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Special Report: Big Phone and Cable Companies Are Losing Your Calls to Rural America

Phillip Dampier August 28, 2014 Consumer News, Public Policy & Gov't, Video 2 Comments

aroundtheworldBig cable and telephone companies have opened a new digital divide by losing your long distance calls to rural America to save a buck.

The problems have grown so pervasive, a FCC investigation found some of America’s biggest providers are sending some of their long distance calls destined for rural communities across the U.S. through shady, fly-by-night third-party operators in Russia, the United Arab Emirates, Singapore, Japan, Bulgaria and Romania before the phone ever starts ringing on the other end. If it ever starts ringing on the other end.

In Addison County, Vt., State Representative Will Stevens knows all about it. When not representing the people of rural Shoreham, he is running Golden Russet Farm, highly dependent on his landline to deal with customers.

“Phone calls here get cut off,” he told the Addison County Independent. “Or they don’t go through at all. So many times I’ve called elsewhere and you just don’t know if the call is going through, it goes dead. It rings then goes dead. You can’t tell how many times it’s rung on the other end if at all.”

It’s even worse when callers get a recording stating the number is no longer in service.

That is what happened to Pat Plautz who runs a small map store in the town of Reedsburg, Wis. A caller from Milwaukee trying to place an order first got a recording stating her number had been disconnected. Lucky for her the caller tried again, this time connecting.

“My main concern is that people think we’re out of business,” Plautz said.

As many as one in five long-distance calls to rural communities either aren’t connected to the intended number or are corrupted by issues such as static or garbled sound, according to Communications Data Group, a telephone billing company based in Champaign, Ill.

In rural upstate New York, some callers report nearly 100% of their call attempts to certain rural customers fail.

Stevens has attempted to place calls from his rural Shoreham Tel landline in Vermont across Lake Champlain to his father’s camp – 30 minutes away by car – served by the Crown Point Telephone Corporation in Crown Point, N.Y., with absolutely no success.

Rural call failures have created a number of safety fears for concerned relatives, particularly those trying to reach seasonal residents — often retirees that live in the area part of the year.

“When they can’t get through they’ll call us and ask us to check the lines, and we do and they are working properly, so then they’ll ask us if we can go out and see if the person is OK because they aren’t answering their phone,” said Shana Macey, president of the Crown Point phone company. “And we’ll do that because we’re concerned, too.”

A Nationwide Deterioration of Rural Telephone Service

In rural Wisconsin and Minnesota, even 911 calls can get lost. In west-central Minnesota, particularly those along the I-94 corridor, hard-hit communities like Brainerd and Little Falls find their 911 calls are being dropped or lost and businesses have reported huge drops in incoming long distance calls, costing them business.

Shoreham, Vt. to Crown Point, N.Y. by auto.

Shoreham, Vt. to Crown Point, N.Y. by auto.

In Kansas, home to many rural independent phone companies, long distance call problems have become so pervasive, phone companies are publishing information about the problem in their phone directories and on their websites.

Rural customers complain long distance calls often lose one side of the conversation so both parties cannot hear each other, or the call is lost in static and distortion that make it sound like it originated from the middle of Siberia.

What shocked the FCC into calling this problem “epic” earlier this year was the revelation that long distance calls between people as little as 15 miles away from each other often are routed through Siberia or other distant lands as long distance companies seek the cheapest possible way to route calls to boost profits.

Welcome to the world of “Least Cost Routing,” (LCR) a harmless-sounding phrase that often means the difference between getting a long distance call or not.

You might have experienced LCR if you have encountered any of the following:

  • Someone tells you they tried to call you but your phone never rang;
  • Someone tells you they tried to call you and the phone rang on their end, but didn’t ring on yours;
  • A call came through but the quality was poor;
  • One side of the call cannot reliably hear the other;
  • Phantom touch-tone sounds erupt in mid-conversation or distorted sounds from other phone conversations occasionally break through and can be heard by one or both parties;
  • A call came through but the Caller ID was incorrect.

Nationally, users of Google Voice, MagicJack, and other discount long distance services have probably observed at least one of these, all because the companies involved are looking for the cheapest ways possible to route your call.

But the problems have grown well beyond the deep discount providers and affect Verizon, AT&T, Comcast, Time Warner Cable and other phone and cable company telephone customers. Evidence suggests unregulated cable and wireless phone calls are much more likely to encounter LCR than traditional regulated landlines.

http://www.phillipdampier.com/video/KMSP Minneapolis Dropped Calls 3-5-14.mp4

KMSP in Minneapolis reports Minnesota officials are helpless trying to resolve call completion problems because their oversight powers have been largely stripped away by deregulation and telecom lobbyists want to keep it that way. (3:14)

lcr

Least Cost Routing in action.

Deregulation Implicated in Race for High Profits, Low Call Quality

Wisconsin’s Public Service Commission, perhaps slightly perturbed after watching its oversight powers get largely stripped away by the Walker Administration at the behest of AT&T, explained the reality:

Once upon a time – back in the days of rotary phones – a phone call was carried over copper wires which formed a single circuit from end to end. Those days are gone. Today, the network is almost entirely digital, with calls reduced to bits and sent over a massive web of links provided by telephone, cable, cellular and fixed wireless providers. These networks pass calls using a complex set of computer controls, interfaces and protocols. Rural call completion issues appear to be caused by some error or errors in programming, or incompatibility in the software somewhere in the network, that prevents the call from reaching the rural telephone company at all.

Wisconsin Gov. Scott Walker directed his Republican colleagues to draft a sweeping deregulation bill at the behest of AT&T.

Wisconsin Gov. Scott Walker directed his Republican colleagues to draft a sweeping deregulation bill at the behest of AT&T.

The problem is bad enough in Wisconsin the PSC has devoted a section of its website to address the problem, but that is about all it can do. In 2011, Gov. Walker directed his Republican colleagues to draft a sweeping deregulation measure ghostwritten by AT&T. The bill completely stripped the PSC of its ability to investigate consumer complaints or the problems of rural call completion. The Assembly approved the Republican bill 80-13 and the Senate quickly followed on a 25-8 vote. Walker promptly signed the bill into law.

Consumer advocates and rural officials warned the bill would lead to a deterioration of telephone service in Wisconsin, especially in rural areas — exactly what has happened.

“We’re pitting urban against rural,” said Sen. Kathleen Vinehout (D-Alma). “The consumer has absolutely no recourse under this bill.”

Nonsense, declared Sen. Rich Zipperer (R-Pewaukee). “We’re ready to keep up with the technology. First and foremost, this is a job creation bill,” he said.

In fact, the bill may have indeed created new jobs… for overseas, fly-by-night wholesale call connection companies in places like Bulgaria, the United Arab Emirates, and across Russia.

Hundreds of new and mysterious telecommunications companies, some literally run out of garages with a consumer residential broadband account, jumped into the wholesale call completion marketplace. Telephone and cable companies use sophisticated databases that maintain constantly changing price lists for IP-based call completion services. If a long distance company wants the cheapest possible rate, a computer will automatically choose whatever company offers it, without regard to the reputation of the company or its ability to properly route the call.

Fraud has become a serious problem, with some call connection companies charging below-market rates and then connecting calls to an artificial, never-ending ringing signal or an intercept recording stating the number is out of service. Consumers are generally not charged for unanswered calls or those to disconnected numbers, but phone and cable companies often are.

So why do rural Americans suffer the biggest problems? Because rural telephone exchanges are allowed to charge slightly higher call completion fees to companies sending their customers’ calls into these rural areas. The higher charges help defray the higher costs incurred by rural independent phone companies to maintain service with a much smaller customer base. Verizon has millions of landline customers in New York. Crown Point Telephone has 735.

There are millions to be made in the call completion business and a growing number of cell phone companies and large phone and cable companies have teamed up with third-party call completion discounters to shave costs and increase profits. The more money to be made, the more advanced the call routing schemes have become. In the last few years, LCR has become nearly as frenzied as the stock market, with call completion rates subject to change constantly as capacity increases or decreases and as competitors try to match or beat others’ rates.

pushpollA Race to the Bottom

As flyers know, it is often cheaper to fly into a major city and catch a connecting flight to your final destination instead of booking a direct flight. The same is true for phone calls. Mr. Stevens’ call across Lake Champlain involved two high-cost rural telephone companies. So his long distance carrier (or cell phone company) likely sold the call to a third-party to handle. If that third-party found it cheaper to send the call overseas and then back again (often to avoid connection fees), that is exactly what will happen. If it found it couldn’t make any money on the call, it likely dropped it.

“In some cases, the calls become looped in the network and are never completed. In other cases, the calls are delivered via a low quality network which results in poor sound quality,” the Reedsburg Utility Commission, which also runs a local telephone company, says on its website.

In one case a call from Milwaukee to northeast Wisconsin was routed through carriers in Singapore, Dubai, and parts of Europe including Russia.

“It just kept getting shipped everywhere. It was insane,” Peter Jahn, of the Wisconsin Public Service Commission’s Division of Business and Communications Services, told the Journal-Sentinel.

These third-party operators have no responsibility to guarantee calls will be connected, and when their algorithm discovers it has been saddled with a money-losing call that will cost more to complete than the company is charging, it simply drops it, leaving the caller with dead silence, an artificial busy signal, or a dial tone.

“It’s something that’s been going on for years, and it’s very difficult to identify the bad actors. … Some of them could be fly-by-night operations,” admitted Bill Esbeck, executive director of the Wisconsin State Telecommunications Association, which represents telephone companies.

The Murky World of Grey Routes

special reportIn fact, the industry has a different name for this type of call handling – grey routes.

“The grey route is, literally, a sub-par phone line or phone company who is intentionally selling phone service in areas that should be expensive but is cutting corners to be able to provide the service for less,” says 2600hz, a Voice over IP service provider. “An example of a grey route, in it’s simplest form, might be someone buying 50 phone lines that were on special from the phone company for six months – and putting those phone lines in their garage. Then they buy an Internet connection and funnel calls from the Internet to those cheap phone lines all day long.”

The company says grey routes are responsible for a lot of the problems will call completion and quality.

“They’re most likely using a poor quality Internet connection, poor quality equipment and aren’t interested in debugging or fixing problems with their setup – as long as they can keep you on the line long enough to bill the other party,” says the company.

“How do they achieve that? They pitch the route to the phone company who’s losing money on expensive phone calls and falsely promise them great quality. In essence, the theory goes that if only 5% of your calls go over a ‘grey route’ then phone companies can save literally millions of dollars and most customers will ‘tolerate’ the poor quality because it only occurs on such a small number of calls. Unfortunately, the side effects of such behavior range from broken Caller ID and touchtone transmission to audio quality cut-outs and generally poor sounding calls.”

Fly-by-Night Least Cost Call Routing

Fly-by-Night Least Cost Call Routing

Because many of these providers are unsophisticated, mistakes in call routing are common.

In one instance, all calls intended for an area in northern Wisconsin instead were routed to a car dealership, which was deluged with wrong-number calls.

“It took months and months to figure out who had screwed this up,” Jahn told the newspaper.

Unfortunately, it isn’t just the discount long distance providers that occasionally hand off calls to grey routes. The biggest cell phone and cable companies also use them.

For months, Pat Fretschel of Reedsburg had trouble getting calls from Milwaukee. Her callers would assume she wasn’t home and would hang up, when in fact the phone wasn’t ringing at her end of the line.

The problem only affected callers using Time Warner Cable phone service.

“Time Warner kept trying to tell me the calls were being hijacked out of California. I could never wrap my head around that,” Fretschel told the Journal-Sentinel.

Back in New England, Jackie Ambrozaitis is thankful she has a website to advertise her Falkenbury Farm Guest House, because she has no idea how many long distance calls she is missing.

Molly Worden, Jackie’s daughter who lives in Connecticut, reports to the Addison County Independent that she has problems every month reaching both her mother and a sister who also lives in Benson.

Rural first responders can't respond if they don't get a call.

Rural first responders can’t respond if they don’t get the call.

“I call Shoreham Tel and they test the line and they say it’s my phone; they tell me my phone looks for the cheapest way to send the call,” Worden says. “I’ve had people over to the house and called from several different carriers with their cell phones, I’ve tried Verizon, Sprint, Nextel, and I still can’t get through. It will ring 20 times without answer or it goes to busy. Sometimes five, six days in a row I can’t get through.”

Worden’s young children get frustrated when they can’t talk to their grandparents in Vermont, and Ambrozaitis’s 90-year-old father-in-law in Connecticut gets distressed when he can’t reach the family.

Your Health and Safety at Risk?

But the problem isn’t just annoying for friends and family trying to stay in touch.

Doctors “have been unable to reach patients, hospitals have been unable to reach on-call emergency surgeons, and there is a reported instance in which a 911 call center was unable to make emergency call backs,” the National Exchange Carrier Association, which represents rural telecom companies, said in an Aug. 18 letter to the Federal Communications Commission.

“I’m concerned we’ll have a major event where perhaps a first responder doesn’t know that they were called out,” says Steve Head, engineer at HEADSolutions, consultant to the telecommunications industry. Head is working with Waitsfield Telecom, and has been instrumental in recognizing and revealing the extent of the rural connectivity problem nationwide. “We had at least one incident of a hospital trying to get ahold of a patient to schedule surgery and could not get through, and if they had not been able to get ahold of him for this surgery opening it was not going to be able to be done for some time,” he said. “That was major.”

“I Have Regulatory Authority Over Telegraph Lines” – State Regulators Helpless to Intervene

Trying to resolve this problem has fallen largely on the FCC in Washington as telephone company oversight and consumer protection laws in the states have not kept up with technology or have been wiped off the books in deregulation measures.

Rothman

Rothman

“I have regulatory authority over telegraph lines,” complained Minnesota Commerce Commissioner Mike Rothman. “Currently, wholesale transport providers are not defined in statute, they’re unknown.”

In Minnesota, attempts at wholesale deregulation have not been successful, and landline phone companies still fall under some state regulation. Cell phones are covered by the FCC, and, as Rothman explained, cable is pretty much a free-for-all.

Any attempt to place oversight or regulation on telecom companies rings alarm bells and the lobbyists quickly arrive in Rothman’s office, “all lined up, someone from Verizon, another from Sprint, and a representative from a trade group representing cable.”

“Regulation worked for a long time but customers didn’t have a choice. Now they have a choice, but the quality of calls may have declined,” said Rob Souza, senior vice president of Otelco, the Maine-based communication company that bought Shoreham Tel 13 months ago. “I’ve been in this business 40 years, and the modernization of the telecommunications system has been extraordinary. It’s a good, solid reliable system. But when people don’t play by the rules, you get more service problems. That’s not an indictment of the system, but on some people who are trying to shave every penny out of it.”

Inadequate FCC Fines Are Just the Cost of Maintaining a Very Profitable Business

Among those include Matrix Telecom Inc. of Irving, Tex., fined $875,000 by the FCC to resolve a call-completion investigation. Similar agreements were reached with Level 3 Communications LLC for $975,000 in March and Windstream Corp. for $2.5 million in February.

But those amounts are miniscule in comparison to the potential financial benefits reaped from LCR.

“In the short-term, it’s going to take the FCC cracking down and making those fines larger, so the cost of not doing what the carriers are supposed to do is greater than doing what they’re supposed to,” said Reedsburg Utility Commission general manager Brett Schuppner.

But the FCC isn’t immune to lobbying either, and powerhouse AT&T is at the front of the line fiercely fighting to weaken new FCC rules to a level that would qualify them as homeopathic.

CommLawBlog fingered AT&T as the worst offender. The phone company recently filed a petition to change FCC rules designed to find and track the source of degradation of rural calls. The company also wants waivers for its wireless traffic and intaLATA toll calls (those placed to nearby areas outside of a customer’s local toll-free calling zone). They are also seeking a six month extension of a reporting deadline. This is significant, CommLawBlog says, because AT&T is the largest interexchange carrier with the most traffic sent to many rural areas in the country. Letting them effectively “opt out” could nullify many of the benefits of the new rural call completion rules.

Those suggested changes from AT&T are getting a cold response from groups like the National Association of Regulatory Utility Commissioners, which complain that rural call completion problems have been ongoing for years and now is not the time to weaken FCC rules.

On a separate front, Sen. Tim Johnson (D-S.D.) has introduced a bill requiring the FCC to keep a registry of the companies responsible for routing long-distance calls. It also would set service quality standards for the carriers.

The bill has little chance of being passed because of significant Republican opposition.

http://www.phillipdampier.com/video/KTVM Montana Incomplete Calls Madison County 4-24-14.mp4

In rural Montana, long distance telephone calls often don’t reach homes and businesses. KTVM talks with a business owner in Madison County who thinks it’s unfair rural America is stuck with substandard service. (1:40)

http://www.phillipdampier.com/video/You Might Have to Call Again If I Live in Rural America.flv

David Lewis, CEO of ANPI talks about Rural Call Completion at the IP Possibilities Conference and Expo. Lewis goes into greater detail about how this problem developed, how it affects customers, and what solutions are available to fix it. Because Lewis is speaking to an audience of mostly telecom professionals, we’ve provided a “cheat sheet” to explain some of the jargon. (11:43)

Telco Jargon Translated (in chronological order as it appears in the video)

Tier 1 Carriers – The biggest IP networks
CLEC’s – Competitive local phone companies (Time Warner, Comcast, MagicJack, Vonage, etc.)
ILEC’s – Incumbent local phone companies that have been around for decades
RBOC – A former regional Bell company (eg. Verizon, AT&T, SBC, Qwest, etc.)
Termination – When a call successfully reaches the called party’s phone number
PSTN – The network that powers your traditional landline
Enhanced 911 – 911 operators automatically get your calling location and other pertinent details
PSAPs – a 911 call center
Rate Deck – Essentially a price list showing the cost to complete calls to different areas
Bypassing Access – Getting around the traditional compensation system for calls made to rural telephone companies
Feature Group D – a type of telecommunication trunk used to provide “equal access” capability from telecommunication carriers and central offices (where the switching equipment is located and customer lines are connected and terminated) to the access tandem. The caller’s number is passed along to the next carrier in the call chain for Caller ID and 911.

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Time Warner Cable’s Nationwide Outage; Politicians Protest, Customers Can Get Service Credits

Just one technician can bring Time Warner Cable service to its knees for millions of customers nationwide.

Just one technician can bring Time Warner Cable to its knees.

Time Warner Cable broadband and on-demand television services were unavailable for about three hours this morning after routine maintenance turned into a nationwide outage that affected early risers trying to go online.

Things began to go wrong at around 4:30am ET when Time Warner Cable Internet connections began dropping across the country. The problems also affected on-demand viewing for Time Warner Cable TV customers and brought down Time Warner Cable’s own website.

The company blamed a problem with their backbone connection during routine maintenance. The company said it schedules such work for the very early morning hours to minimize customer disruptions. But once alarm clocks on the east coast began ringing, customers discovered they had no Internet service.

The outage persisted until around 6am ET, although some customers were not back online until after 7am.

Although complaints about Time Warner Cable began flooding social media networks as the sun went up, customers also used the outage as an opportunity to oppose the Comcast-Time Warner Cable merger. The outage demonstrates that a single technician making a mistake at one of the nation’s largest cable companies can disable services for millions.

Virtually every provider experiences a significant outage affecting many or most of their customers at least once a year:

This outage map illustrates this morning's service disruption at Time Warner Cable.

This outage map depicts this morning’s service disruption at Time Warner Cable.

Time Warner Cable will credit you for their outage, but only if you ask:

Meanwhile, New York Gov. Andrew Cuomo promised an investigation in a statement issued Wednesday:

Today’s widespread internet outage that has apparently impacted more than 11 million customers at Time Warner – which is based in New York – is a stark reminder that our economy is increasingly dependent on a reliable broadband network. That is one of the reasons why I pushed for a stronger standard of review for cable company mergers earlier this year.

I have directed the New York State Department of Public Service to investigate this outage as part of its review of Comcast’s proposed merger with Time Warner. The Department will also review whether the outage affected Time Warner’s provision of telephone service in any way. In addition, the Department will include its analysis of this event in its ongoing study of the telecom industry, which is exploring potential changes to the regulatory landscape pertaining to telephone, internet and cable. Dependable internet service is a vital link in our daily lives and telecommunications companies have a responsibility to deliver reliable service to their customers.

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52 Mayors Pledge Allegiance to Comcast’s Merger Deal; Is Yours on the List?

mayorsMore than 50 mayors of towns and cities large and small regurgitated Comcast-provided talking points in a joint letter submitted to the FCC in support of the Comcast-Time Warner Cable merger:

The combination of these two American companies will bring benefits to every affected city. Cities joining the Comcast service area will benefit from increased network investment, faster Internet speeds, improved video options and leading community development programs to help us tackle important community challenges like the digital divide. Existing Comcast markets will enjoy the benefits of a company with the scale and scope to invest in innovation and deliver products and services on a regional basis.

For us, the most significant aspect of the proposed transaction is its capacity to propel new investment in infrastructure in Time Warner markets that will enhance video and Internet service in our communities. Comcast has pledged to invest hundreds of millions of dollars a year speeding up and improving the combined company’s networks.

We also view positively the apparent response to this development from other companies that provide similar services. Since the Comcast Time Warner Cable transaction was proposed, Google has announced plans to expand its high-speed Fiber service to 34 new communities, AT&T has announced plans to expand its 1 gigabit U-Verse service to 100 new municipalities including 21 large cities, and Sprint’s corporate parent has proposed to build a 200 Mbps wireless network for the US.

In addition to being terribly misleading, parts of the letter are factually inaccurate. The letter’s text was taken almost entirely from Comcast’s own talking points released to the media and disclosed to the Securities and Exchange Commission.

Buffalo Mayor Byron Brown 2012: Time Warner Cable is naughty. 2014: Time Warner Cable is nice.

Buffalo Mayor Byron Brown
2012: Time Warner Cable is naughty.
2014: Time Warner Cable is nice.

Remarkably, Buffalo Mayor Byron Brown managed a complete flip-flop on his views of Time Warner Cable. In 2012, he co-signed a letter accusing Comcast and Time Warner Cable of anticompetitive behavior, runaway rate increases, and a growing digital divide. He was speaking about Comcast and Time Warner Cable’s  decision to partner with Verizon Wireless to jointly market products to their customers:

“We are deeply worried that the anti-competitive partnership between Verizon Wireless, the nation’s largest wireless provider, and four of the leading cable companies will have a negative impact on economic development and job creation in our cities, leading to higher prices, fewer service options, and a growing digital divide, “ the letter reads. “As you review the Verizon Wireless/cable transaction, we strongly urge you to examine the impact of this transaction on competition and consumer choice, and ensure that our communities are not left behind.”

This year, despite the fact both Comcast and Time Warner Cable still have their cross-marketing agreement with Verizon and both cable operators have raised prices, Brown joined the other mayors heaping praise on both cable companies:

Time Warner Cable has been a responsible corporate citizen whose efforts will only be enhanced by joining forces with Comcast’s community investment programs. Comcast has established itself as an industry leader and exemplary community partner who invests in its local communities and works hand in hand with local governments on critical social challenges like the digital divide.

Except when it is not.

Matthew Keys, who comments on journalism and social media, notes the Comcast merger has little to do with broadband expansion at other companies:

But the mayors failed to note that Sprint’s pledge of a faster wireless data network was predicated on a merger with rival T-Mobile, which fell through earlier this month. In addition, AT&T’s 1-Gigabit Internet service is likely being offered as an incentive for the FCC to approve its own proposed merger with Comcast competitor DirecTV; the Internet service is offered to residents in a handful of cities at a whopping $100 a month, nearly triple what the company sells it’s basic broadband Internet service for. And while the mayors assert that Google is expanding its Fiber service to more than 30 areas, they fail to note that Google is in preliminary talks with those communities and that the rollout may never happen.

If any providers inspired a broadband speed Renaissance, it was Google Fiber and a handful of gigabit community-owned fiber networks like EPB in Chattanooga, all demonstrating fast speeds and affordable pricing can go hand in hand when your primary interest is serving customers, not shoveling money at shareholders.

Customers who happen to live in the cities below might want to fill the email boxes and melt down the phone lines of these mayors who have demonstrated a willingness to throw their constituents under the bus (Matthew Keys did an exceptional job collecting their contact information).

Feel free to share our fact-based testimony with the mayors and let them know you don’t appreciate the fact they are spending taxpayer time and money advocating for a multi-billion dollar cable merger the majority of Americans oppose. Then remind them if this merger succeeds, you will think of them every time you have a problem with your cable service, when your bill increases, and when you discover Comcast has rationed your use of the Internet with a compulsory usage allowance. Because these problems always come fast and furious with Comcast, let them know you will have no trouble recalling their role in bringing Comcast to town when you go and vote.

Mayor Name
City
State
E-mail
Phone Number
William Bell Birmingham Alabama [email protected] (205) 254-2283
Tom Tait Anaheim California [email protected] (714) 765-5247
Kathleen DeRosa Cathedral City California [email protected] (760) 770-0340
Harry Price Fairfield California [email protected] (707) 428-7400
Acquanetta Warren Fontana California [email protected] (909) 350-7600
Jeffrey Gee Redwood City California [email protected] (650) 780-7597
Steve Hogan Aurora Colorado [email protected] (303) 739-7015
Marc Williams Arvada Colorado [email protected] (303) 424-4486
Richard McLean Brighton Colorado [email protected] (303) 655-2266
Michael Hancock Denver Colorado [email protected] (303) 331-3872
Pedro Segarra Hartford Connecticut [email protected] (860) 757-9500
Cindy Lerner Pinecrest Florida [email protected] (305) 234-2121
Joy Cooper Hallandale Beach Florida [email protected] (954) 457-1318
Alvin Brown Jacksonville Florida [email protected] (904) 630-1776
George Vallejo N. Miami Beach Florida [email protected] (305) 948-2986
John Marks Tallahassee Florida [email protected] (850) 891-2000
Tomas Regalado Miami Florida [email protected] (305) 250-5300
Lori Moseley Miramar Florida [email protected] (954) 602-3142
Buddy Dyer Orlando Florida [email protected] (407) 246-2221
Frank Ortis Pembroke Pines Florida [email protected] (954) 435-6505
Michael Boehm Lenexa Kansas [email protected] (913) 477-7550
Michael Copeland Olathe Kansas [email protected] (913) 971-8500
Kevin Dumas Attleboro Massachusetts [email protected] (508) 223-2222
Gary Christenson Malden Massachusetts [email protected] (781) 397-7000
Michael McGlynn Medford Massachusetts [email protected] (781) 393-2409
Daniel Rizzo Revere Massachusetts [email protected] (781) 286-8111
Albert Kelly Bridgeton New Jersey [email protected] (856)-455-3230
Dana Redd Camden New Jersey [email protected] (856) 757-7200
Frank Nolan Highlands New Jersey [email protected] (732) 872-1224
David DelVecchio Lambert New Jersey [email protected] (609) 397-0110
Gary Passanante Somerdale New Jersey [email protected] (856) 783-6320
Thomas Kelaher Toms River New Jersey [email protected] (732) 341-1000
Eric Jackson Trenton New Jersey [email protected] (609) 989-3030
Richard Berry Albuquerque New Mexico [email protected] (505) 768-3000
Ken Miyagishima Las Cruces New Mexico [email protected] (575) 541-2067
Byron Brown Buffalo New York [email protected] (716) 851-4890
Ernest D. Davis Mount Vernon New York [email protected] (914) 665-2300
Lou Odgen Tualatin Oregon [email protected] (503) 691-3011
Joseph DiGirolamo Bensalem Pennsylvania [email protected] (215) 633-3603
Eric Papenfuse Harrisburg Pennsylvania [email protected] (717) 255-3040
Rick Gray Lancaster Pennsylvania [email protected] (717) 291-4701
Robert A. McMahon Media Pennsylvania [email protected] (610) 566-5210
Michael Nutter Philadelphia Pennsylvania [email protected] (215) 686-2181
C. Kim Bracey York Pennsylvania [email protected] (717) 849-2221
Joseph Riley Charleston South Carolina [email protected] (843) 577-6970
Stephen Benjamin Columbia South Carolina [email protected] (803) 545-3075
Lee Leffingwell Austin Texas [email protected] (512) 974-2250
Beth Van Duyne Irving Texas [email protected] (972) 721-2410
Allen Owen Missouri City Texas [email protected] (281) 403-8500
Leonard Scarcella Stafford Texas [email protected] (281) 261-3900
Matthew Doyle Texas City Texas [email protected] (409) 643-5902

This article updated 8/28 to reflect that Pedro Segarra is the mayor of Hartford, Conn., not Hartford, Colo.

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Comcast to 2,700+ NY’ers – Your Opposition to Our Merger: Unsubstantive, Should Be Ignored

Phillip Dampier August 26, 2014 Comcast/Xfinity, Time Warner Cable No Comments

psctestComcast told the New York Public Service Commission that the overwhelming majority of the substantive comments submitted to the regulator “express a strong desire and enthusiasm for the improved and expanded voice, data, video, and broadband services” that the merger of Comcast and Time Warner Cable will bring to the state.

new math“Given these many concrete benefits, and the lack of any harm to competition or consumers, it should come as no surprise that the overwhelming majority of the substantive comments (approximately 110 out of a total of about 140 substantive comments) filed in this proceeding support Commission approval of the transaction,” Comcast wrote in its latest submission.[1]

Comcast’s “new math” applies a subjective (and undisclosed) standard about what constitutes “substantive,” but in the end the cable company has urged the Commission to disregard the sentiments of more than 2,700 New York State residents who have filed comments in strong opposition to the merger because their remarks simply fell beneath Comcast’s standards.

“The minority of organizations and individuals who filed substantive comments opposing the transaction largely ignore the significant public interest benefits of the transaction,” writes Comcast. “Instead, these detractors raise issues that are not relevant to the transaction and are factually inaccurate and speculative – such as unfounded concerns about Comcast’s broadband management practices, misplaced criticisms of Internet Essentials, and general fears that ‘big is bad.’ None of these commenters identify any reasonable basis to reject or condition the Joint Petition.”

Comcast did not apply the same rigorous standards of ‘substantiveness’ to comments sent by its supporters, who often used what New York Assemblyman Joe Morelle admitted was a Comcast-supplied template ghost-written by the company itself.[2]

“Supporters of the transaction span a wide range of groups and individuals, including governmental officials (e.g., mayors, town supervisors, county commissioners, city councils, state legislators, and school superintendents); businesses and non-profits; state and local organizations focused on economic development; community service, youth and family, and diversity organizations; arts and education groups; and others,” writes Comcast.

chicago urban leagueBut the company never disclosed the many financial ties between Comcast and its political and civic supporters. In fact, a large percentage of the “template” letters of support originated from politicians like Assemblyman Morelle, who recently received a $1,000 check from Comcast[3] and Rochester city councilman Adam McFadden, whose group claims to receive $50,000 annually from Comcast.[4] [5]

In fact, it is hard not to find financial connections between Comcast’s supporters and the cable company itself. A random sampling uncovers multiple instances of Comcast contributions that were followed by letters of support for its merger:

The Urban League has received at least $12 million in in-kind contributions from Comcast since 2007, in addition to direct financial contributions to local chapters around Comcast’s service area.[6] In just one example Stephen Thomas, Comcast’s area vice president, who also serves on the Chicago chapter’s board of directors, presented the organization with a check for $40,000.[7] Just a few months later, Andrea L. Zopp, president of the Chicago Urban League, wrote to urge the FCC to approve Comcast’s merger deal.[8]

“Comcast is a strong supporter of the Urban League movement throughout the country. … I sincerely ask that you approve this transaction so that the Urban Leaguers and everyone else can benefit,” Zopp wrote.

Various chapters of the Boys and Girls Club also submitted glowing letters in favor of the merger. Comcast has partnered with local Boys & Girls Clubs since 2000, providing more than $68 million in cash and in-kind contributions. But no chapter was willing to openly admit Comcast asked them to share their views with New York regulators and only a few disclosed the financial ties the organization has with Comcast. The Boys and Girls Club has been a very loyal supporter of whatever Comcast has on its corporate agenda. Chapters submitted letters urging regulators to approve the Comcast-NBC merger in 2010 as well.[9]

Another strong supporter Comcast quotes from in its filing is the National Black Chamber of Commerce. But they don’t mention Comcast is a corporate sponsor of the group.[10]

Comcast (falsely) claims their Internet Essentials is the country's only discount Internet program for the disadvantaged. But Google Fiber gives it away for free.

Comcast (falsely) claims their $9.95 Internet Essentials is the country’s only discount Internet program for the disadvantaged. But Google Fiber gives it away for free to anyone who wants it.

Comcast also called criticism of its Internet Essentials discount Internet program “inaccurate and unavailing,” despite the fact the company’s own senior vice president David Cohen admitted the program was stalled to use as a political chip to win approval of its merger with NBCUniversal.[11]

Comcast also falsely claims it is the only Internet discount program for the poor of its kind.

“[Critics] simply advocate a different broadband adoption program – one that no company has ever implemented, that has never been attempted or even analyzed, and that may not be equally sustainable or popular or easy to publicize,” Comcast wrote. “Comcast is the only company to offer a program of this kind, and it has continually and voluntarily expanded the scope, breadth, and eligibility for and benefits of the program.”

In fact, it may have escaped Comcast’s attention that Google has provided residents in their fiber service areas with free Internet service with absolutely no income qualification or needs test, after paying a “construction fee” ranging from $30 in Provo, Utah [12] to $300 in Kansas City.[13] Residents in the latter community can break the somewhat steep construction fee into 12 payments of $25 each and have a guarantee of free service for up to seven years. Over the course of both programs, Google offers a more compelling and less expensive offer without onerous qualification requirements.

Yr    Google Fiber Cost  Comcast Internet Essentials Cost (@$9.95/mo)

1          $300                            $119.40
2          $0                                $119.40
3          $0                                $119.40
4          $0                                $119.40
5          $0                                $119.40
6          $0                                $119.40
7          $0                                $119.40

Over the course of seven years, a Google Fiber customer selecting discounted Internet would pay $300. A Comcast customer would pay $835.80 – a difference of $535.80.

While Google Fiber’s service area is very limited, it does offer an evidence-based challenge to Comcast’s inaccurate claim that its Internet Essentials program is unprecedented and represents the best solution for New York. A well-designed program designed to help New Yorkers will sell itself far better than the complicated, restrictive, and revenue-protection-oriented Internet Essentials, and its lack of penetration in long-standing Comcast service areas speaks for itself.

The California Emerging Technologies Fund also found serious problems with Internet Essentials from top to bottom.[14]

“Comcast makes the sign-up process long and cumbersome,” CETF claimed.[15] “The application process often takes 2-3 months, far too long for customers who are skeptical about the product in the first place, and have other pressing demands on their budgets. The waiting period between the initial call to Comcast and the CIE [Comcast Internet Essentials] application arriving in the mail can stretch 8-12 weeks, if it comes at all. After submitting the application, another 2-4 weeks elapse before the equipment arrives. Many low-income residents do not have Social Security Numbers (SSNs) and are required to travel long distances to verify their identities because Comcast has closed many of its regional offices. Recently, some potential subscribers with SSNs were rejected over the phone and told they had to visit a Comcast office. Comcast has a pilot effort in Florida that should be expanded to allow customers to fax or e-mail photocopied IDs as proof of identification.”

CETF also found widespread violations of Comcast’s own program rules when the cable company conducted credit checks on customers, which can reduce a customer’s already challenged FICO score with a credit inquiry on their file.

“Comcast conducts credit checks for some customers, contrary to CIE rules,” the CETF filing said. “Dozens of clients are receiving letters from Comcast saying that they have failed a credit check. Comcast specifically states and advertises no credit check is needed for CIE. This has repercussions beyond obtaining broadband service. The act of performing a credit check can negatively impact the consumer’s credit worthiness. Initially, some CIE service representatives told customers they could pay $150 deposit to avoid a credit check, also contrary to program rules.”

Customers have also been redirected to Comcast sales call centers, where they receive aggressive sales pitches for higher-cost products and services.

Comcast’s celebration of its commitment to minority television programming does not mention the expansion of minority programming was a condition of the FCC’s approval of the Comcast-NBCUniversal merger.

Among Comcast's "compelling" minority programming that customers are asked to pay for: Baby First Americas, a

Among Comcast’s “compelling” minority programming that customers are asked to pay for: Baby First Americas, a network for bilingual infants aged 0 to 3.

Subscribers got less than compelling programming and more rate increases to pay for it.

National Public Radio noted Comcast’s new minority channels are not exactly drawing significant audiences[16]:

Out of the gate, well, first was Baby First America — for bilingual infants aged 0 to 3.

ASPiRE, a channel focused on African-Americans, is mostly repurposed old series and gospel music videos.

ASPiRE, a channel focused on African-Americans, is mostly reruns and talk shows. Writer Anita Wilson Pringle called the network’s programming “crap.”

Next came Aspire, a family-oriented network from ex-basketball star and entertainment impresario Magic Johnson. Its lineup includes reruns of The Cosby Show plus even older fare: Julia, Soul Train and The Flip Wilson Show.

Writer Anita Wilson Pringle, for one, is no fan of that lineup of TV retreads.

“He promised innovative, new fresh ideas, new fresh programming, and it’s not,” she says.

Pringle is upset that Aspire’s managers were merely reshuffled from the old Gospel Music Channel. And she says the people Aspire is supposed to serve — African Americans — don’t exactly need more reruns or talk shows.

“It’s crap, if you really want to know the truth,” she says. “But my thing is, they did this to break that monopoly that Comcast was having on all these stations, and all that has happened is that Comcast has a stronger monopoly.”

Comcast’s commitment to improve energy efficiency is comparable to Time Warner Cable’s own commitments, providing no net gain for New York consumers.[17]

Comcast’s promised commitments to deliver better customer service have been made annually for several years with no significant improvement, as measured by independent customer satisfaction studies. Comcast relies on a quotation from a Wall Street analyst, Craig Moffett, who provides only anecdotal evidence of customer service improvements and has supported the merger’s potential benefits for shareholders.

Comcast's idea of effective competition is using your Verizon Wireless connection for home broadband use. A 16GB monthly plan will cost consumers as much as $170 a month before taxes and fees.

Comcast’s idea of effective competition is using your Verizon Wireless connection for home broadband use. A 16GB monthly plan will cost consumers as much as $170 a month before taxes and fees.

Comcast’s assertion that the Commission should ignore or downplay bad customer service experiences of customers outside New York is made despite their own admission they serve only a tiny number of New York customers today. Is Comcast suggesting it would be inappropriate to consider their customer service record in comparable-sized cities across the country, some likely served by the same national and offshore customer care centers New Yorkers will reach when they have future problems with Comcast?

Comcast’s claims of plentiful broadband competition also do not exist in the real world for many New Yorkers. The Commission has faced such a large number of complaints about Verizon landline service, which also supports DSL, it launched a Verizon Service Quality Improvement Plan. When a Verizon landline becomes inoperable for several months, as customers in Inwood experienced earlier this year[18], their DSL broadband is also inoperable. For customers served by cable, but not reached by DSL service from telephone companies like Verizon, Windstream, and Frontier Communications, their only realistic home broadband connection comes from the local cable company. Wireless broadband, advocated as a competitive alternative by Comcast, does not penetrate well indoors in large sections of rural upstate New York and is constrained by very expensive service plans and severe limits on data usage, compelling customers to pay excessive fees to obtain service.

A family consuming 16GB of data per month (less than today’s average use per person) would face Internet bills of $170 a month with Verizon Wireless ($40/mo Monthly Line Access – Internet Device + 16GB Data Plan ($130/mo Monthly Account Access)[19] Wired broadband accounts from Time Warner Cable in comparison cost as little as $14.99 a month for unlimited usage.

Where DSL service is available, it is typically offered at speeds lower than a cable operator can offer. As an example, at our residence in the Town of Brighton, N.Y., Frontier Communications can only offer a maximum speed of 3.1Mbps from their DSL service because of our distance from the central office.

Comcast will have a near-total monopoly on all broadband service in excess of 15Mbps in current Time Warner Cable territories not serviced by Verizon FiOS. Verizon’s maximum speed DSL offer is for speeds “up to 15Mbps.”[20] Verizon FiOS expansion outside of already-committed territories has ended, and the majority of upstate New York is not served by Verizon’s FiOS fiber upgrades.

Comcast claims there is a world of difference between highly regulated energy-generation utilities and the “competitive” marketplace for telecommunications.

“Proposals that the Commission approach this transaction with the same mindset, and apply the same types of burdensome conditions, are entirely unjustified,” argues Comcast.

“Electric and gas utilities remain the quintessential public service utilities,” says the cable company. “Their markets are characterized by a lack of competition, captive customer bases, and direct rate-setting and operational oversight by the Commission.”

In fact, many cable customers in New York do face a lack of competition for fast broadband speeds, are stuck with the single cable operator serving their community, and lack the consumer protections offered by the Commission that apply to other utilities.

The Commission can test Comcast’s claims of competitiveness for itself. Stop the Cap! offers a challenge to find more than one provider that can deliver consistent, widely obtainable broadband speeds of 15/3Mbps or greater in downtown Buffalo, Rochester, Albany or Syracuse.

The Commission will discover there is only one provider now capable of delivering that service across the entire urban centers of upstate New York: the local cable company.

In far western New York, Verizon FiOS is available only in small parts of South Buffalo and North Buffalo and select suburbs.

In Rochester, Frontier Communications does not offer consistent access to speeds greater than 10Mbps.

Albany and Syracuse are also bypassed by Verizon FiOS, left with Verizon DSL, which only offers speeds “up to 15/1Mbps.” Most customers get less.

Comcast would have the Commission believe any review of its broadband service is off-limits and outside of their jurisdiction anyway.

“The Commission has no authority to review broadband transactions and lacks statutory authority to regulate broadband services – and beyond this, cable broadband services are interstate information services that are not properly subject to state jurisdiction,” claimed Comcast.

It further argued the Commission must ignore “matters beyond the Commission’s jurisdiction,” quoting from a 2006 proceeding.

mergerComcast evidently forgets the law has changed in New York. In 2006, the Commission had to disprove a petition was in the public interest to reject it. In 2014, the applicant is solely responsible for carrying the burden of proof that their proposal is in the public interest.

Nothing in Section 222 of the Public Service Law places restrictions on what the Commission can consider when weighing public interest benefits.

Comcast’s claims of its wish to expand service into rural, unserved areas also must be questioned. Comcast automatically sets a high bar for expansion suggesting it will occur only “where economically feasible,” which is the same standard in place with the incumbent cable operator.

“Where economically feasible” is the reason cable companies in New York have rarely expanded their service territories, except in high growth areas where population density warrants expansion. All cable operators have an internal formula governing Return On Investment requirements that must be met before expansion begins. The Commission must review that information and compare the standards used by both applicants, because it will ultimately govern any future natural expansion of cable service in rural New York.

Conclusion

Comcast’s rosy picture of New York’s future with a merged Time Warner Cable-Comcast is belied by the real world experiences of New York consumers who have learned from long, hard experience that when a cable company starts promising a better deal, the result has too often been higher rates and fees, unwanted channels, poorer customer service, and new restrictions.

'An Extortion-for-distortion hose job.'

Don’t close your eyes to the facts.

Cable operators have enjoyed unfettered power to escape oversight with inflated claims of fierce competitiveness that they suggest will keep prices and abusive behavior in check, but in reality rates are rising and Comcast’s customer approval ratings live in the basement.

Comcast’s most recent filing continues to dismiss these very real concerns for New Yorkers who will not have a choice of a cable operator other than Time Warner Cable or Comcast. Calling the comments of more than 2,700 New Yorkers largely opposed to this merger “unsubstantive” is precisely the attitude of a cable company that has earned its bad reputation with customers.

Sending “templates” to politicians and non-profits that have received funding from Comcast and asking them to send letters to regulators urging approval of the company’s latest item on the agenda is the kind of “substantive” evidence Comcast wants the Commission to rely on in this proceeding.

But worst of all, Comcast suggests that any review of the company’s broadband service, its pricing and performance, and the potential for usage allowances and usage fees above and beyond the current high cost of Internet service is off-limits to New York regulators. The Commission already recognizes the growing importance of broadband in New York State and that it is, in reality, nearly a necessity.

Time Warner Cable recognizes that and is moving ahead on an upgrade program that delivers broadband benefits above those offered by Comcast and at a lower price, with no usage allowances or overlimit fees likely in the foreseeable future. It remains clear to us that Time Warner Cable is the better choice for New York. We have a well-documented history of not being great fans of Time Warner Cable, but we know worse when we see it, and we see it in Comcast.

[1] http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={60D7F65E-3AAB-4507-B58D-7F14E31E130A}

[2] http://www.rochesterhomepage.net/story/d/story/lawmakers-write-letters-supporting-comcast-deal/38184/WjHF311jeEqZdF9IOMX7mg

[3] http://www.rochesterhomepage.net/story/d/story/lawmakers-write-letters-supporting-comcast-deal/38184/WjHF311jeEqZdF9IOMX7mg

[4] http://stopthecap.com/2014/08/11/rochester-city-councilman-adam-mcfaddens-love-for-comcast-and-the-50k/

[5] http://www.nlc.org/corporate-engagement/corporate-partners-program

[6] http://corporate.comcast.com/news-information/news-feed/national-urban-league-resource

[7] http://www.thechicagourbanleague.org/cms/lib07/IL07000264/Centricity/Domain/14/impact-jan-2014.pdf

[8] http://www.thewrap.com/consumer-groups-urge-fcc-to-reject-comcast/time-warner-cable-deal/

[9] http://apps.fcc.gov/ecfs/document/view?id=7020462210

[10] http://www.nationalbcc.org/news/progress-reports/2107-recap-of-22nd-annual-conference

[11] http://stopthecap.com/2013/07/10/comcasts-internet-essentials-facade-padding-the-bottom-line-without-cannibalizing-your-base/

[12] https://fiber.google.com/legal/subscriber/provo/

[13] https://fiber.google.com/legal/subscriber/kansascity/

[14] http://arstechnica.com/business/2014/07/comcasts-internet-for-the-poor-too-hard-to-sign-up-for-advocates-say/

[15] http://www.cetfund.org/files/140711_CETF_Partners_Comcast-TWC_FCC_PR_and_Filing.pdf

[16] http://www.npr.org/2013/11/12/244558834/comcast-deal-puts-new-minority-run-channels-in-play

[17] http://www.timewarnercable.com/en/about-us/corporate-responsibility/environment.html

[18] http://manhattan.ny1.com/content/shows/ny1_for_you/203064/ny1foryou–inwood-verizon-customers-want-phone-service-outages-to-stop

[19] http://www.verizonwireless.com/wcms/consumer/shop/shop-data-plans/more-everything.html

[20] http://www.verizon.com/home/shop/shopping.htm

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Stop the Cap! Files Testimony in Opposition to Comcast-Time Warner Cable Merger With FCC

Stop the Cap! completed and today filed a formal submission with the Federal Communications Commission opposing the merger of Time Warner Cable and Comcast.

We joined tens of thousands of filers — mostly consumers — strongly opposed to the merger on the grounds it is not in the public interest.

Earlier today, Consumers Union filed its petition with more than 20,000 signatures of ordinary Americans across the United States who want nothing to do with Comcast.

Back here in New York, Comcast this afternoon filed a response with the Public Service Commission regarding our (and other) submissions opposed to the merger. We will be analyzing and rebutting their response straight away. Comcast went all-out name-dropping people and groups (many with direct, usually undisclosed financial ties to Comcast) to sell New York regulators the theory ‘the groups and people who matter’ are in favor of their merger while those opposed are mostly out-of-state rabble or unsubstantial individuals of few words.

“Given these many concrete benefits, and the lack of any harm to competition or consumers, it should come as no surprise that the overwhelming majority of the substantive comments (approximately 110 out of a total of about 140 substantive comments) filed in this proceeding support Commission approval of the transaction,” writes Comcast.

Comcast did not share their subjective standard of what constitutes “substantive” but a quick review of the groups cited in Comcast’s response show some substantive was involved - a check from Comcast either recently or in the past. Our view is that it doesn’t take more than a sentence to express extreme displeasure about Comcast taking over Time Warner Cable, and those views should matter just as much as a virtual Hallmark card from a group or politician that used a Comcast-provided “template” with a detachable check at the bottom.

Our favorite was Comcast’s highly defensive ‘hey New York PSC, it’s none of your business that Comcast is testing usage caps and you cannot use it against us’:

The Writers Guild of America, West, Inc. (“WGAW”), Zephyr Teachout and Tim Wu, and Stop the Cap! argue that Comcast will extend data caps and usage-based pricing to New York to impose restraints on online content and drive up consumer costs.

This broadband-related claim is irrelevant to this proceeding and beyond the Commission’s jurisdiction. Indeed, the FCC expressly approved of usage-based billing in its 2010 Open Internet Order and is again examining the issue in the pending Open Internet rulemaking.

In other words, whether data caps are appropriate is a matter of federal regulatory concern, not one that relates to this proceeding or that is even transaction specific (since nothing precludes TWC from adopting caps at any time, as it has in the past).

So regardless of whether data caps are in the public interest or not, New York should not be allowed to weigh in because former FCC chairman Julius Genachowski said usage based billing could be an innovative way to bill for broadband.

In reality, New York can decide for itself what is in the best interests of its residents, and Time Warner Cable determined what was best after a two-week firestorm in 2009 that taught them compulsory usage caps were a really bad idea. But Comcast isn’t terribly interested in the views of the unsubstantive masses — which is comparable to their attitude toward customers, so no change there. It’s just a free preview weekend of what we all have in store if Comcast takes over.

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Time Warner Cable PlayStation Network Users Can Avoid Future Problems With a DNS Change

Phillip Dampier August 19, 2014 Consumer News, Time Warner Cable 3 Comments

sony-entertainment-networkLate last week, hundreds of thousands of PlayStation Network users subscribed to Time Warner Cable broadband found their game play interrupted by an “outage” that turned out to be a misconfigured domain name service (DNS) update. Whether Sony was responsible for sending bad data or Time Warner Cable had problems properly integrating the changes, gamers were out of luck for hours Friday until a corrected update could be distributed.

The service outage affected customers relying on Time Warner Cable’s own DNS servers. Customers that dropped Time Warner Cable and their DNS provider were back in business almost immediately.

Broadband customers need not rely on the domain name service offered by your provider. Both Google and OpenDNS offer more robust alternatives, and you can make the switch in seconds.

PlayStation Network users: change your PS3 or PS4 Internet connection setting to manual, changing only the DNS server information.

Everyone else: Check your router manual for the address of the configuration menu.

Choose any two out of these four DNS addresses for your primary and secondary entries:

  • Google: 8.8.8.8 and/or 8.8.4.4
  • OpenDNS: 208.67.222.222 and/or 208.67.220.220

 

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Approving Comcast-Time Warner Cable Merger Opens the Door for Massive Cable Consolidation

Liberty Global logo 2012Although Charter Communications did not succeed in its bid to assume control of Time Warner Cable, it isn’t crying about its loss to Comcast either.

Greg Maffei, president and CEO of Liberty Media Corp., which has very close ties to John Malone, former cable magnate, says if the merger between Comcast and Time Warner Cable is approved, it will start a race to merge the rest of the cable industry into just a handful of cable operators serving almost the entire country.

Comcast’s argument is that since it does not compete with Time Warner Cable, there are no antitrust or anti-competitive reasons why it should not be allowed to buy Time Warner Cable. If state and federal regulators believe that, nothing precludes a company like Charter (Liberty has an ownership interest in the cable company) snapping up every other cable operator in the country. In fact, Charter has signaled consolidation is precisely its intention, alerting investors it intends to play a very aggressive role in mergers and acquisitions once it sees what regulators feel about the Comcast-Time Warner deal.

Likely targets for Charter include:

  • Atlantic Broadband
  • CableONE
  • Cablevision
  • Mediacom
  • Midcontinent Communications

Cox remains privately held and Bright House Networks is tied up in contractual obligations with Time Warner Cable.

http://www.phillipdampier.com/video/Bloomberg Maffei Charter Is Logical Acquirer of Cable Assets 8-6-14.flv

Greg Maffei, president and chief executive officer of Liberty Media Corp., talks about the outlook for Charter Communications Inc. and the cable industry. Speaking with Betty Liu on Bloomberg Television’s “In the Loop,” Maffei also discusses the decision by Rupert Murdoch’s 21st Century Fox Inc. to withdraw its $75 billion takeover bid for Time Warner Inc. (5:40)

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Cloudy Days for Bright House Networks Ahead? Comcast-Time Warner Merger Complicates Volume Discounts

(Original image: Musée McCord Museum - Re-envisioned by Stop the Cap!)

(Original image: Musée McCord Museum) — (Re-envisioned by Stop the Cap!)

Bright House Networks customers could face much higher cable television bills and a decline in technology upgrades thanks to a merger deal between two companies that should theoretically have no impact on them.

Bright House Networks has been an odd duck among cable companies since it was created from cobbled-together systems originally owned by Vision Cable, Cable Vision, TelePrompTer, Group W, Paragon and others. In the 1990s and early 2000s, Time Warner effectively ran the cable systems still owned by the Newhouse family. After the AOL-Time Warner merger, Advance/Newhouse decided to take back control of the management and operations of its cable systems, relaunching them under the Bright House Networks brand.

While the Newhouse family continues to assert its ownership and control of Bright House, it is highly dependent on Time Warner Cable to handle cable programming negotiations and broadband technology. That is why Bright House customers were sold “Road Runner” broadband service for many years – a brand familiar to any Time Warner customer. To this day, programming blackouts that affect Time Warner cable TV viewers usually also impact those subscribing to Bright House. Time Warner Cable also retains a minority ownership interest in Bright House.

Although the company is well-known in Indianapolis, Birmingham, suburban Detroit and Bakersfield, its presence is most recognized in central Florida, where it serves customers in Orlando, Daytona Beach, Lakeland, Tampa Bay, and many points in-between.

Despite the fact Bright House serves more than two million customers and is the sixth largest cable company in the country, it is small potatoes to major programmers like Comcast-NBCUniversal, Viacom, Disney, and others. All the best discounts go to satellite television providers and giant cable operators like Comcast and Time Warner Cable. Smaller operators pay substantially more.

That is where the merger between Comcast and Time Warner Cable comes in.

brighthouse1The federal government is likely to count Bright House’s 2.2 million customers as part of the Time Warner Cable family, at least as far as control of cable programming pricing is concerned. Despite Comcast’s voluntary commitment to keep its national share of the cable TV business under 30 percent with the merger of Time Warner, Comcast hasn’t taken seriously counting  the customers of the uninvited cousin – Bright House.

Logistically and legally, Comcast would assume control of Time Warner Cable’s interest in Bright House if the merger is approved by state and federal regulators. That may be too much for regulators to swallow.

Because Bright House is insignificant to Comcast and Time Warner Cable’s marriage plans, Comcast could end up terminating the arrangement, which even Bright House acknowledged would put it “at risk of losing the material benefits such agreements provide, include possibly raising costs for its customers and hampering its ability to compete effectively—a result that would certainly not be in the public interest.”

The Newhouse family has evidently seen the writing on the wall, hiring Wall Street investment bank UBS to advise whether it makes sense to sell. If Bright House does decide to hang out a “for sale” sign, Time Warner Cable has the right to bid first. But by that time, if things go according to plan, it might be Comcast ultimately swallowing up yet another large cable system.

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NYS Assembly Leader Joe Morelle Plagiarizes Comcast Testimony in Letter to Regulators

New York State Assembly Leader Joe Morelle (D-Rochester) plagiarized large sections of a Comcast press release and the Congressional testimony of Comcast’s executive vice president David Cohen in a letter sent to the New York Public Service Commission endorsing the cable company’s bid to merge with Time Warner Cable.

Morelle evidently ignored or was unaware of his constituents’ overwhelming opposition to the merger deal and seemed unfazed about Comcast’s long record of dreadful customer service, constant rate increases, and the company’s plan to reimplement usage limits on consumer broadband accounts. Morelle simply cut and pasted Comcast’s own words in his letter about the merger, as we illustrate below:

 

morelleN.Y. State Assembly Leader Joe Morelle: “The combination of Comcast and Time Warner Cable will create a world-class communications, media and technology company to help meet the increasing consumer demand for advanced digital services on multiple devices in homes, workplaces and on-the-go.”

cohenDavid Cohen, executive vice-president, Comcast: “The combination of Comcast and TWC will create a world-class communications, media, and technology company to help meet the insatiable consumer demand for advanced digital services on multiple devices in homes, workplaces, and on-the-go.”

 

morelleJoe Morelle: “Comcast has a proven record of investing in new technologies, facilities and customer support to provide the best in broadband Internet access, video and digital voice services.”

cohenDavid Cohen: “Comcast has a proven record of investing in new technologies, facilities, and customer support to provide the best in broadband Internet access, video, and digital voice services.”

 

morelleJoe Morelle: “Similarly, TWC has made significant strides in offering a diverse array of video, broadband, and voice services to its customers.”

cohenDavid Cohen: “Similarly, TWC has made significant strides in offering a diverse array of video, broadband, and voice services to its customers.”

 

morelleJoe Morelle: “Combining the two companies’ complementary strengths will accelerate the deployment of next-generation broadband Internet, video and voice services across the new company’s footprint.”

cohenDavid Cohen: “Combining the two companies’ complementary strengths will accelerate the deployment of next-generation broadband Internet, video, and voice services across the new company’s footprint.”

 

morelleJoe Morelle: “Residential customers will benefit from technological innovations including a superior video experience, higher broadband speeds and the fastest in-home Wi-Fi, while also generating significant cost savings and other efficiencies.”

comcastComcast Press Release: “Through this merger, more American consumers will benefit from technological innovations, including a superior video experience, higher broadband speeds, and the fastest in-home Wi-Fi. The transaction also will generate significant cost savings and other efficiencies.”

 

morelleJoe Morelle: “In just two-and-a-half years, over 350,000 families, representing approximately 1.4 million low-income consumers, have been connected to the Internet thanks to this program. This proposed merger would extend this vital program to many more low-income households in New York by providing access to it in certain areas of the state currently only served by Time Warner.

cohenDavid Cohen: “In just two and a half years, over 300,000 families, representing some 1.2 million low-income consumers, have been connected to the transformative power of the Internet thanks to this program. The transaction will extend this vital program to millions more Americans in the areas currently served by TWC.”

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Bright House, Time Warner Cable, and Mediacom Customers Get Expanded TV Everywhere

NBC_Universal.svgThree cable operators have announced additions to their TV Everywhere services that let cable television subscribers stream certain cable networks from home computers and portable wireless devices.

Time Warner and Bright House are inching towards making their apps more useful with new deals that will allow viewing outside of the home. Unsurprisingly, Time Warner has managed to sign a deal with their potential new owner — Comcast/NBCUniversal –  that includes anywhere-viewing of live and on demand content from NBCUniversal’s suite of cable networks including USA Network, Syfy, Telemundo, Bravo, Oxygen, CNBC, MSNBC, mun2, NBC Sports Network, and Golf Channel, as well as local NBC and Telemundo-owned broadcast stations.

Since Time Warner Cable handles cable programming negotiations for Bright House Networks, both customers will receive the enhanced service.

Within the next few days, customers will have access to the NBC Sports Live Extra and Golf Live Extra services via apps on iOS and Android devices, as well as online. Access to the remaining broadcast and cable networks will become available to Time Warner Cable and Bright House customers starting in September, and continuing on an ongoing basis. Customers must verify their subscription to begin watching.

nfl channelUnfortunately, there are only a handful of NBC-owned and operated broadcast stations across both companies’ service areas. In most cases, local affiliate stations are owned and operated by other corporate entities and will not be included in this deal.

Mediacom Communications has expanded its own TV Everywhere package, adding NFL Network and NFL RedZone this week, along with mobile access to FX, FXX, FX Movies, National Geographic and National Geographic Wild.

Mediacom now offers 40 channels for out-of-home viewing and plans to add FOX Sports Go and other popular sports networks by September.

TV Everywhere allows Mediacom customers to always be connected to live entertainment and information,” said Mediacom senior vice president Ed Pardini. “Adding new channels to this service extends the value of a video subscription by giving customers more options to view their favorite programs when and where they want, whether that’s the big screen in living rooms or with the convenience of a mobile device.”

Mediacom customers looking for NFL Network and NFL RedZone on smartphones and tablets must download the free NFL Mobile App by going to the web site. Mediacom is now listed as a participating provider. Customers should log in with their Mediacom email address and username.

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