Home » cable television » Recent Articles:

Comcast’s “Improvements,” Including Digital TV, Come at a High Cost for Customers

psctest

Comcast has offered the Commission a vague preview of how it intends to improve cable television service for New York customers, but rarely discloses important details about the costs and limitations their “improvements” will bring.

comcast octupusWhile Comcast is excited about the proposition of transitioning Time Warner Cable customers away from the current mixed analog-digital platform to an all-digital lineup, Time Warner Cable customers have paid less and avoided costly, unwanted extra equipment as a result of the choices consciously made by Time Warner Cable.

Comcast and Time Warner Cable have different philosophies about how to best deliver the bulging cable television packages most cable systems now offer:

  • Time Warner Cable adopted “Switched Digital Video” from BigBand Networks, a technology that lets Time Warner deliver only the digital signals that are being watched in a service group or node, instead of the entire lineup.[1] Since it is unlikely subscribers are watching every niche channel on offer, Time Warner has been able to reclaim unused bandwidth. As a result, customers using older cable-ready televisions can continue to access analog television channels without the use of a costly, often unwanted set top box.
  • Comcast has more aggressively chosen a  path to all-digital television service, moving most of their television channels to encrypted digital technology that requires a Comcast set top box, a less costly Digital Transport Adapter (DTA) designed for secondary-use televisions, or a CableCARD. Customers must choose one of these technologies, usually at an added-cost to access their cable television service.[2]

Time Warner Cable also began deploying DTA equipment in certain areas to free up additional bandwidth on its cable systems while still leaving most analog channels intact. The DTA boxes are supplied free of charge during an introductory phase lasting up to a year, after which a $0.99 monthly charge for each box is imposed.[3] (That fee has recently been raised in certain markets, including New York City, to $1.50/mo.[4] [5])

In contrast, Comcast customers were initially entitled to receive up to three no-cost DTAs to install on televisions not equipped with a Comcast set top box.[6]

comcast-cisco-dtaOn January 1, 2013 Comcast began informing subscribers a new $1.99/month “additional outlet service charge,” now applied for each DTA installed. [7]

Public officials in Eagan, Minn., responding to consumer complaints about the new charge, suspected Comcast was attempting an end run around the Federal Communications Commission’s prohibition of “excessive fees for cable equipment.”[8] The additional outlet fee was deemed by Comcast to be a service fee, not an equipment charge.[9]

Attorney Mike Bradley was hired by a group of suburban Minneapolis cable commissions to investigate the legitimacy of Comcast’s new DTA service charge. If the fee were classified as an equipment charge, Comcast would charge 50 cents per DTA based on rate forms filed with the Minnesota cable commissions he represents, Bradley told The Pioneer Press.[10]

For the average Comcast subscriber, the result was another rate increase in return for digital television service. Subscribers with three DTA’s now pay up to $5.97 extra per month in order to continue to receive the exact same programming on the same number of televisions within their household – a $25 annual surcharge per DTA, $75 if the customer uses three DTA’s, complained Eagan, Minn. Mayor Mike Maguire in a letter to Sen. Amy Klobuchar.[11]

Comcast’s fees, in addition to being well in excess of the actual cost of the equipment, will earn the company at least $550 million annually in new revenue – all for equipment that costs the company around $50 per unit.[12] Because Comcast is encrypting its lineup, even televisions equipped with QAM tuners, capable of receiving digital television signals without a set top box, will also eventually need the new equipment to unscramble television signals.

[1]http://www.cedmagazine.com/news/2009/09/time-warner-cable-serves-up-sdv-in-n.y.,-dallas,-l.a.
[2]http://customer.comcast.com/help-and-support/cable-tv/how-bill-will-change-with-digital-migration
[3]http://www.cedmagazine.com/news/2012/01/time-warner-cable-wraps-up-all-digital-conversion-pilot-in-maine
[4]http://www.twcableuntangled.com/2013/04/were-converting-analog-signals-to-digital-across-the-new-york-region/
[5]http://www.timewarnercable.com/en/residential-home/support/faqs/faqs-tv/basictvencryption/what-will-the-digital-adapter-cost.html
[6] http://www.twincities.com/ci_22617153/comcast-fee-plan-cause-confusion-controversy
[7]http://customer.comcast.com/help-and-support/cable-tv/how-bill-will-change-with-digital-migration
[8]http://transition.fcc.gov/Bureaus/Cable/News_Releases/nrcb4009.txt
[9]http://stopthecap.com/2013/02/21/comcast-calls-1-99-charge-for-digital-adapters-a-service-fee-to-avoid-fcc-complications/
[10]http://www.twincities.com/ci_22617153/comcast-fee-plan-cause-confusion-controversy?IADID=Search-www.twincities.com-www.twincities.com
[11]https://dl.dropboxusercontent.com/u/9008/pioneerpress/yourtechweblog/Eagan%20-%20Sen%20Klobuchar%20ltr%20re%20Cable%20Rate%20Concerns%203-5-13.pdf
[12]http://cisco-news.tmcnet.com/news/2011/04/25/5464600.htm
Share

Comcast’s Much-Touted “X1” Platform Includes a Steep $99 Installation/Upgrade Fee

psctest

The most expensive set top box you will ever rent.

The most expensive set top box you will ever rent.

At all three public informational meetings, a Comcast representative promoted the benefits of Comcast’s new X1 set-top box/platform which can provide enhanced features and integrate with the Internet to provide more detailed programming information and social media interaction.

The Comcast representative did not mention that customers must pay up to a $99 upgrade fee for the privilege of renting Comcast’s X1 platform.[1] That is well in excess of the cost of an entire month of cable TV service.

Time Warner Cable does not charge an upgrade fee for its set top boxes, including the latest models.

[1]http://www.multichannel.com/news/content/comcast-details-x1-upgrade-fee/356207
Share

How Comcast’s Volume Discounts Will Kill Cable-TV Competition

psctest

You can still read a book instead of everything else.

You can still read a book instead of everything else.

Allowing Comcast to dominate New York’s cable television marketplace will deter future competitors from entering the market, particularly for television programming.

One of the arguments made by proponents of the merger is the possibility of decreased wholesale television programming costs won through volume discounts available to the largest nationwide providers. Unfortunately for consumers, Comcast has already declared customers will not benefit from those discounts in the form of lower cable bills.

A prospective new entrant considering providing cable television service will face competition with Comcast without any benefit of volume discounts on programming.[1] That makes it unlikely a provider will offer a competing television package.

This is not a theoretical problem.

In Ohio, independent cable company MCTV discovered that while large cable operators like Comcast were benefiting from volume discounts, it faced contract renewal prices more than 40 times the rate of inflation.[2] Cable ONE, owned by the Washington Post, had to drop more than a dozen Viacom owned channels for good because it could not afford the asking price.[3]

MCTV president Bob Gessner reminds us of just how concentrated the entertainment business has become, noting that nine media companies (Comcast is one of them) now control 95% of all paid video content consumed in the United States.[4]

MCTV’s survival plan includes membership in the 900-member National Cable Television Cooperative, the only way smaller providers can pool resources and win discounts of their own. It is no longer effective as mergers and acquisitions continue to consolidate the cable and telco-TV business. All 900 NCTC members serve a combined five million customers. Comcast has 21 million, DirecTV: 20 million, Dish Networks: 14 million, and Time Warner Cable: 11 million.[5]

media_consolidation

AT&T confesses it cannot compete effectively with Comcast and other larger competitors for the same reason. AT&T’s solution, like Comcast, is to buy a competitor, in this case DirecTV.[6]

Frontier Communications faced a similar problem after adopting Verizon FiOS franchises in Indiana and the Pacific Northwest after purchasing Verizon landline networks in several states. When Frontier lost Verizon’s volume discounts on programming, Frontier’s solution was to begin a marketing campaign to convince its fiber customers to abandon the technology and switch to one of its satellite television partners.[7]

[1]http://www.fiercecable.com/story/comcast-twc-deal-will-squeeze-programming-and-technology-vendors/2014-02-13
[2]http://stopthecap.com/2014/06/05/independent-cable-companies-unify-against-cable-tv-programmer-rate-increases/
[3]http://online.wsj.com/articles/viacom-60-cable-firms-part-ways-in-rural-u-s-1403048557
[4]http://stopthecap.com/2014/06/05/independent-cable-companies-unify-against-cable-tv-programmer-rate-increases/
[5]http://stopthecap.com/2014/06/05/independent-cable-companies-unify-against-cable-tv-programmer-rate-increases/
[6]http://www.bloomberg.com/news/2014-05-02/dish-or-directv-need-deal-most-in-at-t-love-triangle-real-m-a.html
[7]http://stopthecap.com/2011/08/16/frontiers-fiber-mess-company-losing-fios-subs-landline-customers-but-adds-bonded-dsl/
Share

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
Share

Comcast’s Reputation for Bad Customer Service is Legendary and Never-Ending

psctest

Comcast has repeatedly touted its rating from J.D. Power & Associates claiming the company has been cited for the most improvement of any cable operator scored by the survey firm. That isn’t saying very much when one takes a closer look.

comcast-time-warner-cable-mergerIn fact, since 2010 Comcast has achieved very little improvement in its abysmal score. J.D. Power & Associates reports that over the last four years, Comcast has only managed to boost its TV satisfaction score 92 points and Internet satisfaction 77 points… on a 1,000-point scale.[1]

Comcast also continues to have below-average scores in all four regions for both television and broadband, with the exception of Internet service in the north-central region, where it faces competition from DSL offered by telephone company CenturyLink.

Other consumer satisfaction surveys are far less charitable to Comcast.

Consumer Reports ranked Comcast 15th out of 17 large cable companies and called their service and customer relations mediocre. In a survey conducted in April, the consumer group found 56% of the public opposed to the merger, 11% supported it, and 32% offered no opinion. The survey found 74% believing the merger will result in higher prices and fewer choices for consumers.[2]

“A merger combining these two huge companies would give Comcast even greater control over the cable and broadband Internet markets, leading to higher prices, fewer choices, and worse customer service for consumers,” Delara Derakhshani, policy counsel in Consumers Union’s D.C. office, said in a statement.[3]

Nearly every year, Comcast CEO Brian Roberts acknowledges the problems with customer service and promises improvements.[4] But according to the American Consumer Satisfaction Index, those improvements never arrive.

In 2004, ACSI noted it added cable television to its index in 2000, and since that time, “customer satisfaction has gone from bad to worse, and there is no improvement in sight:”[5]

ows_139276912850214Among cable providers, Time Warner has the highest score of 60. Both Comcast and Charter Communications register at 56. For the private as well as public sector, including the IRS, this is the lowest level of customer satisfaction of any organization in ACSI. Consumer complaints are also much more common relative to any other measured industry. Almost half of all cable customers have registered complaints about one thing or another.

When buyers have meaningful choice alternatives, this level of customer (dis)satisfaction is neither competitive nor sustainable. Cable is the only industry to score below 60 in ACSI. With the satellite companies removed, the weighted average for the cable industry is 59.

Under normal competitive conditions, there would be mass customer defections. The reason this is not the case for the cable industry is due to local monopoly power, which means that in most markets, the dissatisfied customer has nowhere to go.

In 2007, ACSI foreshadows what a merger between two giant cable companies is likely to mean for customers as the two companies eventually attempt to integrate their disparate computer systems and management:[6]

After a minor gain in 2006, the first ever for the industry, satisfaction among subscribers to cable and satellite TV service drops 2% to 62, the lowest level of customer satisfaction among all industries covered by ACSI.  None of the providers has improved on customer satisfaction this year.  Comcast (down 7% to 56), DirecTV (down 6% to 67) and Time Warner Cable (down 5% to 58) tumble.  High system loads causing problems with reliability and pricing were major culprits.  Both Comcast and Time Warner have acquired many new subscribers in their deal to divide up troubled cable provider Adelphia Communications – integrating these acquisitions often leads to short-term problems with customer satisfaction.

Comcast MergerIn 2008, things deteriorated further for Comcast customers, according to this ACSI assessment:[7]

Comcast is down 4% to 54, an all-time low for the largest cable provider in the country. Rapid growth may have contributed to difficulties in operations as Comcast continues to add cable subscribers, often through acquisitions of companies in smaller markets.

[…] As is often the case, small is often better in terms of being able to provide good customer service. Cablevision, for example, with some 3 million subscribers, is barely 1/8th the size of Comcast. These companies don’t generally seek to expand quickly beyond their geographic footprints and are often targets of acquisition by larger firms, companies that may be able to withstand depressed customer satisfaction in the short term as operations of the smaller providers are integrated.

This year, both Comcast and Time Warner Cable fell even further according to ACSI:[8]

Cable giants Comcast and Time Warner Cable have the most dissatisfied customers. Comcast falls 5% to 60, while Time Warner registers the biggest loss and plunges 7% to 56, its lowest score to date.

“Comcast and Time Warner assert their proposed merger will not reduce competition because there is little overlap in their service territories,” says David VanAmburg, ACSI Director. “Still, it’s a concern whenever two poor-performing service providers combine operations. ACSI data consistently show that mergers in service industries usually result in lower customer satisfaction, at least in the short term. It’s hard to see how combining two negatives will be a positive for consumers.”

ACSI also scored Internet Service Providers this year and found even worse news:[9]

High prices, slow data transmission and unreliable service drag satisfaction to record lows, as customers have few  alternatives beyond the largest Internet service providers. Customer satisfaction with ISPs drops 3.1% to 63, the lowest score in the Index.

[…] Cable-company-controlled ISPs languish at the bottom of the rankings again. Cox Communications is the best of these and stays above the industry average despite a 6% fall to 64. Customers rate Comcast (-8% to 57) and Time Warner Cable (-14% to 54) even lower for Internet service than for their TV service. In both industries, the two providers have the weakest customer satisfaction.

Comcast claims the transaction will allow the two companies to invest in their networks, improve customer service, and enhance the products available to Time Warner Cable customers.

In reality, Comcast’s largest investment will be in a $17 billion share buyback to benefit their stockholders.[10] Time Warner Cable’s current CEO has secured for himself a golden parachute package of $78 million dollars for just two months on the job as CEO of Time Warner Cable.[11]

With that kind of money on the table, it is no surprise Comcast has invested in 76 lobbyists from 24 different lobbying firms and is spending millions trying to convince regulators, including the NY PSC that this transaction is a good deal for New York. The more than 2,700 New Yorkers that have filed comments with the PSC, largely in strong opposition to this merger, disagree. Their voices should speak louder than out of state groups that have been urged by Comcast to send letters supporting this transaction.

[1]http://variety.com/2014/biz/news/comcast-time-warner-cable-remain-among-most-hated-tv-providers-survey-1201145921/
[2]http://variety.com/2014/biz/news/comcast-time-warner-cable-merger-poll-shows-majority-oppose-1201224277/
[3]http://cuactionfund.org/get-the-facts
[4]http://www.dslreports.com/shownews/Comcast-CEO-Makes-His-Yearly-Promise-to-Improve-Customer-Service-128206
[5]http://www.theacsi.org/component/content/article/30-commentary-category/86-acsi-quarterly-commentaries-q1-2004
[6]http://www.theacsi.org/component/content/article/30-commentary-category/169-acsi-quarterly-commentaries-q1-2007
[7]http://www.theacsi.org/component/content/article/30-commentary-category/179-acsi-quarterly-commentaries-q1-2008
[8]http://www.theacsi.org/news-and-resources/press-releases/press-2014/press-release-telecommunications-and-information-2014
[9]http://www.theacsi.org/news-and-resources/press-releases/press-2014/press-release-telecommunications-and-information-2014
[10]http://www.cleveland.com/business/index.ssf/2014/02/comcast_agrees_to_purchase_of.html
[11]http://www.usatoday.com/story/money/business/2014/03/20/four-months-as-time-warner-cables-ceo--80-million/6658083/
Share

Rogers Harrasses Downgrading Customers With Browser Injection Messages

Plan on downgrading your Rogers cable, phone or Internet service? Be ready for messages injected into your web browsing sessions by the cable company trying to win back your business.

Daryl Fritz from Toronto decided to cancel his Rogers’ home phone and television service and downgrade his Internet service. Fritz soon found this banner intruding on every web page he tried to visit:

rogers

Your decision to leave Rogers is not something we take lightly. We value your business and care about how happy you are with your Rogers experience, so we would like to extend a special offer* in the hope that you will reconsider your decision. Please call 1-855-410-7589 (M-F 9am-9pm/Sat 10am-6pm ET) before your service disconnects to let us know why you are thinking of leaving Rogers. We appreciate your time and consideration. Please click on the “X” in the top right hand corner to acknowledge that you have received this message.

*-Offer available for a limited time for the account indicated (non-transferable) and subject to change without notice.

rogersThe banner usually disappears after the customer acknowledges receiving it. Stop the Cap! has learned the number directs callers to Rogers’ customer retention department where customers are pitched special discounts to change their mind. The prices are comparable, if not better, than new customer promotions found on Rogers’ website. Rogers is far less annoying than Comcast is when it faces losing a customer. If a customer rejects the offer (or never calls in to hear one), they are not bothered any longer and the representative thanks them for their time.

Rogers retention offers are often extremely aggressively priced, especially if mentioning you are leaving for a competitor (especially Bell). Rogers reps can slash prices, put you on a high usage broadband plan at prices lower than what regular customers pay for slower speeds, waive usage caps for a few dollars more, lock in rates for up to eight years, and offer heavy discounts off almost everything.

One current example for cable television:

  • 30% off basic cable ($28/mo instead of $40)
  • TFC ($15/mo)
  • NextBox 2.0 set-top (free) NextBox 3.0 ($2.50/mo)
  • Digital Services Fee (eliminated)
  • CRTC LPIF (it’s the government — $0.50/mo)

rogersThis can knock your Rogers cable bill down to $46/month before GST and other taxes.

Broadband customers can grab a 50% discount off plans like Hybrid Fibre 150 (GTA), normally $86 a month, but $43 on a retention plan. Customers get 150Mbps and 350GB of usage. If you don’t want a cap, demand a deal to remove it (it regularly costs $25/month extra for unlimited). The modem rental is included.

If you still want Rogers Home Phone, you are paying too much if it costs over $20 a month. Home Phone Favourites, including Call Display and one other calling feature of your choice is $15/month on retention. Add 500 long distance minutes for $5/month extra.

All three services combined should cost no more than about $104 a month before GST, which adds $13.52 in Ontario. Provincial taxes vary.

New Rogers customers can also get very aggressively priced deals. This week Rogers is selling 30/5Mbps Internet service (includes 270GB allowance and free modem) for $54.95. Regularly, it’s $61.99 with only a 70GB monthly usage allowance. That is still outrageously high by American standards, but isn’t bad for Rogers. New customers should call 1-800-605-6678 to ask about current offers.

Share

Cox Cable’s Anachronistic World of Nonsense About Data Caps: Inventing New Ways to Bill You More

Cox is behind the times.

Cox is behind the times.

While the rest of the world is moving towards gigabit broadband and unlimited access, Cox Cable continues to live in the past with a regime of data caps the company blames on increased data usage. Your only solution is to upgrade to a bigger data plan you may not want or really need.

Somehow, the folks at Cox can’t seem to manage the natural growth of the Internet while start-ups ranging from Google Fiber to a local fiber provider just getting started in our own community goes out of their way to point out how unnecessary usage limits and usage billing really are.

At Stop the Cap!, we’ll let you in on a little secret the “tech wonder twins” at Cox forgot to mention: data caps are not about managing Internet traffic, they are about managing to control costs, protect cable-TV revenue, and eventually empty customers’ wallets.

Since data caps don’t make much sense in the 21st century reality-based community, Cox attempted a longer-form rationale for data caps in a video that resembles a bad VHS copy of an interrogation by your local homicide squad. Don’t worry, only the truth gets murdered by the ironically named “Tech Talk with Todd and Sarah.” Six minutes later, you still know they’re full of it.

Tip: Next time, bring “the tech.”

http://www.phillipdampier.com/video/Cox Tech Talk with Todd and Sarah Internet Usage Trends.mp4

What Cox still fails to understand (and what Google will have to teach them when they invade Cox’s biggest territories, including Phoenix) is that data caps and usage billing are as anachronistic as those 1978 limited edition Diana Prince/Wonder Woman glasses Sarah is still wearing. (6:17)

Share

Sun Valley Conference Could Spark More Giant Merger Deals; Murdoch, Verizon Sniffing Around

Phillip Dampier July 8, 2014 AT&T, Competition, Consumer News, Verizon, Video No Comments
big fish

All of these media and content companies may be up for grabs.

Could Rupert Murdoch become the next owner of CNN? Will Verizon consider buying out the owner of more than a dozen cable networks, or the Walt Disney Company, owner of ABC?

Since 1983, media moguls have assembled annually in posh Sun Valley, Idaho to talk business. But never have they met while several huge consolidation and merger deals are on the table among their colleagues. Comcast acquiring Time Warner Cable and AT&T buying out DirecTV are both seen as game-changers among Wall Street bankers and the media elite, leaving many self-consciously pondering whether they are no longer big enough to stay competitive in a consolidated media world.

The Wall Street Journal and the Atlanta Journal-Constitution both report that at least one huge merger deal could emerge as a result of this week’s conference. Among the most likely buyers is FOX CEO Rupert Murdoch, who is reportedly looking to buy a major content company.

The most likely target is Time Warner (Entertainment), former owner of Time Warner Cable. After spinning off its money-losing magazine unit, TW has become much more focused on content and distribution – exactly what Murdoch is looking for. Time Warner owns New Line Cinema, HBO, Turner Broadcasting System, The CW Television Network, Warner Bros., Kids’ WB, Cartoon Network, Boomerang, Adult Swim, CNN, DC Comics, Warner Bros. Animation, Cartoon Network Studios, Hanna-Barbera, MLB Network and Castle Rock Entertainment. In fact, altogether the company owns or controls dozens of television channels which could all soon fall into the hands of Murdoch.

A Murdoch acquisition would be the last death-blow for Ted Turner’s Turner Broadcasting System, which launched CNN, TBS, and TNT and is now a division within Time Warner. Murdoch’s Fox News Channel was launched as a conservative alternative to CNN’s perceived left-leaning reporting. A Murdoch buyout would either deliver bipartisan profits to the media mogul or allow him to shut down the network or relaunch it under the Fox News brand.

Such an acquisition would not be cheap. Time Warner is worth as estimated $62 billion.

A Murdoch buyout would be especially troublesome for those already upset with corporate media consolidation. Murdoch would end up controlling three major U.S. networks – FOX, CW, and MyNetworkTV, multiple cable news channels, dozens of local television stations in major media markets, and more cable networks than most people can count. In fact, the assembled list of Murdoch-owned media properties is enormous:

Murdoch: The next owner of CNN?

Murdoch: The next owner of CNN?

Adult Swim, Boomerang, Cartoon Network, CNN Worldwide, HLN, Inside CNN Tour & Store, TBS, TCM, TheSmokingGun.com, TNT, truTV, Turner Sports, Fox Business Network, Fox News, Star India, YES Network, Twentieth Century Fox, Fox 2000 Pictures, Fox Searchlight Pictures, Fox International Productions, Twentieth Century Fox Television, Fox Home Entertainment, Shine Group, Twentieth Century Fox Animation, The Sun, The Times, The Sunday Times, Times Literary Supplement, The Wall Street Journal, The New York Post, The Australian, The Daily Telegraph (Australia), The Sunday Telegraph (Australia), The Herald Sun, The Sunday Herald Sun, The Courier Mail, The Sunday Mail, The Advertiser, NT News, The Sunday Territorian, The Sunday Times (Australia), The Sunday Tasmanian, Mercury, Warner Bros. Pictures, Warner Bros. Pictures International, New Line Cinema, Warner Home Video, Warner Bros. Advanced Digital Services, Warner Bros. Interactive Entertainment, Warner Bros. Technical Operations, Warner Bros. Anti-Piracy Operations, Warner Bros. Television Group, Warner Bros. Television, Telepictures Productions, Warner Horizon Television, Warner Bros. Animation, Warner Bros. Domestic Television Distribution, Warner Bros. International Television Distribution, Warner Bros. International Television Production, Warner Bros. International Branded Services, Studio 2.0, The CW Television Network, DC Entertainment, Warner Bros. Theatre Ventures, HarperCollins General Books Group, HarperCollins Children’s Books Group, HarperCollins Christian Publishers, HarperCollins UK, HarperCollins Canada, HarperCollins Australia/New Zealand, HarperCollins India, FX, FXX, FXM, National Geographic Channel, Nat Geo WILD, Nat Geo Mundo, FSN, FOX Sports 1, FOX Sports 2, FOX Soccer Plus, FOX College Sports, FOX Deportes, FOX Life, Baby TV, Fox Broadcasting Company, Sky 1, Sky Atlantic, Sky Living, Sky Arts, Sky Sports, Sky Movies, Sky News, Sky Deutschland, Sky Italia, MyNetworkTV, MundoFox, FOX International Channels, Fox Sports Enterprises, HBO, HBO On Demand, HBO GO, Cinemax, Cinemax on Demand, MAX GO, HBO2, HBO Signature, HBO Family, HBO Comedy, HBO Zone, HBO Latino, More Max, Action Max, Thriller Max, 5 Star Max, Max Latino, Outer Max, Movie Max, Barron’s, MarketWatch, Factiva, Dow Jones Risk & Compliance, Dow Jones VentureSource, All Things Digital, Amplify, News America Marketing, and Storyful.

Murdoch has already shown a willingness to spend big. He has recently taken an ownership interest in the up and coming Vice Media, popular with the under 30-viewing crowd. He also spent $415 million to buy romance novel publisher Harlequin Enterprises.

But Murdoch may not be the only one shopping for a deal. The Wall Street Journal offered a shopping list:

  • Small cable network owners: Nobody just owns three or four cable networks these days. Content conglomerates like CBS, Disney, Time Warner and Comcast own 15, 30, or even 40 different channels. Smaller players are ripe for the picking. Chief among them include Scripps Networks Interactive (Food Network, HGTV), AMC Networks (AMC, IFC, Sundance), and Crown Media (Hallmark).
  • Small studios: Owning a small Hollywood studio is quaint, but Wall Street investment bankers think the time is long past to sell out to larger corporate entities who can better leverage distribution of their releases, easy enough if you own your own theater chain, pay cable network, broadcast stations, and basic cable outlets.
Both phone companies are attending Sun Valley for the first time.

Both phone companies are attending Sun Valley for the first time.

In addition to buyout offers from the largest networks around, Discovery Networks is also in the mood to grow larger at the urging of its board of directors, which includes Dr. John Malone, CEO of Liberty Global. Malone is behind much of the cheerleading to consolidate the cable industry and helped spark the Comcast-Time Warner Cable deal when his partly owned Charter Communications sought a takeover of Time Warner Cable itself.

Wall Street bankers love even better the idea of selling Discovery to a new owner – Disney.

For the first time, phone companies AT&T and Verizon are also in attendance at Sun Valley, and analysts don’t believe the CEOs are there for summer vacation.

Jimmy Schaeffler, chairman of media and telecom consulting firm Carmel Group, says Verizon has been most lacking in the content ownership department and “needs something else right now” as rivals bulk up. AT&T’s acquisition of DirecTV only underlines that sentiment among many Wall Street analysts who think Time Warner (Entertainment) could be an option if Verizon isn’t outbid by Murdoch.

All of this shopping has caused alarm for some, including CNN’s media reporter Brian Stelter who declared, “I will eat my remote control … in fact, I will eat my copy of the New York Post … if Murdoch becomes the owner of CNN.” 

http://www.phillipdampier.com/video/WSJ Digits Media Consolidation 7-7-14.flv

The Wall Street Journal’s ‘Digits’ explores the ongoing consolidation of media creators and distributors. This year’s media conference in Sun Valley could spark more merger deals. (5:02)

Share

Los Angeles Has Accumulated $35 Million in Cable Franchise Fees It Has No Idea How to Spend

35-LACityView

Channel 35 is Los Angeles’ Government Access station

Los Angeles cable subscribers are paying $30-50 a year in extra franchise fees the city government has no idea what to do with, allowing a bank account dedicated to housing the unspent funds to reach $35 million and counting.

A new audit by the Office of the City Controller found no misappropriation or ethical lapses by the city government, but it did criticize the lack of long-term planning regarding how franchise revenue should be used, as well as lax auditing of expenses that were paid from the fund. Los Angeles City Controller Ron Galperin added the city’s lack of consistent auditing of the five major cable operators servicing greater Los Angeles may be allowing cable operators to charge customers franchise fees the companies are keeping for themselves. A 2006 law passed at the behest of Verizon and AT&T allowing statewide video franchise agreements in California isn’t helping either.

For decades, communities have been able to demand up to a 5% franchise fee from cable and phone companies offering video services in their areas in return for access to public rights-of-way and other public property. Most cities, including Los Angeles, have requested the maximum allowed – 5% of the provider’s gross annual revenue earned within the city. Cable operators retaliated by recouping the franchise fee by billing cable customers for it on a separate line on monthly cable bills.

In Los Angeles, 60% of all franchise fees ($31 million) paid are transferred to the city’s all-purpose General Fund, used for all types of city expenses. The remaining 40 percent ($12.4 million) is supposed to be earmarked for a Telecommunications Fund, but the city often raids that account as well. Time Warner Cable subscribers account for 85% of Los Angeles’ cable franchise revenue, AT&T U-verse contributes another 10% with other operators paying considerably less. Last year, Charter Cable wrote a check for less than $5,000, primarily because only a tiny part of the city of Los Angeles is served by Charter today.

So where is the excess money still in the account coming from?

fund balance

The Unintended Consequences of Statewide Video Franchising

Eight years ago, Governor Arnold Schwarzenegger signed AB 2987:  the “Digital Infrastructure and Video Competition Act of 2006” (DIVCA). In reality, DIVCA was just another statewide video franchise bill heavily pushed by the state’s dominant phone companies — AT&T and Verizon — to let them begin offering video services without having to sign franchise agreements with thousands of local governments across the state.

verizon attAT&T and Verizon sold the legislation to the public as a red-tape cutter to bring Verizon FiOS and AT&T U-verse to millions of Californians without unnecessary bureaucratic delay.

But lobbyists from both phone companies, as well as several cable companies, were successful in inserting their own amendments into the law that undercut their arguments for passing the legislation:

  • As local franchise agreements expired, companies took their franchise renewal business direct to the state, cutting off local oversight. Communities could no longer require operators to expand into rural areas or impose fines for sub-standard service;
  • Cable companies won the right to toss Public, Educational, and Government Access (PEG) channels out of their buildings. Many communities assigned responsibility for housing and operating PEG channels as part of their franchise agreement. DIVCA rendered those agreements void and unenforceable;
  • Cable companies no longer had to offer institutional broadband networks for free or at a discount to local governments, schools and libraries, and many existing networks were closed down as soon as the local franchise agreement expired and communities balked at the new prices charged by telecom companies.

But perhaps the most controversial amendment was language that gets AT&T and Verizon out of meeting obligations to build out their fiber networks where they choose not to built them, while still compelling smaller independent telephone companies to offer service to every customer within their telephone service area within a reasonable amount of time.

So instead of promoting a rush towards video competition, both AT&T and Verizon won concessions that let them cherry pick — on their own schedule — customers for AT&T U-verse and Verizon FiOS:

  • Verizon is in compliance with DIVCA as long as 25% of the households where service is available are low-income and within 5 years, Verizon increases that to at least 40%;
  • AT&T stays out of trouble with DIVCA by providing video service to 35% of low-income households where service is available. Within five years, AT&T must reach at least 50%.

One of the biggest victims of DIVCA are PEG channels which lost the sponsorship of the cable companies that used to underwrite them as part of their franchise agreements. American Community Television reported in California, Illinois and Indiana, where statewide video franchising laws were passed, cable operators that operated PEG channels closed the doors, sometimes with only 30 days notice. Even in states where PEG funding remained, channels have been exiled to Channel Siberia (eg. Channel 1,512) or are under constant threat of losing their channel if they don’t meet an operator’s arbitrary quality of programming criteria.

Time Warner Cable has moved PEG channels to digital service in a majority of their service areas, requiring many customers to have an added-cost cable box to watch.

To help Californian PEG services cope, a state law permitted cities to collect an extra 1% of gross revenue from cable operators to keep funding these channels. But if a city already collects a full 5% franchise fee, any money collected from PEG channels must only be spent on their operations — no raiding of funds allowed. If the local government thinks there are bigger priorities than supporting public, educational, and government access, the future of PEG channels is questionable.

How to Spend the Untouchable Proceeds

The new home of Los Angeles' Government Access channel

The new home of Los Angeles’ Government Access channel

With Los Angeles-area cable companies collecting and sending on the proceeds of the 1% PEG surcharge to city coffers, the money has been more or less just piling up over the last seven years, unspent.

As of the end of June last year, the city had squirreled away about $22 million collected from cable TV customers stashed in a non interest-bearing account. PEG operations across the United States are not known for being profligate spenders, relying on budgets that would be insufficient to keep the lights on at a typical local public television station. So some question whether Los Angeles’ Public Access, Educational Access, and Government Access networks need $22 million to continue operations.

The city has decided the Government Access channel — the one that airs council meetings and other political functions — does need a new home.  So the city is spending $20 million to completely renovate one of the oldest buildings in Los Angeles, the long-vacant three-story Merced Theater near Olvera Street.

When complete, the state-of-the-art digital facilities of Cityview Channel 35 may rival those of some commercial television stations in Los Angeles. The building will house a small performance venue on the first floor, a studio with space for a 70-person live audience, and plenty of office space on the third floor. What it evidently won’t have room for is the Public Access and Educational Access channels that make up the rest of the PEG trio. The new facility is for the exclusive use of Channel 35.

Local residents are happy someone is finally doing something with the theater, which has been empty and unused for at least 30 years. The project could also make Los Angeles’ Government Access channel one of the most capable in the country, producing high quality programming well beyond the ubiquitous city council meetings.

“Space for a live audience of about 70 people will allow us to engage the public with debates, town halls and other events that we weren’t able to do,” Mark Wolf, executive officer at the city Information Technology Agency, which oversees Channel 35, told Downtown News. “The venue also gives us a full upgrade to digital technology, as we’ve been operating in an analog environment.”

Downtown News partly misled its readers when it suggested cable providers are footing the bill for the renovated home of Channel 35. Although money from the city’s general fund won’t be used for the project, the money did originate from cable subscribers who have paid higher cable bills since 2007 because the city elected to collect a 1% PEG franchise fee.

Galperin

Galperin

Even after spending $20 million on the Merced Theater, the money from Time Warner Cable, Cox, AT&T, Verizon, and Charter cable TV subscribers will keep rolling in. The audit found that by the time the new Merced Theater facility opens in 2016, the city will again have between $21-25 million in unspent PEG funds.

Galperin thinks throwing more money at traditional PEG operations would be a mistake, particularly when younger audiences are not even subscribing to cable television.

“We’re in a new era,” Galperin said. “The old rules that envisioned everybody getting their programming from cable are changing before our very eyes. We are in a totally different era in terms of how people get their information, so much of viewership is on the Internet now, not necessarily on cable.”

Because PEG funds can only be spent on PEG operations, as a starting point, funds could be spent to build up what is now an anemic, barely functioning website for Channel 35. Although the channel does stream online, it is intermittent in our experience. Channel 35 might also partner with local public broadcasting and minority-interest channels in co-production ventures. It should also develop a robust on-demand library of its content for site visitors because that is increasingly how Americans choose to watch television.

Galperin suggested other uses including a public Wi-Fi network and city Internet sites for programming and other information, but these may stray outside of the boundaries of what is permissible under current California and federal law.

Of course, there is one other alternative – rescind the PEG fee altogether until there is a legitimate need to collect the money from already overburdened cable subscribers.

franchise fees

http://www.phillipdampier.com/video/Surviving DIVCA.mp4

Silicon Valley Community Television aired this lengthy conference last fall for the benefit of local governments across California still trying to make sense of the 2006 Digital Infrastructure and Video Competition Act, a provider-influenced piece of legislation that has tied the hands of most communities to manage their local telecommunications infrastructure for the good of their citizens. (2 hours, 47 minutes)

 

Share

Time Warner Cable Prepares to Unveil Set-Top-Box-Less Initiative That Comcast Limits to College Campuses

roku

Roku

Time Warner Cable is preparing to solve one of its customers’ biggest annoyances — the expensive and unruly set-top box — by getting rid of them for customers who don’t want them.

CED reports Time Warner Cable provided insight into its “Boxless Home” project at the SCTE Rocky Mountain symposium held last week in Denver.

“One of the projects that I lead is called Boxless Homes where we can take a different device and use it instead of our set-top boxes,” said Time Warner’s Louis Williamson. “We’ve actually addressed the big screen with the Roku. We’ve launched it but we haven’t officially launched what we call our Boxless Homes because its missing a couple of the key Title 6 requirements. and the most important one we’re trying to get working right now is secondary audio. We have closed captioning and other things in it.”

The new project would let subscribers pack up and return their current set-top boxes (not DVRs just yet) and replace them with Internet-enabled Roku, Xbox, and Samsung Smart TVs, potentially saving customers close to $100 a year or more. It is part of the broad transition away from analog service cable companies are making as they gradually move towards IP distribution of content — creating one large broadband pipe across which cable television, Internet access, and phone service will travel.

“We describe things like the iPhones, and iPads and other stuff as companion devices,” Williamson added. “You can use them with your TV, they work as remotes and they’re good for looking at TV for a bit. When you go to something that fits on the big screen, the 10-foot experience like a Roku or the Xbox, or our work we’ve done as an app on Samsung TV that does [live TV and video-on-demand], that’s where we look at as Boxless Homes. You don’t have to have one our boxes; you can use one of those devices as outlets in your home. We’ve been driving heavily to get to that point where we can enable all of our services on a device that is theirs. In a couple of markets the channel lineup is pretty much there except for the transactional video on demand. It’s just getting all the Title 6 compliance in and a good marketing strategy around how you drive it.”

Time Warner management likes the initiative because set-top box equipment is costly to buy and support and many customers would prefer to do away with the frustration and cost of extra equipment, especially when many cable set-top boxes installed in homes before Jan. 1, 2014 use more electricity than a home refrigerator, consuming an average of 446kWh hours each (about $50 a year per box, depending on local energy costs).

Time Warner Cable customers looking to save money already have the option of returning their old energy vampire set-top boxes for one of several new models Time Warner has introduced this year. Contact your local office to find the Time Warner set-top boxes available for service in your area:

Make
Model
Type
Features
On Power (W)
Sleep Power (W)
APD Power (W)
Total Electric Consumption (kWh/yr)
Motorola DCX3510-M Cable APD, AVP, CC, DVR, D2, HD, MR, MS 22.8 18.3 18.3 172
Motorola DCX3200-M Cable APD, AVP, CC, D2, HD, HNI 14.3 11.7 11.6 110
Cisco 8742HDC Cable APD, AVP, CC, DVR, D2, HD, MR, MS 21.7 18.4 18.4 170
Cisco 4742HDC Cable APD, AVP, CC, D2, HD, HNI 18.8 14.1 14.1 136
Samsung SMT-H3272 Cable APD, AVP, CC, DVR, D2, HD, MR, MS 30.3 25.8 25.8 239
Samsung SMT-H3362 Cable APD, AVP, CC, D2, HD, HNI 14.7 13.3 13.3 120
Feature Key
Shortcut
Feature Name
APD Automatic Power Down enabled by default
AVP Advanced Video Processing
CC CableCARD
D2 DOCSIS 2.0
D3 DOCSIS 3.0
DVR Digital Video Recorder
HD High Definition
HNI Home Networking Interface
MR Multi-room
MS Multi-stream
XCD Transcoding

For now, Time Warner expects most of those going box-less will be in the under-30 age demographic. They already have game consoles or Internet-enabled set-top boxes like Roku and are comfortable switching in and out of the Time Warner Cable TV app.

timewarner twc“I think its to early to say how its going to impact the traditional world,” Williamson said in response to a question about whether Boxless Homes will replace traditional MPEG-2 services or augment them. “Currently we don’t even market it or tell anyone about it. The IP video stuff has rolled out word of month. These are the early adopters who are understanding that there’s a TWC app that goes on the Roku box. They decide to go down to their kid’s room or somewhere else and make that their secondary outlet. That’s how it’s evolving now. I think as it gets more and more prevalent and we get on more and more devices, which is going to take time, then its going to be more interesting. Our app on Samsung TV is much closer to our same look and feel as on our se-sop box. Unfortunately these are the real high-end Samsung TVs with the smart hub technology and things like that. There’s not enough of them to understand what the impact is on our footprint.”

Comcast is also working on a box-less approach, but only for college campuses. Its “XFINITY on Campus” project offers streaming cable TV over students’ laptops or portable devices exclusively while on campus. The service is now limited to Emerson College, Drexel University, University of New Hampshire, Lasell College, and MIT. Comcast currently has no plans to offer box-less service to residential subscribers.

http://www.phillipdampier.com/video/BTIG Demo of New TWC TV App on Roku 12-23-13.flv

Rich Greenfield at BTIG Research produced this hands-on demonstration and review of the TWC on Roku app. (6:23)

Share

Search This Site:

Contributions:

Recent Comments:

  • Frank Gau: We changed from a slow provider to Wild Blue over three years ago. It worked OK but wasn't much faster. You could download large files after midnig...
  • How To Potty Train a Toddler: You really make it seem so easy with your presentation but I find this topic to be actually something that I think I would never understand. It seem...
  • gary P: I do pay for Lightning 90 as well and think Brighthouse is a bunch of crooks- they need Verizon FIOS to come to my area (Viera) and kick them in the p...
  • txpatriot: Phillip: If the law requires that 90% of taxable earnings be returned to shareholders, why would you be upset that the companies are not returning ...
  • Aaron: Why bother trying to hide it when it's been working so well (for some people) for quite some time now... http://www.breitbart.com/Big-Government/20...
  • BobInPeoria: Will the main course be Filet Mignon , Ladies' Cut ?...
  • Alex O: Yup, I agree as well. I am not that good at dealing with networking, very annoying to deal with! I could be tinkering for several hours with mixed res...
  • bob: This really worked for me. i have the u300 and max package with promo prices. I called at the end of my promo prices. With the promo prices ending, i ...
  • Darrin: Could they at least try to hide the fact that they bribe people? The blatant oligarchy of our system is starting to rival Putin's Russia....
  • Scott: For $50,000.00 I could pay a lot of Comcast service calls and overage fees with money left over for a few pay per view shows to make it affordable eno...
  • Scott: You have anywhere from 15-30 days to cancel with any Cellular provider after starting service, I'd recommend you take the phone back and get a refund ...
  • Phillip Dampier: No I knew what you meant. :-) My reply was more for those, including McFadden himself, who might rush into denials without realizing we have the go...

Your Account: