When Midwest Publishing couldn't get their AT&T Internet service restored, a business neighbor allowed the company to run a cable next door and borrow theirs.

AT&T likes to think of broadband as a tool towards economic recovery, but too often service problems end up hurting small businesses.

Ask Pat Boll, business manager of Midwest Publishing.  When his company’s AT&T business broadband connection suddenly stopped working last week, much of the business activity at the company stopped with it.  Midwest Publishing, like many small businesses, depends on the Internet to conduct business, take orders, and assist customers.

Boll spent three days trying to get answers from AT&T customer service, but only managed to learn the reason why the company’s Internet service stopped working: AT&T claimed a disconnect order entered into their systems in May was processed… in late August.  That was news to Boll, because they never asked for their service to be shut off.

What was worse is that the mysterious disconnect order remained in AT&T’s computer systems preventing the telecommunications company from re-establishing the service, costing Midwest Publishing thousands in lost business and wasted time.

Like so many stories we’ve covered on Stop the Cap!, Boll turned to local media for help.  He contacted Tulsa TV station KJRH-TV.  Their “2 Works for You Problem Solvers” got in touch with AT&T and managed to do what Boll couldn’t accomplish himself — get AT&T to turn Internet service back on.

Small businesses who depend on the Internet should never have only one provider.  Having a backup service provider can make all the difference in an extended outage.  Many small businesses maintain basic DSL service or even wireless broadband as a backup in case their primary connection stops working.  The expense is well worth it if your business depends on the Internet to stay in business.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/KJRH Tulsa Internet glitch costs small business thousands 9-2-10.flv[/flv]

KJRH-TV in Tulsa shares Pat Boll’s story with Tulsa viewers.  AT&T provides DSL service through much of Oklahoma.  (2 minutes)

Time Warner's "Get Tough" Campaign Caved In to Disney/ABC's Demands

So much for “getting tough.”

Time Warner Cable averted a blackout of several Disney-owned cable and broadcast outlets Thursday when it cut a deal with Disney to keep programming on Time Warner Cable.  As part of the agreement, the nation’s second largest cable operator agreed to add several Disney-owned networks subscribers will ultimate pay higher cable bills to receive in 2011.

The cable trade and business press are applauding the agreement.  The Wall Street Journal said the two sides surprised the TV industry by avoiding the level of public acrimony common with similar disputes in the past, avoided nasty publicity campaigns, and reached an agreement that avoided a standoff.

“We are pleased to have reached an agreement without any interruption in service,” said Time Warner Cable Chief Executive Glenn Britt.

Subscribers may also appreciate they aren’t facing the loss of programming they would still pay for as part of their monthly cable bill.

Disney wins new fees for carriage of ABC shows approaching 50 cents a month per subscriber, according to sources close to the negotiations.  The programmer also will receive substantial increases in payments from the cable company for ABC Family and The Disney Channel, along with the right to repurpose that programming online through services like Hulu and ABC.com.

Time Warner Cable has argued that programming costs make up the bulk of rate increases, yet its newest agreement with Disney compels the cable company to add additional networks and services cable subscribers may have no interest in receiving, much less paying to receive.

Among them are:

• Disney, Jr., a new 24-hour cable network targeting preschoolers which will replace ABC SoapNet in early 2012;
• ESPN Goal Line, a new network showing reruns of college football games;
• ESPN Buzzer Beater, still another new network rerunning college basketball games is also under development and will be added to Time Warner Cable’s lineup when launched.
• ESPN 3D, which will show-off sporting events on newly available 3D televisions.
• The addition of ESPN Deportes HD to Time Warner Cable’s larger footprint.
• Availability of ESPN Radio feeds in New York, Los Angeles and Dallas to Time Warner Cable’s video platform.
• A Time Warner Cable/ESPN Deportes co-branded, Spanish language sports website in Los Angeles.

One of the most contentious issues in the debate had been online video programming.  Time Warner Cable agreed to add ESPN3, an online network, for “authenticated” cable subscribers who have a package that includes ESPN.  That’s a departure from Disney’s usual demand that operators pay a fee for every broadband customer they have in return for access. That means Time Warner Cable customers who subscribe to a TV package will soon be able to access ESPN, ESPN2, ESPN3, and ESPNU even if they don’t subscribe to Road Runner.  But it also means Road Runner customers who don’t take cable-TV will not have access.

Finally, Time Warner Cable won the right to include on-demand access to popular ABC and Disney Channel shows.

Ultimately cable customers will pay a price for this agreement, facing even higher cable rate increases in 2011 to cover the costs for additional programming.  Many critics contend Time Warner Cable’s “Roll Over or Get Tough” campaign is more public relations than substance.  The company can claim they are fighting for subscribers when an intransigent programmer forces the cable company to take networks off the air, but in reality most of the time agreements are reached that look to many more like “rolling over” than “getting tough,” especially when the company simply passes along the added costs to cable customers.

[flv]http://www.phillipdampier.com/video/CNBC Disney Time Warner Agreement 9-2-10.flv[/flv]

CNBC covered the announced agreement between Time Warner Cable and Disney, reporting it was Disney’s largest carriage deal ever.  (2 minutes)

Last week, Stop the Cap! took a look at Virgin Mobile’s new unlimited $40 prepaid wireless broadband service.  Early testing looked promising, with speed test results that were well within economy tier DSL service and better than expected.  But by early this week the story began to change.

We’ve continued testing the service here and have noticed that while Virgin Mobile’s service turned in respectable performance during the business day (East Coast time), once people started heading home, it’s a completely different story.  For the last five days the service has deteriorated to the point of unusability by dinnertime.

It had gotten so bad, we went back to using Cricket’s wireless broadband.

So what’s happening?

First, it’s important to distinguish that these problems are impacting only Virgin Mobile.  Sprint’s postpaid customers can use the same cell tower and backbone network and not experience any performance issues.  Virgin Mobile’s home location on Sprint’s data network is in San Francisco, and until September 2nd, all traffic headed for the Bay Area to what is basically a virtual LAN on Sprint’s network.  The IP address we were assigned was actually an internal address for that virtual LAN.

Our problems started appearing Monday afternoon when we noticed web pages refused to load completely.  Since many web pages are composed of content from a variety of different web hosts (Google Analytics, advertising, embedded content, etc.), if parts of the page refuse to load, the page itself may not appear at all.  Advertising blocks were the worst problem, often leaving one staring at a blank web page waiting for the ad content to render.

By Wednesday, this problem simply made using Virgin Mobile for broadband untenable.  Few pages — even Google’s home page, refused to load reliably.  When pages did appear, they took longer than dial-up in many cases.  We tried to perform some diagnostics but found trace-routing impossible after the third hop and speed tests could not be loaded, much less run reliably.

The fact the worst problems occurred in the late afternoon and evening hours point to a network completely overloaded with customers.

And indeed, Virgin Mobile admitted as much when it replied to some tweets indicating it had quadrupled capacity by the end of this week.  Some users also reported they no longer connected exclusively through the San Francisco (Walnut Creek) location.

As of Thursday, anecdotal reports indicated some service improvements, but the service is still prone to slowdowns during peak usage times.

A few things are evident now that a week has passed:

1. Virgin Mobile Wireless Broadband does not share the better performing Sprint postpaid data network those customers receive.  Virgin Mobile customer traffic shares a much smaller “pool of bandwidth” because of the limitations imposed by its routing.
2. The company needs to either abandon its current routing scheme or dramatically modify it to accommodate the traffic.
3. Refunds for disgruntled customers are often available for the hardware, but don’t expect to get a refund for data usage.
4. The service problems come regardless of the device used or the number of signal bars you receive.
5. New routing cities have popped up since Thursday to supplement San Francisco — Charlotte, N.C., New York, Atlanta, Boston, Southfield (Mich.), Los Angeles, Philadelphia, and a few others.  Feel free to share yours in the comments section.

On Friday, Virgin Mobile suffered a major outage caused by a power failure that has stopped or seriously delayed delivery of text messages.  The outage is also affecting some data connections and customer service availability.  Angry customers have been pelting the company’s Facebook page with hostile remarks since the outage began.

If you signed up for Virgin Mobile wireless broadband, please share your experiences in our comments section!

The dollar-a-holler crowd that takes “charitable” contributions from Comcast is enjoying an abundance of riches thanks to your cable bill payment and their corporate agenda to get the NBC-Comcast merger approved. Everyone is coming out to celebrate the deal — from the United Way in Denver to a Texas sheriff and a group opposing grave desecration.  Regular Stop the Cap! reader Bones sent word Comcast’s Money Party is just getting started.

The Wrap notes Comcast has donated $1.8 billion in cash and in-kind largess to non-profit organizations since 2001, many of which will helpfully throw 44 cents back in the form of supportive letters to the Federal Communications Commission telling them to do whatever America’s largest cable company wants.

It’s all a part of the dirty little game some non-profits play with corporate benefactors to work against your consumer interests.  Even worse, many of these same groups will also ask -you- for a donation as well.  If Comcast keeps raising its rates, perhaps the best option in response to those playing on Comcast’s side is to tell them you already sent a donation… to Comcast.

This year’s circus of money has generated a torrent of correspondence to the FCC that is often nothing less than absurd.

The Wrap found one letter from the president of the Washington, D.C.-based Cherry Blossom Festival.  Did you know cherry blossoms were deeply committed to seeing Comcast and NBC get married?

“Over the past few years, Comcast has generously donated services and sponsorship to our events,” Diana Mayhew, president of the Washington, D.C.-based Cherry Blossom Festival, wrote to the Federal Communications Commission in July. “I believe as Comcast teams up with NBC, it will continue to be a great partner for the Cherry Blossom Festival.”

But it gets much sillier.

Stop the Cap! has compiled just a sampler of comments from several interest groups all in a hurry to get their letters into the public record.  Most were bad, but we also include an example of a letter from a group that didn’t simply applaud the deal.  Our comments are in italics:

National Puerto Rican Coalition: “In our view, […] this joint venture will lead to valuable benefits and unprecedented advances in media diversity for Hispanics and other people of color.”

Do you think the fact NPRC also received valuable funding from the Comcast Foundation might have had something to do with their cheerleading letter?

Cuban American National Council
Hispanic Federation
League of United Latin American Citizens
National Council of La Raza
National Hispanic Media Coalition
SER-Jobs For Progress National, Inc.: “We strongly believe that the Memorandum of Understanding between Comcast and NBCU and the Hispanic Leadership organizations seeks to promote the goals of expanding economic opportunity for Hispanic families and preserving and enhancing programming for Hispanic audiences, and view these commitments as stepping stones to a more responsive and responsible corporate citizenry.”

These groups, many of which also receive direct funding from Comcast, went over the top cooking up a “Memorandum of Understanding” (or is it a shakedown agreement) to land positions on Comcast’s “Advisory Councils.”  These Latino groups managed to get their travel and other expenses paid for by Comcast to attend twice-yearly meetings to discuss diversity issues.  Their agreement also allows this coalition to empower itself, by getting Comcast to agree to call them when looking for “qualified” Latino law firms, suppliers and vendors, and even top management.  That provides these groups power and influence as interested candidates appeal to them to gain a spot on the “qualified” list.  But it goes even further — Comcast has to add several “qualified” (identified with the help of these groups) Latino-owned cable channels to the lineup whether subscribers want them or not.

This agreement was marked “confidential,” but you can read a copy right here.  By the way, it’s no surprise the League of United Latin American Citizens is on this list.  They’ll peddle themselves out to any Big Telecom company that comes with a check in hand, especially AT&T.

Gay & Lesbian Alliance Against Defamation (“GLAAD”): “Given the weight and significance of the Comcast/NBCU merger, GLAAD urges the FCC to ensure that the community of lesbian, gay, bisexual and transgender Americans are not forgotten in its calculus of diversity, and that the stories and visibility of LGBT people and their families are held up as part of the valued diversity in its discussions, analysis and recommendations in this merger.

GLAAD’s filing was an example of a respectable comment letter filed by a minority interest group.  They didn’t take a strong position for or against the merger.  Instead, they shined a light on the issues that concern the LGBT community and said the FCC should take a closer look.  That’s fair and appropriate.

Hmong New Life Radio Broadcasting
Hmong Women’s Heritage Association
Hmong Report At 7
Lao Family Community of Fresno
Sacramento Asian-American Minority, Inc.
National Hmong Grave Desecration Committee: “We believe Comcast’s sensitivity to our need for such programming speaks extremely well of them as a company. It is a clear indication that they will continue to exhibit their sense of the responsibility to underserved communities such as ours subsequent to a merger with NBC-Universal.”

These six groups must be new to the influence game because they each sent nearly identical (often word for word) letters to the FCC in support of the merger.  On the ludicrous scale, nothing beats the National Hmong Grave Desecration Committee finding itself compelled to write a formal letter to the FCC on a multi-billion dollar cable-broadcast merger.

Here's something to remember us by....

Mile High United Way: “Comcast has provided sizeable foundation grants for DRH projects and other meaningful financial donations to other United Way programs. In addition to philanthropy and volunteerism, the company has also provided us with top notch communications support. The company has helped us create video presentations for our key fundraising efforts; it has placed public service announcements on its cable stations in an attempt generate attention and attendance for our events; it has also provided time on its Comcast Newsmakers public service broadcast to publicize our events, our programs and our people.”

That’s all wonderful, but none of it justifies or even argues for a merger between a cable and television network.  This is nothing more than dollar-a-holler advocacy at work — United Way gets goodies from Comcast and now they are returning the favor.  What United Way won’t get from our family is another nickle.  After all, our contributions to United Way pay for this group’s time and effort peddling Comcast’s corporate agenda to the FCC.  And I thought the United Way was supposed to be a charitable organization, not a lobbyist advocating for Comcast.

Sheriff Adrian Garcia – Harris County (Tex.): “Comcast is not just a business operating in Harris County, it is a partner in our effort to be a better and safer community. I hope the FCC will keep all that Comcast does in mind and permit the NBC Universal partnership to move forward.”

Voters in Harris County might want to keep this letter in mind come election time.  This shockingly inappropriate involvement by a law enforcement agency willing to stick its nose in a corporate merger is inexcusable.  Perhaps Harris County needs a sheriff that will spend time fighting crime, not typing up letters to benefit the cable company.  Oh, and by the way Sheriff — Comcast really is just a business.

The National Zoo: “In sum, Comcast has proven to be a reliable partner that cares about our work here at the Zoo in promoting innovative science, educating children, and ultimately establishing a beautiful urban park offering families excitement as well as a welcome place to enjoy nature. We deeply care about our engagement with our local friends and families here in Washington, D.C. and appreciate the fact that Comcast shares our commitment to serving the local community.”

That’s grand, but has nothing to do with a corporate merger proposal.  Comcast’s subscribers are the ones who ultimately care about the Zoo.  It’s their money that paves the way for all those good works.

Center for the Homeless: “I hope you will consider this testimony in favor of Comcast and its strong sense of involvement in American communities and service to those who need it most. Comcast is a true partner in the important work that we do.”

Another group whose mission should be helping the homeless is devoting time and resources to sending love notes to the FCC on behalf of a giant cable company.  By the way, none of the clients your group serves can afford Comcast’s prices.

Partnership for a Drug Free New Jersey: “I look forward to our continued partnership with Comcast and am excited to welcome NBC onto their team. We will continue to reach teens all over New Jersey to help ensure that they remain drug-free and continue to bring the message of hope to so many of our state’s residents.”

The excitement is even greater when you recognize Comcast and the national umbrella group Partnership for a Drug Free America can’t thank each other enough.  The non-profit explained it all in a newsletter: “At the Partnership’s third annual Making A Difference gala held this winter in the Grand Ballroom of the Waldorf-Astoria Hotel, more than 850 guests gathered to honor Ralph J. Roberts, founder and chairman of the executive and finance committee for the Comcast Corporation, and his son, Brian L. Roberts, chairman & CEO of Comcast. Chairing the gala were Geraldine B. Laybourne, chairman & CEO of Oxygen Media and James B. Lee, Jr., vice chairman of JPMorgan Chase & Co. […] The evening generated over $2.1 million to support the Partnership’s programs for children, parents and families.”

The accolades should have stopped at a “thank you” card, not with the unseemly way this group returns the favor by advocating for a merger deal involving one of their benefactors.

"It's your high prices," Americans tell subscription television companies.

For the first time in the history of the subscription television industry, more Americans disconnected their cable-TV, satellite and telco IPTV service than signed up.  The reason?  Americans have finally reached their limit on what they’re willing to pay to Comcast, Time Warner Cable, DISH, AT&T, and others for subscription television.

At first, only premium movie channel subscriptions for networks like HBO and Showtime took the hit, but now Americans are cutting cable’s cord at an accelerating pace.  SNL Kagan, which has tracked the cable industry for decades, reports cable and phone companies saw their worst second quarter in history — losing 216,000 subscribers who canceled their basic cable subscriptions.  If the same losses continue in the third quarter, the pay TV industry will see their total number of households decline to below 100 million subscribers nationwide.

SNL Kagan notes the losses have little to do with online video viewing.

“Although it is tempting to point to over-the-top video as a potential culprit, we believe economic factors such as low housing formation and a high unemployment rate contributed to subscriber declines in the second quarter,” said Mariam Rondeli, an SNL Kagan analyst.

Another factor is the continued decline in wages for America’s middle class.  Despite long working hours and maxed out productivity, Americans take home pay began declining in 2003 and continues its downward slide, now made worse by the housing crisis and high unemployment.

Under these conditions, subscription TV is becoming a luxury.

Looking closer into the numbers, there are a few companies that managed to add subscribers, mostly at cable’s expense.  Verizon FiOS did best of all, adding 414,000 new customers.  DirecTV managed to add 81,000 new subscribers in the second quarter.  Most of those gains came because of promotional pricing which gave consumers a break on their monthly bill for up to a year.

The cable industry is where most of the bleeding is taking place.  Six out of eight major cable operators broke records in subscriber losses in the spring and early summer, cumulatively losing 711,000 customers.  Their overall share of the pay TV market dropped from 63.6 percent in 2009 to 61 percent today.

That’s why cable operators are telling their retention departments to make deals with customers threatening to leave.  Many subscribers are scoring new customer promotional pricing for up to a year in return for a commitment to stay with the cable company.  All customers have to do is call and threaten to cancel and negotiate.

Stop the Cap! recommends not taking their first offer.  Check your cable operator’s website and start with new customer pricing as a negotiating tool.  If they only offer a few dollars in discounts, tell them you will think about it and then call back and speak with someone else.  Avoid committing to “price protection agreements” or other contract terms that hold you in place for a year, unless they give you new customer pricing.

Sometimes the best offers are reserved for those who show up at the cable office with set-top boxes and cable modem equipment in hand, ready to turn in.  When they ask why you want to terminate service, make it clear it’s all about the prices they are charging.  Hint that you’d stay if you could receive the same pricing a new customer gets.

Share your experiences in negotiating and what kind of deals you scored in our comments section.

[flv width=”512″ height=”298″]http://www.phillipdampier.com/video/WSJ Pay TV Loses Subscribers 9-1-10.flv[/flv]

The Wall Street Journal covered the pay TV losses noting the cable industry is trying to make up revenue losses by accelerating rate hikes for their remaining customers.  (3 minutes)