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Sony PlayStation Vue Adds 9 New CBS Local Stations to Lineup


Sony PlayStation Vue has added live streams of CBS stations in nine new markets, expanding the reach of CBS-affiliated stations on the cable TV online alternative.

Effective immediately, subscribers can watch these CBS affiliates if you are located within the local coverage area (thanks to Cord Cutters News):

  • lineup playstationCalifornia: KFMB San Diego
  • Florida: WPEC West Palm Beach
  • Michigan: WWMT Grand Rapids/Kalamazoo
  • North Carolina: WBTV Charlotte
  • Ohio: WKRC Cincinnati, WOIO Cleveland
  • Pennsylvania: WHP Harrisburg
  • Texas: KEYE Austin
  • Utah: KUTV Salt Lake City

PlayStation Vue isn’t just for game consoles, available on PlayStation 4, PlayStation 3, Google Chromecast, Roku, Amazon Fire TV/Stick, and also available on the PlayStation Vue mobile app (iOS/Android). A seven-day free trial is available to U.S. viewers.

The service appears to be a more direct competitor to traditional cable television, offering a substantial number of traditional cable networks and an increasing number of local over the air stations:

PlayStation Vue Packages:

  • Access: 55+ channels, including an assortment of cable, movie and sports channels for $29.99 per month ($39.99 if local stations are provided)
  • Core: 70+ channels and regional sports networks for $34.99 per month ($44.99 if local stations are provided)
  • Elite: 100+ channels, including all channels noted above plus Epix Hits and two other entertainment channels for $44.99 per month ($54.99 if local stations are provided)

Showtime is available a-la-carte. In smaller cities without live local station streaming, the service offers on-demand access to selected network shows.

Frontier Expanding Vantage TV; Applying for Video Franchises in New York and Ohio

Phillip Dampier July 18, 2016 Competition, Consumer News, Frontier No Comments

vantage tvIf you live in parts of the Hudson Valley (N.Y.) or Ohio where Frontier Communications provides phone service, Vantage TV may be coming to your neighborhood soon.

Frontier’s cable television solution for customers still served by its legacy copper wire telephone network appears to be an IPTV service similar to AT&T’s U-verse. Vantage TV is already available to around 200,000 Connecticut customers served by Frontier, inherited from AT&T. Frontier also offers Vantage in Durham, N.C. and has applied for a statewide video franchise in Ohio (granting authority to offer service anywhere in the state it chooses) and another to serve Middletown, N.Y., a community of 28,000 in the Hudson Valley.

Frontier claims over the next four years it will offer Vantage in as many as 40 of its markets, many still served by legacy copper wiring. That represents about three million homes. After a second phase of buildouts, Frontier claims it will to provide video service to about half of the 8.5 million homes in its service area.

In late June, Frontier applied for a video franchise agreement in Middletown, where it expects to compete against Charter Communications (formerly Time Warner Cable). It will be the first time Frontier offers video service in New York.

frontier new logoVantage TV offers up to 300 channels typically bundled with phone and internet service. Customers are provided a “total-home DVR” with 1TB of storage that can record up to six shows at the same time and played back on up to four wireless cable boxes attached to different televisions. An upgraded version 3.0 of Ericsson’s Mediaroom platform offers advanced set-top box features like improved visual search and the ability to watch up to four channels at once in a mosaic. Another feature lets customers bring up a small video screen showing another channel, useful if you are channel surfing during an ad break.

Multichannel News interviewed several Frontier executives about the service, which the company is confident will give it a competitive video product to market to customers. Until Frontier bought AT&T’s Connecticut customers (and its U-verse fiber-to-the-neighborhood system), its only experience selling cable television came from its acquisition of Verizon FiOS systems serving Fort Wayne, Ind., and parts of Oregon and Washington. Frontier quickly learned the value of Verizon’s volume discounts for video programming, which it lost soon after acquiring the systems. In 2011, customers faced massive price hikes for video service and an unusual effort to convince them to switch to satellite TV instead — quite a downgrade from fiber to the home service.

middletownConnecticut, in contrast, is served with a mix of fiber and old copper wiring that has been in place for decades, since the days the state was served by the independent Southern New England Telephone Company. Learning how to deliver reasonable video quality over copper wires in Connecticut gave Frontier experience to go ahead with targeted upgrades that can boost broadband speeds and deliver HD video over an internet connection as low as 2.6Mbps in other states.

In short, Frontier’s business plan for video may work if it can keep network expansion and technology costs as low as possible. Video programming costs are likely to be another matter, however. As programming costs increase in contract renewals, some cable operators are playing hardball and dropping channels that get too expensive for comfort. But many of those channel drops alienate customers. Frontier appears to be following an opposite formula — making sure potential customers know they are still carrying networks the cable operator in the area dropped. Comcast dropped Yankees regional sports channel YES, but Frontier still offers it to its Connecticut customers and goes out of its way to promote its availability.

Hallmark Channel and Hallmark Movies & Mysteries — two networks popular with older viewers who are among the most loyal to cable television, got the axe in 2010 on AT&T U-verse in Connecticut. After Frontier acquired the Connecticut system, it put the two networks back on the lineup.

The more customers Frontier can show it has at the negotiating table, the better position Frontier is in to secure discounts for the video programming it carries. Volume, volume, volume makes all the difference when competing against giant cable conglomerates like Comcast and Charter. Even if Frontier finds it eventually has to drop overpriced channels, it has a much more friendly relationship with over-the-top online video services like Netflix to offer customers as an alternative. Vantage customers can find Netflix’s main menu as a traditional TV channel on the Vantage lineup, allowing subscribers to choose any Netflix show to watch on their television. In the future, Frontier might offer customers other network’s apps as well, making it easy to stream on demand video without having to use a Roku or other similar device.

Is Your Landlord Taking Kickbacks to Keep Better Internet Out of Your Building?

xfinity communitiesIs your cable television service included in your rent or condo “services” fee? Have you ever called another provider and told service was not available at your address even through others outside of your condo neighborhood or apartment complex can sign up for service today? Chances are your landlord or property management company is receiving a kickback to keep competition off the property, while you may be stuck paying for substandard services you neither want or need. Worst of all, chances are it’s all legal and everyone is getting a piece of the action… except you.

Welcome to the world of Multiple Dwelling Unit (MDU) Bulk Service Agreements, the seedy underbelly of the anti-competitive cable and telco-TV world. When cable TV first got going, most people wanted access. In the early days, cable franchises were typically exclusive and cable companies maintained the upper hand in negotiations with apartment owners and property owners. Since the service was in demand, many property owners were told to sign whatever “Right Of Entry” Agreement (ROE) was put in front of them. Most contained clauses that guaranteed that cable company would get exclusive access to the property for as long as it was given a franchise to operate within that community. In other words, basically forever.

This turned out very handy when competitors started showing up. First on the scene were satellite television providers, which had a rough time dealing with landlords who loathed tenants installing satellite dishes that “ruined the aesthetics” of the property. Many rental agreements still restrict satellite television dishes in ways that make their use untenable. But things got much more serious when Verizon and AT&T got into the cable business. Initially, both companies found extending FiOS and U-verse to some rental and gated communities was blocked by the exclusive agreements held by cable operators. By 2007, the FCC finally acted to forbid exclusive service contracts, but the cable industry and property developers have played cat and mouse games with the FCC’s loopholes ever since.

Property Developers, Management Companies, Landlords, and Homeowner Associations With Their Hands Out

att connectedWith the FCC’s 2007 declaration that exclusive contracts between cable companies and property owners were “null and void,” the power of the cable industry to negotiate on their terms was markedly diminished. Although many property owners applauded their new-found freedom to tell the local cable company to take a hike if they did not offer better service to their tenants, many others saw dollar signs in their eyes. With leverage now in the hands of the property owner, if the local cable company wanted to stay, in many cases it had to pay. Only the most brazen property owners kicked uncooperative cable companies off their properties, putting tenants at a serious inconvenience. Instead, many found life more peaceful and lucrative to stick with the existing cable company, signing a new contract for “bulk billing” tenants. On the surface, it seemed like a good deal. Property owners advertised that cable TV was included in the rent (and they paid a deeply discounted price per tenant) and the cable operator had a guaranteed number of customers, whether they wanted the service or not.

Bulk billing also proved a very effective deterrent for would-be competitors, who had to overcome the challenge of marketing their service while the tenant was already paying for another as part of their rent. As a result, telco TV competitors often stayed away from properties with bulk billing arrangements.

As broadband has become more prominent and threatens to become more important than the cable TV package, the cable industry has refined its weapons of non-competition. While they cannot force competitors off properties, they can make life very expensive for them. The latest generation of ROE agreements often grant access rights to the building’s telecommunications conduit, cabling, and equipment exclusively to the cable operator.

fiosIf Google Fiber, AT&T U-verse or Verizon FiOS sought to offer service on one of these properties, they would have to overcome the investment insanity of wiring each building with its own infrastructure, including duplicate cables, in separate conduits and spaces not already designated for the exclusive use of the cable company. Verizon in New York City has faced numerous obstacles wiring some buildings, including gaining access to the building itself. Intransigent on site employees, bureaucratic and unresponsive property management companies, and developers have all made life difficult for Verizon’s fiber upgrade.

AT&T often takes the approach “if you can’t beat ’em, join ’em” and offers its own bulk billing incentives, along with occasional commitments for fiber upgrades. Google Fiber can afford to skip places where it isn’t wanted, although with recent revelations that landlords can raise the rent by up to 11% with the arrival of Google Fiber alone, it may hurt to alienate that fiber to the home provider.

Kickbacks for New Developments = Windfall

Kickbacks for existing properties are lucrative, but nothing compared to the lucrative windfall new property developments can achieve with the right deal.

In 2013, one property developer in Maryland went all out for an exclusive deal with a provider that was going to get de facto exclusivity by using a convoluted series of entities and agreements designed to insulate the company from competition and a challenge from the FCC. A court later ruled the provider used an “elaborate game of regulatory subterfuge” using various corporate entities to escape potential competition.

Some lawyers devote a substantial amount of their practice to the issue of bulk contracts and ROE agreements. Carl Kandutsch serves clients nationwide, many trying to extricate themselves from bad deals of the past. In many cases, an attorney may be needed to find a way out of contracts that don’t meet FCC rules. Other communities sometimes have to buy out an existing contract. Many have to sit and suffer the consequences for years. One residential community found itself trapped with a service provider that was quietly protected by an “airtight contract” negotiated not with the property management company or the homeowner association, but the development’s original builder. The provider delivered lousy service and the community spent six years trying to get rid of the offending firm with no result until they hired an attorney. Although happy to be rid of the bad provider, the homeowner association ended up illustrating how pervasive this problem is after it signed a similar contract with another provider also handing out kickbacks.

Comcast pays up to 10% of a renter's cable bill to the landlord.

Comcast pays up to 10% of a renter’s cable bill to the landlord. (Image: Susan Crawford)

Comcast is more creative than most. It calls its handouts: “Marketing Support Compensation.” The property owner gets an increasing reward for every tenant signed up for Comcast service. Once around two-thirds of tenants are subscribed, the owner gets up to a 10% take of each bill, plus a one time payment of up to $130 per tenant.

Because Comcast’s reputation often precedes it, customers reluctant to sign up without considering other providers will find that tougher to do because Comcast bans other providers from marketing their services to tenants with the support or cooperation of the landlord. In other words, no door hangers, free coffee, brochures in the lobby, or any other on-site promotions. In case a property owner forgets, Comcast sends reminders in the mail:

Comcast likes to remind landlords it has an exclusive. (Image: Susan Crawford)

Comcast likes to remind landlords it has an exclusive. (Image: Susan Crawford)

Susan Crawford calls it “astounding, enormous, decentralized payola” and claims it affects millions of renters.



“These shenanigans will only stop when cities and national leaders require that every building have neutral fiber/wireless facilities that make it easy for residents to switch services when they want to,” Crawford wrote. “We’ve got to take landlords out of the equation — all they’re doing is looking for payments and deals (understandably: they’re addicted to the revenue stream they’ve been getting), and the giant telecom providers in our country are more than happy to pay up. The market is stuck. Residents have little idea these deals are happening. The current way of doing business is great for landlords and ISPs but destructive in every other way.”

One real world example of how this deters competition comes from Webpass (recently acquired by Google), which offers gigabit Ethernet speeds in select MDUs in San Francisco, San Diego, Miami, Chicago, and Boston. The service comes with a low price, but that doesn’t get the company in the door, according to its president, Charles Barr.

Barr has been refused entry by multiple building owners who have agreements with Comcast, AT&T, or others.

“Tenants want us, but we can’t get in,” Barr said.

Crawford argues the FCC has once again been outmaneuvered by ISPs and their attorneys.

“Sure, a landlord can’t enter into an exclusive agreement granting just one ISP the right to provide Internet access service to an MDU, but a landlord can refuse to sign agreements with anyone other than Big Company X, in exchange for payments labeled in any one of a zillion ways,” added Crawford. “Exclusivity by any other name still feels just as abusive.”

This isn’t a new problem. Stop the Cap! first reported on these kinds of bulk buying arrangements back in 2010, all made possible by the FCC’s regulatory loopholes. Six years later, the problem appears to be getting worse.

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 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 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.



“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 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.”


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: $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/Spectrum 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.

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