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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 5 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.

Welcome to 2015; Another Year Fighting for a Square Deal for Essential Broadband Service

Phillip Dampier January 5, 2015 Editorial & Site News No Comments
Phillip Dampier

Phillip Dampier

Welcome to 2015!

This is the seventh year Stop the Cap! has fought for better broadband across North America and beyond. Whether your provider is Comcast, Time Warner Cable, Rogers, Bell, AT&T, Verizon or a (dwindling) number of other cable and telephone companies, there is plenty of room for improvement.

When we began in the summer of 2008, Frontier Communications was contemplating a usage cap of just 5GB a month on their broadband service. A year later Time Warner Cable market tested caps as high as 40GB a month. For almost as long as we’ve existed, Comcast has believed 250GB a month was all most customers ever needed. Rogers’ most popular Internet package today offers 60GB a month, despite the fact Canadians on average watch more online video than anyone else. AT&T thinks 150GB a month is fine for DSL and 250GB is all you’d need as a U-verse customer. Verizon doesn’t see a need for limits on either its DSL or fiber optic networks. Neither does Cablevision.

Usage caps and so-called “usage-based billing” continue to be one of the most under-reported stories in the tech press. Touted as “fair pricing,” these plans are in fact little more than profit-padding for a service that already earns companies as much as 90% gross margin. There is nothing fair about usage-based billing in North America. Customers face the same prices they have always paid for unlimited service, but now endure an arbitrary usage allowance that usually includes a stiff overlimit fee. Those providers charging usage pricing do not offer the fastest service, have not made significant improvements above and beyond other providers that still charge flat rate prices, and frequently also charge excessive modem rental fees.

The duopoly most Americans have for broadband service has become quite fat and happy collecting ever-increasing amounts of money for service that only seems to improve after an upstart competitor like Google arrives ready to offer better service at a lower price. Customers in Kansas City, Austin, and a handful of other communities are getting the best upgrades and are empowered to negotiate a lower price for service. The rest of the country is not so lucky. A handful of often-under capitalized fiber competitors have arrived in some areas, but their market share generally remains a fraction of what the cable and phone companies have locked up.

We have always believed broadband was destined to become the next must-have utility service, following clean water, electricity, gas and some form of telephone service. Unfortunately, Washington policymakers continue to treat Internet access as an optional extra, allowing one or two companies to dominate access in most communities. Policymakers and regulators have done very little to protect consumers from the effects of marketplace concentration, allowing cable and phone companies to merge and raise prices, remain uncommitted to protecting the Open Internet with strong Net Neutrality protections, and not taking the effects of usage caps seriously.

One of the most effective ways a community can combat bad service and high prices is to support launching its own public broadband network. Throughout the United States, local town and counties enduring “good enough for you” broadband (or no service at all) are constructing their own fiber optic networks to better meet the realities of the 21st century digital economy. They face industry-funded opposition in at least 20 states where lawmakers have banned or severely curtailed these networks to protect private telecom giants from the effects of serious competition.

In 2015, Stop the Cap! will continue to fight for consumers looking for a better deal:

  • We continue to oppose industry consolidation. Mergers and buyouts benefit executives and shareholders. They almost never benefit customers who soon find rate increases, fewer choices, and often worse service as a result. Connecticut residents know that first hand enduring Frontier Communications’ recent bungled transition from AT&T service. Customers that dislike Time Warner Cable will likely loathe Comcast if that merger wins regulator approval. AT&T’s buyout of DirecTV leaves one less competitive choice for customers living in AT&T’s service areas looking for an alternative to U-verse television. Imagine if the government had approved AT&T’s attempted buyout of T-Mobile, the one wireless carrier now willing to throw a monkey-wrench into the current dominance of almost-identical expensive wireless service plans from AT&T and Verizon.
  • Usage caps and consumption billing remain unjustified, particularly for wired broadband. Despite industry claims that usage caps and usage billing stimulate investment, in most cases the costs of delivering broadband service and the amounts companies invest in network upgrades continue their relentless decline on a per customer basis. Usage billing is no prescription for congestion problems either. Most congestion problems occur during peak usage levels — when light and heavy users alike are most likely to be online. A truly fair usage pricing scheme would charge a fair price for actual usage and nothing else. But such a pricing scheme would likely cut broadband bills and profits. So providers offer pre-determined compulsory usage allowances at current prices instead, and do not offer a flat rate option or rollover unused usage to a future month. As a result, customers often pay more for less service and constantly have to check their usage to make sure they do not get an unexpected surprise on their bill.
  • Strong Net Neutrality protection is the best guarantee of preserving the Internet as it exists today – where success or failure of an online venture is based on what it offers customers, not on the size of its bank account. A nationwide end to laws restricting the development and expansion of community broadband is also essential to give communities self-determination of their broadband future.
  • We will continue to educate consumers on how to negotiate a better deal with your provider and avoid expensive surcharges like modem rental fees. We will also continue to enlighten you about the pervasive influence of Big Telecom money on non-profits, state and federal governments, and researchers that support the various agendas of some of the largest telecom corporations in the country.

Broadband is improving at an incredible pace around the world, but back home prices continue to rise while Internet speed improvements are often met by usage cap road bumps. Internet affordability remains as much of a problem as rural broadband access. The more you know, the more effective you can argue for a change in telecom policies, where the public interest is better-balanced against corporate profits and duopoly prices.

Thank you for being a part of our efforts to make things better.

Time Warner Cable: Deck the Halls with $8 Modem Fees, Fa La La La La, La La La La ($2.75 DTA Fee, Too!)

Phillip Dampier December 22, 2014 Consumer News, Time Warner Cable 6 Comments

grinch3It’s a Merry Christmas from Time Warner Cable, with rate increases for one and all!

The cable company that usually waits for the holiday season to end before sending out annual “rate adjustment” notices got an early start this year with some dramatic price changes for many customers, with further rate hikes likely to follow later in 2015.

Taking a lead from Comcast, Time Warner Cable is hiking its broadband modem lease fee from $6 a month to $8 a month in January. That equals $96 a year for a modem that not too long ago used to be included at no extra charge as part of your broadband subscription. A typical customer with a Motorola SB6141 DOCSIS 3 cable modem can buy a brand new unit for nearly $20 less than what Time Warner will collect from customers each year for refurbished or used equipment… forever.

In 2013, Time Warner Cable’s Rob Marcus admitted the company does not charge modem rental fees to defray the cost of the equipment, but as a hidden rate increase designed to generate more revenue.

“The modem fee is a rate increase by all accounts, it takes a different form than usual […] it’s very much a part of the overall revenue generation program,” Marcus told an audience of investment banks.

Customers that lost analog channels after Time Warner Cable began converting part of its lineup to digital-only service were offered free Digital Adapters to continue receiving digital cable channels on older analog sets. Customers were expecting a promised $0.99 monthly lease fee for the devices starting January 1, 2015. Instead customers will now pay $2.75 a month for each DTA device, estimated to cost cable companies less than $50 each three years ago.

But the charges don’t end there.

  • timewarner twcThe Broadcast TV Surcharge for cable television subscribers will increase from $2.25 to $2.75 a month;
  • A new “Sports Programming Surcharge” of $2.75 a month now applies to all cable television customers, whether they watch sports channels or not;
  • That on-screen program guide does not come for free. The primary outlet “discounted guide” surcharge is rising from $2.77 to $3.27 a month;
  • HBO will increase from $14.99 to $16.99 a month; the Movie Pass package of Encore movie channels and certain other networks is rising $2 a month, from $5.99 to $7.99.

Part of the sales pitch Time Warner makes to justify rate increases is that broadband speeds have increased up to 100Mbps. Except they haven’t in many Time Warner Cable markets, which remain locked in with maximum speeds of 50/5Mbps for the indefinite future.

Thanks to Stop the Cap! reader Joseph for sharing Time Warner’s letter with us.

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  • Stacy: I am cancelling my service with Suddenlink due to the data cap. I am willing to accept the sacrifice of lower internet speeds to ensure none of my har...
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