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Only 34% of Broadband Customers Would Recommend Their ISP to Others

Usage caps and usage billing are especially unpopular.

Usage caps and usage billing are especially unpopular.

Americans do not have a love affair with their phone or cable company, according to a new study that found most customers either wouldn’t recommend or are neutral about their Internet Service Provider (ISP).

A survey conducted by Incognito Software Systems unintentionally stumbled on the fact consumers deal with either a monopoly or duopoly for broadband service, giving them few alternative options if they do not like the service they are getting. Despite the mediocre ratings many customers give their ISP, only 10% have switched providers in the last year.

“This could reflect a lack of choices in certain regions, or it may be indicative of subscriber apathy toward Internet Service Providers,” the survey found.

Urban and suburban residents hold slightly more favorable views about their broadband service than their rural counterparts. The report found rural residents were less satisfied with service speeds and pricing options, which in most cases involve traditional DSL service from the local phone company.

broadband reportIncognito’s findings show broadband providers are reducing initiatives to acquire new customers as broadband penetration in the United States approaches 90%. Instead, they want current subscribers to pay more to satisfy demands for higher average revenue per customer. Customers already believe their current ISP is charging too much for too slow service.

“In this era of subscriber monetization, it’s essential that broadband providers clearly grasp what’s important to their existing subscribers,” Stephane Bourque, president and CEO of Incognito, said in a statement. “As our survey shows, providers are expected to do more than ever before: provide faster speeds, lower prices and superior WiFi capabilities to live up to their subscribers’ demands.”

“Most subscribers want to pay less (39%) for faster Internet services (24%),” the survey found. At least 33% want faster speeds and 28% are looking for better Wi-Fi reliability. An additional 32% want more choice in Internet plans at different prices.

The survey also found one thing customers absolutely do not want from their ISP: usage-based pricing. The fact that 58% of respondents didn’t want a usage-based billing plan might seem low until the report explains another 27% did not know what usage-based plans were. Only 15% of consumers would prefer a usage-based plan, assuming it would save them money. Most usage billing plans available to customers today do not, unless a customer is willing to cut their usage to 5GB or less per month.

In an effort to appease disappointed cable and phone company executives, the report’s authors optimistically suggest “further education could go a long way into changing the subscribers’ perception” about usage pricing.

Besides raising speeds and reducing prices, the value-added feature customers want their ISP to offer the most in the future is a robust network of accessible Wi-Fi hotspots.

Comcast Raising Usage Caps to 1TB, Boosts Price of Unlimited Add-On to $50 a Month

Comcast-LogoWith the FCC’s increasing skepticism that Comcast’s data caps are about fairness and not an attempt to discourage cable TV customers from cutting the cord and watching all of their shows online, Comcast today announced it was overhauling its data cap allowance and unlimited add-on plan.

Effective June 1, Comcast will increase its current 300GB monthly data cap to a terabyte (1,000GB) for all speed plans. For those exceeding one terabyte in usage, Comcast will sell you an unlimited add-on plan for an extra $50 a month to avoid the overlimit fee of $10 per 50GB of excess usage.

“In our trials, we have experimented with different offers, listened to feedback, and learned a lot,” said Marcien Jenckes, executive vice president of Consumer Services at Comcast Cable. “That is what we said we would do when we launched our trials four years ago – analyze and assess our customers’ reaction to the data plans, including being open to increasing them over time. We have learned that our customers want the peace of mind to stream, surf, game, download, or do whatever they want online. So, we have created a new data plan that is so high that most of our customers will never have to think about how much data they use.”

Comcast-Usage-MeterComcast is also likely responding to thousands of customer complaints filed with the FCC complaining about Comcast’s data caps and the cost of their insurance plan (previously $30-35 depending on market) to avoid overlimit fees.

Despite near universal opposition to Comcast’s data caps, the company has gradually introduced them in a growing number of cities, mostly in the southern United States.

“Comcast doesn’t listen to its customers,” complains Miguel Santos, a Comcast customer in Miami. “It never has and never will. Our family was facing a $200 Internet bill after Comcast introduced caps in Miami-Dade. Now we grudgingly pay them more than $100 a month just for unlimited Internet. It is totally ridiculous.”

Comcast’s decision comes almost a month to the day after AT&T announced it was increasing usage allowances for its U-verse and DSL customers, albeit less generously than Comcast. Most AT&T DSL customers will face 300GB caps, while most U-verse customers will get a boost to 600GB. Only U-verse customers with speeds over 100Mbps will get 1TB of usage.

“We’ve always said that we’d look carefully at the feedback from our trials, continue to evolve our offers, and listen to our customers,” said Jenckes. “We’re currently evaluating our plans to roll this out in other markets, we’ll keep listening – and we’ll be open to making further changes in the future to deliver the best high-speed data service to our customers.”

“That probably means Comcast’s version of generosity will be coming to your city soon,” predicts Santos.

T-Mobile Lets Customers Binge On Porn With No Data Caps; PBS Still Capped

Dantes-Inferno-BrothelIf you are willing to spend $20 a month for a porn video service created for mobile devices, T-Mobile will let you watch forever without counting against your monthly data cap.

The latest “zero rating” (exempting some ‘preferred’ content from data caps) controversy from John Legere’s T-Mobile means if you watch educational programming from PBS on your mobile device, it will take a bite out of your usage allowance. But you can nibble all you like on MiKandi, the latest addition to the Binge On program.

MiKandi, which claims to offer “DVD quality” adult entertainment, calls it a victory for freedom of speech:

“When mainstream tech companies announce new platforms it tends to be another way to censor your online experience,” MiKandi CEO Jesse Adams said in a company blog post. “T-Mobile is treating adults like adults and we hope that other tech companies follow in their footsteps.”

T-Mobile hasn’t exactly trumpeted their new association with a porn video supplier, quietly adding the site to its growing list of data cap free websites. But now that it is there, can Pornhub be far behind?

Mediacom Promises $1 Billion Investment in Broadband Upgrades

logo_mediacom_mainMediacom, perennially rated America’s dead-last cable company by Consumer Reports’ annual subscriber surveys, will invest $1 billion over the next three years to combat increasing competition from AT&T and other telephone companies by improving its broadband service.

The chief goal of the upgrades is to introduce gigabit broadband speeds for nearly all of Mediacom’s three million customers across 22 states. The initiative, dubbed Project Gigabit, will require Mediacom to push fiber closer to customers and businesses and will depend largely on DOCSIS 3.1 technology.

Mediacom is already providing gigabit service in several communities in Missouri, including Jefferson City, where it sells 1,000/50Mbps service for $149.99 per month, with discounts available to customers bundling it with other services. Mediacom has placed a data cap on its gigabit tier of 6TB a month, with an overlimit fee of $10 per 50GB. The Missouri systems bond 32 downstream channels using DOCSIS 3.0 technology, and customers report speed test results averaging 980/60Mbps. In other areas, many Mediacom systems will be upgraded to DOCSIS 3.1 service as part of the gigabit rollout.

Mediacom gigabit

“From the time we acquired our first cable system in March 1996, Mediacom’s focus has always been to offer the smaller communities we serve the same communications and video services that are available in America’s largest cities,” said Mediacom’s founder and CEO, Rocco B. Commisso. “Project Gigabit will allow us to go even further by giving our customers access to one of the fastest broadband networks in the world.”

In addition to speed upgrades, Mediacom also plans:

  • Expansion of Mediacom Business’s high-capacity network inside downtown areas and commercial districts to create more “lit buildings” within the company’s footprint and bring tens of thousands of new business customers on-net with immediate access to fiber-based communications services;
  • Extension of Mediacom’s deep-fiber residential video, Internet and phone network to pass at least an additional 50,000 homes;
  • Deployment of community Wi-Fi access points throughout high-traffic commercial and public areas across Mediacom’s national footprint.
mediacom rating

Consumer Reports subscriber survey results for Mediacom

Customers hope the service improvements might finally lift Mediacom out of last place in consumer satisfaction scores, a rating it has maintained for several years.

Mediacom caps its Internet service and penalizes customers with a $10 per 50GB overlimit fee.

Mediacom caps its Internet service and penalizes customers with a $10 per 50GB overlimit fee.

Altice to New York Public Service Commission: Butt Out of Our Cablevision Buyout!

nosyBillionaire cable magnate and Swiss luxury property connoisseur Patrick Drahi excels at “take it or leave it” offers on behalf of Altice, the cable conglomerate he founded.

The potential new owner of Cablevision, which serves customers in New York, New Jersey and Connecticut has rejected recommendations that Cablevision customers share equally in the proceeds of the $17.7 billion deal. Altice’s lawyers have countered that 15% is more than enough.

Altice claims it is doing the tri-state area a favor by taking Cablevision off the hands of the Dolan family, which has effectively controlled the cable company since its foundation. Altice claims customers will get tangible benefits from the deal:

  • Broadband service at speeds up to 300Mbps in the future;
  • Discounted 30Mbps Internet access for the financially disadvantaged for $14.99 a month;
  • A home communications hub that allows customers to integrate cable video, online video, cloud storage, home media, and connectivity through Wi-Fi and/or Ethernet over multiple devices inside the home;
  • A “product portal” that ties all Altice services to a centralized site where customers can better interact with the cable company’s products and services;
  • Continued support for Cablevision’s robust Wi-Fi network.

Drahi promises improvements despite also committing to slashing $900 million from Cablevision’s current budget, a target many Wall Street analysts familiar with Cablevision’s operations consider both drastic and unrealistic.

Altice1Critics of the deal include consumer groups concerned about the poor performance of other Drahi-run cable systems and Cablevision’s organized labor force, unhappy about Drahi’s statements to Wall Street that he prefers to pay only minimum wage wherever possible. Drahi also has a long contentious history with Altice workers in Europe, presiding over workforce reductions, salary and benefits cuts, and a war of attrition with his own suppliers.

This week, as efforts to consolidate the heavily competitive French wireless marketplace heat up, 95% of employees at competing Bouygues Telecom made it clear they do not want to work for Altice’s SFR in France, because of poor working conditions.

Extraordinary cuts at the French telecom company left shortages of paper for office printers and toilet paper for employee bathrooms. Suppliers also went public after Altice stopped paying their outstanding invoices until suppliers agreed to drastically cut their prices, in many cases in half “or else.”

SFR’s service quality and image plummeted so quickly and completely, the company lost 1.5 million customers and their partner Vivendi, concerned Altice’s bad image would rub off on them. They sold their remaining 20 percent stake in SFR to Mr. Drahi.

Drahi

Drahi

“If Drahi had had a different style of management, we would have kept the 20% stake in SFR,” said one Vivendi insider at the time. “But he had very bad press as a result of his management style. We didn’t want to be associated with any of that.”

Suddenlink and Cablevision customers may not have much of a choice. Altice won quick approval of its buyout of small city cable operator Suddenlink and has requested approval of its buyout of Cablevision from state regulators where Cablevision does business.

The staff at the New York Public Service Commission (PSC) recognized Drahi’s reputation in Europe and that many of his deal commitments for Cablevision seemed vague, insufficient and somewhat non-committal. Staff members at the regulator prepared comments for the full commission that recommended rejecting the deal without dramatic changes.

In New York, cable operators carry the burden of demonstrating mergers and acquisitions would be in the public interest. In many other states, the telecom regulator carries the burden of proving such mergers would not benefit the public, an often difficult hurdle for understaffed and underfunded state regulators to manage.

optimumNew York regulators usually insist that state residents share in the proceeds of any sale that comes before the commission for review. In most cases, this is in the form of an agreement to invest in infrastructure or service improvements, improve customer service standards, and protect jobs. As with Time Warner Cable and Charter, the staff recommended the commission first consider a roughly 50/50 share of any deal savings or synergies, evenly split between customers and shareholders.

Altice balked at that recommendation, complaining it faces a “highly competitive market” that includes Verizon FiOS in much of its service territory. As a result, Cablevision customers deserved less… much less.

“[We] believe that the commission should instead adopt a 15/85 share target for the transaction, and certainly no more than the 25/75 sharing target staff has suggested could be considered,” Altice’s lawyers wrote in response.

Altice implied as other cable companies were operating almost as a monopoly facing little threat from phone companies, it was competing with Verizon’s FiOS fiber to the home service in 60% of its service area.

ny psc“The contrast between the competitive landscape faced by Cablevision as compared to other large cable operators in New York State is stark,” the lawyers wrote. “Verizon FiOS is available in just two Comcast communities, 3% of Time Warner Cable communities, and zero Charter communities in the state.”

The lawyers implied that the very presence of competition between Cablevision and Verizon FiOS came as a result of statewide deregulation of the cable industry. Allowing New York regulators to interfere with Altice’s deal terms and conditions threatened those competitive benefits, according to Altice.

“Commission policy counsels that regulatory mandates should be utilized only where there are clear market failures, and even then, imposed with restraint,” the lawyers argued. “Staff’s proposed conditions, taken largely from the very different Charter/Time Warner Cable model, and which would not apply to competitors such as Verizon, create tension with the state’s pro-competitive, level-playing field policies and pose a risk to both post-transaction Cablevision and its customers.”

Altice is maxing out its credit cards. (Image: FT)

Altice is maxing out its credit cards. (Image: FT)

Altice argues that because competition exists, “it is reasonable to assume that a substantial portion of synergy savings will be re-invested in network infrastructure and new technologies—including research and development associated with such investment—rather than simply returned to customers or shareholders.”

Except that has not proven true with other telecom operators. Last year, Comcast bought back more than $2 billion of its stock, or 35.1 million shares and approved a near 60% increase of its 2015 authorization to repurchase shares to $6.75 billion. In February, Comcast boosted its dividend payout to shareholders by 10% and planned to repurchase another $5 billion of its own stock during 2016. Last year, Verizon announced it was returning capital to its shareholders through a $5 billion accelerated share-repurchase program and raised its dividend payout to the highest level (56.5¢ per share) since at least 2000. From 2012-2014, AT&T paid out nearly $27 billion to investors through its own share repurchase program. This quarter, it announced a 48¢ share dividend payout, also the highest amount since at least 2000.

Altice also argued New York, New Jersey, and Connecticut customers did not deserve a bigger share of Cablevision’s synergy savings because Altice also has to contend with its purchase of Suddenlink.

“The Commission should instead take into consideration Suddenlink’s operations, which Altice acquired at the end of 2015, just as it took into account all of the U.S. entities comprising New Charter post-closing,” Altice’s lawyers argued. The hole in that argument, deal critics claim, is that Altice doesn’t extend the synergy savings from its deal with Suddenlink to anyone except itself.

Altice also pushed back on other PSC staff recommendations:

  • Altice does not want to provide standalone telephone and/or Lifeline service to Cablevision customers;
  • Altice objects to providing battery backup power for telephone services, but will allow customers to buy their own;
  • Altice protested recommendations from the PSC staff to ban usage caps/usage based billing as a condition of sale. Altice claims usage caps may benefit customers and objects to a rulemaking that prohibits Cablevision from imposing them while leaving their competitors free to cap at will. “Cablevision’s competitors are launching aggressive service offers that Cablevision will have to match or beat—and if the company is subject to regulatory restrictions its competitors do not face, it will be handicapped in keeping up with market demands,” Altice argued.
  • New York City should have no say whether this sale is approved or not, claiming the sale does not trigger the city’s right of review.

If the PSC is unimpressed with Altice’s arguments, the cable operator has one other: federal and state law prohibits the commission from imposing most of the terms and conditions its staff recommended. The presentation is unlikely to win much favor at the PSC, particularly because Altice concedes almost nothing and objects to nearly everything on the staff’s menu of deal conditions.

The Communications Workers of America has also attacked the deal, arguing much of Altice’s presentation to the PSC is less than meets the eye. The CWA notes Altice intends to erect a money silo around Cablevision, purporting to protect its finances and operations from the rest of Altice’s telecom empire. But that also means Altice will invest none of its own money in Cablevision upgrades and service improvements, relying on Cablevision’s existing resources, credit lines, and debt obligations to cover the costs. Considering Drahi’s management style, that is likely to drive up debt.

The Financial Times reports Altice has already run up debt, ballooning over the past two years from €1.7 billion in 2012 to just over €50 billion by the end of this year, assuming its acquisition of Cablevision goes through. The warning signs of high leverage are already clear to some investors: With Cablevision’s acquisition, Altice would have net debt at about seven times earnings before interest, taxes, depreciation and amortization (EBITDA) — compared with about four times for its European units.

With jitters over European banks, interest rates, oil and gas, and the general state of the stock market, investors are expressing concern.

“From a general valuation perspective, companies with high leverage start becoming a source of fear,” one Altice investor told the Financial Times.

The PSC will likely adopt many of the staff recommendations regardless of Altice’s objections if it approves the sale. Some of those conditions are likely to include broadband service improvements, a low-income discounted Internet access program, and coverage area expansion into currently unserved areas.

CenturyLink to Test Metered Billing (Comcast Already Is, and Wall Street Asked)

followthemoneyCenturyLink is planning to trial usage caps on its broadband service later this year, not to reduce congestion or to bank the extra money for service upgrades, but to boost revenue and profits.

Stewart Ewing, chief financial officer at CenturyLink, told Wall Street analysts the company was on board with usage caps and usage billing primarily because its biggest competitor (Comcast) is already implementing a similar program in many of its markets. It’s that kind of “competition” many customers say they could do without.

“Regarding the metered data plans; we are considering that for second half of the year,” Ewing told investors on a morning conference call. “We think it is important and our competition is using the metered plans today and we think that exploring those starts and trials later this year is our expectation.”

No details about the test markets or range of usage allowances were made available by Ewing, but CenturyLink is under pressure by Wall Street to improve its revenue after raising prices and tightening credit standards on its customers. The combined impact of rate hikes and a tighter credit qualification policy led CenturyLink to lose 22,000 broadband customers during the last quarter, many who simply stopped paying the bill.

CenturyLink has been under pressure by Wall Street to put usage caps and usage pricing on its broadband service for over a year.

David Barden from Bank of America called data caps “an opportunity” for CenturyLink to rake in more dollars from customers by using misleading pricing to trick customers.

Post

Post

“We have been seeing a lot of the cable companies experimenting with data caps and metering higher-end usage,” Barden told CenturyLink executives on the conference call. “It seems like the FCC is not pushing back on this and it feels like it could be a big opportunity for telcos to, if nothing else, price underneath the cable umbrella and start to raise rates from high-end users.”

In plain English, Barden wants companies like CenturyLink to make customers believe they are getting a better deal from a lower price, at least until customers actually use the service. Then, the rate increases from usage caps and overlimit fees begin.

Glen Post, CEO of CenturyLink, is still committed to believing CenturyLink is in a good position to add broadband customers, despite the forthcoming trials of usage caps and overlimit fees. He defines 40Mbps broadband from CenturyLink as the speed that will “address most of our customers’ actual needs.”

prism tvCenturyLink now has 940,000 households connected to its Gigabit Passive Optical Network (GPON), many for its Prism TV service. Another 490,000 businesses also have access to CenturyLink’s GPON network, primarily for broadband. Post claims more than 30% of the company’s service area is now served with broadband speeds of 40Mbps or greater.

In 2016, CenturyLink expects to spend $1.2 billion on upgrades for its broadband network and capacity. In comparison, in 2015 CenturyLink spent $1 billion repurchasing shares of its own stock and another $1 billion on dividend payouts – both to benefit shareholders.

At present, CenturyLink has around a 15% market share in its GPON-enabled markets (the company didn’t say what its market share was where legacy copper wire infrastructure still dominates). Post believes that gives the phone company enormous room to grow, assuming its customers can pass credit checks and do not mind their broadband service data-capped. Like many phone companies looking for the biggest return on investment, Post noted CenturyLink will pay extra attention to wiring Multiple Dwelling Units (MDUs) — apartment buildings, condos, etc. — where the company can bring fiber service at a lower cost than wiring each home and business.

House Democrats Battle Republicans Over Broadband Rate Regulation Bill

Kinzinger

Kinzinger

Republican-sponsored H.R. 2666 — the “No Rate Regulation of Broadband Internet Access Act” — is drawing opposition from House Democrats because the measure, if it becomes law, could grant cable and telephone companies broad permanent exemption from oversight and consumer protection laws.

The bill, introduced last summer by Rep. Adam Kinzinger (R-Ill.), consists of a single sentence:

Notwithstanding any other provision of law, the Federal Communications Commission may not regulate the rates charged for broadband Internet access service (as defined in the rules adopted in the Report and Order on Remand, Declaratory Ruling, and Order that was adopted by the Commission on February 26, 2015 (FCC 15–24)).

Eshoo

Eshoo

Democrats worry despite the brevity of the bill, its language is broad and sweeping, and could be interpreted by the courts to grant deregulation and freedom from oversight to telecommunications providers that already rank at the bottom of customer satisfaction scores. It would also undercut the FCC’s reclassification of broadband from an information service to a telecommunications service, subject to Title II regulations, which gave the FCC increased authority to oversee the broadband industry.

Rep. Anna Eshoo (D-Calif.) has signaled her likely opposition to the Republican bill, noting the proposed law could “eviscerate the FCC’s authority to protect consumers against truth in billing practices and discriminatory data caps; to ensure broadband availability through [the Universal Service Fund] and E-Rate; to address rate-related issues in merger reviews; to ensure enforcement against paid prioritization; and other essential consumer protections.”

Several Democrats on the House Communications Subcommittee are introducing amendments that would likely keep Republican language prohibiting the FCC from directly regulating broadband prices, but also protect the power of the FCC to regulate billing practices, data caps and usage pricing, Net Neutrality, universal service requirements, merger reviews, and discriminatory and/or unfair business practices.

The Democrats are likely to have an uphill battle in a Republican-controlled House. Constituents may have more influence expressing their opposition to H.R. 2666 by reaching out to Rep. Kinzinger and the 18 Republican co-sponsors of the measure:

Why Satellite Fraudband Still Sucks: Low Caps, Throttled Speeds, Almost-Useless Service

exedeDespite claims satellite broadband has improved, our readers respectfully disagree:

“Most people don’t know what data caps really are until they’ve had satellite based Internet service where the bandwidth is shared,” Scott S. reminds Stop the Cap! He’s a subscriber of Exede, a satellite broadband provider powered by the ViaSat satellite platform serving about 687,000 residential customers nationwide.

Online life can be a lot worse when you are stuck with satellite-based Internet access:

  • “I am only allowed to have 10GB per month total for everything and have a 12/3Mbps service. Anything over that and they either cap your flow or give you substantially lower bandwidth speed.
  • “You can’t go online with more than three devices (including your phones).
  • “You can forget Netflix or watching any shows online.
  • “You can forget playing ANY video games online.
  • “You can forget taking any college courses online without service interruptions (which I am).”

“And they still charge you as much as other ISPs do (at least $60/month) that provide no data caps and a MUCH faster speed,” Scott writes.

Exede offers most customers plans with 10, 18, or 30GB of usage per month. About one-third of the country, typically the most rural regions in the western U.S., can now choose faster plans at speeds nearing 25Mbps because those spot beams are underutilized. But most subscribers get considerably poorer service because about two-thirds of ViaSat’s residential satellite access beams are full. Despite that, Viasat still managed to find capacity to power in-flight Wi-Fi on JetBlue, Virgin America and some United Airlines aircraft.

Customers who have never had DSL or cable broadband tolerate the slow speeds and low caps better than those that move from an area served by a wired provider. Many of those customers call satellite broadband speed marketing claims “fraudulent” and complain low usage caps make it difficult to impossible to use the Internet to use multimedia content.

 

CWA, New York City to Altice: ‘Thanks, But No Thanks’ on Cablevision Buyout

altice debtThe Communications Workers of America has told the New York Public Service Commission it should reject Altice’s proposal to buy Cablevision for more than $17 billion, claiming it’s a bad deal for customers and employees alike.

Citing Altice’s massive debt and the company’s documented history of cutting expenses and investment, Dennis Trainor, vice president for the CWA-District One, said approving the deal would load Cablevision down in debt, making any significant investments in Cablevision’s future doubtful.

“This is a bad deal for Cablevision customers and employees,” Trainor said. “Altice overpaid for Cablevision, and is financing that overpayment by loading Cablevision with debt. That will inevitably lead to worse service for customers.”

The CWA also heavily criticized Altice and Cablevision for stalling sharing documentation with the labor union as ordered by a New York Administrative Law Judge. It filed initial comments opposing the transaction with the PSC under protest.

Optimum-Branding-Spot-New-Logo“As late as the morning of Feb. 5, [the Joint Applicants] have continued their grudging and incomplete disgorgement of relevant and probative material to which CWA is entitled,” the CWA wrote. “CWA now possesses documents and data which are contradictory and require reconciliation.”

The CWA considers the deal good for Altice and Cablevision’s owners and investors, but a raw one for customers.

“For example, Cablevision’s top five executives will have almost $160 million in ‘golden parachute’ compensation available to them under certain circumstances if the transaction is approved, of which almost $100 million will become automatically triggered and payable upon consummation of the merger,” the CWA stated. “In sum, after the transaction closes, Cablevision will be the same company, with the same plant and equipment, but with substantially more debt and relatively little cash on hand,” the CWA concluded.

The CWA also cited Stop the Cap!’s own reporting of the consequences of increasing debt and reduced investment at SFR, an Altice-owned telecommunications provider in France:

“We refer the Commission to publicly available reports of a collapse of service quality for customers of SFR, one of France’s largest telecom service providers, owned by Altice. This has caused a doubling of complaints from wired customers between 2014 and 2015 and a corresponding increase in complaints about wireless service of 50%. Altice had two responses: First, it blamed the company it purchased SFR from ‘we pay the price of underinvestment from the previous [owner]’. Second, it disputes whether the level of complaint is unacceptable ‘For now, we are not very good, but we are not bad.'”

cwa_logoNew York City’s Office of the Public Advocate is no fan either. In its filing, the OPA also cited Altice’s enormous debt load, which has increased dramatically over the last four years.

“[Altice CEO Patrick] Drahi has already driven away customers and alienated employees in France since his acquisition [of SFR],” writes the OPA. “In SFR’s case, Altice eliminated costs to boost SFR’s profit margins. Among Altice’s practices with SFR were: efforts to stall payments for suppliers, initiating salary and job cuts, and a reduction in spending on meaningful service upgrades.”

The OPA also cites reporting by Stop the Cap! documenting how SFR performed after being acquired by Altice.

Leticia James, Public Advocate for the City of New York

Leticia James, Public Advocate for the City of New York

“We know, for example, SFR was forced to completely stop paying suppliers in order to force a renegotiation for cheaper supplies,” writes the OPA. “The French government appointed a mediator to resolve the issues. Moreover, these business practices failed to effectuate Altice’s goals. Just four months ago, Altice reported ‘worse-than-expected’ third quarter results for SFR that drove the company’s shares down 10 percent. In fact, SFR lost one million customers in just one year. Investors correctly attribute customer losses to Altice’s aggressive cost-trimming. As one expert explains, ‘the savings came first immediately and now the churn (or customer defection) goes up.’ Another analyst describes Altice’s ‘dangerous’ actions as not only cutting out the fat, but also the meat and the bones.”

The PSC staff reviewing the transaction also expressed concern that Altice’s willingness to keep data caps at its other acquisition Suddenlink may result in similar data caps being implemented on Cablevision customers after the merger.

Especially notable to the PSC staff was the fact that under Suddenlink’s 1000/50Mbps data-capped plan, “if the connection is utilized at its rated speeds […] a customer could reach the data cap in less than two hours.”

“If Altice were to import Suddenlink’s pricing into Cablevision service territory and impose data caps on its existing plans, some customers would be forced to upgrade not for the increased speed, but for larger data caps,” the PSC staff wrote. “For example, customers on Cablevision’s low-end 5Mbps plan, if limited to a 250GB monthly cap, would technically be able to hit their cap after just five days of constant use. More practically, they would be limited to approximately 83 hours (a little less than three hours a day) of video streaming, if the connection were not used for anything else.”

“Simply put, the introduction of Suddenlink-type data caps in Cablevision’s New York service territory post-transaction would limit the ability of New York consumers to utilize their broadband connections at their own discretion, as they currently enjoy with Cablevision service today, and would lessen the ability of over-the-top voice and video providers to compete with Cablevision’s bundled services,” the PSC staff concluded. “The imposition of Suddenlink-type data caps would be a significant detriment to New York consumers, and should not be allowed as a condition of the transaction.”

Stop the Cap! Files for Party Status in California’s Charter-TWC Merger Proceeding

stopthecap-logoStop the Cap! has filed a motion before California’s Public Utilities Commission (CPUC) to request party status in the Charter-Time Warner Cable merger proceeding, better positioning ourselves to influence the outcome.

As other consumer groups in California continue to formally oppose the merger, we are also filing to ask regulators to consider our request to impose conditions on the deal should the CPUC decide to approve it anyway. As we promised after the New York Public Service Commission approved the deal with significant conditions, we are once again taking a hard look at Charter’s three-year commitment not to impose data caps or usage pricing — a term we find completely inadequate.

cpucIt remains our belief three years is far too short a commitment, and it is unlikely consumers will find plentiful alternatives for broadband service should Charter impose caps in 2019 anymore than they can today. As a reminder to consumers and regulators, deal conditions imposed by regulators on the 2011 merger of Comcast and NBC-Universal have already begun to expire, with relatively little change in competition in the marketplace.

Our late filing for party status comes partly in response to inadequate public notice from Charter Communications and new information and suggestions that came as a result of the New York State PSC proceeding that would be directly informative and beneficial for California residents.

In states where public utility regulators have approved the transaction with ‘most-favored state’ provisions, any benefits we can win for consumers in California will also apply in New York and other states as well.

As always, we are extremely grateful to our newest member of the Stop the Cap! team, Matthew Friedman, who has dramatically strengthened our ability to monitor the marketplace on the west coast to broaden our consumer protection efforts.

We remain an all-volunteer organization, so if you’d like to join our team, use the Contact Us button at the top of the page and send a message. We’d love to have more volunteers helping identify and write about pressing broadband issues throughout the U.S. and Canada, and we’re happy to help with the editing.

The full text of our motion appears below:

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
MOTION OF STOP THE CAP! FOR PARTY STATUS

I. Introduction
Pursuant to Rule 1.4 of the California Public Utilities Commission’s (“CPUC” or the “Commission”) Rules of Practice and Procedure, Stop the Cap! respectfully requests to be granted party status in the above captioned proceeding.

II. Background and Interest in this Proceeding
Stop the Cap! is a consumer group founded in 2008 to fight against the introduction of artificial limits on broadband usage (such as data caps, usage based pricing, and speed throttling) and to promote better broadband speeds and service for consumers. Our group does not accept funding from lobbyists, companies, or any individual affiliated with the telecommunications industry. We return all corporate donations.

Stop the Cap! understands that this is a relatively late file for party status. While Stop the Cap! is generally opposed to this transaction, we feel that the Intervenors are strongly making the case that the Commission should deny the application, and we would refrain from contributing in that regard. However, should the Commission approve this transaction, Stop the Cap! has a deep and detailed knowledge of data caps and usage based pricing (DC/UBP) from our past 8 years of work on this very specific issue. This information and experience would definitely aid the Commission’s process of tailoring effective mitigation conditions, and our input would be complementary to the existing Intervenors’. Based on our direct experience at the recent Los Angeles PPH, we now understand that an issue as complicated as DC/UBP can’t be effectively dealt with by us as an informal commenter. We have no lawyers guiding us through this process —we are merely a group of individual consumers who have banded together to address a common concern. We therefore respectfully request that the Commission forgive our late filing, and note that we would still be able to take part in full in the discussion of relevant conditions, should this transaction reach that stage.

As a party, Stop the Cap! would aim to protect and promote the public interest of our members and other Californians on the issue of DC/UBP. We have attached the discussion we submitted at the Los Angeles PPH to this filing. It details how the issue of DC/UBP affects numerous other concerns in this proceeding, and presents significant and numerous harms to consumers, especially to low income ones. The submission lays out how DC/UBP can increase prices, foster anti-competitive behavior, circumvent net neutrality, hinder innovation and investment, slow broadband deployment, threaten network security, remove educational opportunities, and can even completely erase any “lifeline” broadband condition this Commission may design. The document also explains why the CPUC’s approval of this transaction would make DC/UBP much more likely to be imposed on existing Time Warner Cable subscribers. It details TWC’s repeated and public pledge to “NEVER” impose DC/UBP on its customers. It discusses why the Commission should be particularly suspect of New Charter when it comes to DC/UBP. Finally, it shows that Charter’s opening testimony actually supports a mitigation condition that sunsets based on a competition test, as opposed to an arbitrarily short three years. This is the kind of information we can present to aid in the Commission’s decision making process.

III. Notice
Service of notices, orders, and other correspondence in this proceeding should be directed to Stop the Cap! [extraneous information deleted]

IV. Conclusion
Stop the Cap!’s participation in this proceeding will not prejudice any party and will not delay the schedule or broaden the scope of the issues in the proceeding. For the reasons stated above, Stop the Cap! respectfully requests that the CPUC grant this motion for party status filing.

Dated: February 2, 2016
Respectfully submitted,

/s/ Matthew Friedman
Matthew Friedman
Stop the Cap!

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  • Geoge: 1 TB is definitely better than 300 GB to allow subscribers to stream more hours of videos on Netflix. But I still prefer internet services with no dat...
  • Joe V: These ISP executives still don't get it that nearly all customers DO NOT want usage-based billing on last mile wireline. AT&T, Comcast, Centur...
  • Timothy James: Democratic Republic, ostensibly. The entire purpose of the FCC is to define the standards by which entities may and may not conduct electronic communi...
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  • ryan gomez: Helpful piece . For what it's worth , people a a form , my boss used a sample document here http://goo.gl/VJYqp6....
  • Kyle: We never have lived in a Democracy. We live in a Republic. The federal government is supposed to protect individual rights defined in the Bill of Righ...
  • Timothy James: Well, it's a really dumb endgame, since the country will just end up like pre-1980s Africa. I'm not sure whether the Republicans have a plan beyond "c...
  • Timothy James: By that logic, the FCC shouldn't exist, because state and local laws conflict with federal laws by their very nature. As a federal institution they ne...
  • Timothy James: This move preempts any formal legislation from the FCC, allowing Comcast to lower the cap at their leisure. Meanwhile Republicans battle to strip the ...
  • Ava Cueto: Greetings Eufemia Deemer, my partner filled out a blank OPM OF-306 example here http://goo.gl/QmM7Ni...
  • Eufemia Deemer: Savvy comments . I am thankful for the information ! Does anyone know if my company might be able to find a fillable OPM OF-306 document to edit ?...
  • Jorge Schuldt: Savvy ideas - Incidentally if you want a a form , my boss encountered a blank form here http://goo.gl/J4D1Oz....

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