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Another Comcast Customer Service Catastrophe: $182 in Surprise Charges for a Service Call

The Don't Care Bears

The Don’t Care Bears

While regulators contemplate forcing 11 million Time Warner Cable customers to endure the hell on earth that is Comcast customer service, another horror story emerged this week from a California man who faced $181.94 more on his cable bill than he expected, all because of a service call to check on an Internet service problem that turned out to be Comcast’s fault.

While Time Warner Cable customers usually get an American customer call center to handle these problems, Comcast relies on English-challenged, underpaid offshore customer care dens staffed by “screen readers” that refuse to go off-script to handle the problems of Comcast customers like Tim Davis.

Before digging into the specifics of Davis’ $182 debacle, The Consumerist noted a critical admission from the Comcast call center agent – a word to the wise about getting your complaints about Comcast’s billing errors and inaccurate charges addressed: If you don’t record all of your calls with Comcast customer service to keep a complete audible record of their promises and commitments, you have absolutely no recourse to get invalid charges and other billing mistakes removed from your bill.

“[…]Since I advised my manager that there is a recording and you were misinformed, then she’s the one who can approve that $82,” said Comcast’s customer service representative.

Seemingly flabbergasted, Davis asks to confirm, “You’re telling me that if I didn’t have a recording of that call, you wouldn’t have been able to do it?”

“Yes, that is correct,” answers the rep, confirming that the only way to get Comcast to erase a bogus charge from your account is to have recorded evidence that you were promised in advance that the call would be free.

Davis decided to turn his Comcast nightmare into a NSFW YouTube video.

http://www.phillipdampier.com/video/Comcast Doesnt Do Service Credits Without a Recording Saying Otherwise 8-11-14.mp4

‘You want a service credit? Who the heck do you think you’re talking to. This is Vasee – Employee 5#$ at Comcast’s English-challenged offshore customer call center. We don’t do service credits. Oh wait, you have a recording?’ (Only Comcast would put $$$-signs in the ID numbers of their employees.) (Warning: Strong Language) (13:56)

Although initially promised there would be no charge for the service call because it was an “outside issue,” when Davis’ monthly Comcast bill arrived, there were several mystery charges totaling $181.94 for service call work that Davis said was never done.

fail

The charges represent a “failed video self-install kit,” a “failed Internet self-install kit,” and a wireless network set up charge for work Davis claims was neither sought or provided. Comcast automatically credited back the Wi-Fi setup fee and a portion of the other charges, still leaving Davis with $82 in fees to argue about for a “free service call.”

The representative insisted that Comcast charges $50 for every service call for any reason. That will be unpleasant news to Time Warner Cable customers who pay no fees for service calls that address technical issues that are not the fault of customers.

The Consumerist details the rest of the painful experience:

After being put on hold for an hour, Davis hung up and tried again, this time reaching a supposed “supervisor,” who points out that the $49.95 WiFi setup charge is offset by a $49.95 “service discount,” so that’s free… even though it shouldn’t have been charged to begin with.

She also says there is a $49.99 discount on the supposed “Failed Self Install,” meaning Davis is being charged $50 for the nonexistent failed install, plus the remaining $32 for the failed self-install kit charge. A total of $82 that is still being disputed at this point.

She then offers to give him “BLAST+” Internet service for 12 months free of charge instead of simply taking off the remainder of the questionable charges. This semi-upgrade only has a retail value of $60, meaning he’d still be on the hook for $22 for a call that he’d been told would be free.

Davis, understandably, doesn’t want a cheap Internet service upgrade spread out over 12 months. He wants and asks to have the full $82 refunded.

The rep balks, saying she can’t issue him the credit because it is a “valid charge.”

“Every time we send out a technician there’s a $50 charge for that,” she explains.

“Well, I have a call recorded where the agent tells me in no uncertain terms that there will be no charge,” counters Davis. “You can not bill me for something that I did not authorize. You can not tell me that it’s free, then bill me anyway and then tell me that you can not un-bill me or credit me for the bill.”

“I apologize for that, but there’s no way that I can credit the account,” says the rep, desperately trying to jump back on to her script. “We value you as a customer, that’s why I am trying to check what I can give you.”

As soon as Davis produced the recording that indicated there would be no charge, a senior supervisor quickly approved a credit — several calls and hours later.

Stop the Cap!’s Letter to N.Y. Public Service Commission on Comcast/TWC Merger Deal

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August 6, 2014

Hon. Kathleen H. Burgess
Secretary, Public Service Commission
Three Empire State Plaza
Albany, NY 12223-1350

Dear Ms. Burgess,

The country is watching New York to learn if our state regulators believe a merger between two unpopular cable operators is in the best interest of New York residents.

For the first time in a long time, the Public Service Commission has been empowered to provide much needed oversight over two companies that have enjoyed both deregulation and a near-monopoly across the region, particularly for High Speed Internet service at speeds above 10Mbps.

New Yorkers, like the rest of the country, consistently rank both Comcast and Time Warner Cable as some of the worst companies around.[1] The PSC has the power to facilitate franchise transfers that would effectively combine the two into one giant monolithic cable company dominating the northeastern U.S., or it can reject the proposed assignment of franchises to Comcast, letting both companies know “in the public interest” means something in New York State.

Section 222 of the New York Public Service law[2] provides the PSC with the authority to reject the application for a transfer of a franchise, any transfer of control of a franchise or certificate of confirmation, or of facilities constituting a significant part of any cable television system unless, and I paraphrase, the transfer is in the public interest.

The Commission is on record partly articulating its standard for determining the public interest. In 2013, the Commission stated several principles it considered in the matter of the acquisition of Central Hudson Gas and Electric by Fortis, Inc., to determine if the transaction would provide customers positive net benefits.[3] The Petitioners in that case were held to a standard requiring them to demonstrate the expected intrinsic benefits of the transaction exceeded its detriments and risks.

However, there are considerable differences between energy utilities and the largely deregulated marketplace for multichannel video distributors and broadband providers. While legacy telephone regulations still provide for significant oversight of this vital service, cable operators have won the right to set their own rates, service policies, and broad service areas.

Although many of us believe broadband has become an essential utility service, federal regulators do not, especially after telephone and cable companies have successfully lobbied on the federal level to weaken or eliminate regulation and oversight of television and broadband service with arguments they do business in a fiercely competitive marketplace.[4]

Regulators cannot compel cable operators to provide service in communities where they have chosen not to seek a franchise agreement, and broadband expansion programs in rural, unserved areas have largely only been successful when communities elect to construct their own broadband networks or federal funds (tax dollars and subsidies funded by ratepayers) defray the expense of last-mile networks.  While it is enticing to seek a voluntary agreement from the applicant to expand its rural service area, the public interest benefit to the relatively small number of New Yorkers getting broadband for the first time must be weighed against the interests of millions of existing subscribers in New York who are likely to see further rate increases, usage-limited broadband service, and worse service from Comcast.

New Yorkers will remain captive in most areas to choosing between one telephone and one cable company for packages of phone, television, and Internet access.[5] Promises of competition have never materialized for vast numbers of state residents, particularly those upstate who have been left behind after Verizon ceased its FiOS fiber to the home expansion project.

Unless Comcast was compelled to wire the entire state, any proposal seeking a voluntary agreement to expand Comcast’s service area in New York is likely to be insufficient to solve the pervasive problem of rural broadband availability. It would also saddle millions of New Yorkers with a company unwelcomed by consumers, with no alternative choice.

As you will see in our filing, Comcast has often promised improvements it planned to offer anyway, but held back to offer as a “concession” to regulators.

The result of past deals is one monopolistic cable operator is replaced by another, and as the American Consumer Satisfaction Index reported, bigger is not better for consumers.[6]

The nation’s two largest cable operators, Comcast and Time Warner Cable, now seek further “value creation” for their already very profitable businesses by merging.[7]

News reports indicate further consolidation is likely in the telecommunications marketplace, largely in response to this merger proposal. Soon after Comcast made its announcement, AT&T announced its desire to acquire DirecTV,[8] and Charter Communications’ efforts to bolster its size are likely to be realized acquiring Time Warner Cable customers cast off as part of the Comcast-Time Warner Cable transaction.[9]

How does this benefit New Yorkers? In our attached statement, we go far beyond the testimony offered by Comcast’s representative at the public information meeting we attended in Buffalo. It is vital for any merger review to include a careful analysis of exactly what Comcast is proposing to offer New York. But it is even more important to consider the costs of these improvements. As you will see, many of the promised upgrades come at a steep price – set top box platforms that require a $99 installation fee, the prospect faster broadband speeds will be tempered by broadband usage limits and usage penalties largely unfamiliar to New Yorkers, and other technology upgrades that are accompanied by subscriber inconvenience and added costs.

Comcast’s promised commitments for customers must also be carefully weighed against what it promised shareholders. While Comcast claims it will spend millions to upgrade acquired Time Warner Cable systems (many already being upgraded by Time Warner Cable itself), the merger announcement includes unprecedented bonus and golden parachute packages for the outgoing executives at Time Warner Cable, including a $78 million bonus for Time Warner Cable CEO Rob Marcus, announced less than 60 days after taking the helm.[10] Comcast’s biggest investment of all will be on behalf of its shareholders, who will benefit from an estimated $17 billion share repurchase plan.[11]

The PSC should be aware that previous efforts to mitigate the bad behavior of cable companies have nearly always failed to protect consumers.

Professor John E. Kwoka, Jr., in his study, “Does Merger Control Work? A Retrospective on U.S. Enforcement Actions and Merger Outcomes,[12]” found past attempts at behavioral remedies spectacularly failed to protect against rapacious rate increases after  mergers are approved.[13]

In short, it is our contention that this merger proposal offers few, if any benefits to New York residents and is not in the public interest even if modestly modified by regulators.

The implications of this transaction are enormous and will directly impact the lives of most New Yorkers, particularly for broadband, now deemed by the industry (and consumers) its most important product.[14]

We have attached a more detailed analysis of our objections to this proposal and we urge the New York Public Service Commission to recognize this transaction does not come close to meeting the public interest test and must therefore be rejected.

 

Yours very truly,

 

Phillip M. Dampier

[1]http://arstechnica.com/business/2014/05/comcast-time-warner-cable-still-have-the-angriest-customers-survey-finds/
[2]http://codes.lp.findlaw.com/nycode/PBS/11/222
[3]http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={A55ECCE9-C3B2-4076-A934-4F65AA7E79D1}
[4]http://www.mi-natoa.org/pdfs/The_Ten_Disappointments_of_Cable.pdf
[5]http://www.newyorker.com/news/daily-comment/we-need-real-competition-not-a-cable-internet-monopoly
[6]http://www.theacsi.org/component/content/article/30-commentary-category/179-acsi-quarterly-commentaries-q1-2008
[7]http://corporate.comcast.com/images/Transaction-Fact-Sheet-2-13-14.pdf
[8]http://www.usatoday.com/story/money/business/2014/05/13/att-directv-deal-analysis/9044491/
[9]http://www.reuters.com/article/2014/04/28/us-charter-communi-comcast-idUSBREA3R0N620140428
[10]http://money.cnn.com/2014/03/21/news/companies/time-warner-cable-golden-parachute/
[11]http://www.cleveland.com/business/index.ssf/2014/02/comcast_agrees_to_purchase_of.html
[12]John E. Kwoka, Jr., “Does Merger Control Work? A Retrospective on U.S. Enforcement Actions and
Merger Outcomes,” 78 Antitrust L.J 619 (2013)
[13]7 John E. Kwoka, Jr. and Diana L. Moss, “Behavioral Merger Remedies: Evaluation and Implications for
Antitrust Enforcement,” at 22, available at
http://antitrustinstitute.org/sites/default/files/AAI_wp_behavioral%20remedies_final.pdf
[14]http://online.wsj.com/news/articles/SB10001424052702303657404576359671078105148

Stop the Cap’s Formal Written Submission Opposing Comcast-Time Warner Merger Filed With N.Y. PSC

(Ed. Note: Our formal written submission to the New York Public Service Commission is presented in this series of articles. Please note that any graphics included on Stopthecap.com were not included in the formal filing, but are presented here to make the material more reader-friendly. — PMD)

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STATE OF NEW YORK

PUBLIC SERVICE COMMISSION


Joint Petition of Time Warner Cable Inc. and

Comcast Corporation For Approval of a                                       Case 14-M-0183

Holding Company Level Transfer of Control.


 

 

Statement of Opposition to Joint Petition
Phillip M. Dampier, Director and Founder: Stop the Cap!
Rochester, New York
August 1, 2014

Stop the Cap! is a not-for-profit group founded in Rochester in 2008 to fight against the introduction of artificial limits on broadband usage (usage caps, consumption billing, speed throttling) and for better broadband speeds and service for consumers. Our group does not solicit or accept funding from lobbyists, companies, or others affiliated with the telecommunications industry. We are entirely supported by individual donors who share our views.

telecompromising

Regulators cannot outsmart multi-billion dollar corporate giants with temporary merger mitigation strategies that end up not helping consumers for very long, if it all.

Introduction

Our opposition to the Joint Petition is based on our belief it does not meet the “public interest”  test established in Section 222 of the New York Public Service law, and must therefore be denied.

We are concerned the Commission may attempt a mitigation of Comcast’s failure to demonstrate a public interest benefit for New York residents in its application. The Commission may even attempt to negotiate a monetary public benefit adjustment to afford Comcast the opportunity to pay its way to approval of a merger the overwhelming majority of New Yorkers who have shared their views with the Commission ardently oppose. We submit that the recent change in New York law obligates the applicant alone to demonstrate its proposal is in the public interest. It is not the Commission’s responsibility to propose mitigation formulas that tip the balance in favor of an applicant.

Also lacking in the discussion is a careful analysis and comparison of Time Warner Cable’s existing products and services in contrast with Comcast and, more importantly, the impact of its own upgrade program now underway. It is our contention New York will be better served by retaining Time Warner Cable as the dominant cable provider and rejecting Comcast’s attempt to transfer Time Warner’s franchise agreements to itself. We are not opposed to Comcast independently entering New York and competing head-to-head with Time Warner Cable, although we believe it is unlikely.

Ultimately, we believe Comcast’s executive vice-president David Cohen made one of the strongest arguments why this merger simply does not make sense for New York:

“We are certainly not promising that customer bills will go down or increase less rapidly.”[1]

[1]http://arstechnica.com/tech-policy/2014/02/comcast-no-promise-that-prices-will-go-down-or-even-increase-less-rapidly/

Comcast’s “Improvements,” Including Digital TV, Come at a High Cost for Customers

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Comcast has offered the Commission a vague preview of how it intends to improve cable television service for New York customers, but rarely discloses important details about the costs and limitations their “improvements” will bring.

comcast octupusWhile Comcast is excited about the proposition of transitioning Time Warner Cable customers away from the current mixed analog-digital platform to an all-digital lineup, Time Warner Cable customers have paid less and avoided costly, unwanted extra equipment as a result of the choices consciously made by Time Warner Cable.

Comcast and Time Warner Cable have different philosophies about how to best deliver the bulging cable television packages most cable systems now offer:

  • Time Warner Cable adopted “Switched Digital Video” from BigBand Networks, a technology that lets Time Warner deliver only the digital signals that are being watched in a service group or node, instead of the entire lineup.[1] Since it is unlikely subscribers are watching every niche channel on offer, Time Warner has been able to reclaim unused bandwidth. As a result, customers using older cable-ready televisions can continue to access analog television channels without the use of a costly, often unwanted set top box.
  • Comcast has more aggressively chosen a  path to all-digital television service, moving most of their television channels to encrypted digital technology that requires a Comcast set top box, a less costly Digital Transport Adapter (DTA) designed for secondary-use televisions, or a CableCARD. Customers must choose one of these technologies, usually at an added-cost to access their cable television service.[2]

Time Warner Cable also began deploying DTA equipment in certain areas to free up additional bandwidth on its cable systems while still leaving most analog channels intact. The DTA boxes are supplied free of charge during an introductory phase lasting up to a year, after which a $0.99 monthly charge for each box is imposed.[3] (That fee has recently been raised in certain markets, including New York City, to $1.50/mo.[4] [5])

In contrast, Comcast customers were initially entitled to receive up to three no-cost DTAs to install on televisions not equipped with a Comcast set top box.[6]

comcast-cisco-dtaOn January 1, 2013 Comcast began informing subscribers a new $1.99/month “additional outlet service charge,” now applied for each DTA installed. [7]

Public officials in Eagan, Minn., responding to consumer complaints about the new charge, suspected Comcast was attempting an end run around the Federal Communications Commission’s prohibition of “excessive fees for cable equipment.”[8] The additional outlet fee was deemed by Comcast to be a service fee, not an equipment charge.[9]

Attorney Mike Bradley was hired by a group of suburban Minneapolis cable commissions to investigate the legitimacy of Comcast’s new DTA service charge. If the fee were classified as an equipment charge, Comcast would charge 50 cents per DTA based on rate forms filed with the Minnesota cable commissions he represents, Bradley told The Pioneer Press.[10]

For the average Comcast subscriber, the result was another rate increase in return for digital television service. Subscribers with three DTA’s now pay up to $5.97 extra per month in order to continue to receive the exact same programming on the same number of televisions within their household – a $25 annual surcharge per DTA, $75 if the customer uses three DTA’s, complained Eagan, Minn. Mayor Mike Maguire in a letter to Sen. Amy Klobuchar.[11]

Comcast’s fees, in addition to being well in excess of the actual cost of the equipment, will earn the company at least $550 million annually in new revenue – all for equipment that costs the company around $50 per unit.[12] Because Comcast is encrypting its lineup, even televisions equipped with QAM tuners, capable of receiving digital television signals without a set top box, will also eventually need the new equipment to unscramble television signals.

[1]http://www.cedmagazine.com/news/2009/09/time-warner-cable-serves-up-sdv-in-n.y.,-dallas,-l.a.
[2]http://customer.comcast.com/help-and-support/cable-tv/how-bill-will-change-with-digital-migration
[3]http://www.cedmagazine.com/news/2012/01/time-warner-cable-wraps-up-all-digital-conversion-pilot-in-maine
[4]http://www.twcableuntangled.com/2013/04/were-converting-analog-signals-to-digital-across-the-new-york-region/
[5]http://www.timewarnercable.com/en/residential-home/support/faqs/faqs-tv/basictvencryption/what-will-the-digital-adapter-cost.html
[6] http://www.twincities.com/ci_22617153/comcast-fee-plan-cause-confusion-controversy
[7]http://customer.comcast.com/help-and-support/cable-tv/how-bill-will-change-with-digital-migration
[8]http://transition.fcc.gov/Bureaus/Cable/News_Releases/nrcb4009.txt
[9]http://stopthecap.com/2013/02/21/comcast-calls-1-99-charge-for-digital-adapters-a-service-fee-to-avoid-fcc-complications/
[10]http://www.twincities.com/ci_22617153/comcast-fee-plan-cause-confusion-controversy?IADID=Search-www.twincities.com-www.twincities.com
[11]https://dl.dropboxusercontent.com/u/9008/pioneerpress/yourtechweblog/Eagan%20-%20Sen%20Klobuchar%20ltr%20re%20Cable%20Rate%20Concerns%203-5-13.pdf
[12]http://cisco-news.tmcnet.com/news/2011/04/25/5464600.htm

Comcast’s Much-Touted “X1” Platform Includes a Steep $99 Installation/Upgrade Fee

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The most expensive set top box you will ever rent.

The most expensive set top box you will ever rent.

At all three public informational meetings, a Comcast representative promoted the benefits of Comcast’s new X1 set-top box/platform which can provide enhanced features and integrate with the Internet to provide more detailed programming information and social media interaction.

The Comcast representative did not mention that customers must pay up to a $99 upgrade fee for the privilege of renting Comcast’s X1 platform.[1] That is well in excess of the cost of an entire month of cable TV service.

Time Warner Cable does not charge an upgrade fee for its set top boxes, including the latest models.

[1]http://www.multichannel.com/news/content/comcast-details-x1-upgrade-fee/356207

How Comcast’s Volume Discounts Will Kill Cable-TV Competition

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You can still read a book instead of everything else.

You can still read a book instead of everything else.

Allowing Comcast to dominate New York’s cable television marketplace will deter future competitors from entering the market, particularly for television programming.

One of the arguments made by proponents of the merger is the possibility of decreased wholesale television programming costs won through volume discounts available to the largest nationwide providers. Unfortunately for consumers, Comcast has already declared customers will not benefit from those discounts in the form of lower cable bills.

A prospective new entrant considering providing cable television service will face competition with Comcast without any benefit of volume discounts on programming.[1] That makes it unlikely a provider will offer a competing television package.

This is not a theoretical problem.

In Ohio, independent cable company MCTV discovered that while large cable operators like Comcast were benefiting from volume discounts, it faced contract renewal prices more than 40 times the rate of inflation.[2] Cable ONE, owned by the Washington Post, had to drop more than a dozen Viacom owned channels for good because it could not afford the asking price.[3]

MCTV president Bob Gessner reminds us of just how concentrated the entertainment business has become, noting that nine media companies (Comcast is one of them) now control 95% of all paid video content consumed in the United States.[4]

MCTV’s survival plan includes membership in the 900-member National Cable Television Cooperative, the only way smaller providers can pool resources and win discounts of their own. It is no longer effective as mergers and acquisitions continue to consolidate the cable and telco-TV business. All 900 NCTC members serve a combined five million customers. Comcast has 21 million, DirecTV: 20 million, Dish Networks: 14 million, and Time Warner Cable: 11 million.[5]

media_consolidation

AT&T confesses it cannot compete effectively with Comcast and other larger competitors for the same reason. AT&T’s solution, like Comcast, is to buy a competitor, in this case DirecTV.[6]

Frontier Communications faced a similar problem after adopting Verizon FiOS franchises in Indiana and the Pacific Northwest after purchasing Verizon landline networks in several states. When Frontier lost Verizon’s volume discounts on programming, Frontier’s solution was to begin a marketing campaign to convince its fiber customers to abandon the technology and switch to one of its satellite television partners.[7]

[1]http://www.fiercecable.com/story/comcast-twc-deal-will-squeeze-programming-and-technology-vendors/2014-02-13
[2]http://stopthecap.com/2014/06/05/independent-cable-companies-unify-against-cable-tv-programmer-rate-increases/
[3]http://online.wsj.com/articles/viacom-60-cable-firms-part-ways-in-rural-u-s-1403048557
[4]http://stopthecap.com/2014/06/05/independent-cable-companies-unify-against-cable-tv-programmer-rate-increases/
[5]http://stopthecap.com/2014/06/05/independent-cable-companies-unify-against-cable-tv-programmer-rate-increases/
[6]http://www.bloomberg.com/news/2014-05-02/dish-or-directv-need-deal-most-in-at-t-love-triangle-real-m-a.html
[7]http://stopthecap.com/2011/08/16/frontiers-fiber-mess-company-losing-fios-subs-landline-customers-but-adds-bonded-dsl/

Comcast’s ‘We Don’t Compete With TWC’ Argument Opens the Door to Merging With Every Cable Company

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competitionComcast has argued there should be no antitrust concerns over their merger with Time Warner Cable because the two companies do not directly compete with each other.

That is precisely the problem. Nothing has ever precluded Comcast from applying to provide service throughout New York in direct competition with Time Warner Cable, but that has never happened. If one accepts Comcast’s logic, nothing should preclude it from acquiring every cable company in the United States because in almost no cases do cable operators compete head-to-head for customers.

Comcast must not be convinced of its own argument, because it has voluntarily agreed to limit its television market share to less than 30 percent by selling groups of Time Warner Cable customers to Charter Communications.[1]

The lack of competition is profound in New York, particularly upstate, and will only grow worse if this merger is permitted.

comcast whoppersWhile sections of the state enjoy competition from Verizon FiOS fiber to the home service, enormous regions, including metropolitan Rochester and Binghamton have no prospect of widely available fiber broadband speeds consistently above 10Mbps because Frontier Communications almost entirely relies on DSL and its variants in Rochester and Verizon suspended its fiber expansion before even contemplating upgrading Binghamton.

The cities of Buffalo and Syracuse can only find FiOS in wealthy suburban areas, while inner-city residents are left either choosing Time Warner Cable or Verizon DSL, if offered.

It is also critical to note both cable operators fiercely compete with each other for sports programming rights and advertising dollars, both of which have major implications in a large metropolitan market like New York. Both Comcast and Time Warner Cable have records of withholding sports programming from competitors or charging excessively for access.[2]

[1]http://time.com/79053/comcast-time-warner-cable-charter/
[2]http://judiciary.house.gov/_cache/files/665684a1-49d4-4aca-9bc1-79ae9ad387b9/grunes-testimony.pdf

Comcast/Time Warner: We Dare You to Compare – ‘Our Regular Retail Prices Are a Secret’

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One of the most difficult questions you can ask a customer service representative of either Comcast or Time Warner Cable is what their regular price is for service. As a Buffalo News reporter discovered in August 2013, Time Warner Cable refused repeated attempts to ascertain the non-promotional price of its broadband service.[1]

merger benefitsMaking a direct comparison between the prices charged by Comcast and those of Time Warner Cable require unnecessary perseverance made even more difficult by the fact Comcast only serves a tiny portion of New York State.

Both companies offer promotional deals to new customers as well as those threatening to cancel service, but those prices fluctuate wildly and eventually expire.

Time Warner Cable has made it even more difficult this year by completely eliminating the most popular plans from its retail price list: bundled service packages known in the industry as “double-play” (two services) or “triple play” (three services).[2]

A Time Warner Cable spokesman told the Los Angeles Times the company is required by regulators to provide pricing information for only some of its fees, and Internet rates are not one of them.[3] This year, Time Warner kept the size of its broadband rate hikes to itself. It is much the same for Comcast.

Both cable companies make a point of telling the news media that these prices, including installation, reflect the “rack rates” and that “most customers will pay less […] after cutting a deal for their programming package.”

ratehike1In 2011, Time Warner Cable raised some of its “rack rates” by up to 51.1 percent.[4]

That makes a rate comparison for television service difficult because the retail rates often do not reflect reality. But beyond rates, regulators need to understand Comcast television packages are very different from what Time Warner Cable customers are used to finding.[5] While Time Warner Cable bundles the vast majority of networks into a Standard TV package, Comcast offers a more extensive variety of packages. While at first glance this may seem to allow customers to better customize a package to meet their needs, Comcast has also taken care to break some of the most popular networks out of lower-cost packages and force customers to choose cable television packages costing much more to get them back.[6]

Sports fans and those who enjoy networks like Turner Classic Movies will have to pay Comcast $87.89 a month for its “Digital Preferred,” package[7], just to get back channels already included in the standard Time Warner Cable TV packages we are familiar with in New York.

At regular prices, a Comcast triple play customer should expect to pay $147.49 for the most bare bones TV, phone, and broadband package, $154.99 for the most popular package without premium channels, and $164.99 a month for a bundle that brings along a similar lineup to what TWC offers, along with Starz.[8] Comcast’s nearest equivalent to Time Warner Cable’s $200 Signature Home service costs $239.99 a month and offers no better Internet speeds than what Preferred Plus customers get.

[1]http://www.buffalonews.com/city-region-whats-the-big-secret-about-pricing-20130805
[2]http://www.timewarnercable.com/en/support/account-and-billing/topics/retail-rates.html
[3]http://articles.latimes.com/2014/mar/17/business/la-fi-lazarus-20140318
[4]http://articles.latimes.com/2011/dec/27/business/la-fi-lazarus-20111227
[5]http://www.timewarnercable.com/en/tv/digital-cable-tv.html
[6]http://www.comcast.com/Corporate/Learn/DigitalCable/digitalcable.html
[7]http://www.comcast.com/Corporate/Learn/DigitalCable/TVChannelLineUp.html
[8]http://www.comcast.com/shop/deals-dealfinder

Comcast’s Reputation for Bad Customer Service is Legendary and Never-Ending

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Comcast has repeatedly touted its rating from J.D. Power & Associates claiming the company has been cited for the most improvement of any cable operator scored by the survey firm. That isn’t saying very much when one takes a closer look.

comcast-time-warner-cable-mergerIn fact, since 2010 Comcast has achieved very little improvement in its abysmal score. J.D. Power & Associates reports that over the last four years, Comcast has only managed to boost its TV satisfaction score 92 points and Internet satisfaction 77 points… on a 1,000-point scale.[1]

Comcast also continues to have below-average scores in all four regions for both television and broadband, with the exception of Internet service in the north-central region, where it faces competition from DSL offered by telephone company CenturyLink.

Other consumer satisfaction surveys are far less charitable to Comcast.

Consumer Reports ranked Comcast 15th out of 17 large cable companies and called their service and customer relations mediocre. In a survey conducted in April, the consumer group found 56% of the public opposed to the merger, 11% supported it, and 32% offered no opinion. The survey found 74% believing the merger will result in higher prices and fewer choices for consumers.[2]

“A merger combining these two huge companies would give Comcast even greater control over the cable and broadband Internet markets, leading to higher prices, fewer choices, and worse customer service for consumers,” Delara Derakhshani, policy counsel in Consumers Union’s D.C. office, said in a statement.[3]

Nearly every year, Comcast CEO Brian Roberts acknowledges the problems with customer service and promises improvements.[4] But according to the American Consumer Satisfaction Index, those improvements never arrive.

In 2004, ACSI noted it added cable television to its index in 2000, and since that time, “customer satisfaction has gone from bad to worse, and there is no improvement in sight:”[5]

ows_139276912850214Among cable providers, Time Warner has the highest score of 60. Both Comcast and Charter Communications register at 56. For the private as well as public sector, including the IRS, this is the lowest level of customer satisfaction of any organization in ACSI. Consumer complaints are also much more common relative to any other measured industry. Almost half of all cable customers have registered complaints about one thing or another.

When buyers have meaningful choice alternatives, this level of customer (dis)satisfaction is neither competitive nor sustainable. Cable is the only industry to score below 60 in ACSI. With the satellite companies removed, the weighted average for the cable industry is 59.

Under normal competitive conditions, there would be mass customer defections. The reason this is not the case for the cable industry is due to local monopoly power, which means that in most markets, the dissatisfied customer has nowhere to go.

In 2007, ACSI foreshadows what a merger between two giant cable companies is likely to mean for customers as the two companies eventually attempt to integrate their disparate computer systems and management:[6]

After a minor gain in 2006, the first ever for the industry, satisfaction among subscribers to cable and satellite TV service drops 2% to 62, the lowest level of customer satisfaction among all industries covered by ACSI.  None of the providers has improved on customer satisfaction this year.  Comcast (down 7% to 56), DirecTV (down 6% to 67) and Time Warner Cable (down 5% to 58) tumble.  High system loads causing problems with reliability and pricing were major culprits.  Both Comcast and Time Warner have acquired many new subscribers in their deal to divide up troubled cable provider Adelphia Communications – integrating these acquisitions often leads to short-term problems with customer satisfaction.

Comcast MergerIn 2008, things deteriorated further for Comcast customers, according to this ACSI assessment:[7]

Comcast is down 4% to 54, an all-time low for the largest cable provider in the country. Rapid growth may have contributed to difficulties in operations as Comcast continues to add cable subscribers, often through acquisitions of companies in smaller markets.

[…] As is often the case, small is often better in terms of being able to provide good customer service. Cablevision, for example, with some 3 million subscribers, is barely 1/8th the size of Comcast. These companies don’t generally seek to expand quickly beyond their geographic footprints and are often targets of acquisition by larger firms, companies that may be able to withstand depressed customer satisfaction in the short term as operations of the smaller providers are integrated.

This year, both Comcast and Time Warner Cable fell even further according to ACSI:[8]

Cable giants Comcast and Time Warner Cable have the most dissatisfied customers. Comcast falls 5% to 60, while Time Warner registers the biggest loss and plunges 7% to 56, its lowest score to date.

“Comcast and Time Warner assert their proposed merger will not reduce competition because there is little overlap in their service territories,” says David VanAmburg, ACSI Director. “Still, it’s a concern whenever two poor-performing service providers combine operations. ACSI data consistently show that mergers in service industries usually result in lower customer satisfaction, at least in the short term. It’s hard to see how combining two negatives will be a positive for consumers.”

ACSI also scored Internet Service Providers this year and found even worse news:[9]

High prices, slow data transmission and unreliable service drag satisfaction to record lows, as customers have few  alternatives beyond the largest Internet service providers. Customer satisfaction with ISPs drops 3.1% to 63, the lowest score in the Index.

[…] Cable-company-controlled ISPs languish at the bottom of the rankings again. Cox Communications is the best of these and stays above the industry average despite a 6% fall to 64. Customers rate Comcast (-8% to 57) and Time Warner Cable (-14% to 54) even lower for Internet service than for their TV service. In both industries, the two providers have the weakest customer satisfaction.

Comcast claims the transaction will allow the two companies to invest in their networks, improve customer service, and enhance the products available to Time Warner Cable customers.

In reality, Comcast’s largest investment will be in a $17 billion share buyback to benefit their stockholders.[10] Time Warner Cable’s current CEO has secured for himself a golden parachute package of $78 million dollars for just two months on the job as CEO of Time Warner Cable.[11]

With that kind of money on the table, it is no surprise Comcast has invested in 76 lobbyists from 24 different lobbying firms and is spending millions trying to convince regulators, including the NY PSC that this transaction is a good deal for New York. The more than 2,700 New Yorkers that have filed comments with the PSC, largely in strong opposition to this merger, disagree. Their voices should speak louder than out of state groups that have been urged by Comcast to send letters supporting this transaction.

[1]http://variety.com/2014/biz/news/comcast-time-warner-cable-remain-among-most-hated-tv-providers-survey-1201145921/
[2]http://variety.com/2014/biz/news/comcast-time-warner-cable-merger-poll-shows-majority-oppose-1201224277/
[3]http://cuactionfund.org/get-the-facts
[4]http://www.dslreports.com/shownews/Comcast-CEO-Makes-His-Yearly-Promise-to-Improve-Customer-Service-128206
[5]http://www.theacsi.org/component/content/article/30-commentary-category/86-acsi-quarterly-commentaries-q1-2004
[6]http://www.theacsi.org/component/content/article/30-commentary-category/169-acsi-quarterly-commentaries-q1-2007
[7]http://www.theacsi.org/component/content/article/30-commentary-category/179-acsi-quarterly-commentaries-q1-2008
[8]http://www.theacsi.org/news-and-resources/press-releases/press-2014/press-release-telecommunications-and-information-2014
[9]http://www.theacsi.org/news-and-resources/press-releases/press-2014/press-release-telecommunications-and-information-2014
[10]http://www.cleveland.com/business/index.ssf/2014/02/comcast_agrees_to_purchase_of.html
[11]http://www.usatoday.com/story/money/business/2014/03/20/four-months-as-time-warner-cables-ceo--80-million/6658083/

NY’s Broadband Future Is Better With Time Warner Cable: Comcast’s Coming Usage Caps Kill Innovation

psctest

Broadband will be critically impacted by any merger of Comcast and Time Warner Cable in New York. The two companies could not be more different in their philosophies regarding access, pricing, and speeds.

say noThis merger will have an especially profound impact on broadband service in upstate New York, largely left behind out from getting Verizon’s fiber upgrades. New York’s digital economy critically needs modern, fast, and affordable Internet access to succeed. Verizon has not only ceased expansion of its FiOS fiber to the home network in New York, it has virtually capitulated competing for cable customers in non-FiOS areas by agreeing to sell Time Warner Cable service in its wireless stores.[1]  In cities like Rochester, served by Frontier Communications’ DSL, Time Warner Cable is the only provider in town that can consistently deliver broadband speeds in excess of 10Mbps.

Time Warner Cable has never been the fastest Internet provider and had a history of being slower than others to roll out speed increases. But it is also the only cable provider in the country that experimented with usage caps and consumption billing and shelved both after subscribers bitterly complained in market tests in cities including Rochester.[2]

Then CEO Glenn Britt announced the end of the usage cap trial just two weeks after it became public.[3] Britt would later emphasize that he now believed there should always be an unlimited use plan available for Time Warner Cable customers who do not want their Internet use metered.[4] In study after study, the overwhelming majority of customers have shown intense dislike of limitations on their Internet usage, whether from strict usage caps Comcast maintained for several years or usage allowances that, when exceeded, would result in overlimit fees.[5] Just this month, the Government Accounting Office confirmed these findings in a new study that reported near-universal revulsion for usage caps on home wired broadband service:[6]

In only two groups did any participants report experience with wireline UBP [usage-based pricing].

However, in all eight groups, participants expressed strong negative reactions to UBP, including concerns about:

  • The importance of the Internet in their lives and the potential effects of data allowances.
  • Having to worry about data usage at home, where they are used to having unlimited access.
  • Concerns that ISPs would use UBP as a way of increasing the amount they charge for Internet service.

Time Warner Cable has learned an important lesson regarding consumer perception of usage-based billing and usage caps on Internet service. In 2012, the company introduced optional usage caps for customers interested in a discount on their broadband service. Out of 11 million Time Warner Cable broadband customers, only a few thousand have been convinced in enroll such programs.[7]

Despite results like that, Comcast has not learned that lesson and has twice imposed unilateral, compulsory usage limits on their broadband customers, starting with a nationwide hard usage cap of 250GB per month introduced in 2008. Violators risked having their broadband service terminated by Comcast.[8] Today, for some that would be comparable to losing electricity or telephone service. The threat has profound implications in areas where Comcast is the only broadband provider.

Comcast temporarily rescinded its cap in May 2012, but has gradually reintroduced various forms of usage-related billing and caps with market trials in several Comcast service areas[9]:

Nashville, Tennessee: 300 GB per month with $10/50GB overlimit fee;

Tucson, Arizona: Economy Plus through Performance XFINITY Internet tiers: 300 GB. Blast! Internet tier: 350 GB; Extreme 50 customers: 450 GB; Extreme 105: 600 GB. $10 per 50GB overlimit fee;

Huntsville and Mobile, Alabama; Atlanta, Augusta and Savannah, Georgia; Central Kentucky; Maine; Jackson, Mississippi; Knoxville and Memphis, Tennessee and Charleston, South Carolina: 300 GB per month with $10/50GB; XFINITY Internet Economy Plus customers can choose to enroll in the Flexible-Data Option to receive a $5.00 credit on their monthly bill and reduce their data usage plan from 300 GB to 5 GB. If customers choose this option and use more than 5 GB of data in any given month, they will not receive the $5.00 credit and will be charged an additional $1.00 for each gigabyte of data used over the 5 GB included in the Flexible-Data Option;

Fresno, California, Economy Plus customers also have the option of enrolling in the Flexible-Data Option.

courtesy-noticeComcast customers in these areas do not have the option of keeping their unlimited-use broadband accounts. Despite the fact Comcast executive vice president David Cohen refers to these as “data thresholds,” they are in fact de facto limits that carry penalty fees when exceeded.[10]

Cohen predicts these usage limits will be imposed on all Comcast customers nationwide within the next five years.[11] Time Warner Cable has committed not to impose compulsory limits on its broadband customers. Verizon has never attempted to place limits on its home broadband customers. Frontier shelved a usage limit plan of 5GB per month attempted in 2008 and currently provides unlimited service.

Comcast CEO Brian Roberts sat for an interview with CNBC in June in which he implied usage growth was impinging on the viability of its broadband business, justifying usage caps. At the end of the interview, Time Warner Cable ran advertising emphasizing it has no usage caps.[12] Both companies have highly profitable broadband services, as do other providers across the country.[13]

As our group has found, usage caps and consumption billing on cable Internet and DSL are little more than a transparent rate increase and anti-competitive maneuver to restrict the growth of the industry’s biggest potential competitor: online video. If a consumer can stream all of their video programming over a broadband account, there is no reason to retain a cable TV package. Comcast’s usage cap provides a built-in deterrent for customers contemplating such a move.

While a Comcast representative offered (without any independent verification) that the average Comcast broadband user consumes fewer than 20GB of data per month, Sandvine released evidence in its Global Internet Phenomena Report 1H2014 study that cord-cutters in the U.S. – at least those whose usage indicates the use of streaming as a primary form of entertainment – now consume about 212GB of data per month (with 153GB of that going toward “real-time entertainment usage”).[14]

That would put many customers perilously close to Comcast’s current market tested usage allowance.

Approving the transfer of franchises from Time Warner Cable to Comcast has the potential of saddling the majority of New York residents with usage caps and/or consumption billing with little or no savings or benefit to the consumer while introducing a major impediment to potential online video competition to help curtail cable television pricing.

[1]http://www.verizonwireless.com/wcms/consumer/home-services/tv-internet-homephone/twc.html
[2]http://www.reuters.com/article/2009/04/16/us-timewarnercable-idUSTRE53F6EQ20090416
[3]http://stopthecap.com/2009/04/16/we-won-time-warner-killing-usage-caps-in-all-markets/
[4]http://www.twcableuntangled.com/2012/02/launching-an-optional-usage-based-pricing-plan-in-southern-texas-2/
[5]http://www.dailytech.com/Microsoft+Study+Bandwidth+Caps+Change+Internet+Users+Behavior/article24639.htm
[6]http://eshoo.house.gov/uploads/7.29.14%20Preliminary%20GAO%20Report%20Findings%20from%20Data%20Cap%20Study.pdf
[7]http://stopthecap.com/2014/03/13/time-warner-cable-admits-usage-based-pricing-is-a-big-failure-only-thousands-enrolled/
[8]http://arstechnica.com/uncategorized/2008/08/its-official-comcast-starts-250gb-bandwidth-caps-october-1/
[9] http://customer.comcast.com/help-and-support/internet/data-usage-trials-what-are-the-different-plans-launching
[10] http://customer.comcast.com/help-and-support/internet/data-usage-trials-what-are-the-different-plans-launching
[11]http://techcrunch.com/2014/05/14/comcast-wants-to-put-data-caps-on-all-customers-within-5-years/
[12]http://stopthecap.com/wp-content/uploads/2014/04/nocaps.png
[13]http://gigaom.com/2014/02/12/comcast-and-time-warner-cable-forget-tv-it-is-all-about-broadband/
[14]http://www.multichannel.com/news/technology/cord-cutters-gobble-down-bits-sandvine-study/374551#sthash.JYFP7o69.dpuf

			
			

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