Home » cable television » Recent Articles:

Some of America’s Largest Telecom Companies Are Overbilling You

bill errorAs part of its investigation of cable and satellite television companies, the U.S. Senate Permanent Subcommittee on Investigations found large discrepancies in how five of America’s largest cable and satellite companies—Charter Communications, Comcast, Time Warner Cable, DirecTV, and Dish—identify and correct overcharges caused by company billing errors.

The subcommittee released its report to coincide with today’s hearings on customer service and billing practices in the cable and satellite television industry. The Senate subcommittee focused its attention primarily on billing errors associated with rented set-top boxes and receivers, not programming packages or add-on services. The bipartisan report found satellite TV company Dish was probably the least prone to billing errors associated with satellite equipment and Time Warner Cable was the worst at identifying equipment billing discrepancies. Even when it did find instances of overbilling, the company refused to give customers automatic full refunds as a matter of “efficiency.”

That “efficiency” is expected to be very profitable for Time Warner Cable, which is likely to collect $1,919,844 from overbilling this year alone. Time Warner Cable estimates that, in 2015, it overbilled 40,193 Ohio customers a total of $430,393 and 4,232 Missouri customers a total of $44,152. Time Warner Cable also told the subcommittee that, during the first five months of 2016, it overbilled customers in Ohio for 11,049 pieces of equipment, totaling $108,221.

Charter Communications only did marginally better, mostly because it is a much smaller cable company. Charter estimates that it has overcharged approximately 5,897 Missouri customers a total of $494,000. Charter, along with Time Warner Cable, made no effort to trace equipment overcharges to their origin unless customers specifically asked them to and did not provide notice or refunds to customers.

Let’s review how the five companies compare:

Time Warner Cable

time-warner-cable-sucksTime Warner Cable is notorious for its “no refunds unless asked” policy, which often leaves customers uncompensated for service outages and other problems. That policy also extends to equipment-related billing errors. During the 6.5 year time period covered by the subcommittee investigation, Time Warner Cable never automatically refunded or credited customer for equipment overcharges discovered by the company. Instead, Time Warner’s “Revenue Assurance” team quietly identified and corrected billing errors without any notification or explanation to customers, which may explain why your Time Warner Cable bill can change even when you are locked in with a promotion.

The subcommittee discovered Time Warner Cable still relies on two entirely different billing systems. One, “Integrated Communications Operations Management System”, otherwise known as ICOMS, is especially troublesome to navigate at Time Warner because the company does not use standardized coding across the entire company. Placing an order for Internet service in the Northeast Division of Time Warner Cable is completely different from ordering the same product in a city like Kansas City or the west coast. Employees have complained about ICOMS for years, noting it can take up to 30 separate codes entered correctly in the system to add just one product, like High-Speed Internet. A simple data entry error can mess up an order and generate a billing error (or a lost order or service request that is never processed). But Time Warner Cable also relies on a different platform developed by CSG to manage some of its billing. Some of Time Warner Cable’s acquisitions, like Insight Communications, have operated under the Time Warner Cable brand for several years, but still use some of the billing platforms that were in place before Time Warner took over.

The subcommittee found strong evidence ICOMS is a big problem for Time Warner Cable. Attempts to audit the platform often crash, as it did in May of this year, preventing Time Warner Cable from identifying billing issues. At best, the company only aims for an 80% correction rate using its auditing tools.

One audit uncovered 18,000 customers in the Carolinas, Midwest, and Northeast that were being overbilled for modem and CableCARD equipment. Although Time Warner Cable was going to remove the erroneous charges going forward, it had no plans to automatically refund customers it identified as overcharged unless customers somehow realized that themselves and called in to request retroactive credit.

icoms error

Time Warner Cable erroneously billed one of its own employees for three Internet accounts.

Time Warner Cable once erroneously billed one of its own employees for three Internet accounts.

The subcommittee found if an audit showed that a customer had not been billed for equipment or services that the customer had received, the company treats those inconsistencies as undercharges and adds the charge to the customer’s bill going forward. Time Warner Cable does not attempt to retroactively charge the customer for previous months where that customer was undercharged.

If the audit shows that a customer has been billed for equipment or services that he or she does not have, the story is more complicated. In some cases, customers agree to pay for equipment they do not actually have so that they can receive a cheaper package price—for example, a consumer who wants only Internet service might decide the cheapest option is a promotional package including both Internet and cable television. By participating in the promotion, the customer agrees to pay a monthly rental fee for a set-top box but may instruct the company not to provide a set-top box. In such a case, the customer’s billing records will show a charge for a set-top box, but the customer’s equipment records will show that he or she does not physically have a set-top box. In April 2016, for example, Time Warner Cable identified 49,132 pieces of equipment associated with overcharges; of those 37,653 (approximately 77 percent) were not “correctable” overcharges because they were associated with accounts participating in promotional offers.

Time Warner Cable does not attempt to trace billing errors to their origin. Instead, it only provides a partial credit for the month during which the error was discovered. The company will not notify you of the error or for how long it has been on your bill. Unless you call and demand full credit for the overbilling, you will not receive it.

The cable company defends its policy on the ground that it is “efficient.” Going through months of customer bills to identify overcharges would be costly and time consuming, the company argues. The company also claims that the customer is best positioned to notice an overcharge and bring it to Time Warner Cable’s attention.

After reviewing policies at several different companies, the subcommittee cast doubt on Time Warner’s assertions, noting other companies had no problems returning overbilled amounts to customers without a request to do so.

Charter Communications

Unfortunately for customers, not included on the list of companies willing and able to automatically refund overbilling is Charter Communications, which recently acquired Time Warner Cable and Bright House Networks.

therealcharterbundleThe subcommittee called Charter’s process of identifying and correct overbilling “substandard.”

According to Charter, prior to August 2015, the company did not run any systematic audits to reconcile its billing records with equipment records. Charter’s failure to perform regular audits means that overcharged customers could not receive a prospective correction of their bill unless they noticed the problem themselves and contacted Charter. Beginning in August 2015, however, Charter began taking steps to identify equipment overcharges now on its system. Charter will complete that process in June 2016.

Charter recently upgraded some of its systems to make sure that when an employee adds or deletes services and/or equipment, an update to the customer’s billing record occurs automatically. Charter has 21 employees working for its Billing Quality Assurance department. The employees randomly sample bills to check their accuracy and when Charter changes its bill format or presentation, the team is supposed to review the bills to make certain any billing changes do not introduce mass errors. The subcommittee found these auditing methods were unlikely to discover common “one-off” errors, such as when customers are overbilled for equipment or programming on their specific account.

Charter’s alternate methods of identifying discrepancies quickly become more convoluted and less useful after that.

For example, beginning in August 2015, Charter undertook what it called a “controller reconciliation,” in which the company began to reconcile its billing records with equipment data from its 35 “controllers” throughout the country. These “controllers” are designed to manage box authorizations and “from the office” service connection and disconnection so that a truck roll is unnecessary. These systems can also be useful in identifying unauthorized equipment installed at locations where they were never registered or if the box was authorized for channels a customer was not paying to receive. A controller reconciliation allowed Charter to identify anomalies like in Missouri, where almost 6,000 customers were being billed for set-top boxes they were not using.

The subcommittee was unhappy neither Time Warner Cable or Charter seem willing to use “brute manpower to identify how long a customer has been overcharged and automatically grant a refund or credit,” as well as do more to minimize equipment and programming mismatches with billing records.

Comcast has bigger problems than overbilling.

Comcast has bigger problems than overbilling.

Comcast

Comcast relies on a very similar auditing process in use at Time Warner Cable to identify billing discrepancies, except once Comcast finds one it identifies how long a customer was overcharged, notifies the customer and automatically credits the customer’s account. Starting late last year, Comcast began running audits weekly to improve billing accuracy. Comcast claims just a 0.3% error rate.

Comcast has more than 60 employees nationwide on the east and west coasts examining billing issues and, when needed, individually investigates each case to identify applicable refunds.

DirecTV

DirecTV doesn’t do regular audits, instead relying on a program called SAS Enterprise Miner to search for billing errors before bills are generated. It can also use the same tools to identify and correct past billing errors. The satellite provider goes as far back as necessary to correct past mistakes, and pointed to instances where credits of thousands of dollars were issued to affected customers. DirecTV’s Revenue Assurance department can also reach out and communicate with employees at all levels of the company to investigate billing issues and prevent future ones. What will change as a result of AT&T’s ownership of the company isn’t known.

Dish Network

dishDish was cited by the subcommittee report as having the billing system least likely to generate billing errors. Dish links its equipment and billing systems together, which means any change on one system automatically updates the other.

According to Dish, it is impossible to add or remove equipment without altering the customer’s billing records. Dish provides each customer with one free “receiver”—Dish’s term for the equivalent of a set-top box—and charges $7.00 to $15.00 per month for each additional receiver a customer has. That is the only equipment charge. Dish’s system will only send a television signal to receivers that have been “activated,” which happens as part of the installation process. Once a receiver has been activated, the customer’s billing information is automatically updated to reflect that addition. That system ensures that no receiver is added to a customer’s account unless it has been activated.

Dish customers return their receivers by mail. Dish provides a packaging label so that it can track the receiver once it has been mailed. When the receiver returns to the Dish warehouse, an employee scans the barcode on the receiver, which removes the receiver from the customer’s provisioning records and, in turn, from the customer’s bill.

Hearing: Customer Service and Billing Practices in the Cable and Satellite Television Industry

Permanent Subcommittee on Investigations, June 23, 2016 10:00AM ET

(Video starts at 19:55) (2:18:54)

Cablevision May Owe You Up to $140 for Its Cable Box, But Only If You Ask

cablevision boxIf you are or were a Cablevision cable-TV customer, the cable company may owe you up to $140 for overcharging you for their set-top box, but only if you ask.

Current and former subscribers in New Jersey, New York, and Connecticut will share the proceeds of a settlement fund proposed in federal court in response to a class action lawsuit (Marchese v. Cablevision Systems Corp.) that alleged Cablevision has been misrepresenting the need for its cable equipment dating back to 2004.

You probably qualify as a class member if you had cable television service and a Cablevision set-top box anytime between April 30, 2004 and March 9, 2016. Former subscribers will likely receive a check valued at $20-40. Current customers will be offered the option of a one-time bill credit of $20-40 or the opportunity to get free services from Cablevision valued at $50-140. The longer you’ve been a customer, the higher the value of the free services you may qualify for, including free premium movie channels or multi-room DVR service. If you already have both, you will only qualify for the bill credit.

optimumCustomers should register as a class member to guarantee a share of the settlement proceeds. Visit cableboxsettlement.com to register online, e-mail [email protected] call 1-888-760-4871. The deadline to file a claim is Sept. 23, 2016.

The proceeds of the settlement will likely be distributed by the end of this year, after a fairness hearing scheduled for September to discuss the requested attorneys fee, estimated to be as high as $9.5 million.

As is often the case in class action lawsuits, the company being sued need not admit any wrongdoing, and Cablevision is proclaiming its innocence.

“Cablevision denies all of the claims and allegations in the lawsuit and notes that the settlement is subject to final approval of the court,” a company statement said. “We cannot comment further beyond the publicly available filings in the litigation.”

Cable Industry & Friends Freak Out Over Set-Top Box Competition: It Destroys Everything

comcast-set-topIt’s all hands on deck for a cable industry desperate to protect billions in revenue earned from a monopoly stranglehold on the set-top box, now under threat by a proposal at the FCC to open up the market to competition.

While cable industry groups decry the proposal as a solution looking for a problem, at least 99 percent of cable customers are required to lease the equipment they need to watch pay television. That has become a reliable source of revenue for the industry and set-top box manufacturers, who share the $231 each customer pays a year in rental fees. Collectively that amounts to $20 billion in annual revenue. The FCC argues there is ample evidence cable operators and manufacturers are taking advantage of that captive marketplace, raising rental fees an average of 185% over the last 20 years while other electronic items have seen price declines as much as 90 percent.

With that kind of money on the line and a recent statement from the Obama Administration it fully supports FCC Chairman Thomas Wheeler’s proposal, Wall Street has gotten jittery over cable stocks — a clear sign investors are worried about the economic impact of additional competition and lower prices.

Wheeler

Wheeler

“Instead of spending nearly $1,000 over four years to lease a set of behind-the-times boxes, American families will have options to own a device for much less money that will integrate everything they want — including their cable or satellite content, as well as online streaming apps — in one, easier-to-use gadget,” Jason Furman, chairman of the Council of Economic Advisers, wrote in a White House blog post.

The proposal would coordinate the establishment of an “open standard” for set-top box technology, making it possible for multiple manufacturers to enter the market and compete.

The idea is not without precedent. The cable modem marketplace uses a DOCSIS standard any manufacturer can use to launch their own modem. Once the modem is certified, broadband consumers can choose to either rent the modem from their cable operator ($10 a month from Time Warner) or buy one outright, usually for less than $70, easily paying for itself in less than one year.

But the set-top box proposal just doesn’t add up, argues Comcast — one of the strongest opponents of Chairman Wheeler’s proposal.

“A new government technology mandate makes little sense when the apps-based marketplace solution also endorsed by the FCC’s technical advisory committee is driving additional retail availability of third-party devices without any of the privacy, diversity, intellectual property, legal authority, or other substantial concerns raised by the chairman’s mandate,” wrote David Cohen, Comcast’s top lobbyist.

The National Cable and Telecommunications Association (NCTA) — the country’s largest cable industry lobbying group, said much the same thing.

The Roku set top streaming device.

The Roku set-top streaming device.

“By reading the White House blog, you have to wonder how they could ignore that the world’s largest tech companies — which are often touted in other Administration initiatives — including Apple, Amazon, Google, Netflix and many others are providing exactly the choice in video services and devices that they claim to want,” the NCTA wrote.

Their argument is that a competitive set-top box market has already emerged without any interference from the FCC. Time Warner Cable, for example, voluntarily offers most of its lineup on the Roku platform. Comcast’s XFINITY TV app allows subscribers to watch cable channels over a variety of iOS and Android devices. Several operators also support videogame consoles as an alternative to renting set-top boxes.

But few allow customers to completely escape renting at least one set-top box, especially for premium movie channels. Others don’t support more than one or two streaming video consoles like Roku, Apple TV, or Amazon Fire TV.

In Canada, cable customers can often buy their own set-top boxes and DVRs (known as PVRs up north) from major electronics retailers like Best Buy. For example, Shaw customers in western Canada can purchase a XG1 500GB HD Dual Tuner PVR with 6 built-in tuners and a 500GB hard drive (upgradable), which supports recording up to 6 HD shows simultaneously, for under $350. With some cable companies charging up to $15 a month for similar equipment, it would take just under two years to recoup the purchase cost. Many cable subscribers rent the same DVR for as long as five years before the hard drive starts acting up, necessitating replacement (of the drive).

Endangered?

Endangered cable network? Minority programmers say set-top box competition will destroy their networks.

Arguing the technical issues of cable box competition isn’t apparently enough of a winning argument, so the industry has drafted the support of minority cable programmers and friendly legislators who have taken Hyperbole Hill with declarations that set-top box competition will result in “the ultimate extinction of minority and special-interest programmers.”

How?

A competitive set-top box manufacturer may decide to ignore the way cable channels are now numbered on the cable dial. With everything negotiable, many programmers offer discounts or other incentives to win a lower channel number, avoiding the Channel Siberia effect of finding one’s network on a four digit channel number that channel surfers will likely never reach.

Their fear is that an entity like Google or Apple will pay no attention to how Comcast or Time Warner chooses to number its channels, and will use a different system that puts the most popular channels first.

Fees:

Fees: $34.95 for TV package, $35.90 in equipment and service fees.

But that assumes consumers care about channel numbers and not programs. Those who argue the days of linear TV are coming to an end doubt opening the set-top box market up for competition presents the biggest threat to these minority and specialty programmers. Those that devote hours of their broadcast day to reruns and program length commercials are probably at the most risk, because they lack quality original programming viewers want to see.

Hal Singer, who produces research reports for the telecom industry-backed Progressive Policy Institute, even goes as far as to suggest competitive set-top boxes will discourage telephone companies from building fiber to the home service, because they won’t get the advertising revenue for TV service they might otherwise receive from a captive set-top box market. But Singer ignores the fact Verizon effectively stopped substantial expansion of its FiOS network in 2010 (except in Boston) and AT&T now focuses most of its marketing on selling DirecTV service to TV customers, not U-verse – it’s fiber to the neighborhood service.

But Singer may be accurate on one point. If the cable industry loses revenue from set-top box rental fees, it may simply raise the rates it charges for cable television to make up the difference.

“So long as high-value customers for home video also demand more set-top boxes—a reasonable assumption—then pay TV operators can use metering to reduce the total price of home entertainment for cable customers,” Singer opines. “If this pricing structure were upended by the FCC’s proposal, economic theory predicts that pay TV prices would rise, thereby crowding out marginal video customers.”

Time Warner Cable Tests “Skinny Bundles” of Major Networks, HBO, Showtime for $10/Mo

20 CHANNELWhile cable operators continue to deny cord cutting is real, their marketing departments think otherwise and are responding with slimmed down cable TV packages showcasing premium movie channels at a non-premium price.

This week, Time Warner Cable began offering a $10 add-on video package of over-the-air major network stations for new customers in Manhattan signing up for 50/5Mbps broadband service ($39.95 a month alone on a one year promotion in TWC Maxx markets). Oh did we forget to mention that $10 also includes both HBO and Showtime — the same networks Time Warner sells to everyone else for about $16.95 a month each?

At $10 a month, the package is a steal if you are still interested in local live/linear TV and movie channels. XFINITY Stream for Comcast is comparable, but Comcast extracts $15.99 a month for almost the same thing.

Time Warner Cable is obviously targeting disinterested Millennials that might otherwise skip television or consider the $20 Sling TV package instead.

But the cable company is downplaying the package and its price.

Time Warner Cable CEO Rob Marcus likes to remind investors at least 80 percent of Time Warner customers still subscribe to the big 200+ channel cable TV package, and Time Warner has hardly been a pioneer of “skinny bundles” that cut down the TV package to just the essentials.

Despite those assertions, the number of Americans willing to drop cable television continues to increase… and fast. Convergence Consulting notes the industry lost 283,000 video customers in 2014 and 1.1 million in 2015 — a four-fold increase. Convergence estimated at least another 1.1 million will cut the cable TV cord this year in what could become “the new normal.”

Video consumers are turning instead to on-demand, online viewing, which can provide commercial-free and binge viewing opportunities. Both Millennials and Generation X viewers are trending towards shows, not channels and networks, and many would never know (and fewer still care) what channel they were watching without the identity bug perpetually attached to the lower right of the screen.

Eventually, cable television service will likely occupy a part of a fat IP-pipe free-for-all, where viewers can still watch linear programming if they wish, but are more likely going to customize a much more personal viewing experience online instead.

After Waiting Forever, Boston is Finally Getting Verizon FiOS

verizon bostonThe long wait for fiber optic broadband in the city of Boston is finally over.

In a surprise announcement with Boston Mayor Martin J. Walsh and Verizon officials, Verizon announced it will commit to at least $300 million in investments over the next six years to bring fiber to the home service to residents of the metro area.

Construction of the fiber-optic network will be completed on a neighborhood-by-neighborhood basis according to customer demand. Initially, the project will begin in Dorchester, West Roxbury and the Dudley Square neighborhood of Roxbury in 2016, followed by Hyde Park, Mattapan, and other areas of Roxbury and Jamaica Plain. The city has also agreed to provide an expedited permitting process to encourage the project.

“Boston is moving faster than our current infrastructure can support, and a modern fiber-optic communications platform will make us a next-level city,” Walsh said in a statement.

“This transformation isn’t just about advanced new fiber-optic technology — it’s about the innovative services this platform will allow people to create and use, today and in the future,” Verizon Wireline Network president Bob Mudge said in a statement.

Bringing FiOS inside the city of Boston will challenge the de facto monopoly Comcast had held for years. The only alternative most residents have is Verizon DSL.

The dramatic turnaround came six months after Verizon adamantly told the Boston City Council Verizon FiOS expansion was dead. Verizon announced it would stop FiOS expansion in 2010 to concentrate on its existing FiOS commitments and better marketing the service to attract more customers.

The sudden end to FiOS expansion six years ago caught many cities by surprise. As a result, in several areas, the fiber service is only available in select suburbs and not city centers.

Verizon’s unions have also pushed for further FiOS expansion, but today’s announcement is expected to have no impact on plans by the Communications Workers of America and the International Brotherhood of Electrical Workers to strike Verizon starting early Wednesday morning.

The partnership also covers Verizon Wireless and its plans to attach wireless equipment to city street lights and utility poles without a lengthy permitting process.

Verizon was also likely offered a much easier time securing a license to offer cable television service, a stumbling block Verizon has experienced in several large cities.

Echoing Google Fiber, Verizon will try to win itself some free marketing and buzz by giving residents a chance to compete to see what neighborhoods get FiOS first. A free online registration process will be used to assess demand and help Verizon prioritize its fiber-optic network construction schedule.

Verizon will also support digital initiatives for the income-challenged, including a $100,000 Digital Equity contribution to the city, offered to support a mobile hotspot lending program at the Boston Public Library enabling Internet access to families on an as-needed basis.

Boston neighborhoods marked "A" will be upgraded to FiOS first, followed by "B" and so on. The upgrade effort is expected to take at least six years.

Boston neighborhoods marked “A” will be upgraded to FiOS first, followed by “B” and so on. The upgrade effort is expected to take at least six years.

Time Warner Cable Reminds Los Angeles About Outrageous Cost of Sports TV

Phillip Dampier March 29, 2016 Consumer News, Time Warner Cable No Comments

SportsNet-LA-logoA bone toss by Time Warner Cable (just over a week before the opening of baseball season) to get Southern California satellite and cable providers to pick up carriage of the Los Angeles Dodgers’ SportsNet LA at a discount has backfired and further inflamed critics of the cost of sports programming.

Now two years old, the cable channel jointly owned by the Southern California division of Time Warner Cable and the Los Angeles Dodgers has been a sore spot for sports fans who don’t subscribe to Time Warner Cable or Charter Communications — the only two major providers offering the sports channel. It is the exclusive home of all-things-Dodgers and the Major League Baseball team was well compensated by Time Warner Cable with $8.35 billion for the 25-year deal.

Because of the huge amount of money on the line, Time Warner Cable priced SportsNet LA at $4.90 a month wholesale per subscriber — a stunning amount for a channel devoted to a single sports team. Providers serving Southern California, including DISH, DirecTV, Verizon, Cox, and AT&T, refused to carry the channel, and for two years Dodgers games have not been seen by more than half the region’s pay TV customers.

dodgersThe issue has sparked outrage among sports fans and politicians, who have complained about the ongoing impasse between Time Warner and other providers. Only Charter Communications, now in sensitive negotiations with the California Public Utilities Commission over its acquisition of Time Warner Cable, relented and agreed to pick up the channel for its customers last summer.

Time Warner Cable has consistently refused to allow the channel to be sold a-la-carte. Instead, every cable TV customer has to pay to make Time Warner’s expensive deal with the Dodgers pay off for the cable operator. Because other companies have consistently boycotted the network, Time Warner Cable has lost a reported $100 million a year from SportsNet LA.

That may explain why this year Time Warner Cable suddenly announced it would offer one year of the channel at a discount – $3.50 a month wholesale, closer in line with other regional sports channels.

Under normal circumstances, the price cut should attract other providers to get a deal signed, but these are not normal times in the cable television business.

Time Warner’s offer has been met with angry accusations of hubris in the Los Angeles sports press. None of the providers boycotting the channel seem interested in the deal either. The reason? The discount only lasts one year, after which the price shoots back up.

Imagine the customer service call centers at DirecTV and Verizon taking heated phone calls in March 2017 when the sports channel gets dropped for its too-high renewal rate.

hostage“Why would anyone give everyone a taste of something for a year?” Mark Ramsey, a media consultant based in San Diego, told the Los Angeles Times. “All the leverage goes to the seller, not the buyer. It’s a temporary fix. This is not a free sample for Sirius XM. Dropping a channel is worse than not carrying a channel.”

Cable subscribers, particularly non-sports-fans, are also incensed at the prospect of their TV bill going up $3.50-5.00 a month for a single channel.

The dispute continues to fuel speculation that these kinds of money disputes are sure to hurry the demise of the one-size-fits-all cable TV package. Around one-quarter of Americans don’t subscribe to cable or satellite and less than two-thirds of those that do are adults 18-29. That demographic reality spells eventual doom. Cable TV is increasingly a must-have service only among older Americans. At least 83% of those 50 and older subscribe to cable television. That number drops to 73% for those aged 30-49. The younger you are, the less likely you see a need for cable television.

As a-la-carte alternatives grow, an ever larger percentage of Americans are expected to abandon the cable package. So far, the only party that doesn’t seem to care much either way is the Dodgers — they got their $8.35 billion and can sit on it for the next two plus decades.

Time Warner Cable likely underestimated the blowback on its wholesale pricing plans for SportsNet LA, but seems happy enough for now to offer only a temporary discount. But it also gives their customers another excuse to scrutinize their cable bills, which now include a “sports programming” surcharge, and scream for a-la-carte across the board.

“So, I am supposed to be excited that TWC is going to lower the price of the Dodgers to other providers? Right?,” complained Scott Bryant from Apple Valley. “Now myself, and others who could care less about the Dodgers will be forced to add another $3.50 a month to get the Dodgers, a team I could care less about? This is a joke, right? It’s time to force all cable/satellite providers allow us to pick our own channels and pay for what we want. This is nothing more than corporate welfare. When I see another added fee to my bill for local sports coverage, I will do it, too! I’m an Angels fan. Forcing me to pay for the Dodgers is criminal. I’m a sports fan, but this is out of control. Where are my scissors?”

FCC Prepares to Approve Charter-Time Warner Cable-Bright House Merger

mergerDespite clamoring for more competition in the cable industry, FCC chairman Thomas Wheeler is reportedly ready to circulate a draft order granting Charter Communications’ $55 billion dollar buyout of Time Warner Cable, with conditions.

The Wall Street Journal reported late last night the order will be reviewed by the four other commissioners at the FCC and could be subject to change before coming to a vote.

Wheeler’s order is likely to follow the same philosophical approach taken by New York State’s Public Service Commission — approving the deal but adding temporary consumer protections to blunt anti-competition concerns.

Most important for Wheeler is protecting the nascent online video marketplace that is starting to threaten the traditional cable television bundle. Dish’s Sling TV, the now defunct Aereo, as well as traditional streaming providers like Hulu and Netflix have all been frustrated by contract terms and conditions with programmers that prohibit or limit online video distribution through alternative providers. The draft order reportedly would prohibit Charter from including such clauses in its contracts with programmers.

fccCritics of the deal contend that might be an effective strategy… if Charter was the only cable company in the nation. Many cable operators include similar restrictive terms in their contracts, which often also include an implicit threat that offering cable channels online diminishes their value in the eyes of cable operators. Programmers fear that would likely mean price cuts as those contracts are renewed.

Wheeler has also advocated, vainly, that cable operators should consider overbuilding their systems to compete directly with other cable operators, something not seen to a significant degree since the 1980s. Cable operators have maintained an informal understanding to avoid these kinds of price and service wars by respecting the de facto exclusive territories of fellow operators. Virtually all cable systems that did directly compete at one time were acquired by one of the two competitors by the early 1990s. It is unlikely the FCC can or will order Charter to compete directly with other cable operators, and will focus instead on extracting commitments from Charter to serve more rural and suburban areas presently deemed unprofitable to serve.

gobble-til-you-wobbleMost of the other deal conditions will likely formalize Charter’s voluntary commitments not to impose data caps, modem fees, interconnection fees (predominately affecting Netflix) or violate Net Neutrality rules for the first three years after the merger is approved. As readers know, Stop the Cap! filed comments with the FCC asking the agency to significantly extend or make permanent those commitments as part of any approval, something sources say may be under consideration and a part of the final draft order. Stop the Cap! maintains a cable operator’s commitment to provide a better customer experience and be consumer-friendly should not carry an expiration date.

It could take a few weeks for the draft order to be revised into a final order, and additional concessions may be requested, a source told the newspaper.

Meanwhile, the California Public Utilities Commission (CPUC) is still reviewing the deal. News that the FCC is prepared to accept a merger is likely to dramatically reduce any chance California regulators will reject the merger out of hand. Stop the Cap!’s Matthew Friedman is continuing discussions with the CPUC to bolster deal conditions to keep usage caps, usage-based billing, and other consumer-unfriendly charges off the backs of California customers. New York customers will automatically benefit from any additional concessions California gets from Charter, as the PSC included a most-favored state clause guaranteeing New Yorkers equal treatment. Any conditions won in California and New York may also extend to other states to unify Charter’s products and services nationwide.

An independent monitor to verify Charter is complying with deal approval conditions is likely to be part of any order approving the transaction, although critics of big cable mergers point out Comcast has allegedly thumbed its nose at conditions imposed as part of its acquisition of NBCUniversal, and only occasionally punished for doing so.

47% of Americans Would Switch Providers After One Bad Customer Service Experience

Phillip Dampier February 16, 2016 Competition, Consumer News 10 Comments

Press “1” for inconvenience.

At least half of the country would switch their cable, telephone, or satellite company in a matter of days after a bad customer service experience, if they could.

[24]7’s newly published 2016 Customer Engagement Index surveyed 3,500 customers globally, including 1,200 U.S. respondents, to understand what drives customer behaviors. The survey quickly identified cable and satellite providers among the worst offenders, and for good reason. Customer satisfaction scores for telecom companies continue to rest at the bottom of the barrel.

The survey found almost half were ready to bolt after a single bad experience dealing with customer service, whether it was with a dead-end interactive voice response menu that took them nowhere, to long hold times, to being asked the same questions over and over again as their call is transferred, to unresponsive customer service agents that never resolved the issue to a customer’s satisfaction.

Millennials increasingly prefer to work with self-service options and tolerate a ponderous experience with telephone-based customer service less. Having a website or app that can manage your account is well-appreciated by a growing number of customers that dread having to call anyone to resolve a problem.

“The way customers engage with brands has dramatically shifted, yet many enterprises’ approach to customer service and sales is stuck in yesterday’s paradigm,” [24]7 founder and CEO PV Kannan said in a statement. “For this reason, it’s more important than ever for brands to be where their customers are, and allow them to engage on their own terms. Companies that fail to prioritize the customer experience risk falling behind.”

Right now cable and satellite companies are failing a lot of their customers, scoring lowest with only a 59% customer satisfaction score. Internet providers only score marginally better at 63%.

cust satis

Anger at poor service has led to 47% of consumers saying that they would take their business to a competitor within one day (if price and products are of equal value), while 79% say they would do it within one week. Millennials and GenX customers are less patient than Baby Boomers and those in the Greatest Generation.

Lucky for telecom companies many customers don’t have anywhere else to take their business. For most, finding a provider offering at least 25Mbps broadband that isn’t the cable company is impossible. Many phone companies don’t offer competing cable television and broadband is a problem if you subscribe to satellite TV. That may explain why many Comcast customers don’t believe the cable company is trying hard enough to improve customer service. They don’t have to.

FCC Chairman Tells Crowd He’s “Not Done Enough” to Bring More Cable Competition

Phillip Dampier February 3, 2016 Competition, Consumer News, Public Policy & Gov't No Comments
Wheeler

Wheeler

FCC Chairman Thomas Wheeler confessed he “has not done enough” to bring consumers more competition to Comcast, Time Warner Cable, Charter, and other cable operators.

Appearing at the Wharton School at the University of Pennsylvania on Tuesday, Wheeler said Comcast’s effort to buy Time Warner Cable in 2015 would not bring additional competition to the marketplace. The FCC remained pessimistic about the deal, stalling for months until a request for approval was eventually withdrawn by Comcast.

Wheeler has been especially sensitive about deals that could impact broadband services — wireless or wired — since becoming chairman of the FCC during President Obama’s second term in office. The FCC has proven itself less concerned with cable television matters, having approved a merger of AT&T and DirecTV while it still contemplates the merger of Charter Communications with Time Warner Cable and Bright House Networks.

Wheeler also spent time speaking about his latest initiative, breaking up the virtual monopoly on set-top boxes. Wheeler has proposed ending that monopoly by creating a new open standard platform for set-top equipment, allowing various manufacturers to develop boxes for retail sale to consumers.

More Than Half of America Would Wave Goodbye to ESPN for $8/Mo Off TV Bill

Phillip Dampier January 13, 2016 Consumer News, Online Video, Video 3 Comments

The buffet is open.

ESPN’s ability to bid for expensive sports rights may be threatened if pay television customers finally get a chance to subscribe to only the networks they want to watch.

A recent consumer survey conducted by Civic Science found 56% overall would remove ESPN/ESPN2, with 60% of female respondents and 49% of male respondents thrilled to drop ESPN to save $8 a month on their cable bill.

Richard Greenfield at BTIG Research has tried in vain to warn ESPN parent company Disney it may be on borrowed time.

“We continue to believe ESPN is in serious trouble as they spent far too heavily on long-term sports rights contracts, given the deteriorating state of the multichannel video bundle and accelerating shift of TV ad dollars to mobile,” Greenfield wrote in a note to investors. “Simply put, ESPN has been the largest beneficiary of the ‘BIG’ cable bundle for decades and is now dramatically overearning, with consumers the biggest losers.”

No basic cable network costs consumers more than ESPN, with $5-9 dollars of every cable TV bill paying for ESPN and its sister sports networks, whether customers watch or not. Each year, ESPN rakes in almost $9 billion from American households and advertisers, much of it used to bid for high-profile sporting events which used to appear exclusively on major broadcast networks. With billions on hand from pay television customers, many who also pay surcharges for sports programming and broadcast/over the air stations, sports teams and their owners are flush with cash. Some cable companies have even resorted to launching expensive cable networks in association with team owners just to secure viewing rights as competitors continue to bid up the price.

ESPN’s business model depends on making every cable customer pay for ESPN, so its contracts prohibit cable operators and satellite providers from placing the network on an added-cost tier.But as new online video providers launch, many are trying to omit expensive sports programming to give customers cheaper options. If consumers choose those providers, expensive cable networks are in big trouble.


ESPN president John Skipper admits ESPN’s secret: It rakes it at least $6 billion annually from cable customers, many who never watched ESPN. (Playing time varies)

Greenfield has tangled with Bob Iger, Disney’s chairman and CEO about the risks to ESPN’s future business model in the recent past. Iger has taken the cord cutting threat in stride, claiming ESPN is even prepared to start selling its networks individually, direct to consumers. Greenfield believes Iger is bluffing.

“As soon as ESPN launches a direct-to-consumer offering, it will remove the ‘protection’ they receive from cable/satellite distributors who guarantee ESPN a certain level of penetration,” Greenfield writes. “So no matter what price point ESPN/ESPN2 launch to consumers, it enables their legacy distributors such as Comcast to offer far more robust channel packages without ESPN.”

In an open market where customers get to decide on the channels they pay to receive, more than half of the country would not pay for ESPN, creating an enormous revenue hit for the network. Without adequate funds to compete in sports programming rights auctions, ESPN would likely lose access to many sporting events, further reducing revenue received from advertisers as ratings dropped. To make up for those subscriber losses, ESPN might have to charge consumers up to $30 a month for a Netflix-like ESPN offering. Civic Science asked how many would pay $20 a month for ESPN and found only 6% of survey respondents willing. In contrast, about 80 percent of Comcast customers now take ESPN, but not because they have a choice.

Cord-cutting may already be taking a toll on ESPN’s bank account. Those dispensing with a cable television package in favor of Hulu, Amazon, or Netflix may be partly to blame for ESPN’s decision to layoff 300 employees last fall.

“The math for a direct-to-consumer offering for a basic cable network does not work, especially for channel(s) with very high monthly fees embedded within the current MVPD bundle,” said Greenfield. “Disney cannot take ESPN direct-to-consumer and they know it, whether they admit that publicly or not. Furthermore, if the multichannel video bundle frays faster than expected and the TV ad market continues to weaken, ESPN’s future growth prospects are dim, at best.”

Search This Site:

Contributions:

Recent Comments:

  • Lee: There are states that allow you to contract for electric and natural gas with companies other than the ones that own the gas pipelines and the electri...
  • Guest9987: Why not 65.536Mbps? That would make it 8192KB/s which is what the standard should be; any more or less is questionable so far. It's not like 8.192MB/s...
  • Chad: EV, I completely agree. Recording your phone calls is a great way to keep these companies in check. There's a great blog post about how this, and a ha...
  • modal: I pay a visit each day some websites and websites to read content, however this blog offers quality based writing....
  • FredH: If your area is upgraded to be getting 300Mbps down and you aren't, there could be any number of factors preventing it that are your responsibility, n...
  • Ev: Why bother rearranging deck chairs on the titanic? Drop your cable TV service, put up an antenna for a bunch of channels, buy a DVR, and if you still...
  • Ev: People need to start recording ail their phone calls with company reps. They're recording it already, for their benefit. One little app on your phone...
  • beth: Called TWC today. They're the only cable provider in my area. I pay for internet and phone unfortunately still hooked to Direct for the football seaso...
  • Austin: "Responsible usage".... "limited resource"???? Give me a break! It's not like internet is mined out of a pocket in the ground. How can these idiots ke...
  • SendDavid: If you're in NY, you can also submit a claim for a refund with David, Inc. and they'll do all the work for you--50% of claims get refunded: http://bit...
  • SendDavid: If you're in NY, you can submit a claim for a refund with David, Inc.--50% of claims get refunded: http://bit.ly/2cSmmE9...
  • Seluryar: Its very hard for me to see many ISP's getting behind this since it seems many of them seem stingy on their upload speeds....

Your Account: