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Cablevision Execs Sued for Excessive Pay; $80 Million Paid to Dolan Family Over 3 Years

Phillip Dampier March 10, 2014 Cablevision, Consumer News No Comments
Charles Dolan, Cablevision CEO

Charles Dolan, Cablevision CEO

Cablevision Systems Corp.’s board of directors have been sued by an investor for wrongfully approving “grossly excessive” compensation for Chairman Charles Dolan and members of his family who serve as executives at the fifth-largest U.S. cable company.

The board of Bethpage, N.Y.-based Cablevision, which includes Dolan’s three daughters, approved more than $80 million in pay and benefits for the firm’s founder and his son over the last three years while the company piled up financial losses, according to the plaintiff’s suit.

Charles Dolan founded the cable company in 1973. Although others at the company have taken a larger role managing its day-to-day operations, Charles still won approval of $41 million in compensation for himself over a three-year period beginning in 2010. His son James was awarded $40 million, despite the fact he seems to be losing interest in Cablevision, preferring to devote more time to his rock band – JD & The Straight Shot – where he serves as lead singer, according to the lawsuit.

The plaintiff alleges the compensation packages were excessive and a waste of corporate assets at a time when Wall Street analysts criticized the cable company for underperforming financially.

cablevision“The Dolans treat Cablevision as a family coffer, routinely entering transactions with the company that have improperly favored the Dolan family’s interests over the interests of the company and its public stockholders,” said shareholder Gary Livingston, who filed the suit.

What the Dolan family wants, they usually get. The family collectively hold shares that control about 73 percent of the company’s voting rights.

It isn’t the first time the Dolan family — now billionaires — have found themselves in court over compensation issues. In 2008, the company’s top executives agreed to pay more than $24 million to settle shareholder lawsuits accusing them of benefiting from stock option grants that were backdated.

Livingston’s case is an example of “baseless shareholder lawsuits designed simply to enrich the plaintiff and his lawyers,” Charles Schueler, a Cablevision spokesman, told Bloomberg News today in an e-mailed statement.


Time Warner Cable Phone Customers May See Their Phone Numbers Go Unlisted

Phillip Dampier March 10, 2014 Competition, Consumer News, Frontier, Time Warner Cable No Comments

digital phoneTime Warner Cable telephone customers may find their phone numbers missing from directory assistance records and residential phone books.

This year, the cable company began charging directory publishers for its residential customer listings and some, including Frontier Communications, have refused to pay.

As a result, customers are likely to find their next copy of the White Pages thinner than it used to be.

The usefulness of telephone directories and directory assistance services have both been in decline for years as customers migrate to unlisted cell phones. But the loss of cable phone customers from phone books is a new trend. In the past, cable companies provided the listings for free to most directory publishers as a service to customers who wanted to keep their phone numbers in the directory. But now those listings are a money-maker, only available for sale.

Phil Yawman, Frontier Communications vice president and general manager for the Rochester, N.Y. area — Frontier’s largest urban market — told WXXI News the phone company opted not to buy the listings. 

Time Warner Cable spokesperson Joli Plucknette-Farmen said charging a fee for residential directory listings is accepted by the Federal Communications Commission.

Frontier, like many other phone companies, also no longer provides automatic delivery of residential White Pages listings, although the lucrative Yellow Pages will still appear on customer doorsteps. 


Sprint Faces $400 Million Lawsuit for Stiffing New York State’s Taxman

Here comes the taxman.

Here comes the taxman.

New York Attorney General Eric Schneiderman has won the right to continue the state’s lawsuit against Sprint-Nextel Corp., for allegedly underpaying millions of dollars in taxes. If the courts find Sprint fully liable, the company could owe New York up to $400 million in damages.

Schneiderman’s lawsuit claims Sprint has been illegally pro-rating state and local sales taxes on its service plans based on actual customer usage instead of the full amount of monthly access charges that New York law defines as taxable.

The lawsuit alleges Sprint has underpaid New York’s Department of Taxation and Finance at least $100 million since 2005.

sprintnextelSince 2002, New York Tax Law has required mobile phone companies to collect and pay sales taxes on the full amount of the monthly access charges for their calling plans. For example, when a customer pays Sprint a fixed monthly charge of $39.99 for 450 minutes of mobile calling time, the law requires Sprint to collect and pay sales taxes on the entire $39.99. According to the Attorney General’s complaint, starting in 2005, Sprint illegally failed to collect and pay New York sales taxes on an arbitrarily set portion of its revenue from these fixed monthly access charges.

Sprint’s scheme is ongoing, said Schneiderman. As a result, the state claims Sprint’s underpayment of New York sales taxes is growing by about a $210,000 a week, more than $30,000 a day.

The Attorney General’s lawsuit is the first ever tax enforcement action filed under the New York False Claims Act. The Act allows whistleblowers and prosecutors to take legal action against companies or individuals that defraud the government. Fraudsters found liable under the False Claims Act must pay triple damages, penalties and attorneys’ fees. Under the False Claims Act, whistleblowers may be eligible to receive up to 25 percent of any money recovered by the government as a result of information they provide.

Sprint asked the court to dismiss Schneiderman’s lawsuit, but the New York Supreme Court ruled against the company on July 1. Sprint appealed the decision to the Appellate Division, which unanimously affirmed the July 1 ruling on Feb. 27.


Sen. Charles Schumer Recuses Himself from Consideration of Time Warner/Comcast Deal


Sen. Schumer

Sen. Chuck Schumer (D-N.Y.), who quickly praised Comcast’s $45 billion buyout of Time Warner Cable on speculation it would preserve jobs in New York has now recused himself from any further consideration of the merger after revelations emerged his younger brother is integrally involved in the deal.

The American Lawyer magazine named Robert Schumer, a partner at Paul Weiss, its “Dealmaker of the Week.” Schumer is leading the Paul Weiss law firm’s team advising Time Warner Cable on its sale to Comcast in a $45.2 billion all-stock deal.

“As Senator Schumer and his brother had never discussed the matter before, the piece in American Lawyer was the first Senator Schumer learned that his brother had worked on the deal,” said Max Young, a spokesman for Schumer, in a statement. “Now that he’s aware of his brother’s involvement, Senator Schumer will recuse himself from Congressional consideration of the matter to avoid any appearance of bias.”

Most of Sen. Schumer’s support for the deal surrounded a commitment he obtained from top Comcast lobbyist David Cohen to honor Time Warner Cable’s plan to add jobs to a commercial services call center opening in Buffalo. Schumer was integral in the effort to get Time Warner to locate the new call center at Compass East, the site of the former Sheehan Hospital on Buffalo’s east side. The call center is expected to employ 250-300 workers and add 150 jobs over five years.  With 1,000 Time Warner Cable jobs on the line in western New York and over 10,000 throughout the state, Schumer sought commitments from Cohen that Comcast would not slash jobs as part of more than $1 billion in cost savings expected from the deal. Cohen would only commit to honoring the jobs at the Buffalo call center and other job commitments already in the works.

Analysts expect Comcast will heavily cut middle management positions from Time Warner’s workforce and eliminate several customer care centers as part of the merger. Comcast’s massive “customer care” operation is heavily committed to offshore call centers staffed by low paid, English-challenged operators. Comcast’s poor customer service earned the company fines last summer in Seattle.

Schumer’s recusal is a blow to Comcast’s effort to win the deal’s approval in Washington, where the deal will face intense anti-trust scrutiny.

Robert Schumer told American Lawyer the deal was specifically structured to expect many of the regulatory questions.

“We obviously had to be confident that we believed the deal could get done,” he told the magazine. “There were significant negotiations around the contract terms involving the regulatory approvals, but obviously we were very comfortable with it.”

But family connections mean Sen. Schumer will not be among those championing the merger deal.


Arris Launching Six Tuner Mega Whole House DVR for Time Warner Cable

Phillip Dampier February 12, 2014 Consumer News, Time Warner Cable 1 Comment
The Arris IP805-M DVR, produced for Time Warner Cable

The Arris IP805-M DVR, produced for Time Warner Cable

Time Warner Cable customers in New York City and Los Angeles will get a major set-top box upgrade from a next generation DVR allowing six programs to be recorded and once and viewed anywhere in the home.

Arris filed papers with the Federal Communications Commission seeking certification of its new IP805-M set-top, branded with the Time Warner Cable logo.

The new device includes six internal tuners, 1TB of recording space, and a “whole house” platform that will let customers watch recordings from other televisions or portable wireless devices within the home. The new DVR is capable of transcoding traditional QAM channels into IP video.

Time Warner Cable will unveil the new box later this year as part of plans to upgrade service in New York City and Los Angeles under the TWC Maxx project. Customers in other cities may have to wait for the device to become available.

Time Warner has fallen behind many other cable operators, satellite providers and phone companies that offer superior DVR equipment.

Arris’ newest piece of equipment, caught by FierceCable, is just one of the upgrades the company announced last week.


Time Warner Cable Plans to Triple Broadband Speeds (If They Survive a Hostile Takeover)

Time Warner Cable today announced major improvements in its service, including a tripling of broadband speeds and equipment upgrades that will first arrive in New York City and Los Angeles.

With the cable company facing a hostile takeover effort by Charter Communications with Comcast’s help, CEO Rob Marcus sought to appease shareholders that worry the cable company’s recent lackluster results originate from outdated technology, poor customer service, and broadband speeds that are well below the cable industry average.

Time Warner Cable will have to increase capital spending to pay for the upgrades, expected to cost $3.8 billion annually for the next three years.

nycla enhancements

CEO Rob Marcus calls the effort a “transformation of the Time Warner Cable customer experience.” The upgrade program is called TWC Maxx for now inside Time Warner Cable, but will have its own brand when it publicly launches later this year.

Here are some highlights:



TV Service

  • Network infrastructure upgrades to enhance reliability
  • New advanced set-top boxes
  • A six-tuner DVR
  • A cloud-based interface and navigation
  • An expanded on-demand library


  • Dramatic free speed boosts for all customers
  • A new Ultimate speed tier of 300/20Mbps

Unfortunately, customers outside of Los Angeles and New York will have to wait up to two years for the upgrades to reach their community.


“With ‘TWC Maxx,’ we’re going to essentially reinvent the TWC experience market–by-market,” said Marcus. “We’ll triple Internet speeds for customers with our most popular tiers of service, add more community WiFi, dramatically improve the TV product and, perhaps most importantly, we’ll set a high bar in our industry for differentiated exceptional customer service. We’re focused on providing the features and benefits that matter most to our customers.”

The most noticeable improvement will be free broadband speed upgrades. Customers with Standard or above Internet service will also receive the latest generation cable modems including Advanced Wireless Gateways for customers with Turbo to Ultimate tier service. Marcus did not say whether the company is ending is monthly equipment fees for cable modems.

Here are the new speed tiers:

  • Everyday Low Price - Currently 2/1Mbps – New 3/1Mbps
  • Basic - Currently 3/1Mbps – New 10/1Mbps
  • Standard - Currently 15/1Mbps – New 50/5Mbps
  • Turbo - Currently 20/2Mbps – New 100/10Mbps
  • Extreme – Currently 30/5Mbps – New 200/20Mbps
  • Ultimate - Currently 50/5Mbps – New 300/20Mbps


New York and Los Angeles Upgrade Schedule

The first four network hubs scheduled for upgrade are those in West Hollywood and Costa Mesa, Calif. and portions of Woodside (Queens) and Staten Island, N.Y. The rest of both cities will be upgraded by the end of this year.

Los Angeles customers will also see analog cable television service discontinued in favor of digital later this year. New York City has already been converted to all-digital television. Customers in both cities will be able to schedule same-day appointments and one-hour service windows.

Who Gets Upgraded Next?

Analysts expect Time Warner Cable will upgrade cities where they face competition from U-verse and FiOS after completing NYC and LA.

Analysts expect Time Warner Cable will upgrade cities where they face competition from U-verse and FiOS after completing NYC and LA.

Analysts say Time Warner Cable’s upgrade plans are more aggressive than initially anticipated and many expect the company to move quickly, especially in competitive markets, to boost subscriber numbers and cut customer defections to help convince shareholders it is worthwhile to reject Charter’s hostile takeover bid.

The most likely markets to be targeted for upgrades after New York and Los Angeles are those facing stiff competition from Google Fiber and Verizon FiOS. Cities where AT&T U-verse delivers competition are likely to come next, and those cities where Time Warner Cable only faces competition from telephone company DSL service will likely be the last to be upgraded. However, long before that, Time Warner Cable could be sold off to other cable operators that will make these upgrade plans moot.

Marcus today reiterated his rejection of Charter’s latest $132.50 a share offer. Marcus said the cable company is only interested in an offer above $160 a share, and that at least $100 of that must be in cash, with the balance in Charter stock. Charter will have trouble delivering that amount of cash without the assistance of other cable operators.

Craig Moffett with MoffettNathanson Research isn’t sure Marcus’ plans are enough to keep TWC from being sold. He expects Charter to soon increase its offer above $140 with the help of Comcast, which is willing to pay cash for Time Warner Cable systems in New York, New England, and North Carolina after a deal with Charter is complete.

http://www.phillipdampier.com/video/Bloomberg Rob Marcus Interviewed 1-30-14.flv

Robert Marcus, chief executive officer of Time Warner Cable Inc., talks about the cable company’s fourth-quarter earnings and its forthcoming upgrades, and Charter Communications Inc.’s $37.4 billion buyout bid. Time Warner Cable beat fourth-quarter profit estimates and forecast subscriber growth. Marcus speaks with Betty Liu on Bloomberg Television. (8:38)


Comcast Seeking Buyout of Time Warner Cable Customers in N.Y., New England, and N.C.

Comcast-LogoComcast Corporation and Charter Communications are actively working on a deal to let Comcast acquire Time Warner Cable subscribers in New York, New England, and North Carolina, according to sources reporting to CNBC.

The split-up of Time Warner Cable is contingent on a successful takeover bid by Charter Communications, which would quickly sell the systems in the three regions to Comcast for an undisclosed sum.

CNBC reports Comcast and Charter are close to agreeing on terms, but Time Warner Cable and Charter remain far apart on the terms of Charter’s takeover bid.

Charter_logoComcast’s involvement in the deal could inject much-needed cash into a takeover bid financed largely by debt. It might also prompt Charter to sweeten its offer for TWC.

Comcast’s interest in the northeast and mid-Atlantic region is not surprising. The cable company already has a large presence in eastern Massachusetts, New Jersey, Maryland, D.C., and Virginia. Time Warner Cable is the dominant cable company in New York, western and northern New England, and North Carolina.

Charter would likely keep Time Warner Cable’s operations in Texas, California, the midwest and south for itself if it succeeds in a takeover.

Charter has reportedly has hired Innisfree M&A, a proxy solicitor, to prepare for a possible proxy fight with Time Warner. Innisfree specializes in convincing shareholders to agree to proposed mergers and acquisitions.

Liberty Media, which has a substantial ownership interest in Charter Communications, is also appealing directly to Time Warner Cable stockholders and is planning to run its own slate of candidates for Time Warner Cable’s board of directors. Should Liberty-nominated candidates attract a majority of votes at the annual shareholder meeting in May, the new board members are expected to quickly approve a sale of the cable company.

http://www.phillipdampier.com/video/Bloomberg Comcast Charter Near Pact on Time Warner Assets 1-27-14.flv

Comcast Corp. is near a deal to buy New York, North Carolina and New England cable assets from Charter Communications, Inc. if shareholders approve Charter’s takeover bid for Time Warner Cable Inc., people with knowledge of the matter said. Alex Sherman reports on Bloomberg Television’s “Money Moves.” (3:28)


Time Warner Cable Moves Al Jazeera America Out of Channel Siberia

Phillip Dampier January 27, 2014 Consumer News, Online Video, Time Warner Cable 2 Comments

aljazeera-time-warnerTime Warner Cable customers looking for Al Jazeera America in New York are forgiven if they can’t find it. Time Warner Cable initially exiled the network to Channel Siberia — Channel 181 — between Univision Deportes and Shop Zeal, a shopping network that couldn’t draw flies.

But starting this week Time Warner has agreed to move the news network to Channel 57, evicting a Manhattan public access channel relocated elsewhere. Al Jazeera America’s new neighbor is HLN – home of Nancy Grace and a more irreverent light news lineup.

The contrast between HLN and Al Jazeera America could not be more clear. While HLN and other news channels spent hours covering last week’s arrest of pop star Justin Bieber, Al Jazeera America mentioned the arrest only in passing, noting the network is dedicated to hard news, increasingly hard to find on other cable news channels.

Al Jazeera America’s ratings are still a fraction of other news outlets on the cable dial, but the network is planning a promotional blitz to introduce itself and explain the difference in coverage.

Time Warner Cable currently carries the news channel on its cable lineup only in New York and Los Angeles, but subscribers nationwide can watch the channel on TWC’s TV Everywhere app – TWC TV, available for home computers, Android, iOS, Kindle Fire, Roku, XBox 360 and Samsung Smart-TVs.


Time Warner Cable Adds Local Stations to TWC App in Los Angeles, San Diego

Phillip Dampier December 18, 2013 Online Video, Time Warner Cable 2 Comments

Time Warner Cable TV subscribers in Southern California can now access local over-the-air television signals on the company’s TWC TV app, expanding the lineup of hundreds of cable channels to now include the major network affiliates — a significant gap in the “TV Everywhere” app for most customers.

tveverywhereResidents in Los Angeles and San Diego join those in New York and Kansas City that can now receive local over the air programming on their home computer, tablet, game console, or Roku box. Time Warner Cable requires viewers to subscribe to both its television and broadband services to watch, and only from your home’s Wi-Fi network.

The service is designed to bring value to Time Warner’s cable TV package and offer subscribers the opportunity to watch cable programming without an additional set-top box. Current licensing restrictions keep Time Warner from offering most television programming while on the go, but the cable company is attempting to negotiate those rights when programming contracts come up for renewal.

The major networks are not waiting for cable operators to negotiate with them, however:

  • ABC: The network’s Watch ABC app has been available since the spring and offers live streaming of the local ABC station in eight major markets including New York, Chicago, and Los Angeles. Viewers must live within the viewing area to watch;
  • CBS: The network has purchased part ownership in Syncbak which specializes in digital content delivery, but the network has not announced plans for a streaming app;
  • FOX: In addition to Hulu/+, FOX wants to adopt mobile broadcast technology using the Dyle Mobile platform, which allows device owners to receive over the air television with the use of a special add-on antenna;
  • NBC: NBC will follow ABC and offer live viewing of local affiliates over an app starting in large cities early next year.

How to Get a Better Deal for Verizon FiOS; $79.99 Triple-Play Offer With $300 Rebate Card

Cablevision CEO Jim Dolan may have to eat his words when he told shareholders he was done giving promotional discounts to customers bouncing back and forth between competing providers. Now Verizon has given Cablevision customers an excuse to say goodbye to the cable company for at least the next two years.

The Verizon FiOS $79.99 Triple Play promotion is back and includes a $300 Visa rebate card and free activation when ordering from Verizon’s website.

fios triple play

The package includes:

  • FiOS TV’s “Prime HD” tier, which includes around 215 channels, 55+ in HD. (See channels);
  • FiOS Basic Internet (15/5Mbps), upgradeable to 50/25Mbps for $10 more per month;
  • Verizon Home Phone including unlimited calling and features including Voice Mail, Caller ID and Call Waiting;
  • a 50% optional discount off HBO and Cinemax for one year.

The fine print:

  • Promo rate shows up on your Verizon bill as a $35 credit during months 1-12 and a $25 credit for months 13-24. That means you will pay $79.99 for the first year, $89.99 for the second. Factoring in the $300 gift card, your rate is still under $88 a month for two years;
  • Offer for new FiOS customers only. (Existing customers – see below);
  • A $230 early termination fee applies to this 2-yr contract offer, with the dollar amount gradually decreasing for each month of service;
  • Equipment costs, a $3.48 Regional Sports Network fee, taxes, franchise fees and other similar charges are extra.

fiosHere are some tips for current FiOS customers:

  1. Current FiOS customers may be able to negotiate a very similar deal (without the gift card) by talking to Verizon’s “Elite Team,” a/k/a Customer Retentions. Call Verizon’s customer service line (1-800-837-4966) and select the option to cancel service and your call will be transferred.
  2. Customers off-contract will have the best results securing a new promotional deal. On-contract customers nearing the end of their agreement can suggest they are willing to pay the last few months of a pro-rated early termination fee to leave if they cannot get a better deal with Verizon.
  3. Let the representative know you can always cancel your existing service and take advantage of a new customer promotion under your spouse’s name, but “to save both of us time and aggravation, let’s work out a comparable deal with my existing service.”
  4. Verizon often has one-year customer retention deals available that do not impose any term commitments. Make sure to ask the representative about no-contract options, if not volunteered, because certain off-contract retention deals can actually cost less. It is very unlikely you will get the gift card, but you might be able to win a one time courtesy credit.
  5. Request a free upgrade to Verizon FiOS Quantum (50/25Mbps service) as part of a retention deal.

Earlier this year, customers told Stop the Cap! they had success securing a 12 month, no-contract retention offer that included a mid-range television package, 50/25Mbps broadband, and home phone service for $95 a month with an invitation to call back and sign up for a similar deal one year later.

Verizon’s pricing is very aggressive and beats both Cablevision and Comcast in the northeast.

Cablevision now offers a triple play bundle for $84.95 a month for one year that doesn’t include installation charges or other ancillary equipment, service, programming, taxes, and franchise fees. Cablevision isn’t offering a $300 gift card either. But the cable company does include a free Smart Router and free Optimum Online Ultra 50 for six months.

A similar two-year promotion from Comcast runs $89 a month in northern New Jersey and includes a $300 gift card and then a nasty surprise after the first year. Once a customer reaches month 13, the promotional rate increases to a whopping $109.99 for the remainder of the two-year agreement — quite an increase. The Comcast promotion also offers far fewer television channels (80+), but does bundle HBO and X1 Advanced DVR service for one year, includes 20Mbps download speeds, and Streampix free for three months. The usual extra fees also apply.


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