A Cablevision ad against Fox

Cablevision and Fox finally settled their two week programming dispute Saturday when two local Fox-owned broadcasters and an assortment of cable channels returned to suburban New York area-television screens.  Cablevision ultimately capitulated to Fox’s increased programming fees and grumbled it was stuck paying an “unfair price” for the programming.

“In the absence of any meaningful action from the FCC, Cablevision has agreed to pay Fox an unfair price for multiple channels of its programming including many in which our customers have little or no interest,” Cablevision said, adding that it “conceded because it does not think its customers should any longer be denied the Fox programs they wish to see.”

But in reality, Cablevision subscribers who suffered through the two week outage will ultimately pay the price for Fox-owned programming in the next round of cable company rate increases.

While Cablevision subscribers can now watch the remaining games of the World Series from home, the cable-broadband industry post-game wrap-up show is now underway, surveying the winners and losers.

Let’s take a look:

WINNER: Fox Networks

Fox got everything it wanted, and then some, from Cablevision.  Consumers never take the side of the cable companies that have overcharged them for years. All most know is that when their favorite channels are not on the cable system that charges them more than $50 a month for service, it’s the cable company’s fault. While the terms of the final deal were not disclosed, it’s a safe bet Cablevision is paying rates even higher than those charged to New York’s other cable company Time Warner Cable.  The cave-in by Cablevision means Time Warner and other cable systems will likely also see higher rates for Fox programming now set as a precedent by Cablevision.  So will telco and satellite TV providers.  That’s money Fox will take to the bank.

LOSER: Cablevision

Not only did they alienate their customers, at one point telling them to watch Fox programming on third party websites, they are now facing a $450 million class action lawsuit from subscribers (filed by an attorney with prior connections to Fox parent company News Corporation.)  It is difficult to feel sympathy for a cable company deprived of Fox programming that still charged subscribers full price for channels they could not watch.  One industry executive praised Cablevision for “taking one for the team,” a phrase consumers have heard before to defend corporate pickpocketing.

Cablevision was actively promoting ivi last week through their customer service representatives

WINNER: ivi Networks

Stop the Cap! reported on upstart ivi several weeks back.  The service carries all of metropolitan New York’s broadcast stations and Cablevision ended up recommending its blacked-out subscribers buy an ivi subscription to watch Fox-owned broadcast channels no longer on the cable lineup.  The new online cable system, which started in September, added New York subscribers in droves, annoying Fox to the point of sending a cease-and-desist letter to Cablevision CEO James Dolan to get cable company representatives to stop recommending the service, which Fox claims is “illegal, and perhaps criminal.”

WINNER: Verizon & Satellite Dish Companies

Many subscribers fleeing Cablevision for competitors have probably left for good, especially if they scored substantial discounts and promotions during their first year or two of service.  Verizon FiOS always faced resistance from customers not wanting to devote the time needed to install the service, and when customers have been with a cable company for 20 or more years, change does not come easy.  But die-hard sports fans already inconvenienced by earlier channel interruptions pulled the trigger just to get away from the endless programming disputes.

Verizon scored new customers over the dispute.

LOSER: Comcast-NBC Merger

Lawmakers set to either applaud or introduce roadblocks to the proposed merger between Comcast and NBC saw first hand what can happen when big media companies duel it out over money — millions of customers can be left in the middle with nothing to show for it.  Bloomberg reports the dispute could force significant concessions to prevent or limit such disputes in the future.  U.S. Representative Maxine Waters, a California Democrat, said the Fox-Cablevision spat made her “increasingly concerned with the potential harm” if a dispute arose between an enlarged Comcast and competing video provider. In a letter to FCC Chairman Julius Genachowski last week, she called for “substantive and enforceable conditions” to preserve competition.

WINNER: NFL Networks – Where is Our Binding Arbitration?

Cablevision’s demands for binding arbitration to settle their disputes with Fox rang hollow, if not hypocritical, for NFL Network officials, who have been calling on Cablevision for the same binding arbitration the cable operator demanded of Fox.  The NY Post quoted an unnamed executive at the cable network: “Cablevision has been urging Fox to agree to binding arbitration — the same strategy we’ve been offering Cablevision — but we continue to get sacked.”

LOSER: The Federal Communications Commission

Despite demands from most consumer groups and Cablevision to intervene in the programming disputes, the FCC delivered a rebuke telling all sides to stop with the stunts and start with serious negotiations.  Beyond that, the agency did what it has done best under the Obama Administration: sit on its hands.

THE BIGGEST LOSER: You

With the grandstanding by both sides finally over Saturday — the shouting and expensive publicity campaigns wrapped up and put away for next time (KeepFoxOn.com now renders a blank page) — the person left standing with the bill in hand was you.  Fox wrapped the costs of its expensive publicity campaign into the rate increase Cablevision finally conceded to paying.  The bags of money to be handed from the Dolan family that owns Cablevision over to Rupert Murdoch will be filled from your pockets.  And there is no end in sight to future disputes raising programming costs even higher than ever.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Cablevision Fox Dispute 11-1-10.flv[/flv]

Bloomberg News delivers three reports detailing the impact of increased programming costs on cable bills, inaction by the FCC, and whether Americans are fleeing cable TV for online video instead.  (10 minutes)

Advertising money cannot buy: a technical problem helped Maine viewers get acquainted... real acquainted with independent candidate Shawn Moody.

Viewers of Bangor’s CBS affiliate watching on Time Warner Cable were treated last week to a one and half hour endorsement of independent candidate Shawn Moody thanks to a technical snafu.

A Time Warner Cable spokesman said an equipment failure caused WABI-TV’s signal to lock up at around 5:40am last Tuesday.  At the time, an ad for Moody was on the air and a frozen picture was delivered to viewers until the problem was fixed at around 7:30am.

“The hour and a half ad for Moody was the biggest exposure this candidate has received all year, all because of a cable company equipment failure,” writes our reader Stefan from Bangor.  “Although the picture was frozen, the sound worked normally so the whole thing was surreal.”

The cable company apologized for the failure and noted there was no implied endorsement of the candidate.

“The signal freeze had nothing to do with the content,” said company spokesman Andrew Russell. “It just happened to be what was on the screen when it happened.”

[flv]http://www.phillipdampier.com/video/WABI Bangor Time Warner Fixes Glitch 10-28-10.flv[/flv]

WABI-TV explains to its viewers what happened when a political ad got stuck on their TV screens for an hour and a half last week.  (1 minute)

Stop the Cap! reader James dropped us a note to let us know Cablevision customers calling to cancel their cable service are scoring $20 a month off their cable bills for two years if they decide to stay with the cable company. It’s all because of the ongoing dispute between Cablevision and Fox over programming fees.

That $500 goes a long way towards compensating Cablevision customers for at least a year of petty programming disputes between executives who think of $500 as tip money.

So if you are a Cablevision customer, here is how to get your money back:

1. Call Cablevision at this number – 1-800-918-2581, which takes you directly to the customer retention department.
2. Tell the representative you wish to cancel your cable service because of the ongoing dispute with Fox and your loss of local and cable channels.
3. When they argue with you about why you should stay, tell them you are tired of being put in the middle of these disputes and forced to pay for programming you are not getting.
4. They may offer a $20 credit for just 12 months.  Tell them that is not long enough and if the representative won’t do any better, hang up and call back.

Be polite, persuasive, but persistent.  Customers on existing promotional deals may not qualify for this, but if you are paying regular Cablevision prices, you do.

The sooner you call, the better as word is getting out about this deal which could be withdrawn at any time.

A firestorm erupted this week on Broadband Reports over news that Shaw Cable was turning its existing “soft” Internet Overcharging scheme into a “hard” system filled with usage limits and overlimit fees.  One of Shaw’s social media representatives tried to throw some water on the fire:

I’ve seen a lot of discussion here about the new policy, and quite a bit of inaccurate or incomplete information and speculation, so I’d just like to set all of this straight.

Essentially, the system works like this: your package includes an allowance for a certain amount of traffic. If you exceed that traffic for one billing cycle, you will receive a notice on your bill advising you of the fact. We also automatically activate your traffic monitor so that you can monitor your usage from that time forward.

Since the bill arrives, of necessity, after your billing cycle ends, we give you a cycle’s grace between the period when you exceeded and when we start charging. That is to say that if you exceed in billing cycle one, you’ll receive your bill part of the way through billing cycle two, and so we won’t start charging for excess traffic until billing cycle three.

As to how much bandwidth will cost, here’s how it works:

If you exceed your monthly traffic allowance, you’ll receive a bill for $1 per GB for Extreme and above, $2 per GB for High Speed and High Speed Lite. Considering how much media, etc, you can obtain in 1 GB, $1 is not expensive.

However, if you plan to exceed by a considerable margin, data packs are also available, and what these do is allow you to increase the traffic allowance by the following amounts:

• $5 for 10 GB
• $20 for 60 GB
• $50 for 250 GB

So this gives you the option to increase your monthly traffic allowance to meet your needs. It’s also considerably less expensive than the standard $1-$2 per GB rate.

The best part about the data packs is that you can apply them at any time up to three days before the end of your billing cycle. So if you discover that you’ve exceeded your included usage allowance, and still have three days to the end of the billing cycle, just give us a call (or chat) and ask that we add the appropriate data pack for you.

[…]I’ve seen some posts here suggesting that this new policy has been financially motivated to avoid upgrading our networks. That’s actually not the case. In fact, just a few weeks ago we increased the included usage for all of our services by 25%, just in time for NetFlix. If you want to think about it in financial terms, just consider how much more bandwidth the network would need to allow a 25% increase for every customer, and how much that kind of network upgrade would cost. It’s pretty clear that our motives are not financial. If they were, increasing the included usage would not be very sensible, would it? It would, after all, considerably reduce the number of customers exceeding their monthly traffic allowance, would it not?

I hope that this clarifies the situation, but if there are any questions, please do feel free to ask.

James – Shaw

Shaw tinkers with their Internet Overcharging scheme

In part, this rebuttal was also directed to Stop the Cap!, because we are actively participating in that discussion.  Shaw’s argument about usage limits and how the company’s implementation of them benefits their customers is familiar to many of our readers who fought off usage caps proposed by Time Warner Cable last year.  Somehow, the same company that sets unjustified limits and penalty prices on already-overpriced broadband service is doing customers a real favor by offering alternative pricing plans for heavier users that reduces war-crime profiteering to pickpocketing.

That’s logic Stalin might have appreciated, but most customers already burdened with high cable and broadband bills won’t.

Our response:

Don’t you just love it when Internet Overchargers always claim their new gotcha fees are never about the money?

“James” from Shaw offers a classic example of what happens when your broadband provider implements a scheme to boost your broadband bill and then claims it’s good news that the company has some options to keep those overlimit fees from stinging too badly.

When Internet Overchargers tell you it’s not about the money, it’s really ALL about the money.

Here's what happens when a third provider ruins a Canadian broadband duopoly

Who knew that an invisible border that makes unlimited Internet possible in Vancouver, Washington makes it impossible in Vancouver, B.C. Using Shaw’s argument, providers south of the border are headed straight for bankruptcy court while companies like Shaw barely hold on with “free usage upgrades” of existing limits.

But of course the financial reports for shareholders Shaw’s social media mavens don’t talk about tell the real story. Shaw enjoys considerable revenue from their broadband division thank you very much, and plans to do even better now that they can achieve ‘revenue enhancers’ from their enforced Internet Overcharging schemes.

That’s another way of saying Shaw’s Wallet Biters are back for more of YOUR money.

Whether it’s 20 cents per gigabyte (at least a 100 percent markup) or $2 (rape and pillage pricing), these schemes are hardly good news for Shaw customers. Indeed, if Shaw was truly concerned about saving their customers something under their cap ‘n tier regime, they’d deliver those “usage paks” to customers automatically instead of forcing them to call the company to add them when they go over the limit. If you remember to ask, Shaw gets extra profits they can take to the bank. If you forget, Shaw throws a Money Party on the extra high everyday overlimit rates.

What Shaw forgets to tell you is the cost to deliver increased usage and bandwidth to customers is ALWAYS dropping, and dropping fast. The price charged to move 10GB of traffic not too long ago moves 100GB today. So it’s hardly rough on Shaw to expand yesterday’s unjustified limit to today’s higher, still unjustified limit.

When one also considers yesterday’s “soft cap” is about to become tomorrow’s budget-busting “hard cap,” few Shaw customers are calling 1-800-FLOWERS to send a thank-you bouquet to Calgary.

Having been to Calgary, I know the people in Alberta and elsewhere across western Canada know a ripoff when they see one. They ask, “why is our broadband so overpriced and usage limited?” They wonder where the CRTC has been. They wonder why countries in Asia and even eastern Europe are now beating the pants off Canadian broadband with faster speeds at lower prices.

The fact is, Shaw pulls these overcharging tricks on their customers because they can. The broadband duopoly in Canada from cable and phone companies deliver punishing usage limits on Canada that are being banished in other countries around the world. Even notorious cappers like Australia and New Zealand are finally ridding themselves of broadband that is always capped, always throttled.

What would be sensible is that Shaw, a multi-billion dollar major player in Canada would plow some of their enormous profits into network capacity upgrades that can accommodate the needs of Canada’s growing knowledge economy, not inhibit its growth. Then, earn additional profits by selling even faster speed tiers and content customers can access over those networks.

Considering even Shaw admits only a small percentage of customers create traffic problem on their networks, it’s not hard to see the company’s new reliance on hard Internet Overcharging is designed to capture new revenue from those hitting their caps, thanks to the increasing number of broadband customers using their fast connections for high bandwidth content.

And hey — bonus: it also discourages those customers from even considering pulling the plug on their cable package to watch everything online.

Recently, the FCC issued a report claiming Americans are often only getting half the broadband speeds they are promised by providers.  KTVX-TV, the ABC station in Salt Lake City, recently investigated whether that held true for local residents.

The results?  Most Salt Lake City Internet users don’t always get a good deal from providers that often deliver inconsistent speeds, even on premium priced plans that can cost up to $130.

Ookla, which has been compiling speed test data as well, reports the United States was in 11th place globally when it comes to being honest about what broadband speeds providers actually deliver.  Don’t get too excited — we score 30th on the download speed index.  More than two dozen nations deliver faster service.

Which nation scores at the very top of the honesty chart?  The Republic of Moldova, a largely-Romanian speaking former Soviet Republic.  In fact, ISPs in Chişinău, the capital city, are too modest, claiming speeds lower than they actually provide customers.  The rest of the top-10 honesty ranking contains a number of countries in eastern Europe — countries that blow the United States out of the water when it comes to telling the truth about broadband speed:

1. Republic of Moldova, 109.21%
2. Russia, 98.65%
3. Slovakia, 98.64%
4. Lithuania, 97.97%
5. Ukraine, 97.58%
6. Hungary, 96.80%
7. Switzerland, 96.72%
8. Bulgaria, 95.96%
9. Latvia, 94.83%
10. Norway, 93.97%

Five states manage to score high marks on the honesty chart, most of which are served by Verizon.  We suspect FiOS may be a major factor in why these states lead the others:

1. Delaware, 100.85%
2. Massachusetts, 100.07%
3. Maryland, 99.56%
4. Rhode Island, 98.83 %
5. Virginia, 98.36 %

KTVX found that the area’s incumbent cable company Comcast did manage to deliver promised broadband speeds, often when most customers are not using the service.  Speeds were far lower in the evening — prime-time usage hours — sometimes as low as 3Mbps.

“Qwest’s DSL is best forgotten,” says Stop the Cap! reader Sangi, who writes from the city of Roy.  “It’s so bad a lot of us think of it as dial-up on caffeine.”

Sangi used to receive DSL service from the phone company, which is planning to merge with CenturyLink.

“When we moved closer to town, cable was an option and that made Qwest something we could live without,” Sangi says.  “They never came close to the speeds they marketed and when we complained, they claimed we wouldn’t notice the difference when browsing web pages and checking e-mail.”

“Apparently Qwest considers the Internet good for little else, at least how they deliver it,” he added.

[flv]http://www.phillipdampier.com/video/KTVX Salt Lake City You Are Getting Half Your Promised Broadband Speed 10-22-10.flv[/flv]

KTVX-TV in Salt Lake City investigates broadband speed claims and finds residents don’t always get what they pay for.  (3 minutes)