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Wall Street Analyst: Cable Monopoly Will Double Your Broadband Bill

Thought paying $65 a month for broadband service is too much? Just wait a few years when one Wall Street analyst predicts you will be paying twice that rate for internet access, all because the cable industry is gradually achieving a high-speed broadband monopoly.

Jonathan Chaplin, New Street Research analyst, predicts as a result of cord-cutting and the retreat of phone companies from offering high-speed internet service competition, the cable industry will win as much as 72.2% of the broadband market by the year 2020. With it, they also win the power to raise prices both fast and furiously.

In a note to investors, Chapin wrote the number of Americans left to sign up for broadband service for the first time has dwindled, and most of the rest of new customer additions will come at the expense of phone companies, especially those still selling nothing better than DSL.

“Our long-term penetration forecast is predicated on cable increasing its market share, given a strong network advantage in 70% of the country (this assumes that telco fiber deployment increases from 16% of the country today to close to 30% five years from now),” Chaplin wrote.

Cable companies already control 65% of the U.S. broadband market as of late last year. Chaplin points out large cable operators have largely given up on slapping usage caps and usage pricing on broadband service to replace revenue lost from TV cord-cutting, so now they are likely going to raise general broadband pricing on everyone.

“Comcast and Charter have given up on usage-based pricing for now; however, we expect them to continue annual price increases,” Chaplin said. “As the primary source of value to households shifts increasingly from pay-TV to broadband, we would expect the cable companies to reflect more of the annual rate increases they push through on their bundles to be reflected in broadband than in the past. Interestingly, Comcast is now pricing standalone broadband at $85 for their flagship product, which is a $20 premium to the rack rate bundled price.”

Chaplin himself regularly cheerleads cable operators to do exactly as he predicts: raise prices. Back in late 2015, Chaplin pestered then CEO Robert Marcus of Time Warner Cable about why TWC was avoiding data caps, and in June of that year, Chaplin sent a note to investors claiming broadband was too cheap.

“Our analysis suggests that broadband as a product is underpriced,” Chaplin wrote. new street research“Our work suggests that cable companies have room to take up broadband pricing significantly and we believe regulators should not oppose the re-pricing (it is good for competition & investment).”

“The companies will undoubtedly have to take pay-TV pricing down to help ‘fund’ the price increase for broadband, but this is a good thing for the business,” Chaplin added. “Post re-pricing, [online video] competition would cease to be a threat and the companies would grow revenue and free cash flow at a far faster rate than they would otherwise.”

Charter/Spectrum Arrives in Northeast/Mid-Atlantic Region, Big Rate Hikes Sure to Follow

The last remaining parts of the country formerly served by Time Warner Cable are rebranding as Charter/Spectrum today, with the introduction of new service plans in upstate New York, western Massachusetts, Maine, and parts of the Carolinas.

“Redefining what a cable company can be,” as Charter Communications promotes to its customers, is a tall order for a cable company that is often loathed by its customers. Our readers have reached out to us all day to suggest, at least so far, Spectrum is the same old cable company, just with a new name.

“If I switch away from my Time Warner Cable plan to adopt a Spectrum plan, my bill will increase $40 a month,” complained Rochester, N.Y. resident June Patterson. “Even the customer service person I talked to said it would be crazy for me to switch plans.”

A customer in Albany, N.Y., reported their bill would increase by $30 a month. Another in Silver Creek, N.Y., claimed a $40 rate rise by switching to a Charter/Spectrum plan.

“I pay $92.06 now for Starter TV and Ultimate Internet in the Ithaca area,” shared another customer on DSL Reports. “After going through two operators, the second one is telling me my price will go up to $125.”

That’s a rate increase of $32.94 a month — $395.28 more a year.

Customers are encountering new plans for television service, but many areas only receive one advertised broadband speed option: 60Mbps. In fact, most areas can also buy 100Mbps service, but it’s very expensive at around $100 a month with a $200 setup fee. Customers have to call to change plans to get either speed. Some customers in former Time Warner Cable Maxx areas have better luck getting the setup fee waived than those living in areas Time Warner Cable never had a chance to upgrade.

In Idaho, The Spokesman Review’s D.F. Oliveria reports Charter/Spectrum is even worse than what Time Warner Cable offered before:

Our new internet service provider, Spectrum (Charter Communications), the company that “merged” with Time Warner’s local cable, has come under increasing fire lately. Many consumers have been calling me about poor customer service, very slow and/or inconsistent internet speeds, higher monthly prices and no printed material available to consumers regarding offerings.

“Since the merger, my bill went up $20 a month and speeds have slowed significantly,” shared ‘Nic’ in northern Idaho. “It’s ridiculous.”

WFTS in Tampa reports former Bright House customers can expect steep rate increases from Charter/Spectrum. (3:21)

In former Bright House territory in Florida, customers saw bills skyrocket by as much as $182 a month, resulting in monthly charges of an unprecedented $305 a month. Charter Communications refused to deal with the affected customers until WFTS-TV’s “Action News” consumer reporter Jackie Callaway intervened and finally got the company to admit the bills were too high by mistake:

Bright House customers Ivan and Linda Sordo say the rate hike hit without warning. The Sordo’s typical bill of $141 shot up to $305 overnight and without warning. And Lillian Rehrig’s normally $123 bill more than doubled to $305. Rehrig says calls to Spectrum got her a partial reduction but no real relief. Her next Spectrum statement came in $120 higher than her old Bright House bill.

What happened in these two cases turned out to be a billing error, an error Spectrum’s owner Charter Communications corrected after we started asking questions.

“When you started speaking with them is only when I got anyone to respond.”

It isn’t known how many other Tampa area customers were also overbilled or if Charter was working to identify and refund those who did not pursue a complaint with a local television newscast.

Charter Communications did tell WFTS-TV the majority of the one million former Bright House customers in the area now being served by Charter/Spectrum will face rate increases of $20-30 a month on average as their current package with Bright House expires. Those customers switching from a grandfathered Bright House or Time Warner Cable package will also automatically lose any promotion those packages were receiving.

In North Carolina, Time Warner Cable is gone and apparently so are some customers’ $300 rebate cards. Time Warner Cable had a long history of customer complaints about its rebate programs, but Charter Communications isn’t too interested in helping customers meet the terms of those rebates and intervene when something goes wrong.

A Steele Creek couple told WSOC-TV Time Warner rejected their rebate after they configured autopay on their Spectrum account with the help of a Charter customer service agent. Despite repeated assurances from customer service, the transition to autopay did not take effect quickly enough and they missed a payment, which canceled their rebate eligibility. Countless hours of negotiations with Charter’s customer service representatives got the couple nowhere. But the promise of bad publicity on the local evening news made the difference, and a $300 gift card was promptly mailed to them. Many other customers simply give up.

WSOC in Charlotte covers the case of the missing Time Warner Cable gift card. Customer service was no help. (1:54)

In Southern California, Spectrum is busy raising rates as well. Hannah Kuhn (76) of Simi Valley saw her bill jump $46 a month after Spectrum took over from Time Warner Cable last fall. Nobody would offer an explanation and in return for her complaints, they evidently shut the grandmother’s cable service off. Most Time Warner Cable customers are enrolled in some type of bundled service promotion. As those promotions expire, Spectrum raises rates to the regular price it intends to charge customers going forward, ending Time Warner Cable’s practice of lowering rates when customers complain.

Most customers with a popular bundled service package rate combining broadband, phone, and television could see their rates rise between $250-360 a year.

Former Time Warner Cable customers across the northeast and mid-Atlantic woke up this morning to incessant advertising like this promoting a “new day” for cable service, courtesy of Charter/Spectrum. (:60)

Charter Spectrum Raising Broadband Prices $5; $64.99/Mo for Entry-Level 60Mbps Plan

Customers in Florida and Texas received this notice with his latest cable bill. (Image courtesy: Nucleartx)

The “consumer benefits” of Charter Communications’ acquisition of Time Warner Cable and Bright House Networks just keep on coming as the company has begun hiking the cost of its broadband plans by $5 a month:

Important Billing Update: At Spectrum, we continue to enhance our services, offer more of the best entertainment choices and deliver the best value. We are committed to offering you products and services we are sure you will enjoy.

Effective with your next billing statement, pricing will be adjusted for:

  • Internet Service from $59.99 to $64.99.

If you are currently on a discounted rate, you will not realize an increase until the end of your promotional period.

The rate increase means Charter/Spectrum’s nationally available, entry-level broadband plan will now cost customers $64.99 a month. The company is also hiking rates on its Ultra tier (300Mbps in former Time Warner Cable Maxx markets, 100Mbps in most other markets) by $5 to $104.99.

Customers signed up to Spectrum’s base 60Mbps internet plan may be able to threaten their way to a lower price by contacting customer service and informing them you plan to switch to Earthlink, which is offering lower-speed plans as low as $29.99 a month for six months. Charter Spectrum has given many complaining customers a 12-month retention plan priced at $39.99 or $44.95 a month for 60Mbps.

Suddenlink Hiking Rates: Internet Up $3.50, Surcharges Now Exceed $13/Month

Suddenlink customers around the country are finding accessing the internet has suddenly gotten more expensive. For many service areas, the cable operator raised its rates in December for television and broadband service, with some of the biggest hikes coming from sneaky surcharges.

In many states, the most popular basic bundle already costs $90 a month. The biggest increases have come from “surcharges” which are never a part of Suddenlink’s advertised promotions, surprising many customers on their first bill.

In Arizona, the Broadcast TV surcharge has gone up another $1.61 a month, making customers pay $8.39 a month for a handful of local channels. A separate sports programming surcharge of $5.15 also applies. Suddenlink is also part of the club of cable operators charging customers $10 a month to rent a cable modem. For good measure, the cable operator also wants another dollar a month for its DVR and $3.50 more for broadband. Assorted other fees and surcharges tack on another $4.50 a month.

Suddenlink has already notified some regulators more price hikes are coming in the next several months.

But a Suddenlink spokesperson said there is more good news than bad.

“We provide Suddenlink customers with superior products and services at a great value, continually introducing faster internet speeds and with plans to roll out an enhanced video experience in the coming months,” Janet Meahan, spokeswoman for Suddenlink, told the Daily Miner in Kingman, Ariz. “Our pricing remains extremely competitive in the face of rapidly rising programming costs.”

Mehan also told the newspaper that Suddenlink introduced 1 gigabit internet service in Kingman in October, and provided “complimentary” speed upgrades for residential customers at no extra charge.

“They also had their artificial internet rate hike when they implemented data ‘allowances’ (caps),” retorted Ryan, a Suddenlink customer. “Their upgrades are anything but complimentary.”

Readers report they’ve had success calling Suddenlink and threatening to cancel service over the rate increases. Some report they’ve successfully negotiated their rates down to a level just a dollar or two higher than what they paid two years ago. Customers can also buy their way out of Suddenlink’s data caps by upgrading their service.

New subscribers and existing customers who elect to get an upgrade will automatically be enrolled in an unlimited plan at no extra charge the first year, pay an added $5 a month after 12 months, and an added $10 a month after 24 months. Customers currently subscribing to Suddenlink’s fastest local services may choose to retain their existing usage-based plans or upgrade to an unlimited plan.

Merry Christmas from Comcast: We’re Raising Your Rates (Again)

Phillip Dampier December 14, 2016 Comcast/Xfinity, Competition, Consumer News 2 Comments

Tis the season for rate increases. Fa-la-la-la-la, La-La-La-La.

Comcast is bringing itself some Christmas cheer this holiday season with more of your money going into its pocket as the cable giant announces nationwide rate hikes that will cost customers an average of 3.8 percent more in 2017. Comcast blames much of the increase on others.

“We continue to make investments in our network and technology to give customers more for their money—like faster internet service and more Wi-Fi hotspots, more video across viewing screens, better technology like X1 and a better customer experience,” Comcast said in a statement. “Unfortunately, the costs we are charged to carry popular networks continue to increase significantly, especially broadcast television and sports programming, which are the largest drivers of increases in price adjustments.”

Customers may not feel like they are getting more for their money with Comcast’s data caps and overlimit fees, which increasingly affect customers except in the northeast (for now). Cable TV customers will generally see a published rate increase of around $1 a month, which sounds like a pittance until you scrutinize the rate hike more closely.

Bill padding is where the real money will be made in 2017:

  • Broadcast TV Fee: Was around $5 in most markets, but Comcast intends to charge $2 more, bringing the fee to $7 a month;
  • Regional Sports Surcharge: Whether you watch sports channels or not, you will be expected to pay $2 more next year for those channels, with fees rising to $5 a month.

The absence of viable broadband competition in states like Maryland, bypassed by Verizon FiOS, means Comcast can raise broadband prices almost at will.

TV Predictions notes officials in Montgomery County, which includes the suburban Washington, D.C. cities of Bethesda and Rockville, have been notified of $5 a month rate hikes on broadband, taking some internet access pricing above $80 a month:

  • Internet Plus will increase from $77.95 a month to $82.95 a month;
  • Internet Pro Plus with Showtime will rise from $81.95 a month to $86.95 a month;
  • Internet Pro Plus With HBO will increase from $84.95 a month to $89.95 a month;
  • Premier XF Double Play package will increase from $182.95 a month to $187.99 a month, taking Comcast closer to the $200 cable bill.

Standalone internet pricing is now just as expensive as a deluxe cable television package, despite the fact it costs Comcast only a fraction of the amount it charges to provide the service:

  • Performance plan will rise from $69.95 to $74.95 a month;
  • Performance Pro plan will go from $79.95 a month to $84.95 a month;
  • Blast plan will rise from $82.95 a month to $87.95 a month.

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  • Sam: Hello, I'm Thomas Rutledge CEO Of Charter Cable. My Shareholders in NYC-NJ are on strike. I'm made a whopping $98.5 million dollars. My Union IBEW 3 S...
  • Anthony: Perfect timing with this video. On the day that Canada upholds net neutrality, we get a nice reminder of how horrible the outlook is for the Internet...
  • Tony: Time Warner/ Spectrum would shut off my service , kept billing me ,, I called to ask why and they said they wouldn't stop billing me the full monthly ...
  • John: CSPAN is paid for by cable and sat. operators, it's their organization, and they pay dues per customer....
  • Sandy: I have been with Dish Network entirely too long to keep going through this crap almost every 6 months. I'm not getting quality service like this. If I...
  • Chuck: Hello all we are going through the same type of problems. Ever since Frontier took over Verizon we've had to call every month to get bill changed. Has...
  • Roger: If I'm not mistaken, they don't pay for C-SPAN and may not pay for the religious and shopping channels. If they do, it is a nominal fee. In additi...
  • Limboaz: It's a shame that Google has thrown in the towel with their fiber network expansion, and it's also a shame that Telco's like Centurylink are just so p...
  • Thomas: What is even more amazing is how difficult ATT really is, they are a slow moving beast a snail leaving behind wreckage and a slimly trail. They give n...
  • Wendell: Take them religious channels off . and them Cspan channels off. Them stupid shopping channels off. And leave chiller on......
  • Pam: Okay enough is enough, both Hearst and Dish. You need to get this channel back on the air. I'm paying for a service and only getting 2/3's of my viewi...
  • reader50: Regarding Dish, I'm hoping they are planning to offer wireless internet. We need more competition for home internet, and Dish would need coverage ever...

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