diversity organizations; arts and education groups; and others,” writes Comcast.

chicago urban leagueBut the company never disclosed the many financial ties between Comcast and its political and civic supporters. In fact, a large percentage of the “template” letters of support originated from politicians like Assemblyman Morelle, who recently received a $1,000 check from Comcast[3] and Rochester city councilman Adam McFadden, whose group claims to receive $50,000 annually from Comcast.[4] [5]

In fact, it is hard not to find financial connections between Comcast’s supporters and the cable company itself. A random sampling uncovers multiple instances of Comcast contributions that were followed by letters of support for its merger:

The Urban League has received at least $12 million in in-kind contributions from Comcast since 2007, in addition to direct financial contributions to local chapters around Comcast’s service area.[6] In just one example Stephen Thomas, Comcast’s area vice president, who also serves on the Chicago chapter’s board of directors, presented the organization with a check for $40,000.[7] Just a few months later, Andrea L. Zopp, president of the Chicago Urban League, wrote to urge the FCC to approve Comcast’s merger deal.[8]

“Comcast is a strong supporter of the Urban League movement throughout the country. … I sincerely ask that you approve this transaction so that the Urban Leaguers and everyone else can benefit,” Zopp wrote.

Various chapters of the Boys and Girls Club also submitted glowing letters in favor of the merger. Comcast has partnered with local Boys & Girls Clubs since 2000, providing more than $68 million in cash and in-kind contributions. But no chapter was willing to openly admit Comcast asked them to share their views with New York regulators and only a few disclosed the financial ties the organization has with Comcast. The Boys and Girls Club has been a very loyal supporter of whatever Comcast has on its corporate agenda. Chapters submitted letters urging regulators to approve the Comcast-NBC merger in 2010 as well.[9]

Another strong supporter Comcast quotes from in its filing is the National Black Chamber of Commerce. But they don’t mention Comcast is a corporate sponsor of the group.[10]

Comcast (falsely) claims their Internet Essentials is the country's only discount Internet program for the disadvantaged. But Google Fiber gives it away for free.

Comcast (falsely) claims their $9.95 Internet Essentials is the country’s only discount Internet program for the disadvantaged. But Google Fiber gives it away for free to anyone who wants it.

Comcast also called criticism of its Internet Essentials discount Internet program “inaccurate and unavailing,” despite the fact the company’s own senior vice president David Cohen admitted the program was stalled to use as a political chip to win approval of its merger with NBCUniversal.[11]

Comcast also falsely claims it is the only Internet discount program for the poor of its kind.

“[Critics] simply advocate a different broadband adoption program – one that no company has ever implemented, that has never been attempted or even analyzed, and that may not be equally sustainable or popular or easy to publicize,” Comcast wrote. “Comcast is the only company to offer a program of this kind, and it has continually and voluntarily expanded the scope, breadth, and eligibility for and benefits of the program.”

In fact, it may have escaped Comcast’s attention that Google has provided residents in their fiber service areas with free Internet service with absolutely no income qualification or needs test, after paying a “construction fee” ranging from $30 in Provo, Utah [12] to $300 in Kansas City.[13] Residents in the latter community can break the somewhat steep construction fee into 12 payments of $25 each and have a guarantee of free service for up to seven years. Over the course of both programs, Google offers a more compelling and less expensive offer without onerous qualification requirements.

Yr    Google Fiber Cost  Comcast Internet Essentials Cost (@$9.95/mo)

1          $300                            $119.40
2          $0                                $119.40
3          $0                                $119.40
4          $0                                $119.40
5          $0                                $119.40
6          $0                                $119.40
7          $0                                $119.40

Over the course of seven years, a Google Fiber customer selecting discounted Internet would pay $300. A Comcast customer would pay $835.80 – a difference of $535.80.

While Google Fiber’s service area is very limited, it does offer an evidence-based challenge to Comcast’s inaccurate claim that its Internet Essentials program is unprecedented and represents the best solution for New York. A well-designed program designed to help New Yorkers will sell itself far better than the complicated, restrictive, and revenue-protection-oriented Internet Essentials, and its lack of penetration in long-standing Comcast service areas speaks for itself.

The California Emerging Technologies Fund also found serious problems with Internet Essentials from top to bottom.[14]

“Comcast makes the sign-up process long and cumbersome,” CETF claimed.[15] “The application process often takes 2-3 months, far too long for customers who are skeptical about the product in the first place, and have other pressing demands on their budgets. The waiting period between the initial call to Comcast and the CIE [Comcast Internet Essentials] application arriving in the mail can stretch 8-12 weeks, if it comes at all. After submitting the application, another 2-4 weeks elapse before the equipment arrives. Many low-income residents do not have Social Security Numbers (SSNs) and are required to travel long distances to verify their identities because Comcast has closed many of its regional offices. Recently, some potential subscribers with SSNs were rejected over the phone and told they had to visit a Comcast office. Comcast has a pilot effort in Florida that should be expanded to allow customers to fax or e-mail photocopied IDs as proof of identification.”

CETF also found widespread violations of Comcast’s own program rules when the cable company conducted credit checks on customers, which can reduce a customer’s already challenged FICO score with a credit inquiry on their file.

“Comcast conducts credit checks for some customers, contrary to CIE rules,” the CETF filing said. “Dozens of clients are receiving letters from Comcast saying that they have failed a credit check. Comcast specifically states and advertises no credit check is needed for CIE. This has repercussions beyond obtaining broadband service. The act of performing a credit check can negatively impact the consumer’s credit worthiness. Initially, some CIE service representatives told customers they could pay $150 deposit to avoid a credit check, also contrary to program rules.”

Customers have also been redirected to Comcast sales call centers, where they receive aggressive sales pitches for higher-cost products and services.

Comcast’s celebration of its commitment to minority television programming does not mention the expansion of minority programming was a condition of the FCC’s approval of the Comcast-NBCUniversal merger.

Among Comcast's "compelling" minority programming that customers are asked to pay for: Baby First Americas, a

Among Comcast’s “compelling” minority programming that customers are asked to pay for: Baby First Americas, a network for bilingual infants aged 0 to 3.

Subscribers got less than compelling programming and more rate increases to pay for it.

National Public Radio noted Comcast’s new minority channels are not exactly drawing significant audiences[16]:

Out of the gate, well, first was Baby First America — for bilingual infants aged 0 to 3.

ASPiRE, a channel focused on African-Americans, is mostly repurposed old series and gospel music videos.

ASPiRE, a channel focused on African-Americans, is mostly reruns and talk shows. Writer Anita Wilson Pringle called the network’s programming “crap.”

Next came Aspire, a family-oriented network from ex-basketball star and entertainment impresario Magic Johnson. Its lineup includes reruns of The Cosby Show plus even older fare: Julia, Soul Train and The Flip Wilson Show.

Writer Anita Wilson Pringle, for one, is no fan of that lineup of TV retreads.

“He promised innovative, new fresh ideas, new fresh programming, and it’s not,” she says.

Pringle is upset that Aspire’s managers were merely reshuffled from the old Gospel Music Channel. And she says the people Aspire is supposed to serve — African Americans — don’t exactly need more reruns or talk shows.

“It’s crap, if you really want to know the truth,” she says. “But my thing is, they did this to break that monopoly that Comcast was having on all these stations, and all that has happened is that Comcast has a stronger monopoly.”

Comcast’s commitment to improve energy efficiency is comparable to Time Warner Cable’s own commitments, providing no net gain for New York consumers.[17]

Comcast’s promised commitments to deliver better customer service have been made annually for several years with no significant improvement, as measured by independent customer satisfaction studies. Comcast relies on a quotation from a Wall Street analyst, Craig Moffett, who provides only anecdotal evidence of customer service improvements and has supported the merger’s potential benefits for shareholders.

Comcast's idea of effective competition is using your Verizon Wireless connection for home broadband use. A 16GB monthly plan will cost consumers as much as $170 a month before taxes and fees.

Comcast’s idea of effective competition is using your Verizon Wireless connection for home broadband use. A 16GB monthly plan will cost consumers as much as $170 a month before taxes and fees.

Comcast’s assertion that the Commission should ignore or downplay bad customer service experiences of customers outside New York is made despite their own admission they serve only a tiny number of New York customers today. Is Comcast suggesting it would be inappropriate to consider their customer service record in comparable-sized cities across the country, some likely served by the same national and offshore customer care centers New Yorkers will reach when they have future problems with Comcast?

Comcast’s claims of plentiful broadband competition also do not exist in the real world for many New Yorkers. The Commission has faced such a large number of complaints about Verizon landline service, which also supports DSL, it launched a Verizon Service Quality Improvement Plan. When a Verizon landline becomes inoperable for several months, as customers in Inwood experienced earlier this year[18], their DSL broadband is also inoperable. For customers served by cable, but not reached by DSL service from telephone companies like Verizon, Windstream, and Frontier Communications, their only realistic home broadband connection comes from the local cable company. Wireless broadband, advocated as a competitive alternative by Comcast, does not penetrate well indoors in large sections of rural upstate New York and is constrained by very expensive service plans and severe limits on data usage, compelling customers to pay excessive fees to obtain service.

A family consuming 16GB of data per month (less than today’s average use per person) would face Internet bills of $170 a month with Verizon Wireless ($40/mo Monthly Line Access – Internet Device + 16GB Data Plan ($130/mo Monthly Account Access)[19] Wired broadband accounts from Time Warner Cable in comparison cost as little as $14.99 a month for unlimited usage.

Where DSL service is available, it is typically offered at speeds lower than a cable operator can offer. As an example, at our residence in the Town of Brighton, N.Y., Frontier Communications can only offer a maximum speed of 3.1Mbps from their DSL service because of our distance from the central office.

Comcast will have a near-total monopoly on all broadband service in excess of 15Mbps in current Time Warner Cable territories not serviced by Verizon FiOS. Verizon’s maximum speed DSL offer is for speeds “up to 15Mbps.”[20] Verizon FiOS expansion outside of already-committed territories has ended, and the majority of upstate New York is not served by Verizon’s FiOS fiber upgrades.

Comcast claims there is a world of difference between highly regulated energy-generation utilities and the “competitive” marketplace for telecommunications.

“Proposals that the Commission approach this transaction with the same mindset, and apply the same types of burdensome conditions, are entirely unjustified,” argues Comcast.

“Electric and gas utilities remain the quintessential public service utilities,” says the cable company. “Their markets are characterized by a lack of competition, captive customer bases, and direct rate-setting and operational oversight by the Commission.”

In fact, many cable customers in New York do face a lack of competition for fast broadband speeds, are stuck with the single cable operator serving their community, and lack the consumer protections offered by the Commission that apply to other utilities.

The Commission can test Comcast’s claims of competitiveness for itself. Stop the Cap! offers a challenge to find more than one provider that can deliver consistent, widely obtainable broadband speeds of 15/3Mbps or greater in downtown Buffalo, Rochester, Albany or Syracuse.

The Commission will discover there is only one provider now capable of delivering that service across the entire urban centers of upstate New York: the local cable company.

In far western New York, Verizon FiOS is available only in small parts of South Buffalo and North Buffalo and select suburbs.

In Rochester, Frontier Communications does not offer consistent access to speeds greater than 10Mbps.

Albany and Syracuse are also bypassed by Verizon FiOS, left with Verizon DSL, which only offers speeds “up to 15/1Mbps.” Most customers get less.

Comcast would have the Commission believe any review of its broadband service is off-limits and outside of their jurisdiction anyway.

“The Commission has no authority to review broadband transactions and lacks statutory authority to regulate broadband services – and beyond this, cable broadband services are interstate information services that are not properly subject to state jurisdiction,” claimed Comcast.

It further argued the Commission must ignore “matters beyond the Commission’s jurisdiction,” quoting from a 2006 proceeding.

mergerComcast evidently forgets the law has changed in New York. In 2006, the Commission had to disprove a petition was in the public interest to reject it. In 2014, the applicant is solely responsible for carrying the burden of proof that their proposal is in the public interest.

Nothing in Section 222 of the Public Service Law places restrictions on what the Commission can consider when weighing public interest benefits.

Comcast’s claims of its wish to expand service into rural, unserved areas also must be questioned. Comcast automatically sets a high bar for expansion suggesting it will occur only “where economically feasible,” which is the same standard in place with the incumbent cable operator.

“Where economically feasible” is the reason cable companies in New York have rarely expanded their service territories, except in high growth areas where population density warrants expansion. All cable operators have an internal formula governing Return On Investment requirements that must be met before expansion begins. The Commission must review that information and compare the standards used by both applicants, because it will ultimately govern any future natural expansion of cable service in rural New York.

Conclusion

Comcast’s rosy picture of New York’s future with a merged Time Warner Cable-Comcast is belied by the real world experiences of New York consumers who have learned from long, hard experience that when a cable company starts promising a better deal, the result has too often been higher rates and fees, unwanted channels, poorer customer service, and new restrictions.

'An Extortion-for-distortion hose job.'

Don’t close your eyes to the facts.

Cable operators have enjoyed unfettered power to escape oversight with inflated claims of fierce competitiveness that they suggest will keep prices and abusive behavior in check, but in reality rates are rising and Comcast’s customer approval ratings live in the basement.

Comcast’s most recent filing continues to dismiss these very real concerns for New Yorkers who will not have a choice of a cable operator other than Time Warner Cable or Comcast. Calling the comments of more than 2,700 New Yorkers largely opposed to this merger “unsubstantive” is precisely the attitude of a cable company that has earned its bad reputation with customers.

Sending “templates” to politicians and non-profits that have received funding from Comcast and asking them to send letters to regulators urging approval of the company’s latest item on the agenda is the kind of “substantive” evidence Comcast wants the Commission to rely on in this proceeding.

But worst of all, Comcast suggests that any review of the company’s broadband service, its pricing and performance, and the potential for usage allowances and usage fees above and beyond the current high cost of Internet service is off-limits to New York regulators. The Commission already recognizes the growing importance of broadband in New York State and that it is, in reality, nearly a necessity.

Time Warner Cable recognizes that and is moving ahead on an upgrade program that delivers broadband benefits above those offered by Comcast and at a lower price, with no usage allowances or overlimit fees likely in the foreseeable future. It remains clear to us that Time Warner Cable is the better choice for New York. We have a well-documented history of not being great fans of Time Warner Cable, but we know worse when we see it, and we see it in Comcast.

[1] http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={60D7F65E-3AAB-4507-B58D-7F14E31E130A}

[2] http://www.rochesterhomepage.net/story/d/story/lawmakers-write-letters-supporting-comcast-deal/38184/WjHF311jeEqZdF9IOMX7mg

[3] http://www.rochesterhomepage.net/story/d/story/lawmakers-write-letters-supporting-comcast-deal/38184/WjHF311jeEqZdF9IOMX7mg

[4] http://stopthecap.com/2014/08/11/rochester-city-councilman-adam-mcfaddens-love-for-comcast-and-the-50k/

[5] http://www.nlc.org/corporate-engagement/corporate-partners-program

[6] http://corporate.comcast.com/news-information/news-feed/national-urban-league-resource

[7] http://www.thechicagourbanleague.org/cms/lib07/IL07000264/Centricity/Domain/14/impact-jan-2014.pdf

[8] http://www.thewrap.com/consumer-groups-urge-fcc-to-reject-comcast/time-warner-cable-deal/

[9] http://apps.fcc.gov/ecfs/document/view?id=7020462210

[10] http://www.nationalbcc.org/news/progress-reports/2107-recap-of-22nd-annual-conference

[11] http://stopthecap.com/2013/07/10/comcasts-internet-essentials-facade-padding-the-bottom-line-without-cannibalizing-your-base/

[12] https://fiber.google.com/legal/subscriber/provo/

[13] https://fiber.google.com/legal/subscriber/kansascity/

[14] http://arstechnica.com/business/2014/07/comcasts-internet-for-the-poor-too-hard-to-sign-up-for-advocates-say/

[15] http://www.cetfund.org/files/140711_CETF_Partners_Comcast-TWC_FCC_PR_and_Filing.pdf

[16] http://www.npr.org/2013/11/12/244558834/comcast-deal-puts-new-minority-run-channels-in-play

[17] http://www.timewarnercable.com/en/about-us/corporate-responsibility/environment.html

[18] http://manhattan.ny1.com/content/shows/ny1_for_you/203064/ny1foryou–inwood-verizon-customers-want-phone-service-outages-to-stop

[19] http://www.verizonwireless.com/wcms/consumer/shop/shop-data-plans/more-everything.html

[20] http://www.verizon.com/home/shop/shopping.htm

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

psctest

August 6, 2014

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

Dear Ms. Burgess,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Yours very truly,

 

Phillip M. Dampier

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

psctest

One of the most difficult questions you can ask a customer service representative of either Comcast or Time Warner Cable is what their regular price is for service. As a Buffalo News reporter discovered in August 2013, Time Warner Cable refused repeated attempts to ascertain the non-promotional price of its broadband service.[1]

merger benefitsMaking a direct comparison between the prices charged by Comcast and those of Time Warner Cable require unnecessary perseverance made even more difficult by the fact Comcast only serves a tiny portion of New York State.

Both companies offer promotional deals to new customers as well as those threatening to cancel service, but those prices fluctuate wildly and eventually expire.

Time Warner Cable has made it even more difficult this year by completely eliminating the most popular plans from its retail price list: bundled service packages known in the industry as “double-play” (two services) or “triple play” (three services).[2]

A Time Warner Cable spokesman told the Los Angeles Times the company is required by regulators to provide pricing information for only some of its fees, and Internet rates are not one of them.[3] This year, Time Warner kept the size of its broadband rate hikes to itself. It is much the same for Comcast.

Both cable companies make a point of telling the news media that these prices, including installation, reflect the “rack rates” and that “most customers will pay less […] after cutting a deal for their programming package.”

ratehike1In 2011, Time Warner Cable raised some of its “rack rates” by up to 51.1 percent.[4]

That makes a rate comparison for television service difficult because the retail rates often do not reflect reality. But beyond rates, regulators need to understand Comcast television packages are very different from what Time Warner Cable customers are used to finding.[5] While Time Warner Cable bundles the vast majority of networks into a Standard TV package, Comcast offers a more extensive variety of packages. While at first glance this may seem to allow customers to better customize a package to meet their needs, Comcast has also taken care to break some of the most popular networks out of lower-cost packages and force customers to choose cable television packages costing much more to get them back.[6]

Sports fans and those who enjoy networks like Turner Classic Movies will have to pay Comcast $87.89 a month for its “Digital Preferred,” package[7], just to get back channels already included in the standard Time Warner Cable TV packages we are familiar with in New York.

At regular prices, a Comcast triple play customer should expect to pay $147.49 for the most bare bones TV, phone, and broadband package, $154.99 for the most popular package without premium channels, and $164.99 a month for a bundle that brings along a similar lineup to what TWC offers, along with Starz.[8] Comcast’s nearest equivalent to Time Warner Cable’s $200 Signature Home service costs $239.99 a month and offers no better Internet speeds than what Preferred Plus customers get.

[1]http://www.buffalonews.com/city-region-whats-the-big-secret-about-pricing-20130805
[2]http://www.timewarnercable.com/en/support/account-and-billing/topics/retail-rates.html
[3]http://articles.latimes.com/2014/mar/17/business/la-fi-lazarus-20140318
[4]http://articles.latimes.com/2011/dec/27/business/la-fi-lazarus-20111227
[5]http://www.timewarnercable.com/en/tv/digital-cable-tv.html
[6]http://www.comcast.com/Corporate/Learn/DigitalCable/digitalcable.html
[7]http://www.comcast.com/Corporate/Learn/DigitalCable/TVChannelLineUp.html
[8]http://www.comcast.com/shop/deals-dealfinder
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A Note to Non-Profits/Civil Rights Groups Supporting the Comcast-Time Warner Cable Merger

penIf your non-profit or civil rights group has or is thinking of writing a glowing letter in favor of the merger of Comcast and Time Warner Cable, Stop the Cap! is delighted to announce our new Alert Your Donor Base service. Each time we discover a letter submitted to a state or federal regulator announcing your enthusiastic support for the Worst Company in America marrying the second worst, we’ll be sharing that exciting news, along with any contributions we discover Comcast has sent your way, to your members and supporters.

We were surprised to learn that so many non-profit and civil rights groups don’t seem to publicize their sudden fascination with Comcast’s growth agenda. Perhaps it is an oversight. But that’s no problem. We’ll make sure the news lands on your Facebook page, Twitter feed, and your local media outlets. You have nothing to be ashamed about, right?

If donors decide that Comcast has evidently given your group so much support you feel somehow obligated to divert your attention away from your core mission to write a Hallmark Card in favor of $45 billion corporate merger deals, that’s important news for them to know. Perhaps donors will decide it is safe to direct their contributions to the groups that are dedicated to helping real people, not multibillion dollar cable companies.

It’s the least we could do.

Here’s a sample:

Dear Carlisle Hope Station:

For the benefit of your donors, we’d like to share your exciting news that the Carlisle Hope Station of Carlisle, Pa. took valuable time out of its day to send a letter of support for Comcast’s $45 billion merger deal with Time Warner Cable. This merger will have no impact on your group or its constituency because Comcast is already your local cable company. You decided it was best for New Yorkers to also enjoy cable service from the 2014 winner of the Worst Company in America award.

We pondered why your charitable group would spend time, money, and resources on a letter writing campaign for multi-billion dollar corporation. Then we discovered Comcast is a Platinum Donor, contributing more than $10,000 in in-kind/real contributions to your organization. Since Comcast has so generously donated to your effort, perhaps there are other local needy organizations that could do with some donations — ones that don’t have time to write letters to out-of-state regulators about cable company mergers.

Yours very truly,

Stop the Cap!

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Comcast Threatens Limited Income Seniors Over Compensation for Cable Boxes Destroyed in Fire

http://www.phillipdampier.com/video/WZZM Grand Rapids Over 50 seniors displaced by fire at Battle Creek apartment complex 6-20-14.flv

WZZM in Grand Rapids covers the fire in an independent living complex that left at least 50 seniors homeless and facing big bills from Comcast. (1:53)

fireAt least 50 seniors residing in an independent living complex in Battle Creek, Mich., were burned out of their apartments after a devastating fire in late June. Some of the fixed income seniors lost everything they owned.

Despite the understanding and patience of credit card companies, banks, insurance companies, AT&T, and the local power utility — all willing to wait for payments or waive billing for those affected, one company stood out for its plan to collect damages from the fire victims: Comcast.

The Area Agency on Aging, working to help the victims, reached out to local Battle Creek media to report Comcast’s local agents were aggressively seeking compensation from the displaced seniors after learning about the fire.

“They want $120 for each cable box, despite the fact these seniors just lost their homes and many are low-income,” Carla Fales, CEO of the agency told WWMT-TV.

Comcast’s response: “Everything destroyed must be paid for.”

06-burned-cable-boxAs is often the case, once Comcast’s disagreeable behavior becomes a headline on the 6 o’clock local news, public relations damage control begins.

When WWMT called Comcast’s corporate offices, the cable company assured the newsroom Comcast would probably waive the fees, but provided no guarantees.

“I can assure everyone there is a process in place; we are working individually with customers to help them in this difficult time,” offered a Comcast spokesperson.

Monday night, Battle Creek Mayor Dave Walters told WWMT that fire victims will not be held responsible for the cost of the lost equipment.

But some may be mired in paperwork to avoid the lost/damaged equipment fees.

Affected residents who were insured at the time of the fire still have to reimburse Comcast through a damage claim filed with their insurance company. Those uninsured will be asked to submit a fire report which must be requested from the local fire department. In some cases, customers may also asked to offer a notarized statement indicating they were not insured to avoid the $120 charge.

But before any of that happens, Comcast also traditionally requires customers to pay any past due balances on their account before equipment credits can be provided.

Comcast’s zeal for charging penalties for lost or damaged equipment is not limited to Michigan.

battle creekIn January, a Tennessee woman’s home went up in flames and was quickly declared a total loss. The only company to give the family a hard time was Comcast, who billed them $550 for four used cable boxes and a rented cable modem melted in the fire.

“I thought, ‘What are they trying to do to me?'” Emma Hilton said. “I’ve done went through a fire. I tried to salvage what I can.”

Hilton was unsure what exactly Comcast expected the fire department to do about the cable company’s equipment.

“(Firefighters) couldn’t get the TV’s. They were burning,” she told WJHL-TV.

Despite the fact her landlord leveled the rest of the uninhabitable home, Comcast still wanted to get paid if she could not recover the equipment from the ashes.

“You mean they’re actually going to charge me for those cable boxes and after I told you I had a fire?'” Hilton said of one of her phone conversations with the cable provider.

Comcast told her to read the contract, which leaves responsibility for the cable equipment entirely up to the customer. Comcast includes a strong recommendation to keep up a renter’s or homeowner’s insurance policy. Now customers know why.

In the past six years of covering these stories, Stop the Cap! has found many renters who simply don’t bother with renter’s insurance, mistakenly assuming the landlord’s own insurance policy covers their damages. But it does not. A renter’s insurance policy typically costs about $100 a year and covers the renter’s personal belongings (and cable boxes). Some policies also cover displaced living expenses — food, a hotel room, etc. They also cover liability in the event a guest is injured inside your rental property. Some cable companies demand up to $500 for each lost or damaged piece of equipment — an unnecessary point of stress and expense right after a major negative event. Get insurance. It’s a bargain.

http://www.phillipdampier.com/video/WWMT Grand Rapids Seniors Asked to Pay Comcast for Damaged Boxes 6-20-14.flv

WWMT in Grand Rapids covers Comcast’s initial resistance to giving seniors a break on fire-damaged cable equipment after their senior living complex was heavily damaged in a fire. (1:38)

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