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When Fiber Competition Arrives, Time Warner Cable Slashes Prices As Customers Call to Cancel

david-and-goliathThe day had finally arrived. After months watching construction crews work their way towards the house she and her boyfriend rent in Rochester, N.Y., Brenda Ververs called Time Warner Cable to cancel service. She thought it would take five minutes to dispense with a barely-tolerated relationship she has maintained with the cable company for nearly 20 years. Instead, she got a retention offer too good to dismiss out of hand.

Greenlight Networks, an East Rochester-based fiber overbuilder has been slowly expanding its footprint into a handful of neighborhoods in Rochester and its suburbs, providing 100/20Mbps service for $50 or 1,000/100Mbps for $250 a month. But only a fraction of area residents have heard of the company and even fewer qualify to sign up for their service.

“When the neighbors first saw their construction crews and we found out it was a company called Greenlight, we thought they were there to install red light traffic enforcement cameras,” Ververs said.

Greenlight uses a similar approach to Google Fiber, informally recruiting “fiberhoods” of potential customers. Once enough interest is shown, the company schedules fiber construction in the neighborhood.

But the process remains largely a mystery to many, because unlike Google, Greenlight does not update its website with neighborhood rankings or a detailed service map.

Time Warner Cable, Greenlight’s chief competitor, is well-aware of its fiber competition but considers it too minor to warrant any attention, at least until customers like Ververs call to cancel service.

Time Warner Cable’s national customer retention centers often confuse Greenlight Networks in Rochester, N.Y. with Greenlight, the larger municipally owned fiber to the home network in Wilson, N.C.

“They thought I was moving to North Carolina and was canceling service to start a new account down there, but they finally found Rochester’s Greenlight Networks in their system and went into a script about how Time Warner Cable was an established company and Greenlight was basically a fly-by-night operation that could fail any day,” said Ververs.

Other customers have told Stop the Cap! Time Warner alternates between recognizing Greenlight as a legitimate competitor worth their respect and one that cannot be trusted with your business. But the customer retention effort eventually ends up in the same place — offering customers drastic rate cuts to stay with the cable company.

Not what competition fans want to see: Greenlight's "Expansion Plans" web page is blank.

Not what competition fans want to see: Greenlight’s “Expansion Plans” web page is blank.

“They asked me why I would consider switching to Greenlight for $50 for 100Mbps broadband-only service when for $69 they will give me 50/5Mbps service, cable television, and phone service for two years,” Ververs said. “They emphasized it was less than $20 more for all three services from Time Warner vs. $50 for Internet-only service from Greenlight. They even promised a free upgrade to 100Mbps when it arrives in Rochester sometime this year.”

Some departing customers are also being offered modem fee waivers and free extras, like premium movie channels and expanded international free long distance calling.

Greenlight does not charge modem or franchise fees or hidden surcharges like regulatory recovery fees.

Behind the scenes, Time Warner Cable is also making an effort to lock up the most likely places a fiber overbuilder would want to expand service – multi-dwelling units that are less expensive to wire than single family homes.

Cable operators aggressively recruit apartment managers and neighborhood associations to sign contracts that include discounted service for every home, apartment or condo in a complex, usually offered as “included in the rent or neighborhood association fee.” Many contracts of this type give the cable company exclusive access to existing wiring, discouraging would-be competitors by requiring them to pay considerably higher construction costs to independently wire multi-dwelling units.

Readers also tell us Time Warner is offering departing customers the service improvement many wish they had all along, including a commitment to check and rewire customer homes for free if service quality is among the reasons a customer plans to cancel service. Some customers are also offered specialized customer service contact numbers normally available only to premium-class Signature Home customers. Still others are being given substantial bill credits or rebates if they agree to stay with the cable company.

Ververs hates Time Warner Cable service and the constant rate increases, but the $69 retention offer, apparently only available to customers in competitive areas, has kept them from making a final decision to switch to Greenlight.

“Greenlight doesn’t offer a video or telephone package — just broadband, and we cannot ignore the fact we used to pay Time Warner $160 and can now get three services and free HBO for almost $100 less than we were paying, less than $20 a month more than we would pay Greenlight, and Time Warner plans to match Greenlight’s 100Mbps speeds this year,” said Ververs.

Downtown Rochester, N.Y.

Downtown Rochester, N.Y.

But broadband-only customers are less impressed with Time Warner’s retention efforts in a community than has yet to see cable broadband speeds increase beyond 50Mbps.

Stop the Cap! reader Joseph Corriea writes his friend just signed up for Greenlight in the Highland Park area of Rochester and Time Warner immediately countered with an offer of Extreme Internet (30/5Mbps) for $39 a month. The deal breaker may have been the modem fee Time Warner didn’t offer to waive. Corriea’s friend left Time Warner for Greenlight and is happy with their flat $50 a month bill with no hidden gotcha fees.

Corriea wonders exactly how much bandwidth Time Warner Cable is withholding from barely competitive markets like Rochester.

The answer is plenty. Frontier Communications continues to lose an already meager broadband market share in areas of western New York wired for cable. The majority of its DSL customers only qualify for slowband speeds of 12Mbps or less and although the company recently claimed to have spent $9 million on upgrades in the area, many wonder where the money went.

“Frontier is a joke, they have always been a joke, and the only people doing business with them don’t know any better,” said Riga resident David Sobcek. “DSL is a dinosaur and although they claim faster speeds are available, it is very hit or miss to qualify for them and when the weather is bad, it’s a miss even if you did qualify. They locked my speed at a fraction of what they were selling and gave me nothing but excuses. Time Warner Cable has a monopoly for 99% of this area.”

Western New York is not on Time Warner Cable’s Maxx upgrade list for 2015, which boosts speeds up to 300Mbps. Google has intentionally avoided fiber projects in the northeastern United States because Verizon (and its limited deployment of FiOS fiber) dominates the region, and Frontier Communications has no plans to upgrade cities like Rochester to fiber to the neighborhood service similar to AT&T U-verse.

For the foreseeable future, that leaves Rochester with David vs. Goliath competition – a multi-billion dollar cable company vs. a fiber upstart. But with Time Warner Cable carrying more customer dissatisfaction baggage than American Airlines, nobody should count Greenlight Networks out, especially when the biggest complaint about Greenlight is why it is taking so long to expand their service area.

Channeling Pinnochio, NCTA Cable Lobby Launches “The Infinite Internet” (They Want to Usage Cap)

pinnocThe National Cable & Telecommunications Association (NCTA), the nation’s largest cable lobbying group, has outdone itself with a brand new fact-challenged video truth-seekers will quickly discover is little more than industry propaganda.

“For nearly 20 years, cable has been building Internet networks that are empowering everyone from innovators and entrepreneurs to kids in the garage,” says the NCTA in its introduction of its new video “The Infinite Internet.” “The Internet propels business, education, entertainment – whatever we want. It’s a platform of possibilities and the fast growing technology in history. Cable is proud of the part we’ve played in advancing America’s future and we’ll continue to make it faster and more accessible.”

Except many NCTA member companies want to introduce usage caps and consumption billing that limit those possibilities on an already absurdly profitable service. The same broadband duopoly of cable and phone companies also holds America’s broadband rankings back, and has demonstrated its real priority is to charge more money for less service.

We’ve reviewed the video and found credibility problems with almost every claim:

Claim: “America’s ISPs have invested trillions of dollars and laid 400,000 miles of fiber optics.”

Our finding: FIB Even industry mouthpieces like the Progressive Policy Institute and NCTA members themselves have a problem with “trillions.” The chief executives of AT&T, Bright House Networks, Cablevision, CenturyLink, Charter, Comcast, Cox, Frontier, Suddenlink, Time Warner Cable, 15 other companies, and industry groups such as the National Cable & Telecommunications Association itself, the Telecommunications Industry Association, and the CTIA Wireless Association claimed in the spring of 2014 that the entire telecommunications industry (not cable alone) spent a combined $1.2 trillion on communications infrastructure. A considerable percentage of that investment was to build out cellular networks, first for mobile phone calls and only later for wireless data. The cable industry spent far less than $1 trillion on its own infrastructure and at the time of its most rapid growth, it was intended primarily to deliver cable television, not broadband.

Stop the Cap! also found the NCTA cheating in its claims of increasing investment in broadband. The trade group was citing cumulative spending, not actual year-to-year spending. A careful review shows broadband investments are generally flat or in decline and are nowhere near comparable to the investments the industry made in the late 1990s.

Although it may be true the cable industry has deployed 400,000 miles of fiber optics, the overwhelming majority of cable customers cannot directly access any of it. Virtually all the cable industry’s fiber is deployed between the company’s headquarters and individual communities where it is connected to the same coaxial cable platform that has been around since the 1960s. Most of the rest is laid for commercial purposes, notably providing backhaul connectivity for cell towers. Time Warner Cable alone deployed fiber to its 10,000th cell tower back in 2013. It’s a lucrative business, earning that cable company more than $61 million a quarter.

BroadbandNow found no cable company appearing on the list of top fiber broadband providers. In fact, as of 2012 only 23% of Americans have access to fiber broadband ranking the United States 14th among western countries in fiber optic penetration according to the OECD.

Claim: “High speed connections reach nearly every home with blazing fast speeds that power our lives.”

Our finding: HIGHLY MISLEADING The NCTA fails to define its terms here. What exactly constitutes a “high-speed connection.” The FCC currently defines broadband as providing speeds of 4Mbps or better. Is that “blazing fast?” The FCC is currently considering redefining broadband to mean speeds of at least 25Mbps, well below many cable company entry-level broadband tiers. The NCTA also likes to claim that 99% of households have access to high-speed Internet, but they include wireless technology at any speed in those figures. If you can get one bar from AT&T’s 3G wireless Internet network, you’ve got high-speed broadband in their eyes.

In fact, when it comes to stingy coverage areas, cable is notoriously not available outside of the biggest cities and suburbs, as the government’s own National Broadband Map depicts:

Map showing cable companies offering at least DOCSIS 3.0 cable broadband service.

Map showing cable companies offering at least DOCSIS 3.0 cable broadband service.

Claim: “ISP’s want access for everyone.”

Our finding: TRUE, WITH MISSING FINE PRINT What company would not want to offer its products and services to everyone. The real question is whether they plan on doing that or simply wishing they had. The cable industry has no intention of implementing sweeping changes to the Return On Investment (ROI) formula that determines whether your home gets access to cable or not. Some companies like Time Warner Cable and Frontier Communications are expanding their cable and DSL networks, but only when the government steps in with broadband deployment grant funding.

Assuming service is available, the next hurdle is cost. BBC News reported in 2013 home broadband in the U.S. costs far more than elsewhere. At high speeds, it costs nearly three times as much as in the UK and France, and more than five times as much as in South Korea. Today it costs even more when you count the growing number of providers charging modem rental fees as high as $10 a month and often cap usage or force customers into usage-based billing schemes.

Claim: “With over 300,000 public Wi-Fi hotspots, the Internet of Things is emerging.”

Cox Cable sells their customers on accessing over 300,000 Wi-Fi hotspots, with a prominent asterisk.

Cox Cable sells their customers on accessing over 300,000 Wi-Fi hotspots, with a prominent asterisk. Access is only available for free if you are a current cable broadband customer.

Our finding: MISLEADING The NCTA is referring to collaboration between Bright House Networks, Cox Communications, Optimum, Time Warner Cable and XFINITY that allow each other’s high-speed Internet customers to use to each company’s Wi-Fi hotspots. They key word is “customers.” The hotspots may be technically reachable by the public, but unless you are a current cable broadband subscriber, using them typically requires the purchase of a daily use pass.

Claim: “Cable will continue to invest, building this platform of possibilities, if we preserve the freedom that created the Internet.”

Our finding: EMPTY CLAIMS The NCTA’s commitment that the cable industry will continue to invest is fulfilled if one cable operator spends just $1 on their network infrastructure. Notice the NCTA does not commit its members to stopping the ongoing decline in broadband investment, much less move to increase it. It also has no explanation for the annual rate increases and new fees and surcharges customers are paying, as the gap between broadband pricing abroad and at home grows even larger. 

“Preserve the freedom” is code language for maintaining the deregulation that the industry has used to its advantage to raise prices in a broadband market most Americans will find is either a monopoly or duopoly. Although the NCTA implies it, the cable industry did not create the Internet. It was a government project (gasp!) initially developed through contracts with the Department of Defense and soon broadened to include educational institutions. The first significant commercial ISPs emerged only in the late 1980s. Cable industry broadband finally showed up around a decade after that. The industry’s claims are akin to boasting Lewis and Clark discovered Kansas City… in 1966.

If the cable industry gets some oversight of its broadband service and enforced protection of Net Neutrality, does that mean investment will flee? First, providers are already spending a lower percentage of capital on broadband expansion in the current deregulatory environment. Second, as broadband becomes the cable industry’s top earner, it provides an endless supply of revenue without the headaches of negotiating programming contracts, dealing with cable television network rate increases, and the growing phenomenon of cord-cutting. In other words, without significant new competition, it remains a license to print money.

http://www.phillipdampier.com/video/NCTA The Infinite Internet 1-20-15.mp4

The NCTA is trying to make hay with its new video, “The Infinite Internet” which purports to share how Big Cable’s vision of the Internet is making new things possible. They don’t mention many of their member companies want to place a usage cap on that innovation, even as they continue to raise prices way out of proportion of the cost of delivering the service. It’s classic cable industry propaganda. (1:08)

President Obama Calls for an End to State Bans on Community Broadband; Public Networks Save $

Obama

President Barack Obama

President Barack Obama will be in Cedar Falls, Iowa today to announce steps his administration plans to take to improve broadband in the United States, including a call to end laws that restrict community broadband development that limits competition.

“Today, too few Americans have affordable and competitive broadband choices, but some communities around the country are choosing to change that dynamic,” says a statement issued by the White House. “As a result – as outlined in a new report being issued today – cities like Lafayette, Chattanooga, and Kansas City, have broadband that is nearly one hundred times faster than the national average, yet still available at a competitive price. By welcoming new competition or building next-generation networks, these communities are pioneers in broadband that works, and today in Cedar Falls, Iowa, the President is highlighting their remarkable success stories and providing municipal leadership and entrepreneurs new tools to help replicate this success across the nation.

The report, produced by the National Economic Council and Council of Economic Advisers, finds no evidence to support industry contentions that community-owned broadband duplicates existing broadband services and wastes taxpayer dollars. It also challenges cable and phone industry-backed groups claiming publicly owned broadband networks are business failures.

It cites the success of Chattanooga’s EPB Fiber service, operated by the local municipal utility. Not only is EPB successful financially, but it has introduced Chattanooga residents to the kind of competition sorely lacking in most cities for telecom services.

cedar falls“EPB’s efforts have encouraged other telecom firms to improve their own service,” states the report. “In 2008, for example, Comcast responded to the threat of EPB’s entrance into the market by investing $15 million in the area to launch the Xfinity service – offering the service in Chattanooga before it was available in Atlanta. More recently, Comcast has started offering low-cost introductory offers and gift cards to consumers to incentivize service switching. Despite these improvements, on an equivalent service basis, EPB’s costs remain significantly lower.”

In Wilson, N.C., Time Warner Cable customers pay significantly less for cable and broadband service than other North Carolina customers because of the presence of Greenlight, the community-owned fiber to the home provider. TWC customers in Wilson pay stabilized prices for service while residents in the nearby Research Triangle pay as much as 52 percent more for basic Internet service, according to the report. Greenlight’s competition has brought gigabit broadband to the community as well as lower prices for customers who decide to remain with Time Warner. The combined savings is estimated at more than $1 million annually for Wilson residents.

EPB is the municipal utility in Chattanooga, Tenn.

EPB is the municipal utility in Chattanooga, Tenn.

Those who believe municipal broadband is a waste of taxpayer dollars should consider the story of Lafayette, La.’s LUS Fiber. In addition to bringing superior broadband service to a city dominated by a cable operator that used to treat the market as an afterthought, the presence of LUS’ fiber to the home network has forced Cox Cable to improve service, offer significant customer retention deals to departing customers and defer rate increases. The investment in community broadband has saved residents an estimated $4 million from rate hikes that went ahead in other Cox cities, with an estimated total savings of between $90 and $100 million for Lafayette-area broadband customers over LUS’ first 10 years of service.

Taxpayer-supported institutions like local government, law enforcement, and schools have also seen dramatic savings by switching to municipal solutions. In Scott County, Minn. the local government’s annual bond payment for constructing their own broadband network is $35,000 less than what the county used to pay private companies for a much slower network. Area schools that formerly paid private sector telecom companies $58 per megabit of Internet speed now pay $6.83 — a savings of nearly 90 percent. Schools also received dramatic speed increases from 100 to 300Mbps. They paid less for more service — from $5,800 a month before to $2,049 a month today. Those payments go straight back to the county government instead of into the hands of out-of-state investment bankers and shareholders. On the state level, Minnesota’s public institutional network is saving taxpayers almost $1 million a year.

With the broadband profit gravy train for big cable and phone companies grinding to a halt in competitive areas, several of these companies have spent millions lobbying state governments to outlaw public broadband services. They have succeeded in 19 states, primarily with the assistance of the corporate-funded American Legislative Exchange Council (ALEC), which appeals to primarily Republican lawmakers with claims government broadband is unfairly competing with the private sector. In fact, private providers have not been driven out of communities where they face municipal competition, but they have been forced to lower prices and improve service for customers.

Today the president will call for a new effort to support local self-determination for broadband by strongly opposing industry-backed, anti-competitive deterrents and bans on community-owned networks. The president will also sign a letter addressed to FCC chairman Thomas Wheeler encouraging him to move forward with a federal ban on state broadband laws that restrict broadband development.

He will also announce additional funding for rural broadband expansion and take steps to bring local leaders together to explore how the development of community broadband initiatives in their cities and towns can make a major difference in the 21st century digital economy. The president recognizes that most Americans lack sufficiently competitive choices for broadband service and often have just one choice — the cable company — for broadband speeds greater than 25Mbps. That means many Americans are seeing their broadband speeds lag while their monthly bills continue to grow.

Community-owned broadband may be the only alternative many cities have for better broadband as would-be competitors are scared off by high construction costs and an inability to secure cable television programming at competitive prices for their customers.

Comcast Announces 2015 Rate Hikes – Broadcast TV Surcharge More Than Doubles; New Regional Sports Fee

Phillip Dampier January 6, 2015 Comcast/Xfinity, Competition, Consumer News 2 Comments

comcast highwayComcast Internet-only customers looking for speeds up to 100Mbps will pay Comcast an unprecedented $88.95 a month for a package containing the company’s Blast! broadband service with a rented cable modem.

The company has begun informing subscribers of the first of its 2015 rate increases that took effect in some areas on Jan. 1.

“We have worked very hard to hold down price adjustments, and there are no price changes for our Limited Basic ($16.10), Digital Preferred ($85.90) or Internet Essentials ($9.95) services,” said Bob Grove, Comcast’s vice president of public relations. “While we continue making investments in our network and technology to give customers more for their money, including more video across platforms, better experiences like X1 and faster Internet service, we periodically need to adjust prices due to increases we incur in programming, business costs and new technology. On average, nationally, the customer bill will increase by 3.4 percent.”

Some will pay more than others. Here is a sample:

  • Customers with DVR service face a $2 rate hike for the monthly DVR service charge, which now stands at $10 a month;
  • Digital Premier, which includes an assortment of premium movie channels, is rising from $131.75 to $140.35;
  • The hourly service charge for service calls is increasing from $33.80 to $35.80;
  • Each extra cable outlet in your home will cost a one time service fee of $33.20, up from $32.75;
  • Any pre-existing outlet in your home will now be charged a one time activation fee of $22.95, up from $22.05;
  • Service upgrades that require an in-home visit will be charged $28.45, an increase from $26.30;
  • The in-home wiring service protection plan that covers you in case of an inside cable wiring or service deterioration problem will see a price increase of $1 to $4.95 a month. Customers without the plan will now pay $35.80 an hour for service calls.

Cable television customers face an increase of more than 100% for the company’s Broadcast TV surcharge introduced in 2013. In most areas, the fee is rising from $1.50 per month to $3.25. A previously announced $2 increase in modem rental charges will raise the cost of using Comcast-supplied equipment including Comcast’s Gateway to $10 a month.

Comcast is also introducing a new compulsory regional sports network surcharge of $1 a month for all XFINITY TV packages starting with Digital Starter and higher tiers and XFINITY 450 Latino.

Customers with analog-only televisions using a DTA converter box to handle digital cable television channels on these older sets face an even more dramatic price hike. Customers that used to pay as little as $0.50 for Digital Adapter Additional Outlet Service will now pay $2.99 a month.

Premium channels such as HBO have seen price reductions, possibly in response to declining subscriber numbers. HBO drops to $15 a month and all other premiums decrease to $12 a month.

Comcast customers looking for the biggest bang for their buck should consider bundled service packages which discount Internet, television, and telephone service. Current customers should also consider letting Comcast know they are shopping the competition for a better deal. Ask them to lower your rates if they want you to stay.

“Et tu, Brute?” – Comcast Joins Time Warner Cable Jacking Up Modem Rental Fees Nationwide

Phillip Dampier January 5, 2015 Comcast/Xfinity, Consumer News No Comments

comcast money pileComcast has announced a holiday cable modem rate increase that will raise the cost of renting a modem from $8 to $10 a month.

At least 90 percent of Comcast customers reportedly still lease cable modems from the company, delivering a staggering $275-300 million in extra revenue every quarter.

The average modem or gateway offered by Comcast reportedly costs the company an average of $40. At that price, Comcast will earn back its investment in just four months, after which Comcast can book the rest as almost pure profit.

“We continue to make investments in our network and technology to give customers more for their money,” said a statement provided by Comcast. “Last year, we made our 12th speed increase in 13 years, offered the fastest outdoor Wi-Fi hotspots as well as the fastest indoor Wi-Fi connection speeds on our latest and greatest advanced wireless gateways, plus we are at nearly 8 million total Xfinity Wi-Fi hotspots. As a result, we periodically need to adjust prices due to increases we incur in rolling out these new technologies.”

Most Comcast customers are unaware they can buy their own cable modem equipment and avoid the rental fees altogether. Comcast maintains a list of compatible modems on its website, but the overwhelming majority of its customers still pay to lease the equipment.

In December, Time Warner Cable announced a general cable modem rental fee increase from $6 to $8 a month, effective this month.

Comcast’s modem rate increase will be gradually introduced across its service footprint, starting in Boston, Salt Lake City and across Connecticut.

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  • Phillip Dampier: Readers: Please see our newly updated 2015 guide to Getting a Better Deal from Time Warner Cable. You will get the latest information about negotiatin...
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  • Dave: Apparently the middle class American(born here) is fast becoming the country's poor by sucking the life blood out of this class of people. Greed, is a...
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