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Nine Upstate NY Mayors Accuse Verizon of Avoiding Urban Poor In Fiber Upgrades

Phillip Dampier — Tue, 22 May 2012 20:04:43 +0000

Verizon has a moratorium on further expansion of its fiber to the home service except in areas where it has existing agreements to deliver service.

Virtually every mayor in the urban centers of upstate New York is accusing Verizon Communications of redlining poor and minority communities when deciding where to provide its fiber-to-the-home service FiOS.

Now they are telling the Federal Communications Commission and Department of Justice to become more closely involved in reviewing a proposed anti-competitive marketing partnership between the phone company and some of the nation’s largest cable operators.

The mayors are upset that Verizon has chosen to target its limited FiOS network primarily on affluent suburbs surrounding upstate New York city centers.

“Verizon has not built its all-fiber FiOS network in any of our densely-populated cities. Not in Albany, Buffalo, Syracuse, Binghamton, Kingston, Elmira or Troy,” the mayors say. “Yet, Verizon has expanded its FiOS network to the suburbs ringing Buffalo, Albany, Troy, and Syracuse, as well as many places in the Hudson Valley, and most of downstate New York. As a result, the residents and businesses in our cities are disadvantaged relative to their more affluent suburban neighbors who have access to Verizon’s FiOS, providing competitive choice in high-speed broadband and video services.”

The mayors fear the reduced competition that will come from the marketing partnership between the phone and cable industry will eliminate any pressure on Verizon to expand its fiber optic network into more New York cities. The agreement allows Verizon Wireless customers to received significant bundled discounts when they sign up for cell phone service and a cable package from Comcast, Time Warner Cable, Cox, or Bright House Networks. No corresponding discount is available to a Verizon Wireless customer choosing to bundle Verizon FiOS, putting the fiber service at a competitive disadvantage.

“These commercial agreements appear to eliminate any incentive that Verizon might have had to expand its all-fiber network to our high-density urban centers,” the mayors say. “After all, Verizon Wireless, a subsidiary of Verizon Communications, will now be able to sell Time Warner’s video and broadband service as part of their bundled package in our communities.”

That leaves most with Verizon’s DSL service, a product Verizon has been marketing less and less to its customers. The company recently announced it would no longer sell standalone DSL broadband, another point of contention for the mayors.

The mayors are concerned that Verizon’s deteriorating landline network will have profound implications for city centers, where tele-medicine, education, business, and entertainment services will all be left lacking if the fiber network is not extended.

“As you are well aware, high-speed broadband is critical to economic development and job creation, as well as improvements in health care, education, public safety, and civic discourse which is so essential to communal life,” say the mayors. “The economic health of our cities and our upstate region depends upon access to the same first-rate communications infrastructure available to the New York City metropolitan region and the suburban communities that ring our cities.”

The nine mayors are also questioning whether Verizon executives misled them when they claimed Verizon’s strong financial performance would allow the company to reinvest profits into further expansion of its FiOS network. Verizon executives have since admitted the company is indefinitely finished with FiOS expansion, except in areas where it already committed to build the fiber network.

Signing the letter were:

Byron W. Brown – Mayor, City of Buffalo
Stephanie A. Miner – Mayor, City of Syracuse
Gerald D. Jennings – Mayor, City of Albany
Matthew T. Ryan – Mayor, City of Binghamton
Shayne R. Gallo – Mayor, City of Kingston
Susan Skidmore – Mayor, City of Elmira
Brian Tobin – Mayor, City of Cortland
Robert Palmieri – Mayor, City of Utica
Lou Rosamilla – Mayor, City of Troy

(The city of Rochester is served by Frontier Communications, which has no plans to deliver a fiber to the home network within its local service area.)

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Elmira Spins Its Wheels Negotiating for a Better Deal from Time Warner Cable

Phillip Dampier — Tue, 22 May 2012 19:52:13 +0000

The southern tier city of Elmira, N.Y. is not too happy with Time Warner Cable’s lock on the local cable market.

“There’s no competition so their prices continue to go up, their offers continue to go down, and the people here with no other competition are just paying and paying and paying,” Elmira mayor Sue Skidmore told WETM News.

Skidmore and the city council intend to hold public hearings on the cable operator’s franchise renewal before they attempt to negotiate the next 10-year agreement with the cable company.

“This gives the public an opportunity to come and say anything good or bad pertaining to the cable franchise,” said city manager John Burin. The public meeting is scheduled for 7pm, June 4, on the second floor of Elmira City Hall.

Skidmore

The city’s ability to press Time Warner Cable for lower rates or service changes are extremely limited, however. Wholesale deregulation of the cable television industry has allowed most cable operators to manage their systems as they see fit, with no obligation to accept the recommendations of local government.

This fact of life was underscored when Time Warner mailed its own vision of what a renewal agreement with the city should look like, prior to any public discussion.

The city’s lawyer, John Ryan Jr., told the Ithaca Journal the company deleted several provisions in the proposed renewal agreement that are part of the current agreement. Ryan intends to speak with the operator about those changes, and wants to see changes in the city’s favor.

In most franchise renewal agreements, the only leverage a city typically has is to threaten not to renew a cable franchise. That is a very rare occurrence, however, because it is exceptionally rare for another major cable provider to agree to service a city that cancels a franchise renewal with another company. In the end, most renewal agreements come down to handshake agreements to correct any long-standing service issues, agree to wire certain unserved areas, and negotiate over public, educational, and government access channels and franchise fees payable to the city.

The local telephone company, Verizon Communications, has no plans to provide its FiOS fiber optic service in the city, leaving customers with the competitive option of landline phone service, DSL, and a contract with Verizon’s satellite TV partner, DirecTV.

Click here to view the embedded video.

WETM in Elmira reports city officials are preparing for franchise renewal discussions with Time Warner Cable. The cable company is already on that, preemptively sending the city a franchise renewal agreement it wrote itself. (1 minute)

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Vidéotron Secretly Filming Technicians on Fake Service Calls; Watch the Results

Phillip Dampier — Thu, 10 May 2012 21:29:42 +0000

Vidéotron, Quebec’s largest cable operator, is secretly filming some of their technicians on fake service calls to verify they are providing professional service to the company’s customers.

But instead of keeping the results to themselves, the company is publishing the resulting videos to their website for customers to enjoy.

A total of 21 technicians were put to the test, and the company set up some outrageous challenges for them to overcome, starting with a single woman trying to convince her mother the technician was her boyfriend, with comical results.

While we are unlikely to see the Vidéotron technicians that failed the tests, the company has launched a publicity campaign to praise itself for excellent service.

“Our conscientious technicians are ambassadors for Vidéotron and its values,” said Manon Brouillette, president of consumer markets. “We are very proud of them. They have achieved an impressive 96% customer satisfaction rate and this campaign is a tip of the hat to their great work.”

Putting technicians to the test, especially those working for third-party subcontractors, might not be a bad idea for some U.S. cable companies to try, especially after some of those technicians were later arrested for sexual assault, theft, and other crimes.

Click here to view the embedded video.

Watch Vidéotron’s first edition of its hidden camera trap for company technicians, when a single woman gets in over her head with a little white lie. (2 minutes)

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Major Time Warner Cable Outage Interrupts Service for Rochester-Area Customers

Phillip Dampier — Mon, 30 Apr 2012 21:47:34 +0000

Time Warner Cable's office on Mt. Hope Avenue in Rochester, N.Y.

A major service outage Sunday disrupted cable-TV, phone, and broadband service for a large number of Time Warner Cable customers in the Rochester, N.Y. area.

Starting at around 8am, cable channels started to pixelate and freeze, broadband service began to fail, and calls to and from Time Warner Cable phone customers were, in some cases, disrupted.

Time Warner’s local service number was quickly jammed with calls, and the company placed a recording on that line indicating they were aware of the problem, which later was described as a “router problem.”

Service was finally restored in the mid-afternoon.

Time Warner Cable customers can receive credit for the service outage, but only if customers request it.

Customers can call, chat, or e-mail the cable operator and let them know credit is requested for yesterday’s outage. A customer service representative will usually respond to e-mail requests within hours, with service credits appearing on the next bill.

Click here to view the embedded video.

WHAM-TV led Sunday’s evening news with a report about the service outage’s impact on Rochester residents and businesses. (2 minutes)

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

Phillip Dampier — Mon, 16 Apr 2012 15:42:39 +0000

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

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

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

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

Audet

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

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

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

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

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

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Cable Collusion: Time Warner Cable Sends Letter Welcoming Customer to Comcast Territory

Phillip Dampier — Wed, 11 Apr 2012 19:20:50 +0000

Other than the original “five families” that ruled New York’s underworld from the 1930s on, it is hard to find a level of collusion higher than in today’s telecommunications marketplace. It’s a veritable No-Fight Club, and the first rule is cable companies don’t fight with other cable companies. (The second is phone companies don’t compete with other phone companies.) Everyone has their respective territory, and only the bravest interlopers dare to intrude on the cozy duopoly territory most North Americans endure, at least until the boys can drop a dime with the feds and put the kibosh on them with anti-community broadband laws or buying them out and telling them to scram.

But Time Warner Cable does not have to rub it in. But they do anyway, see.

One reader of the Consumerist was perturbed when Time Warner Cable sent him a letter congratulating him for his decision to move... and welcoming him to consider Comcast Cable as his new provider.

Do you think Ford would ever send you a letter suggesting you give Toyota a try? Or would McDonald’s ever shoot you an e-mail telling you to check out the lovely Burger Kings in your new neighborhood? Of course not. So why would the cable industry not care which company you choose?

Consumerist reader Mike recently moved out of an area where he had no choice for cable TV other than Time Warner Cable to a town where Comcast is the only option.

[...] “What makes me even angrier is that they spent money printing and mailing this letter that only serves to remind me that I don’t have any choice!”

That mailer came courtesy of something called, “The Cable Movers Hotline,” which sounds like a clearinghouse for consumers searching for a moving company. Indeed, the website for the group even includes video moving tips courtesy of HGTV’s Lisa LaPorta, David Gregg, senior editor, Behindthebuy.com, and interior designer Libby Langdon.

What’s the real story, morning glory? Don’t blow your wig, sister. It’s coming.

In fact, the “Hotline” is a creature of CTAM – the Cable & Telecommunications Association for Marketing, a Maryland-based trade group that includes most of the nation’s largest cable operators as members. CTAM’s “Hotline” is the cable industry’s attempt to make sure that fresh start in your new cave doesn’t include service from the dirty rat phone company or some grifter satellite TV provider with a flim-flam rebate scam. With none of CTAM’s members willing to compete head-on with other cable operators, trading customers back and forth doesn’t hurt business, keeps the butter and egg man counting up those bills, and helps bleed you dry.

A 21st century clip joint? You said it!

Don't thank us, it was nothing!

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Time Warner Cable CEO Sees Pay Cut — Only Made $16.4 Million in 2011

Phillip Dampier — Thu, 05 Apr 2012 16:54:41 +0000

Britt

Time Warner Cable CEO Glenn Britt earned $1 million less in compensation after his stock option awards and non-equity incentive bonus declined over 2010.

Still, the head of America’s second largest cable operator last year earned $1.25 million in direct salary and even more with stock awards and bonuses, for a total compensation package of $16.4 million.

The pay package, disclosed in a Securities and Exchange Commission filing Tuesday, shows Britt also received nearly a half-million in miscellaneous compensation, including $346,395 for his personal use of the Time Warner Cable corporate jet and a company-provided car and driver.

In 2010, Britt earned $17.4 million in total compensation.

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Wall Street: We Expect Time Warner’s Usage Based Billing to Become the Rule, Not the Exception

Phillip Dampier — Wed, 29 Feb 2012 21:21:02 +0000

Moffett

On the heels of Time Warner Cable’s recently announced return to usage-based billing, some Wall Street analysts are sending signals they expect the cable operator not to dabble in usage-based pricing for long, but rather jump right in, charging all of their customers usage fees to boost revenue and profits.

Time Warner Cable’s careful effort to position usage pricing as an “option” does not seem to impress Sanford Bernstein’s Craig Moffett, who expects the cable company to roll out Internet Overcharging schemes to all of their customers.

“Over a period of years, as the market becomes more accustomed to (usage-based pricing), we expect these plans to become the rule rather than the exception,” Moffett wrote in a research note to his investor clients.

The concept of usage pricing is also provoking Netflix, dubbed one of the net’s biggest usage offenders by some providers, to become more vocal in its support for flat rate broadband.

With some Netflix movies coming in at nearly 3GB in high definition, Time Warner’s usage-limited Internet Essentials customers will rapidly erode their usage cap into the overlimit territory.

Netflix executives dismiss provider claims that broadband traffic explosions are undermining profits, especially considering the cost of delivering broadband traffic to consumers continues to plummet.

One Wall Street analyst looking to maximize those provider profits chastised Reed Hastings, founder of Netflix, for putting service providers under “financial pressure.”

“Yeah, that 92% Comcast operating margin is really under a lot of pressure,” Hastings responded at the Morgan Stanley Technology, Media and Telecom conference in San Francisco. “There is no financial pressure on ISPs.”

Variety reports Time Warner has said nothing about keeping flat rate broadband at its current $40-50 price point.

Moffett points out there is plenty of room for Time Warner Cable to accustom subscribers to a metered future.

The analyst believes Time Warner will eventually move flat rate Internet to an “ultra premium” price point that will be far more expensive than customers today are accustomed to paying.

In 2009, Time Warner offered customers scheduled to participate in its failed usage pricing experiment flat rate service for $150 a month.

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Comcast Wants $94,000 from Massachusetts Families to Install Cable Service

Phillip Dampier — Thu, 19 Jan 2012 17:10:08 +0000

Broadband everywhere, except where it isn't.

Comcast is willing to install cable service for a neighborhood in Ashburnham, if six families agree to split the estimated $94,000 installation fee.

Paying more than $10,000 each just to get cable television from the nation’s largest cable operator is not a top priority for those living on Old Pierce Road and Rindge State Road, but getting reliable Internet access is. Comcast officials have refused all requests to extend cable service to the families, because there are simply too few of them in the company’s eyes to justify the expense.

Families were surprised to find neither Comcast or Verizon interested in serving the neighborhood, because state broadband maps show coverage in Ashburnham from both the dominant cable and phone company. Comcast suggested the families sign up for satellite Internet service or use a wireless provider instead. But families complain paying Verizon Wireless or AT&T for mobile broadband is expensive and has resulted in rationed Internet use because of very low data caps. Even worse, when the weather turns bad, the wireless Internet service effectively turns off.

The affected families want better answers.

“I’m not afraid to spend $400 to get out of a [wireless] contract if I can have Internet when it’s cloudy out,” James LeBlanc of Rindge State Road told the Sentinel & Enterprise. “But I don’t have $10,000 just sitting in my pocket.”

Wireless broadband for rural Massachusetts is simply not a serious solution for most because of the low usage allowances that accompany the service.

“It’s difficult when it’s raining out, and we can’t get online, and I have to tell my kids, sorry, you can’t do your homework tonight,” his wife, Wendy LeBlanc told the newspaper. “My oldest goes to Overlook (Middle School) and I’m going to have to send in notes for any assignments that require Internet research to be done at school.”

“It’s a hardship for our family,” said Brian Belliveau, of Old Pierce Road. “We don’t have enough Internet service. We get into situations where we use all of our data within the first two weeks of the month and have to go without it the rest of the month. Our kids are in school with kids who have service all the time, and they don’t understand why we don’t. It’s hard to explain.”

Comcast’s attitude so far has been ‘tough luck — it’s a money thing.’ Company officials simply won’t front the construction and installation costs because it would take too long to recoup that investment. That leaves the families with few alternatives.

Although Ashburnham, a community of 6,000 in north-central Massachusetts, is considered “rural,” it is not nearly rural enough to qualify for federal broadband funding. Besides, according to broadband mapping data supplied by area cable and phone companies, Ashburnham is already “well-served” with broadband. But don’t tell that to families without Internet access.

Local officials were stunned the multi-billion dollar company wouldn’t assume upfront expenses in return for goodwill and devoted, long-term paying customers.

“I may be sort of old-fashioned, but a company sometimes has to do what is in the best interest of its customers to gain their loyalty,” Selectman Gregory Fagan said. “I’m offended when you say the company can’t afford it. Our schools are giving our children Internet assignments. There’s been discussion of giving tablets to all kindergartners. It’s not like in the ’80s when these things were a luxury. They are must-haves now.”

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Rate Increases for One and All: AT&T, Comcast, Cox, DirecTV — Up, Up and Away

Phillip Dampier — Tue, 10 Jan 2012 16:16:41 +0000

Customers of some of the largest cable, phone, and satellite companies will pay an average of 3-6 percent more for service in a series of rate increases taking effect between now and the end of February.

AT&T U-verse

If your introductory offer has expired, expect to pay more for just about everything as of Feb. 9.

Cable TV:

U-family will increase from $54 to $57,
U100 will increase for some from $54 to $59 and for others from $59 to $64,
U200 will increase from $69 to $72/U200 Latino will increase from $79 to $82,
U300 will increase from $84 to $87/U300 Latino will increase from $94 to $97,
U400 will increase from $109 to $114,
U450 will increase from $117 to $119/U450 Latino will increase from $127 to $129.

For high speed Internet customers who ordered their current speed before June 12, 2011, effective with the February 2012 billing statement, the monthly price for Basic will increase from $19.95 to $25, Express will increase from $30 to $33, Pro will increase from $35 to $38, Elite will increase from $40 to $43, and Max will increase from $45 to $48. If you are paying a monthly high speed Internet equipment fee for the Residential Gateway, the amount will increase from $4 to $6.

For Voice Unlimited, effective on February 1, 2012, the monthly price will increase from $33 to $35.

AT&T blames increased programming costs and “the cost of doing business” for the rate increases. AT&T is increasing broadband pricing despite enjoying further cost reductions from their Internet Overcharging scheme implemented in 2011.

Comcast

Comcast implements rate increases at different times of the year throughout its national service area. But a preview of what is forthcoming can be seen in south Florida and Minnesota, where Comcast’s new rates for 2012 have increased an average of 5.8 percent. That comes after a 2 percent rate hike last year. It’s a bitter pill for many customers to swallow, because Comcast has also been moving popular cable channels like Turner Classic Movies into the more expensive Digital Preferred package. The price of that full basic package will now run just short of $85 a month. Customers in Minneapolis are staring down these new rates:

Basic 1: no change in most franchise areas.
Digital Economy: increases from $29.95 a month to $34.95 a month, or 16.7 percent.
Digital Starter: increases from $62.99 a month to $66.49 a month, or 5.6 percent.
Digital Preferred: increases from $80.99 a month to $84.49 a month, or 4.3 percent.

Comcast blames increased programming costs and upgrade expenses associated with its now completed DOCSIS 3 project. Comcast also has converted many of its service areas to all-digital service, which has opened up additional room to sell more expensive broadband packages, add additional HD channels, and make room for new product lines relating to home automation and security.

Cox Cable

Broadband Reports readers are sharing anecdotal evidence Cox has begun its own 2012 rate increase campaign. In Florida, cable TV rates are up yet again:

Prices for Cox TV and Cox Advanced TV will be as follows:

Cox TV Starter will change from $19.55 to $22.85/mo.
Advanced TV will change from $5.50 to $4.20/mo.
Advanced TV Standard Definition receivers will change from $5.55 to $6.99/mo.
Advanced TV High Definition, High Definition/DVR & DVR receivers will change from $7.45 to $7.99/mo.

Advanced TV Paks will change:

Any 1 Pak (excluding Variety Pak) from $4.00 to $4.25/mo.
Any 2 Paks (excluding Variety Pak) from $8.05 to $8.50/mo.
Any 3 Paks from $12.00 to $12.50/mo.
Variety Pak will be $4.00/mo.

Premium pricing will change:

1 premium channel from $13.99 to $14.99/mo;
2 premium channels from $23.99 to $24.99/mo;
3 premium channels from $30.99 to $34.99/mo;
4 premium channels from $36.99 to $44.99/mo.
(Pricing for the 3rd and 4th Premium channels will be grandfathered at the current price for existing customers.)

Cox’s Preferred Internet tier is increasing from $49.99 to $53.99 a month. Basic phone service increases from $11.75 to $13.18, and popular calling features like Caller ID are also increasing (from $5.95 to $9.00 per month).

Rates vary in different franchise areas.

DirecTV

The satellite TV provider will raise rates on Feb. 9 by 4 percent on average. Its costs are going up by more than that, the company said on its website: “The programming costs we pay to owners of TV channels will increase by about 10 percent.”

DirecTV defends its rate increase, noting it will introduce new features in 2012 that include more than 170 HD channels and the most 3D viewing options of any television provider. The full breakdown is provided from DirecTV:

Rate increases effective February 2012. Click image to enlarge.

Consumer Tips

Customers who subscribe to bundled services will see the fewest rate increases. The more services you bundle, the lower the typical cost of each component within the bundle. It rarely pays to have one company as a TV provider and another delivering your broadband because standalone service pricing is increasingly the most expensive option.
Ask for an extension of your introductory or promotional rate. Request pricing from the competition and be prepared to summarize it with your current provider when arguing for a lower rate. If your current provider thinks you are serious about jumping to another provider, they may lower your rates to keep your business.
Be prepared to switch. Cable companies base their retention offers on several factors: what the competition offers, how long you have been a customer (2+ years guarantees a better retention deal) and how you pay your bill. If you are a late payer, expect a much more difficult time negotiating a lower rate. You may encounter a brick wall if you are labeled a “flipper” that jumps between providers’ introductory pricing offers. But even these customers will be welcomed back, with lower rates, when they inevitably return. They just won’t get their promotional offer renewed.
Some companies reserve their most aggressive pricing for customers who actually schedule a disconnect or turn in their equipment. Cable companies have gotten wise to empty threats from negotiating customers. If you schedule a complete service disconnection two weeks in advance, some companies will take you seriously and call you with the most aggressive “win back” offers available, especially if you turned in your cable equipment.
Dump extras overboard. Premium channel pricing has skyrocketed recently after remaining relatively stable for nearly two decades. HBO is now at or above $15 a month in many areas. As customers try to economize, premium movie channels are usually the first to go, and many cable operators are starting to lose preferred wholesale volume pricing discounts. They are passing along new, higher prices to the dwindling number of premium customers left. Scrutinize your cable bill carefully for potential savings. Look for mini-pay tiers of HD channels you never watch, consider downgrading your “digital phone” package to local-only calling if you rarely make long distance calls, and consider tossing “Turbo” broadband speed packages that only incrementally increase download speed. Many customers originally signed up to obtain higher upload speeds, but as cable companies boost speeds for all of their customers, the extra boost may no longer be worth the money.

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