Phillip “I Shop Online” Dampier

Last week, JCPenney launched their nationwide redemption tour, apologizing to millions of ex-customers that fled the former retail giant, begging them to come back.

It took over a year for JCPenney to get the message that “disciplining” and “re-educating” customers to accept the wisdom of everyday higher prices with few sales and almost no coupons was hardly the door-busting success “miracle worker” CEO Ron Johnson originally had in mind. The ex-Apple executive was rewarded a $52.7 million signing bonus to take over JCPenney’s tired leadership and in return he dragged sales down 28.4% from the year before, with same store sales down 32%. Johnson’s new vision also steamrolled one-third of JCPenney’s online business.

The day those results became known, he confidently showed Wall Street he did not dwell in the reality-based community: “I’m completely convinced that our transformation is on track!” (For Kohl’s benefit anyway.)

Johnson also believed in a “less is more” philosophy in human resources, overseeing layoffs of 13 percent of the company’s workforce last April, with another 350 let go in July.

Despite the fact his all-new, rebooted vision of JCPenney was about as popular as bird flu, he stayed, even as customers and employees didn’t.

It wasn’t that the company didn’t know customers had a problem with all this. Many complained about the radical, unwanted changes at JCPenney, particularly middle-aged professional women representing one of the stores’ most important business segments. Company executives simply didn’t listen.

A year later, some of the same analysts that cheered JCPenney’s crackdown on discounting now wonder if the company will survive 2013. Many fretted about the real possibility the last customer to brave the “new era” of JCP might forget to turn the lights out when they left for good. Others were mostly furious the board let Johnson go.

Despite the tragic consequences, the conventional wisdom on Wall Street remains: Alienating customers with a revamp nobody asked for and “everyday pricing” designed to boost profits every day was not the problem, how Johnson implemented the strategy was. He just didn’t educate customers enough.

We see the same warped thinking in the broadband marketplace, particularly with usage caps, consumption billing, junk fees and the general ever-increasing price of broadband itself.

On providers’ quarterly results conference calls, the regular questions challenging leaders of the industry are not about providers charging too much for too little. The real concern is that your ISP is leaving too much ripe fruit on the tree:

• Where is the revenue-boosting usage caps and consumption billing, Time Warner Cable?
• Comcast: can’t you raise prices further on those recent speed increases to maximize additional revenue?
• Verizon: why are you spending so much on fiber broadband upgrades customers love when that money could have gone back to shareholders?
• AT&T: Is there anything else you can do to exploit your market share and make even more money from costly data plans?

The best ways a consumer can reward a good broadband provider include remaining a loyal customer, paying your bill on time and upgrading to faster speeds as needed. For Wall Street, the growing demand for broadband is a sign there is plenty of wiggle room for at-will rate increases, new fees and surcharges, contract tricks and traps, customer service cuts, and monetizing usage wherever possible. After all, you probably won’t cancel because the other guy in town is doing the same thing.

This is what sets the broadband marketplace of today apart from most retailers: consumers don’t have 10-20 other choices to take their business to if they are fed up.

Comcast or AT&T? Both charge a lot and have usage limits on their broadband service for no good reason. Your other alternatives? A wireless provider charging even more with an even lower usage cap. Or you can always go without.

While providers may tell you there is a healthy, competitive broadband marketplace, Wall Street knows better. When Time Warner Cable recently announced it would dramatically curtail new customer promotions and concentrate on delivering fewer services for more money, nobody bothered asking whether this would result in a stampede to the competition. What competition?

Although Google is delivering much-needed, game-changing competition in a tiny handful of cities, most Americans will not benefit because the best upgrades and lowest prices are only available where Google threatens the status quo. A larger number of municipalities are done putting their broadband (and economic) future in the hands of the phone and cable company and are building their own digital infrastructure for the good of their communities.

For everyone else, we can dream that one day, someday, the cable and phone company most Americans do business with will be forced to run their own JCPenney-like apology tour for years of abusive pricing and mediocre “good enough for you” broadband with unwarranted usage limits. Time Warner Cable went half way, but until competition or oversight forces some dramatic changes, we should not count on providers to actually listen to what customers want. They don’t believe they need to listen to earn or keep your business.

Other stories of interest:

1. Time Warner Cable’s Broadband Pricing Game: Special Wall-Street-At-Home Edition
2. Craig “Data Cap” Moffett Leaves Sanford Bernstein Wall Street Firm to Start His Own
3. Wall Street Journal’s Distorted Views on Broadband Only See the Industry’s Point of View
4. Time Warner Cable Loses 15% of Their Analog Cable Customers; News on Broadband Caps, Pricing
5. Time Warner Cable Pulling Back Hard on Promotions: New Customers Will Pay More for Less

Where to put all the cash?

While you received a 2% cost of living salary hike that was eroded away by rising health insurance premiums this year, Comcast CEO Brian Roberts took $29.1 million in total compensation straight to the bank in 2012, walking home with $3.5 million more this year than last.

Most of Roberts’ compensation is tied to incentive pay that rises along with the value of Comcast stock. Roberts base salary remained flat at $2.8 million, but his non-equity incentive awards rose right along with the 61 percent increase in the value of Comcast stock over 2012. Comcast executive compensation was disclosed in a proxy statement last week.

Comcast stock is up another 11% so far in 2013, fueled by earnings increases from its broadband service and rate increases that have helped the company maintain revenue numbers despite basic video customer losses.

Other Comcast executives are sharing in the pay bonanza. Chief financial officer Michael Angelakis deposited $23.2 million in compensation during 2012, a six percent increase. NBC Universal CEO Steve Burke, now part of the Comcast family, saw his pay rise by 11% from $23.6 million to $26.3 million. Executive vice president David Cohen got a 5% salary boost to $15.9 million last year.

The head of the cable division — Neil Smit — did not do as well. He had to make do with only $18.3 million in 2012 — a 1% decline from his 2011 pay of $18.5 million. With that kind of salary, he might be just one step away from buying store brands, clipping coupons, and turning down the thermostat at night.

Other stories of interest:

1. Comcast Pay Bonanza – $31.1 Million for CEO Brian Roberts in 2010
2. Comcast CEO Cashes In: $11.6 Million Holiday Gift for Himself While Your Rates Increase
3. Time Warner Cable CEO Sees Pay Cut — Only Made $16.4 Million in 2011
4. Time Warner CEO Wins Contract Extension – $17 Million Compensation Package
5. AT&T CEO Rewarded $21 Million in 2012 While AT&T Ends Customer Rewards Program

AT&T continues its quest to make landline service a really bad deal with the introduction of a new bill-padding fee that wireless customers will not have to pay.

AT&T’s $1.99 “Tennessee Regulatory Inspection Fee” appeared on customer bills in March, much to the surprise of customers.

“My regular service is only 22 bucks,” Charles “Buck” Meyer told the Chattanooga Times Free Press. “If they add $2 to it, that’s almost a 10 percent increase. I’ve been on the fence about switching off my landline for some months, and this could be the thing that pushes me over the edge.”

AT&T says it is entitled to recoup the money it pays to the Tennessee Regulatory Authority. The $1.99 fee appearing on March bills is a “one-time” fee until AT&T figures out how much it plans to charge customers on an ongoing basis. Most companies subject to TRA fees build them into the monthly cost of the service. AT&T is the only phone company in the state to break the fee out on the bill and collect the money separately.

In 2009, when the company lobbied for widespread deregulation of phone bills in Tennessee, it claimed deregulation would not bring about increased rates.

Meyer does not see it that way. He considers AT&T’s new fee a stealth rate hike.

“Slip a little line item on there that’s just a couple bucks and is a one-time deal,” he told the newspaper. “Then pretty soon it’s on there every month.”

The new fee is permitted because of a 2009 change in Tennessee’s statutes that now allow companies to pass along regulatory fees on customer bills.

Companies like AT&T heavily lobbied for statewide deregulation of telephone bills that year, and spent $180,000 in campaign contributions to lawmakers, their political action committees or party organizations. AT&T hired at least 20 lobbyists to help push deregulation through the Tennessee legislature. Critics of the bill warned its passage would lead to rate increases, something AT&T denied at the time.

AT&T Tennessee president Geoff Morton told the Times Free Press back in 2009, “the company needs to compete with rivals and is not interested in raising rates.”

AT&T refused to say how much it will collect from the new fee, but Morton said the company is now lobbying for another law that would gut the fees AT&T pays to the TRA to oversee the quality of phone service in the state.

“In the previous administration, telecommunications inspection fees increased despite a dramatic decrease in telecommunications services regulated by the commission,” AT&T spokesman Bob Corney told the newspaper. “We are hopeful that legislation will pass this session to reduce the regulatory burden on landline telephone customers in Tennessee.”

WMC’s “Ask Andy” segment has some non-answers from AT&T about their new $1.99 “regulatory authority inspection fee.” When the Memphis consumer reporter called AT&T, the company said, “no comment.”(1 minute)

Other stories of interest:

1. AT&T Giving Nashville Customers Bill Shock – Hundreds of Dollars of Overcharging… Month After Month
2. AT&T Wins Total Rate Deregulation in Tennessee: Let the Rate Hikes Commence
3. Deregulation Savings? CenturyLink Wins Right to Raise Phone Rates in Arizona
4. AT&T, Colorado Lawmakers Target Landline Subsidy; Collateral Damage: CenturyLink, Public Broadband
5. Kansas’ Law Allowing AT&T to Deregulate Itself Means Higher Phone Bills Are Imminent

Dr. John Malone’s Liberty Media will buy a 27.3 percent interest in Charter Communications with a $2.62 billion investment in America’s fourth largest cable operator.

Liberty will buy the stake from investment firms Apollo Management, Crestview Partners, and Oaktree Capital Management.

“We are pleased with Charter’s market position and growth opportunities and believe that the company’s investments in its high-capacity digital network which provides digital HD and on demand television, high-speed data and voice, will benefit its customers and shareholders alike,” Malone said in a statement.

Malone is no stranger to the cable industry, having been at the helm of Tele-Communications, Inc. (TCI), the largest cable operator in the country in the 1980s and 1990s. TCI systems were sold to AT&T in 1999, which eventually spun them off to Comcast and Charter Communications, which still run them today.

Dr. John Malone

Since Malone’s exit at TCI, he has been in charge of Liberty Global, which owns cable systems overseas and controls several U.S. cable programming interests through his Liberty Media operation. The investment in Charter represents Malone’s return to an American cable industry he helped pioneer.

The agreement requires Liberty to acquire no more than 35 percent of Charter until January 2016, at which point Liberty’s maximum allowable controlling interest rises to 39.99 percent. Liberty also wins four seats on Charter’s board of directors. But many industry analysts predict Malone will not be satisfied with anything less than eventual full control.

Malone often takes an initial minority interest in the companies he later intends to acquire outright. Macquarie analyst Amy Yong told Reuters he employed a similar tactic to gain control of SiriusXM, the satellite radio company.

“He’s probably going to have a pretty big say in the company’s future over the next few years. This will accelerate capital returns and take advantage of Charter’s tax assets to consolidate the cable industry some more,” Yong said.

Malone is attracted to investment opportunities in companies with high marketplace leverage opportunities and exploiting potential revenue from captive customers in the rural, less-competitive markets Charter has traditionally favored.

Here today, gone tomorrow: Bresnan Communications that was Optimum is now Charter Cable.

Malone also has a strong philosophy towards marketplace consolidation, something ongoing in the cable industry, particularly among smaller cable operators serving less-populated areas.

Under the leadership of ex-Cablevision executive Thomas Rutledge, Charter Communications recently acquired the interests of Cablevision West — former Bresnan Cable systems in the mountain west. Malone sees considerable opportunities expanding operations in smaller communities that have either received substandard cable service, or none at all.

Malone has recently been stockpiling available cash for investments, spinning off his former cable programming properties Starz, a premium cable channel, Discovery Communications, which runs the Discovery Networks, and Liberty Interactive, which owns the lucrative home shopping channel QVC.

Charter Communications has had a difficult history. Microsoft co-founder Paul Allen bought a controlling interest in the cable operator in the late 1990s, primarily because he saw cable broadband as a natural fit for his vision of a future wired America. Allen’s weighty investment was used to jump into a cable industry consolidation frenzy still underway more than a decade ago. Cable operators claimed consolidation was necessary to increase efficiency by building up regional clusters of cable systems. Before consolidation, it was not unusual for two or three different cable operators to serve customers in separate parts of a metropolitan area. Often one operator would serve the city with one or two other cable companies offering service in suburban and exurban communities nearby.

In 1999 alone, under Allen’s leadership, Charter Cable acquired 10 cable companies.

By 2005, Charter Cable had amassed millions of new subscribers, but not as many as company executives claimed when they artificially inflated subscriber numbers to protect the value of the company’s stock. Four executives were indicted that year for criminal accounting fraud. By 2009, with $22 billion in debt, the company declared bankruptcy, eventually wiping out shareholders.

The court’s decision to forgive 40 percent of the company’s debt angered creditors but opened an opportunity for private equity firm Apollo Capital Management to gain control by ending up with the majority of shares in the restructured company.

For years, the company has continued to receive some of the worst customer satisfaction ratings in the industry, usually ranking at or near the bottom. But many Charter customers stay because there is little competition from other players, especially telephone companies. AT&T’s U-verse is the most likely triple-play competitor, but AT&T has avoided introducing U-verse in many of Charter’s service areas because they are deemed too small.

Malone sees Charter’s future revenue potential grow as a broadband provider, considered both a money-maker and must-have service. Analysts say that Charter is well-positioned to poach more customers from phone companies, which typically only offer slow DSL service in much of Charter’s rural footprint.

Gore: Malone is the Darth Vader of cable.

But customers may find with Malone’s involvement, that service may come at a price. Malone was criticized heavily in the 1980s and 1990s for leading the charge for customer rate increases. TCI’s captive customers in Tennessee found their cable bills increased between 71-116 percent in just three years during the 1980s.

Former Sen. Al Gore, Jr., at the time called Malone the head of a “Cable Cosa Nostra” and the Darth Vader of big cable. The cable executive was a frequent target of lawmakers flooded with constituent complaints about poor cable service and accelerating prices.

In 1999, The Guardian noted Malone was an admirer of telecom oligopolies:

He is scathing about regulatory attempts to prevent monopolies and mergers. Governments, he says, are “antediluvian” in their approach to the emerging new world economic order. Instead of trying to prevent mergers and collusion between media and communications companies, Malone says governments should actually promote the creation of “super-corporations” (such as his own) with enough capital to exploit the potential of new technology.

That attitude may soon be back in play with the cable industry’s increasing focus on expanding broadband service as their new primary revenue generator.

Other stories of interest:

1. Cable’s ‘Darth Vader’ is Back: John Malone’s Liberty Global Buys Virgin Media for $16.3 Billion
2. Cablevision West For Sale: Time Warner Cable, Charter, Suddenlink All Submit First-Round Bids
3. Charter Cable Sniffing Around Optimum West; Could Acquire Western Systems from Cablevision
4. Former Cable Czar John Malone Says Internet Video is Too Chaotic: It Needs to Be Controlled (By Them)
5. Charter Cable’s Los Angeles System Up for Bidding – Wisconsin/LA Cable Swap Falls Through

Bright House Networks first boosted Internet speeds in January and is now back with a price boost.

The cable provider’s Turbo High Speed Internet increased earlier this year from 20 to 30Mbps for downloads. Its Lightning tier went up even more — from 40 to 60Mbps. Even Business Class customers saw speed increases to 70Mbps. But now prices are up as well — as much as $5 a month more for “upgraded broadband services,” a higher cable modem rental fee, and $3 more for television packages:

• Standard Cable TV service is up $3, from $65 to $68 a month
• Late fees are increasing by an extra $0.50;
• The cable modem rental fee that used to be $2 a month has increased an additional $1.50 — now $3.50 per month.

Price increases will not affect customers on promotional offers or certain bundled service packages combining multiple services.

The fee that bugs many customers the most is the company’s modem rental fee, which applies regardless of the age of your equipment.

“I told the customer service rep that I’ve had this modem for a couple of years and it’s not like altered or improved,” Pete Dooley of Satellite Beach, Fla. told Florida Today. “She said ‘You know the economy is today. They just needed more money.’ I guess you’re just supposed to casually accept it.”

The rest of the rate increases were attributed to the cost of cable television programming.

Jeff Kagan, a cable industry analyst told the online news service cable television rates have roughly doubled over the last decade.

Other stories of interest:

1. Frontier Communications Boosts DSL Modem Rental Fee to $6.99 Per Month
2. Bright House/Time Warner Customers: Switch to Earthlink to Avoid Modem Rental Fee
3. ‘Tis The Season for Comcast Rate Hikes: Cable Modem Rental Increases to $5 Per Month
4. Frontier Gouges Customers With New, Mandatory Modem Fee (Even If You Own Your Own)
5. Chattanooga’s Can-Do Broadband: Faster Speeds, Lower Prices While Others Hike Rates

Esteves

Time Warner Cable is spending less to maintain and improve services for residential customers even as broadband usage grew 40-50 percent, redirecting spending on its business services division instead.

Irene Esteves, chief financial officer of Time Warner Cable, told attendees at Morgan Stanley’s Technology, Media & Telecom Conference that the growth in the company’s capital spending is associated with serving business, not residential customers.

Esteves reported that spending on residential services was actually down slightly in the last year. The business services division used its increased capital to wire 100,000 office buildings and provisioned 1,900 cell towers with backhaul service last year.

But despite decreasing costs, Time Warner Cable expects to continue increasing broadband prices, primarily because it can.

“What we have found is [...] as customers use it more, value it more, we can then price it more,” said Esteves. “And we think that’s a terrific dynamic for the market for quite a bit of time.”

Powering usage growth more than anything else is online video.

“If we look at peak volume, which is really what drives our capacity planning, 66% of that increase comes from streaming video,” notes Esteves. “Again, the more they use it, the more they love it, the more important we become to them as a service provider. So we’re continuing to watch that usage pattern and cheering them on.”

For traditional television viewing, Time Warner’s march to digital will also carry on, but it will happen slowly.

Time Warner Cable has chosen a gradual transition to IP video for cable television service. Subscribers can expect about a dozen channels per year to be removed from analog service until the cable system offers a completely digital television package. In Maine and New York City, that digital transition is already complete.

“We’re taking a more measured approach over a 5-year time period,” said Esteves. “We’re taking [away] analog channels in the 10 to 12 per year kind of measure, which is less disruptive to our customers and less capital-intensive.”

That kind of transition, coupled with annual rate increases, could potentially alienate customers, but Time Warner has retrained its retention specialists to assuage customers headed for the door.

“With the increasing promotional activity in the marketplace, we have more and more of our customers on promotion and it’s imperative that when the [promotion expires], we’re being very thoughtful about who rolls off to what, when,” said Esteves. “We’re training specialists to talk to customers, listen to them, find out the reasons for potentially leaving and recapturing those.”

But the industry is also under pressure from Wall Street to cut promotional activity and stop discounting service excessively, because it gets customers used to a lower price.

“If you think about the promotional prices in the marketplace, that really drives people to price shop and that just increases the transactions and the turmoil in the industry, which increases everyone’s cost and reduces everyone’s profitability,” Esteves said. “So the real conundrum for the entire industry is how do we each build on our retention rather than build on the promotional side in order to keep our customers and become more profitable.”

Other stories of interest:

1. Time Warner Cable CFO Wants to Introduce Usage-Based Pricing “The Right Way”
2. A Look Inside Time Warner Cable’s Quarterly Results and Forthcoming Plans
3. Time Warner Offers New Telecommuter Broadband Packages; Residential Service Still Cheaper
4. Time Warner Cable’s Rate Hikes Reach the Carolinas: Still $58/mo for Standalone Broadband
5. Analyzing Time Warner Cable’s Latest Quarterly Results: Broadband, Broadband, Broadband

Time Warner Cable subscribers in Wisconsin are facing the third rate increase since October 2012.

The cable operator has announced a $3/month rate hike for most television packages — a four percent increase for those with the popular digital variety package.

Time Warner blamed increasing programming costs in a notice attached to this month’s cable bills. The company defended the increase, stating the rate rise was half of what it could have been if the cable company tried to recoup all the programming costs incurred over the last year.

Customers facing higher cable bills and still paying regular prices should consider our advice on winning a lower rate from the company. With just 10 minutes, our readers are saving $20-50 a month on Time Warner Cable services with attractive customer retention deals.

In October, Time Warner announced it was introducing a cable modem rental fee of $3.95 a month. In November, the company raised rates on its converter boxes by $1.05 a month. The latest rate increase for cable television takes effect next month.

 Thanks to Stop the Cap! reader Nkundinshuti in Milwaukee for sending word.

Other stories of interest:

1. Time Warner Cable Raising Prices for Set Top Boxes to $10/Month in Wisconsin
2. Time Warner Raising Rates in the Carolinas: $90.49 for Digital Cable, $167.89 Triple Play
3. Time Warner Cable Hiking Rates: Basic Cable Up 8.2% – $72.50/Month in Southern California
4. Time Warner Cable Announces First of a Series of Rate Increases for 2012
5. Time Warner Cable Increasing Rates in South Carolina

Time Warner Cable customers in the Carolinas will soon pay $90.49 a month for digital cable television, including one set-top cable box. Customers who buy broadband, television, and phone service will see their monthly bill rise to $167.89.

The rate increases will not initially apply to customers on term contracts or promotional pricing until those terms expire. Others will begin to pay higher rates in March.

Almost 70 percent of Time Warner Cable’s eastern North Carolina subscribers have digital cable TV. The rate increase for television-only service amounts to an extra $5 a month or $60 a year. Triple play customers will also pay an extra $5 a month.

Time Warner’s last rate hike, not including the introduction of a $3.95/month cable modem rental fee last fall, was in late 2011.

Although Time Warner claimed increased programming costs were responsible for the bulk of the rate increases, the cable company keeps adding more channels. In 2012, Time Warner added NFL Network and NFL RedZone, both costly sports networks. In the last few months, Time Warner added an additional 30 channels to the cable lineup in the Carolinas, including a number of new HD channels and barely watched networks including Retirement Living Television and Magic Johnson’s Aspire TV.

A rate change notice mailed to customers in the Carolinas will include exact pricing changes applicable in different communities, but customers in Fayetteville and surrounding parts of the eastern Carolinas will see these changes starting in March:

• Broadcast cable: From $16.19 to $17.99
• Cable programming tier: From $53.30 to $54.50
• Basic cable: From $69.49 to $72.49
• Digital tier: From $10.68 to $9.01
• Basic cable, when bundled with standard Internet and/or home phone unlimited nationwide: From $68.99 to $71.99
• Digital cable includes basic cable, digital tier, digital equipment and Navigator interactive guide: From $85.49 to $90.49
• Digital cable when bundled with standard Internet and/or home phone unlimited nationwide: $82.49 to $85.49
• Basic cable, standard Internet and home phone unlimited nationwide: From $162.89 to $167.89
• Cable card: From $2 to $2.50
• Digital equipment primary outlet: From $6.82 to $8.99
• Navigator interactive guide: Not applicable to $2.17

Customers affected should consider reviewing our tips on how to fight for a better deal from Time Warner.

Other stories of interest:

1. Time Warner Cable’s Rate Hikes Reach the Carolinas: Still $58/mo for Standalone Broadband
2. Time Warner Cable Begins Digital Cable Conversion in Upstate New York
3. Time Warner Cable Hiking Rates: Basic Cable Up 8.2% – $72.50/Month in Southern California
4. Time Warner Cable Increasing Rates in South Carolina
5. Time Warner Raising Rates on CNY Customers; Newest Set-Tops Boxes Come With Service Fee

Another ISP Limbo Dance. How low can they go?

Telus, western Canada’s largest phone company, has announced it is slashing usage allowances as much as half and raising prices up to $8 a month on broadband packages, eight months after last summer’s $3 rate hike.

A sample:

• Internet 6 was $37, now $45. Usage cap reduced to 100GB, was 150GB.
• Internet 15 was $42, now $50. Usage cap reduced to 150GB, was 250GB.
• Internet 25 was $52 now $60. Usage cap reduced to 250GB, was 500GB.
• Internet 50 was $75 now $80.

A Telus spokesperson explained the reasons for the rate increases and allowance slashing:

It is only fair for customers to pay for the amount of bandwidth they use and be on a plan that realistically reflects their usage patterns; otherwise, moderate users end up subsidizing heavy users. Even with the change TELUS has some of the most generous usage caps in comparison to many other ISP’s. Most customers use only a fraction of the allotted threshold. Usage limits are put into place so that the small percentage of high usage customers to not impact the internet experience for other users on the network. We currently do not charge for over usage, but the thresholds allow us to ensure that customers are on an appropriate plan for them.

The rate increase is in response to rising costs in providing and maintaining the network. Since 2000, TELUS has invested more than $30 billion in infrastructure across Canada to provide our customers with some of the best communications technology anywhere in the world. These increases affect all clients, from TELUS employees to brand new sign-ups. All the pricing has been adjusted to the higher rate. In terms of price and quality TELUS Internet is very competitive versus our competitors. In most cases, TELUS services will still be less expensive than similar offerings from our competitors.

Most existing clients have already had the benefit of a promotion on sign-up. As with all promotions, including the current new client promotions, they run for a limited time and the discounts they offer expire. We do have loyalty programs in place for existing loyal clients and we do offer existing clients the new promotions in cases where they may not have received anything when they signed up.

Customers are outraged about the changes, particularly because Telus has been raising prices twice a year since 2011. The new rate plans are now comparable to Telus’ largest competitor, Shaw Cable.

Telus has not traditionally enforced usage cap violations on their network, nor have they imposed overlimit fees. But a customer service representative said “Telus can suspend allowance violators for 30 days for repeated violations.”

In North America, virtually every major ISP has watched bandwidth costs decline as connectivity continues to get cheaper. But that does not stop some providers from raising prices and slashing usage limits on a service most Canadians find they cannot live without.

Other stories of interest:

1. Telus Raises Usage Allowances and Speeds; Anti-Usage Billing Movement Scores Victory
2. Canada’s Usage Based Billing Raises Prices for Consumer Broadband to New Highs
3. Western Canada’s Internet Overcharging Two-Step: Shaw and Telus Plan to Gouge You
4. Comcast Raising Prices… Again, But Their Usage Cap Remains Firmly In Place; 3.5 Percent Increase For Many
5. Silver and Gold: Wringing Customers Dry With Bell Holiday Rate Hikes & Higher Penalties

Rogers Communications customers have a New Year’s surprise arriving in their mailboxes as eastern Canada’s largest cable company announces it is boosting rates effective Jan 24.

Many Rogers broadband customers will be paying an additional $3 a month for usage-capped service. Some of the steepest rate increases are reserved for budget-minded customers who only want the basics.

Those subscribed to Phone Essentials, Cable Digital Plus and Internet Lite face a 6.7 percent rate hike, which translates into $8 a month or $96 a year. One thing not increasing is Rogers’ usage allowances.

Rogers Rates Up, Up, and Away

• Phone Essentials up 7.0%
• Phone Favorites up 5.2%
• Phone Deluxe up 4.6%

• Cable Basic up 2.9%
• Cable Digital Plus up 5.7%
• Cable VIP up 2.9%

• Internet Lite up 7.8%
• Internet Express up 6.1%
• Internet Extreme up 4.8%
• Internet Extreme Plus up 4.2%

Rogers Communications isn’t exactly hurting. Their profits have been accelerating every quarter over the last year:

• Q4 2011: $327 million profit
• Q1 2012: $356 million profit
• Q2 2012: $400 million profit
• Q3 2012: $466 million profit

Image courtesy: Rick

Rogers’ customer Sunfox, who lives in Markham, Ont., and provided the breakdown, is purely tongue-in-cheek about Rogers’ quest for more of their customers’ money.

“I mean clearly something had to be done,” he writes on Broadband Reports’ Rogers Forum. “Any reasonable person can see that $1.5 billion profit in 12 months isn’t anywhere near enough, so it was time to significantly increase rates for their customers.”

Customers who want out can follow these instructions provided by Rogers:

Affected customers who wish to respond to the rate increase notice may call us at 1 888 ROGERS 1 (764-3771).

Residents of New Brunswick who do not wish to accept any applicable rate increase may choose to cancel the service(s) affected by the rate increase(s). Any applicable early cancellation fee, device savings recovery fee or service deactivation fee will apply.

Residents of Newfoundland and Labrador and Québec who do not wish to accept any applicable rate increase may choose to cancel the service(s) affected by the rate increase(s) without any early cancellation fee by sending us a notice to that effect no later than 30 days after the rate increase(s) take effect, as indicated in the rate increase notice.

Residents of Ontario who do not wish to accept any applicable rate increase may choose to cancel the service(s) affected by the rate increase(s) without any early cancellation fee, device savings recovery fee or service deactivation fee, as applicable, by sending us a notice to that effect no later than 30 days after receiving the rate increase notice.

Other stories of interest:

1. Rogers Doubles Maximum Overlimit Usage Fee from $50 to $100 to “Protect Customers”
2. Rogers Hiking Prices on Broadband by $2/Month; Blames Service “Enhancements”
3. Happy New Year Rate Increase from Time Warner Cable: The $49.99 Service Call is Here
4. Rogers Communications Set to Layoff 300 Workers
5. Rogers Increases Speeds, But Annoying Usage Caps Remain the Same