Cablevision characterizes the dispute as a "TV tax" on its subscribers

More than three million Cablevision subscribers in New York, New Jersey and Connecticut are without their local ABC station as another retransmission fee dispute reached an impasse late Saturday night.

WABC-TV, the top-rated television station in New York went dark on Cablevision customer screens Sunday morning, potentially depriving cable customers access to tonight’s Academy Awards telecast.

“If Cablevision is serious about doing right by their customers and returning ABC7 and its programming to them, then they need to act now. The ball is in their court,” WABC-TV president and general manager Rebecca Campbell said in a statement.

The station says it sent Cablevision a new proposal earlier today, but Cablevision had not yet responded.

Cablevision argues it already pays $200 million dollars a year for Disney-owned cable networks like ESPN, and WABC’s request for what the company characterizes as $1 per month per subscriber is too much.

Cablevision is telling subscribers “it is wrong for ABC to demand $40 million in new fees to help pay the salaries and bonuses for top ABC executives” and characterizes the additional fees as a “TV tax.”  That argument might have some sway had Cablevision not recently agreed to some hefty pay raises and bonuses for its own management, while customers faced another rate increase.

Coming just two months after another high profile dispute between the cable operator and Scripps’-owned Food Network and HGTV, some Cablevision subscribers have had enough.

Stop the Cap! reader Jen said she ordered Verizon FiOS for her Long Island home as soon as she heard about the dispute.

“We’ve been here before and I just knew these guys would not get serious about negotiations until after the station was pulled, and I’m tired of them playing with my lineup arguing over who gets my money,” Jen writes.  “Verizon FiOS had a great sign-up offer and they don’t have these bull-headed disputes that drag customers into the middle of the ring to get repeatedly gored.”

Jen’s service was installed Friday, so she’s enjoying tonight’s Oscar telecast while her neighbors might not.

“Maybe we’ll have them over so they don’t have to play around with rabbit ears,” she adds.

Cablevision has been hounded by politicians who are also annoyed with programming disputes.  Cablevision says it would agree to binding arbitration and wants the Federal Communications Commission to intervene.  Both possibilities are highly unlikely, however.

What is likely is the high profile Academy Awards broadband will act as a de facto deadline for the two sides to hammer out a final agreement in time to allow WABC back on the lineup.  Most likely, both sides will settle around the 50-60 cent range for New York’s channel seven.

[flv width=”600″ height=”356″]http://www.phillipdampier.com/video/WABC New York Cablevision Drops WABC 3-7-10.flv[/flv]

WABC-TV New York tells viewers Cablevision dropped channel 7 early Sunday morning after negotiations failed to resolve a dispute over fees. (2 minutes)

[flv]http://www.phillipdampier.com/video/Cablevision Dispute WABC 3-5-10.flv[/flv]

Cablevision is running this message for subscribers explaining the loss of WABC-TV from the cable lineup. (3 minutes)

'Don't worry about our new higher prices.'

AT&T is raising its rates for existing DSL customers.  Stop the Cap! reader Bill writes that his latest bill shows a $3 forthcoming rate hike on his “Elite” DSL service just three months after his one year promotional price expired.

“First, there is nothing ‘elite’ about AT&T DSL.  Their promised 6Mbps speed is really closer to 3Mbps, and worse when the weather is bad,” Bill writes. “Second, I’m going to be paying more than $45 for DSL service that my nearby neighbors pay for 10Mbps cable modem service that actually delivers 10Mbps.”

Bill doesn’t have that option unless he pays $8,000 to his local cable company to install a cable down the street to reach his home.

“I called AT&T and tried to downgrade my service,” Bill adds. “When you call and reach the cancellation department, they’ll offer you all sorts of incentives to stay.”

Bill joined many other AT&T customers who have called the company to complain about the price increase during difficult economic times, and many are getting substantial discounts.

“They gave me another year of service for $24.95, the same promotional price I had before, which saves me $20 a month,” Bill notes.

That’s more meaningful than AT&T’s explanations on customer bills.  Broadband Reports quotes from AT&T: “We’re adjusting our pricing for AT&T High Speed Internet service in an effort to better align our pricing structure across our entire service territory, and to better reflect the value of our broadband service. But don’t worry, even with this adjustment, our pricing is still competitive across the industry.”

Some of our readers are not satisfied with that explanation and have been calling customer service looking for discounts, which they’re finding.  Among the offers:

• Six months of service for $24.95 with a promise of an additional six months at that price if you call and ask at the end of the term;
• Six months of service at $22.95 with a similar six month extension when the first six months are up;
• 12 months of service at $22.95.
• 12 months of service at $19.95 (mostly found in Illinois).

Representatives may first offer to “lower your price” by switching you to a lower speed tier.  Refuse that offer and tell them you simply want a lower price.  Customers who have other competitive options (cable) will find AT&T most amenable to offering a lower price.  Those with no other options may find AT&T less willing to negotiate.  In those cases, some of our readers recommend calling back to speak to a different customer service representative.  If you do not have a standard residential phone line along with your DSL service, getting discounts becomes very difficult.

Trying to negotiate takes less than 30 minutes of your time and often brings you more than $200 in savings over the coming year.  That’s worth the effort.

[flv]http://www.phillipdampier.com/video/Sen Al Franken Grills Comcast-NBC Merger Advocates 2-4-10.flv[/flv]

Stop the Cap! has received several requests for Sen. Al Franken’s (D-Minnesota) comments during the Senate hearing in early February reviewing the proposed merger.  So here, for your viewing pleasure, is the portion of the hearing where Franken comes out swinging in opposition to the ongoing consolidation of media companies in America. (February 4th – 14 minutes)

Virgin Mobile’s Broadband2Go prepaid mobile broadband service is increasing usage allowances in hopes of attracting new customers at current prices.

The service, launched last June, has not been as successful as it could be, especially in markets where competitors like Cricket offer no-commitment wireless broadband for $40 a month for up to 5GB of usage, for a lower initial cost.

Sprint, which now owns the Virgin Mobile brand, isn’t lowering prices, but it is increasing usage allowances.

Before:

$10 buys you 100MB of access that expires 10 days after activation.
$20 buys you 250MB of access that expires 30 days after activation.
$40 buys you 600MB of access that expires 30 days after activation.
$60 buys you 1GB of access that expires 30 days after activation.

Now:

The high end Virgin Mobile plan now matches many postpaid plans for pricing and usage allowance, without a two year contract.  But it’s still priced $20 higher per month than Cricket.  ConnectedPlanet notes:

According to Virgin Mobile chief marketing officer Neil Lindsay, more than 70% of Virgin’s customers said they signed up for Broadband2Go because of the flexibility to change the plans as they needed more or less bandwidth and to pay only for what they needed. Virgin is targeting those cord cutters, such as students or families, who may be using the Broadband2go as a replacement for their at-home Internet service. Virgin’s own surveys indicate that this at-home group already includes 16% of its Broadband2Go customers. Of its user base, 30% also use the card more than four times per week, and 47% asked for additional data on their existing plans.

In turn, Leap Wireless, which owns Cricket, is hinting it may be looking at its own pricing and usage allowances to maintain competitiveness.  No specifics yet, but Leap’s 4th quarter earning results were hardly impressive, reporting a wider loss than Wall Street analysts expected, as competition and a weak economy helped erode profits.  The company does not plan to expand into new cities in 2010, but will offer nationwide coverage for existing customers with expanded roaming agreements.  Also on the way — smartphones from Blackberry and at least one Android phone.

Rogers Communications Monday began their latest Internet Overcharging scheme on Canadian broadband customers — they’ve doubled the maximum overlimit penalty from $25 to $50 for customers who exceed the cable company’s arbitrary broadband usage allowances.

It’s a fact of life for anyone living with a provider that wants to charge too much for broadband service.  Like the credit card industry, the tricks and traps keep on coming as providers seek to monetize everything they can to extract as much money from customers as possible.

For some providers like Bell, the trick is to gradually reduce your usage allowance, exposing more and more customers to overlimit fees (the company even sells an insurance plan to protect you from their audacious pricing).  For others, the fee trap comes from gradually increasing the maximum overlimit fee until there is no maximum.

Rogers has chosen the latter method, effectively passing through massive rate increases for Canadians that dare to use too much.

Originally, Rogers Extreme service was priced at $60 a month for 10/1 Mbps service with a 95 GB cap.  Customers who traditionally exceeded that paid $1.50 per gigabyte in overlimit fees.  With a $25 maximum penalty, many customers just accepted the fee as their ticket to unlimited broadband.  Now, Rogers has conceded a quarter to customers, lowering the per gigabyte penalty rate to $1.25.  But for customers who still regularly exceed their allowance, the charges really add up.  That $60 a month now balloons to $110 per month for exactly the same unlimited service customers used to enjoy for less.

That forces customers like the Globe & Mail’s Michael Snider to make some choices:

1. Reduce usage — a win for Rogers and broadband rationing for him;
2. Upgrade to a higher tier service plan to get a better allowance — a win for Rogers and a higher bill for Snider.  Extreme Plus has an allowance of 125 GB, just a 30 GB difference, for an additional $10 a month;
3. Grin and bear it — a win for Rogers and a future that guarantees him bigger bills indefinitely.

This is the type of move that may force customers who regularly approach or exceed their cap to seriously consider upgrading their service package.If that’s part of Rogers’ plan, it worked.

I just bumped up my service from Extreme to Extreme Plus (if you do the same, inquire about the promotion that offers $20 off Internet for the first six months if you lock in for a year — that’s upgrading only). So now, I’ll be getting 25-Mb download speeds (still a measly 1-Mb upload, though) and a cap of 125 GB a month and, once the promotion ends, will be paying $14 a month more ($10 for the service and $7 for the modem rather than $3).

Call me a sucker, but twice in the past year I have exceeded my 95 GB cap and paid an extra $25 on my bill — once after backing up several gigs on an online backup service and once after downloading a few movies on my Xbox.

But Snider also faces, by design, the one-two punch of Internet Overcharging schemes.  Not only do they fatten provider profits, they also discourage him from using his broadband service, fearing a higher bill.  Even better, they discourage cord-cutting — relying on your broadband service and dropping your cable-TV package.

I am discovering that I’m actually limiting my consumption of some totally legitimate services because I’ve no desire to pay extra on my Rogers bill at the end of the month.

Take for example Microsoft Xbox’s movie service. After waiting for what seemed eons for some kind of a legit movie download service, I finally have access to one that has a list of movies that I’d actually like to see, but it’s proving too expensive to really enjoy it regularly. Reason is, downloading an HD movie eats up more than 11 GB of my bandwidth — more than 10% of my monthly allotment (before I upgraded) for one freaking movie. That goes for games too. It seems as though distributors are leaning more and more to online delivery, but at 6 or 8 GB per game, again, that eats up a lot of bandwidth.

Being the gatekeeper for broadband distribution and also being a content distributor has its advantages.  If the competition starts getting too hot and heavy, locking down the distribution platform guarantees no competitor will ever get the best of you.

Whatever you do, don't turn off this modem, despite the fact you're paying for traffic it receives 24/7. Unplugging a cable modem could "damage it" according to Rogers.

Rogers claims its all about costs from increased broadband consumption, but one look at their pricing scheme proves that wrong.  Rogers reserves the biggest penalties of all for its lightest-use customers.  Those on Rogers Ultra-Lite tier suffer with barely-broadband speeds of 500/256 kbps with a usage limit of just 2 GB for a ridiculous $27.99 per month.  The penalty rate for customers who can hardly be described as “power users” is a whopping $5 per gigabyte.  They pay more because they impact the network more?  How does that work?

The Canadian Radio-television and Telecommunications Commission (CRTC), the agency responsible for oversight of telecommunications services in Canada is no help.  They’ve become a de facto telecom industry trade association, rubber-stamping approval of whatever providers want.  The result is expensive, usage-limited, speed-throttled broadband service across the country.

What can you do to control your monthly broadband bill Rogers wants to raise?  Their advice is basically to use less of the broadband service you paid good money to get.  Oh, and despite the fact whenever your cable modem is powered on you are bombarded with constant traffic which eats into your allowance, whatever you do, don’t leave it unplugged — it will “damage it.”  From Rogers Internet FAQ:

We STRONGLY recommend that you do not turn off your modem when you are away from home. Your cable modem has been designed to remain powered at all times. Regularly turning it off and on may result in damage to your cable modem.

…and damage to our profits.