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Intel Bails On Competing Virtual Cable TV Service; Cable Buyer Would Keep Service Out of U.S.

Phillip Dampier November 12, 2013 Competition, Liberty Media, Online Video, Verizon, Video No Comments
Behind the 8 ball.

Behind the 8 ball.

Intel’s plan to launch a competing virtual cable television operation delivering programming over existing broadband connections is dead and the cable industry has tentative plans to bury the technology overseas.

OnCue was to feature dozens of popular cable networks and a large library of on-demand content using hardware that combined live, on-demand, and streaming video. The service was supposed to be up and running this year, but despite months of talks, Intel was unable to announce any significant carriage agreements with major cable networks. Cable programmers were reportedly fearful of alienating their biggest customers — large incumbent cable, telco and satellite companies — potentially leaving networks exposed to retaliation during contract renewal talks.

The cable industry has repeatedly warned that reselling programming to streaming providers dilutes the value of those networks. The clear implication: sell to our competitors and we will demand significantly discounted rates when our contracts come up for renewal.

Intel has reportedly been shopping the remnants of the service to new buyers. A late October rumor that Verizon Communications was a likely buyer has gone unconfirmed. Today, Bloomberg News reports Dr. John Malone’s Liberty Media has shown an interest (since denied by Liberty) in acquiring the service. Other media accounts suggest Verizon and Liberty could jointly buy the service, but Malone is loyal to the cable industry and is reportedly uncomfortable doing business with a telephone company.

Should Liberty Media acquire the technology, cable companies in the United States can stop worrying about OnCue as an online competitor. Liberty Media would only deploy the technology as an advanced set-top box offered through its owned and operated European cable systems.

http://www.phillipdampier.com/video/Bloomberg Is Intel Abandoning Web-TV Project 10-30-13.flv

Bloomberg senior West Coast correspondent Jon Erlichman reports that Intel may be turning over its web-TV project to Verizon and looks at possible reasons why the company may be abandoning the project and what it could mean for Verizon. He speaks on Bloomberg Television’s “Bloomberg West.” (2:28)


The Cable Industry Explains Offline America: “The Internet is Not Relevant to Them”


The cable industry believes the majority of America not using the Internet remain offline by choice.

The National Cable Telecommunications Association (NCTA) says the digital divide is not their fault. Price have very little to do with it, according to an NCTA infographic showing just 6% cite “cost” as the main reason they are not signed up for Internet service.

“Cable has made extensive efforts to connect all Americans to the Internet. And while high-speed Internet adoption has rapidly increased in the United States, still too many low-income families remain unconnected and are at risk of falling behind in the global information economy,” writes NCTA blogger John Solit. “Connecting all Americans in order to bridge the digital divide and expand the availability of broadband service remains a national goal embraced by cable companies. In a recent blog post, David L. Cohen, Comcast Executive VP & Chief Diversity Officer said, “[I]n just over two years through our Internet Essentials program, Comcast has connected an estimated 1 million low-income Americans, or more than 250,000 families, to the Internet at home.”

The “digital divide” — broadband have’s and have-nots — has been a regular topic among regulators and legislators for more than a decade. A suspicion that cost is a major factor keeping people from signing up could result in legislation compelling providers to offer low-cost Lifeline broadband service to the income-disadvantaged. In the last three years, the cable industry has tried to fight off that type of approach with voluntary programs that selectively target non-customers.

internet essentials

Comcast’s Internet Essentials provides 5/1Mbps service for $9.95 a month, but signing up isn’t easy.

The discounted service is available only to families with school-age children that qualify for the school lunch aid program. Comcast often promotes its discount program to legislators and others in the industry as an example of the voluntary effort the cable industry is making to solve the digital divide. Target customers who most likely qualify for the service are not going to learn about it through television ads or cable company mailers targeting low-income zip codes. Most of Comcast’s marketing effort is in cooperation with area schools.

Ironically, Comcast’s Internet Essentials actually forces some people to temporarily give up Internet access if they want to participate.

Customers must be current on their Comcast bills and must not have a subscription to any Comcast Internet service for the last 90 days to receive consideration. If you already have Comcast broadband service, you must disconnect it for at least three months before you can apply for Internet Essentials.

This requirement is designed to protect Comcast’s bottom line. Why offer a discount to customers already willing to sacrifice for home Internet service at Comcast’s regular price?

“How is this helping me and my family out,” asks one Tennessee customer who tried to sign up for Internet Essentials but couldn’t because they were already paying for Comcast Internet service. “The Comcast representative said that if I wanted to be enrolled in the program I would have to discontinue my Internet service for 90 days and then reapply. We have the Economy Internet Promotion and pay $19.95 per month. After the promotion ends our fee will increase to $26.95 a month. In our current economy and financial situation saving $17 per month would greatly help our family to keep our service. I will not rest until I find a solution to this problem. My children at least deserve that.”

Comcast also makes it its business to check your household to make sure at least one child still qualifies for the National School Lunch Program. The company reserves the right to immediately cancel service if you miss a payment or move. Participants also must not upgrade, alter or change Comcast service for any reason or risk being removed from the program.

Comcast’s Wi-Fi Ban



One of the most annoying conditions of the Internet Essentials program is that it does not allow Wi-Fi access.

Phil Shapiro, who refurbishes donated computers and distributes them to needy families regularly runs into Comcast’s Wi-Fi ban – a significant issue for larger families that need to be online concurrently.

“I’ve taken three donated computers to [one] family and I was expecting to get them all online with this cable modem service,” Shapiro tells The Hechinger Report.  “But not so fast. Comcast’s telephone tech support tells me that Internet Essentials users cannot use Wi-Fi with their cable modems. Nowhere in Comcast’s printed literature or on the website is this limitation mentioned. Naturally, families who sign up for Internet Essentials get confused about this, but they are not well positioned to advocate for their needs.”

Charlie Douglas, a Comcast spokesperson, confirms that Internet Essentials does not offer Wi-Fi service, although he noted a customer could theoretically buy a wireless router themselves and use that to provide wireless connectivity. But that isn’t what Comcast’s technical support team recommends. Any deviation from the terms of the service offered to Internet Essentials customers could lead to an immediate disqualification. Comcast defines Internet Essentials as a wired service, including one outlet and a basic (not wireless) modem.

“The family that I was helping patiently waited for me while I talked on the phone,” said Shapiro. “They could see that I spoke very politely with the tech support person. They also saw that I had reached the end of my patience.”

A representative told Stop the Cap! Internet Essentials accounts have insufficient bandwidth and speed for Wi-Fi service, so it is not offered.

Shapiro dismisses Comcast’s explanation. Many public Wi-Fi networks offer even slower service than Comcast.

Douglas defended Comcast’s policy noting families served by the program don’t miss Wi-Fi and don’t need it.

But those using tablets might disagree, and with an increasing number of students using them as school textbooks are gradually phased out, Wi-Fi will only grow in importance.

Many large school districts, including Los Angeles, are introducing Wi-Fi only tablets for student use because they are cheaper and easier to support. When Internet Essentials participants ask about Wi-Fi access with the discounted broadband service, Comcast representatives are trained to up sell customers out of the program and sign them to a more costly plan than includes built-in Wi-Fi support.

Customers can successfully, if covertly, connect a router with Wi-Fi capability to the basic cable modem supplied by Comcast and configure wireless Internet Essentials service. But there are no guarantees Comcast will not give customers grief about it, if they wish.

http://www.phillipdampier.com/video/Comcast Internet Essentials Key Milestones 11-13.mp4

Comcast produced this video marking the start of the second year of its Internet Essentials program. Chicago Mayor Rahm Emanuel gushed Internet Essentials was “top of the line” Internet access. He was joined by other recognizable political leaders and the former chairman of the Federal Communications Commission Julius Genachowski. (2:47)


Time Warner Cable’s Halloween Nightmare: 3% of Customers Left This Summer, With More to Follow

pumpkinTime Warner Cable’s summer was “horrible,” to quote one analyst, after three percent of customers left over programming disputes and increasing prices for broadband and telephone service, with more likely to follow as price promotions expire and rates increase further.

Cable analysts were shocked Time Warner Cable lost 308,000 customers in the last three months, most leaving over interruptions of CBS and Showtime over a contract dispute. But customers were also ready to leave over increasing modem rental fees, rate increases, and the company’s growing pullback on promotional pricing. Time Warner Cable’s poor results have ironically caused its stock price to increase this morning, but only because investors suspect a shareholder value-boosting merger with Charter Communications could come within months.

“Just horrible,” MoffetNathanson analyst Craig Moffett wrote in a note to investor clients this morning. “The CBS dispute apparently took a much larger toll than anyone would have imagined, and this colored all the results.”

Sources have told Reuters that cable billionaire John Malone has approached Time Warner Cable about a full takeover by Charter Communications, but has been rebuffed by Britt so far. But with Britt exiting and Time Warner Cable’s underperformance, shareholder pressure for a deal with Charter will only increase.

“This enhances Malone’s appeal to Time Warner Cable shareholders that they would be better off with another management team,” Brean Capital analyst Todd Mitchell told Reuters.

When promotional prices end, a growing percentage of TWC customers drop services or take their business elsewhere.

When promotional prices end, a growing percentage of TWC customers drop services or take their business elsewhere.

The subscriber losses pushed profits down 34 percent at the cable company, to $532 million. The triple play tragedy saw subscriber losses for all the company’s residential services. At a time when other cable companies cannot process High Speed Internet sign ups fast enough, at least 24,000 Time Warner Cable broadband customers left over rate hikes and equipment fees. Analysts had expected the company to pick up more than 46,000 broadband customers during the last three months, not lose them. The company’s phone service is also in decline. Only rate increases and customers upgrading to higher speed tiers delivered a slight revenue boost.

Outgoing CEO Glenn Britt set the stage for the current forced retreat on its revenue forecast for the year:

  • Time Warner Cable executives made the decision at the end of 2012 to stop heavily discounting service and cut back on promotions. Their theory was the company would attract a larger base of stable customers willing to pay non-promotional rates and tolerate rate increases;
  • Executives announced as Time Warner’s phone service was brought “in-house,” the company would stop aggressively pricing triple play bundles that included phone service. That turned out to be a bad decision for growth because customers, already prone to landline cord-cutting, downgraded their bundle or left when promotions expired and ditched the phone line;
  • A year of broadband price increases and the introduction of a modem rental fee rubbed customers the wrong way. “We have raised prices recently in the form of modem rental fees, but it’s really just broadband price increase,” again admitted Britt this morning. Future rate increases on modem rentals will give broadband customers another push to shop around for a better deal. At least 24,000 did that over the summer and left, mostly for AT&T U-verse in the midwest and Verizon FiOS in the east.

The lengthy dispute between Time Warner and CBS did the most damage and not just to customers directly affected by channel losses. A major increase in call volumes from alienated customers overwhelmed national call centers, creating long hold times for everyone calling in.

Time Warner expects 40 percent of the cable company’s service area will be overlapped by major competitors AT&T U-verse (now 27%) and Verizon FiOS (now 13%). That represents one million more homes than last year.

Bye Bye: Time Warner Cable lost residential customers for all of its services during the third quarter.

Bye Bye: Time Warner Cable lost residential customers for all of its services during the third quarter.

Incoming CEO Robert Marcus said he was dissatisfied with subscriber results from current promotions and rates. New Time Warner Cable customers, Marcus noted, are paying higher prices for fewer or less robust services as part of current promotional packages. Although that has driven a “dramatic improvement in recurring revenue” among customers actually signing up, many choose the lower-priced competition instead.

Marcus also noted customers are taking fewer services and are resistant to upgrading to double or triple play packages, reducing the potential average revenue per customer (ARPU).

“To a great extent, these are expected outcomes of our pricing and packaging strategy and the trade-off between ARPU and volume, but I’m confident we can do better on volume without giving up the ARPU benefits we’ve been achieving,” Marcus told analysts on a morning conference call.

Instead of getting more aggressive on pricing, the company plans to trot out free gifts and pitch discounted slow speed Internet to attract price-resistant DSL customers.

“Next week, we’ll launch our holiday offer, which includes a free Samsung tablet loaded with all of our apps, including TWC TV, with the purchase of higher-end packages,” Marcus said. “I think this will generate lots of interest and really highlight TWC TV and the value it adds to our service offerings.”

Marcus called it inconceivable and unacceptable that at least 4.5 million people are still subscribed to telephone company DSL in Time Warner Cable service areas. The company plans an advertising blitz to steal customers away from companies like AT&T, Verizon, Frontier, CenturyLink, Windstream and FairPoint.

At the center of that effort is the recently announced 2/1Mbps Lite package, which will sell at the everyday price of $14.95 a month. Marcus wants at least 500,000 DSL customers switched to Time Warner over the next 18 months.

“Over time, as these customers’ speed and capacity needs increase, we’ll be well positioned to sell them higher-end product,” Marcus said.

Or they will switch back to the phone company if Time Warner increases the price.


Comcast’s Missing $100 Gift Card Rebate to Switch to Verizon Wireless

rebateAre you still waiting for that $100 gift card Comcast promised to customers who signed up or upgraded service with their marketing partner Verizon Wireless?

You are not alone. Multiple complaints about missing gift cards point to a rebate form promising a gift card six to eight weeks after submission, but the rebate processor has extended that time repeatedly — first to 8-10 weeks, then 10-12 weeks, and now 16-17 weeks… and counting.

If you forgot about the rebate, you may never receive it without contacting Comcast to follow-up. Others found their rebate request rejected by the rebate processor for a variety of reasons.

Customers should have made a copy of their rebate submission to keep for their records. If your rebate still has not arrived, call Comcast at 1-866-347-2229 to escalate the matter and speed up the arrival of your missing gift card.

Although high dollar rebates for cell phones are not uncommon, a large percentage of customers eligible for the rebate never follow through with a properly completed, timely rebate submission.

In many cases, a rejection notice can be overcome by contacting the cable company’s customer service department directly. Many cable companies will credit your account for the amount of the missing rebate.


Verizon, Comcast, Time Warner Cable End Innovation Joint Venture; ‘No Longer Necessary’

comcast verizonA joint venture between Verizon, Comcast, and Time Warner Cable to explore the development of innovative new services delivered across cable and wireless networks has been terminated, according to Fran Shammo, Verizon’s chief financial officer.

Speaking on a quarterly results conference call, Shammo acknowledged the companies still have a cross-marketing agreement selling Verizon Wireless service to Comcast and Time Warner Cable subscribers and pitching cable service inside Verizon Wireless stores. A Verizon spokesperson admitted the parties abandoned the effort to co-develop new products and services at the end of August.

Shammo pointed to Verizon’s recent buyout of Vodafone’s share in Verizon Wireless as one of the market changes that led to dissolving the partnership with the two cable companies. Shammo indicated bringing Verizon Wireless under the full control of Verizon Communications allows the company to develop, market, and distribute its own products and services across both Verizon Wireless and fiber optic FiOS platforms.

Had the joint venture continued, Verizon’s FiOS network might have suffered a competitive disadvantage, being unable to capitalize on the exclusivity of new services developed by Verizon to better compete against the two cable companies that share many Verizon service areas.

Verizon FiOS has already garnered a 39% market share with room to grow in major cities like New York City, Philadelphia, and Washington where Verizon has not yet completed its fiber optic buildout.


Time Warner Cable/Bright House: ¡Se Habla Español!; New Univision Contract Loads Up Cable TV Dial

UnivisionA new agreement between Time Warner Cable, Bright House Networks, and Univision Communications will add at least three new Latino-oriented cable networks to the television lineup beginning as early as next month.

The two cable companies have agreed to extend a carriage agreement with Univision TV as well as bring several new Univision networks to Time Warner Cable viewers. The complete lineup:

  • UnivisionHD: The Univision broadcast network (Spanish)
  • UniMás: The “second program” of Univision’s broadcast network (Spanish)
  • Galavisión: A cable entertainment channel (Spanish)
  • Univision tlNovelas: All telenovelas (soap operas), all the time (Spanish)
  • FOROtv: The Mexico City-based 24 hour news channel (Spanish)
  • El Rey Channel: A joint project of filmmaker Robert Rodriguez and FactoryMade Ventures, launching to cater to second/third-generation young adult Latinos (English)

Many Univision shows are now subtitled in English, especially during prime time hours, to expand the potential viewing audience.

“Time Warner Cable is delighted to be able to work out our early renewal and expand our business relationship with Univision,” said Melinda Witmer, chief video and content officer for TWC. “Our comprehensive agreement expands the number of ways our Hispanic subscribers can enjoy their favorite entertainment, news, sports and telenovelas.”

The deal also allows Time Warner Cable to carry Univision content on streaming video and on-demand platforms.


Editoral Decries Time Warner Cable’s Attempt to Deregulate Phone Service in New York

timewarner twcEfforts by New York’s largest cable operator to deregulate telephone service in New York, potentially cutting off delinquent ratepayers’ phone service at inconvenient times, has run into opposition from an Albany newspaper.

The Times Union published an editorial last week opposing the measure, fearing it could leave some of the millions of Time Warner Cable phone customers without service on nights and weekends without any way to make a payment to prevent the disconnection.

Unlike other services that companies like Time Warner offer — such as TV, Internet, security and remote lighting and heating control — the home telephone holds special status. It has long been regarded as an essential utility, much like residential gas, water and electricity. The PSC regulates how and when a utility can cut a customer off such a critical service for failure to pay a bill on time.

For years, Time Warner maintained it was not a phone company and should not be bound by these rules. That changed earlier this year when it accepted the responsibilities and regulations that come with being a residential phone provider.

Now, though, Time Warner is petitioning the PSC to change the rules governing home phone bills.

Some of the requests appear reasonable, such as updating language about local and long-distance calling charges. But that’s not the case with Time Warner’s request to expand the hours and days when it can disconnect services for customers who have fallen behind in their bills, including their phone service.

Specifically, Time Warner wants to deal with delinquent customers on nights and weekends.

Most other utility providers can cut service for non-payment only during weekdays, when the PSC’s staff is working and available to help broker solutions and protect consumers. The PSC has the authority to make decisions on disputed bills, revise payment plan arrangements and remedy situations where continued service is medically necessary.

Late and unpaid bills are admittedly a chronic problem for cable companies. In the past year, Time Warner sent more than 1.7 million past-due notices to residential customers in the state and shut off or suspended service to nearly 600,000 households for failing to pay bills.

Time Warner calls its proposed change a convenience to its customers. It’s really a convenience for Time Warner, which wants to handle phone bills the same as other services. But this would bypass the special safeguards for phone consumers.

The Public Service Commission is still reviewing the proposal from Time Warner Cable, which is the dominant cable provider in upstate New York and parts of New York City.


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


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

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

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

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

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

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

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

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

Time Warner Cable said it welcomes the competition.

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

City Council President Kevin Corcoran on Friday that

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

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

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

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

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

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

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

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

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

Cost figures for the North Ridgeville project were not disclosed.

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

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

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

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

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

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

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

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


Inside Time Warner Cable’s Free Cable/Reward Programs for Realtors, Property Owners, and Landlords

courtesy accountsWhen you bought a home or moved into an apartment, were you offered a special discount deal to sign up with Time Warner Cable? Or is cable television already provided as part of your lease?

While everyone enjoys saving on cable television, telephone and broadband service, chances are your landlord or the person who lets the cable installer into the building is getting a better deal than you ever will.

Cable companies often (quietly) offer realtors, builders, condo association leaders, landlords, superintendents and even their assistants free or deeply discounted cable service for a variety of reasons:

  • Building owners and builders are given special consideration to help encourage contract agreements that offer bulk cable service to every resident in the complex. The cable operator usually also gets exclusive use of inside wiring, discouraging the competition;
  • Realtors and property developers are often paid in cash for new subscriber leads, usually resulting from “welcome to your new home” move-in kits, “concierge” services offered by your realtor, or special flyers left at your door that pay rewards every time a customer signs up;
  • Superintendents, landlords, and maintenance staff get free service in return for making life easier for Time Warner Cable technicians trying to get into a large multiple dwelling building on service calls. Free cable, including complimentary HBO and Showtime is almost always an effective incentive for those that can otherwise make life very difficult for service providers.

realtor_topTime Warner Cable has provided free or deeply discounted “courtesy accounts” for more than a decade. For much of that time, the informal agreement required the recipient to provide little more than convenient building access for Time Warner Cable technicians. Participants in the program were also asked to pass along any service issues or complaints.

Sometimes, even customers act as informal salespeople for cable service. Time Warner’s “Shared Savings” Bulk Discount program is available in buildings where 40 residents or 50% of the building, whichever is greater, can be convinced to commit to a service contract with Time Warner Cable lasting up to three years. In return, customers are promised free standard installation, bulk-rate Digital TV service, discounted broadband and phone service, and flexible billing options that can either bill residents directly or dispatch a single monthly invoice to building management where service is bundled with a renter’s lease agreement.

This week, the New York Times reported Time Warner Cable was reviewing its courtesy accounts program and asking participants to recommit themselves (and include their Social Security number on an included IRS tax form).

shared savingsDetails about Time Warner’s Apartment Managers’ Program are hard to find. No cable company wants to openly advertise that select customers are getting cable service for free while others watch their bills continue to grow and grow. The Times outlines the new agreement the cable company is requiring New York City program participants to sign.

Real estate workers are now asked to send employment verification along with a signed, formal contract that includes commitments to act as a goodwill ambassador for Time Warner Cable, help the company sell products, and snoop on tenants suspected of stealing cable.

“It is the intention of Time Warner Cable to provide the Promotional Services contemplated in this Agreement to further solidify and enhance the mutually beneficial business relationship between your property and Time Warner Cable,” one California Time Warner Cable contract states. “In keeping with the spirit of this relationship, we expect the Recipient to be our goodwill ambassador to all employees and residents by positively promoting our products and services. [...] Time Warner Cable employees will be allowed access to the property to install, maintain and market services door to door between the hours of 8AM and 9PM.”

min requirements

The Times reports few real estate professionals have any ethical problems making sure the cable company has a reliable point of contact in the building to let workers in without delay and there isn’t much controversy over requests to report service problems either.

But there are concerns about language that informally appoints building workers as deputy ambassadors and marketers of Time Warner Cable products. One offer rewards a free month of Internet to a program participant for every three leads that turn into sales.

timewarner twc“We would consider that a borderline kickback,” Michael Jay Wolfe, president of Midboro Management, a large building management company told the newspaper. “I mean, what are they going to be selling next, Tupperware? They work for the building. They’re not an agent for anybody else.”

Others object to a clause requiring them to “identify, discourage and report” signal theft or equipment tampering, effectively spying on tenants.

Another reason some are balking is Time Warner’s insistence on a signed W-9 tax form, which includes the recipients’ Social Security number. In return, to comply with federal law, the cable company must issue an IRS Form 1099-MISC to all individuals that receive courtesy services worth $600 or more in a calendar year. In other words, the IRS is going to know the identities of those getting compensated with free cable service, which may have tax implications, making the service no longer free in the eyes of the tax man.

Ziggy Chau, a spokeswoman for Time Warner Cable defended the program saying it was intended to help customers.

“If there are service issues, customers want those issues fixed yesterday,” said Chau. “The people in these programs, they’re not going to do it for free. We’re building a good relationship.”

Some real estate workers are refusing to sign the new agreements and losing free cable as a result.


Post TWC-CBS Dispute, Other Networks Preparing to Demand Their Own Increases

cbs twcJust weeks after Time Warner Cable and CBS settled a dispute over retransmission fees, other broadcasters and networks are preparing to make new demands for increased compensation from their cable, satellite, and telco IPTV partners at prices likely to provoke more blackouts.

Despite repeated protestations from Time Warner that over-the-air stations and networks deserve lower fees than cable-only networks, once the two parties went behind closed doors, the cable company quickly agreed to pay considerably more for CBS programming. Sources say CBS made a deal that will run up to five years and includes more than $1.50 in fees per subscriber, up from between 50-85 cents per month, depending on the city served, under the old contract. CBS had asked for about $2 a month. Effectively, the company will earn more than that because Time Warner also agreed to renew both the CBS Sports Network and Smithsonian Channel, which cost extra.

“There is a new template here. Two dollars is the new holy grail,” Wunderlich Securities analyst Matthew Harrigan told Reuters.

Fox was the highest paid network before the CBS deal, collecting close to $1.25 per month per subscriber. ABC receives 50-65 cents and NBC less than that.

Harrigan predicts the other networks will race to raise their own prices, with Time Warner Cable (and others) likely forced to raise rates early next year to cover increased costs.

In the war for compensation, programmers hold most of the leverage.

http://www.phillipdampier.com/video/WSJ Lessons Learned CBS 9-2-13.flv

The Wall Street Journal reports the dispute between Time Warner Cable and CBS set new industry precedents on the value of broadcast stations and networks and how their programming is distributed on digital platforms. (2 minutes)

There have already been local station blackouts in 80 cities so far this year, with the likelihood last year’s record of 91 markets will be broken before Thanksgiving. In almost every instance where a popular network is involved, the pay television provider eventually capitulates because of subscriber complaints or cancellations.



Time Warner Cable admits its dispute with CBS cost the company business, both from prospective new customers going elsewhere and customer disconnects. Time Warner also spent money advertising its side of the dispute and paid to distribute free antennas to affected subscribers.

CBS’ Les Moonves had predicted Time Warner would eventually meet most of the network’s compensation demands before football season arrived. He was right.

“CBS is the winner. Content owners always win these negotiations, it’s just a matter of how much they won,” said Craig Moffett of Moffett Research. “They have all the leverage. Consumers don’t get mad and trade in their channel when these fights drag on. They go looking for a different satellite or telephone company.”

Almost 200,000 Time Warner Cable television customers left during the second quarter, and company officials admit that trend continued during the third quarter as the dispute dragged on. Time Warner Cable is likely to end the year with fewer than 11.5 million video subscribers, a loss of several hundred thousand this year.

Sources say one major sticking point that kept CBS off Time Warner Cable systems for nearly a month wasn’t about money. Instead, it was about digital distribution rights.

Time Warner Cable wanted CBS on its TV Everywhere app TWCTV and was also concerned about CBS selling content to online video streaming competitors that could accelerate cord-cutting.

Time Warner Cable did win permission to offer Showtime on its digital streaming platform and on apps for portable devices. But Time Warner will not get to carry local CBS-owned stations on streaming platforms, a significant blow. The cable company will also have to pay more for streamed and on-demand content.

In the end, CBS got almost everything it wanted and Time Warner Cable was handed back its largely unfulfilled wish list and a bigger, retroactive bill subscribers will eventually have to pay.

“We wanted to hold down costs and retain our ability to deliver a great video experience to our customers,” Time Warner Cable CEO Glenn Britt said in defense of the agreement. “While we certainly didn’t get everything we wanted, ultimately we ended up in a much better place than when we started.”

Moonves gloated to various trade publications and investors that CBS went unscathed after the month-long dispute.

“Our national ad dollars did not go down,” Moonves told attendees at the recent Bank of America/Merrill Lynch Media Communications & Entertainment Conference. “There were no such things as make-goods and there was no harm done financially to CBS Corporation.”

http://www.phillipdampier.com/video/Bloomberg Moonves CBS Got Fair Value for Our Content 9-7-13.flv

CBS’ Les Moonves has won his dispute with Time Warner Cable, says Les Moonves in this interview with Bloomberg TV. (10 minutes)

Comcast owns both NBC and the cable companies that carry its local affiliates.

Comcast owns both NBC and the cable companies that carry its local affiliates.

Cable rate increases are not likely to stop with the agreement with CBS. Analysts predict NBC, ABC, and FOX will be seeking similar rates when their contracts come up for renewal. Altogether, every cable, telco IPTV, and satellite subscriber could see rates increase up to $6 a month for the four major American networks.

“Any time one of these larger networks sets the new standard in terms of pricing for their programming, the rest follow,” Justin Nielson, an analyst for SNL Kagan, told Hollywood Reporter. “In most cases it’s been CBS and FOX trailblazing what the rates should be and then ABC and NBC following.”

Comcast-NBC’s Steve Burke is already there. Burke told investors affiliates should be paying 20 to 25 percent more for cable networks such as USA, Bravo, SyFy, CNBC and MSNBC .

“We’re not paid as much as we should be given our rating and positioning by cable and satellite companies,” Burke said. “I see no reason why we won’t sort of draft behind the other broadcast networks and get paid in a similar way.”

Burke predicts NBC will earn between $500 million to $1 billion annually from increased retransmission consent fees comparable to what CBS and FOX receive.

Next week, DISH Networks faces the expiration of their contract with ABC/Disney-owned channels, including the Cadillac-priced ESPN. The outcome of renewal negotiations may serve as an indicator for where rates are headed in the world of retransmission economics.

A growing number of elected officials in Washington are paying attention as they and their constituents live through one programmer blackout after another. At least four pieces of legislation have been introduced to deal with the problem in very different ways, according to Bloomberg News:

The Satellite Television Extension and Localism Act

This law, known as STELA, dates to 2004 and gives satellite companies a license to provide local TV stations, just as cable operators do. The current law is set to expire at the end of 2014, with most observers calling its reauthorization a near certainty. The debate is mainly over how “clean” the STELA reauthorization bill will be as it emerges from the legislative process, with the pay TV companies urging lawmakers to address the issue of retransmission disputes. Broadcasters are working for a “clean” bill, written narrowly to address the satellite companies’ immediate needs. “There’s nothing clean about the current retransmission system,” says Brian Frederick, a spokesman for the American Television Alliance, a coalition of pay-TV companies. Two House committees held hearings on the law this week. A final bill and vote are expected next year.

Video CHOICE (Consumers Have Options in Choosing Entertainment)

Representative Anna Eshoo, a Democrat who represents much of Silicon Valley, introduced this bill Sept. 9 aimed at ending blackouts. “Recurring TV blackouts, including the 91 U.S. markets impacted in 2012, have made it abundantly clear that the FCC needs explicit statutory authority to intervene when retransmission disputes break down,” Eshoo said in a press release. (The FCC gets involved now only if one party accuses the other of negotiating in bad faith.) The bill would unbundle broadcast stations from a cable package and prohibit a broadcaster from requiring a pay TV operator to take affiliated cable channels to obtain more popular channels. That issue is at the heart of why Cablevision sued Viacom in February, following a contentious negotiation.

Eshoo’s bill would also require the FCC to study programming costs for sports networks in the top 20 regional sports markets. The rising fees for sports programming—led by ESPN—is considered one of the major influences behind rising cable bills and the power that content creators such as Disney hold in negotiations. Cable companies have praised Eshoo’s bill, while broadcasters are not fans. Don’t expect to see it get far in a Republican-led House.

Television Consumer Freedom Act of 2013

This bill, introduced in May by Senator John McCain (R-Ariz.), would end the long era of the cable television bundle, that phenomenon by which you pay for hundreds of channels and find yourself watching only about two dozen, or fewer. This summer, Connecticut Senator Richard Blumenthal signed on as a Democratic co-sponsor, but there’s been no similar sponsors on the House side. Blumenthal explained his support of the bill in an August interview with the Hollywood Reporter:

“What I hear from cable consumers overwhelmingly is, ‘give us freedom of choice. Don’t make us pay for something we don’t want and won’t watch. Why am I paying for—you name a channel you don’t like or five or ten or them—just so I can watch the one I do want.’ That’s overwhelmingly the sentiment of people who buy this product. So this bill just gives voice and force to that sentiment.”

Next Generation Television Marketplace Act

This bill from Representative Steve Scalise, a Louisiana Republican, and former South Carolina Senator Jim DeMint, also a Republican, dates to December 2011 and would deregulate the entire television market, top to bottom. It would repeal compulsory copyright licenses, the legal mechanism by which content owners are required to let pay TV companies carry their programs, if they are paid a fee for the content. The bill, which would also dismantle the system of retransmission fees, is essentially an exercise in carrying free-market ideology to its logical conclusion. The problem? It would require a countless number of individual deal negotiations—any radio or television station that wanted to carry programming (i.e., all of them)—would need to strike deals with every programmer, yielding an inefficient system that would likely prove unworkable. Lawyers would love the bill, but don’t expect it ever to pass Congress.

In fact, none of these bills are expected to pass through both the gridlocked House and Senate this year.

http://www.phillipdampier.com/video/CNBC Les Moonves Says It Would Be Dumb For Lawmakers To Change Retransmission Rules 9-4-13.flv

CNBC also talked with CBS’ Les Moonves about CBS’ views towards compensation and distributing content online. (13 minutes)


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