Time Warner Cable: Our Condolences to Verizon if They Signed the CBS Deal We Rejected

Phillip Dampier August 28, 2013 Consumer News, Online Video, Video 5 Comments
witmer

Witmer

If what Time Warner Cable claims is true, the stalemate that has kept CBS content away from subscribers for four weeks may be less about the money and more about CBS’ desire to control your viewing experience.

Melinda Witmer, TWC’s chief video and content officer, reports CBS is demanding daunting new restrictions in their proposed renewal contract, including requiring customers to “register their television sets” with CBS before being able to turn them on.

Witmer said CBS’ demands also include new powers over DVR capabilities, which means CBS could possibly prevent customers from fast-forwarding through commercials or even block the recording and/or storage of certain programs without network permission.

“CBS announced that they signed a deal with Verizon (FiOS TV) and has suggested that they offered us the same deal Verizon just signed,” Witmer said. “All I can say is our condolences to Verizon if they signed the deal CBS put in front of us. I hope for Verizon’s sake that they didn’t sign that, but if they did I’m glad for us because we’ll compete that much better against them when we finish our deal.”

Cable operators are seeking expanded rights from programmers as customer viewing habits evolve. Among the most important are those that would allow online and on-demand streaming of programming to authenticated cable subscribers.

Time Warner Cable has invested considerable resources in its online viewing platforms for PC’s, smartphones, and tablets, providing most of the TWC lineup on those portable devices. But the service has been largely limited in-home viewing because the cable company is having trouble securing permission to stream most of that content for those on the go.

Time Warner Attempts to Placate Impacted Customers

twcAlthough Time Warner Cable is crediting customers for the loss of Showtime/The Movie Channel, blocked by the cable operator while the impasse continues, Time Warner is not giving any automatic refunds for the loss of CBS basic or broadcast programming and networks taken off the cable dial. CBS-owned Smithsonian TV is the most affected basic cable channel nationwide. Some customers who pay extra for Smithsonian as part of an added-cost HD Tier often known as “TWCHD Pass” have gotten service credits upon request.

Time Warner Cable is giving out free over-the-air antennas to customers in cities where local CBS-owned stations have been taken off the cable lineup.

Time Warner Cable has a limited quantity of free basic indoor antennas available for customers at TWC retail locations in Dallas-Ft. Worth, Los Angeles/Desert Cities, New York City, Milwaukee and Green Bay, Wisc. In addition, TWC has partnered with Best Buy in those cities to provide $20 toward the purchase of any in-stock broadcast antenna at select Best Buy store locations. The cable company has published a list of retail locations where antennas are available as long as supplies last. Limit one per customer and installation is your responsibility.

Radio Shack has also taken advantage of the situation by slashing prices on an AntennaCraft Amplified Omnidirectional HDTV Antenna, now available online for $37.49 – a 25 percent discount. Best Buy is supporting Time Warner Cable’s position in the CBS dispute. Radio Shack is not, telling customers its antennas make it easy to “cut the cable.”

Time Warner is appeasing tennis fans with enhanced coverage of the 2013 US Open Tennis Championship Series with a free preview of The Tennis Channel running Aug. 26 through Sept. 9.

The blackout is also keeping Time Warner Cable, Bright House, and Earthlink (supplied by either cable operator) broadband customers from watching CBS content online.

If you now receive this channel Here’s how your Time Warner Cable video service is impacted
CBS from NYC, LA, Dallas-Ft Worth, Boston, Chicago, Denver, Detroit, Pittsburgh -The CBS channel has been removed from your lineup
-CBS Primetime on Demand is now unavailable
-StartOver and LookBack services on all CBS-owned stations are unavailable
CBS from any city other than the ones listed above -CBS Primetime on Demand is now unavailable
-StartOver and LookBack services on local CBS affiliate stations are unavailable
Flix Flix is now unavailable
The Movie Channel The Movie Channel and The Movie Channel on Demand are now unavailable; TWC is providing replacement programming from Encore on a temporary preview basis–look in your guide for channel numbers.
Showtime Showtime, all its associated multiplex channels, and Showtime on Demand are now unavailable; TWC is providing replacement programming from Starz on a temporary preview basis–look in your guide for channel numbers.
Smithsonian Channel Smithsonian and Smithsonian on Demand are now unavailable

The Federal Communications Commission said it is trying to resolve the fee dispute from Washington.

“The commission is engaged at the highest levels with the respective parties and working to bring the impasse to an end,” Justin Cole, an agency spokesman, said in an e-mailed statement yesterday. “We urge all parties to resolve this matter as quickly as possible so consumers can access the programming they rely on and are paying for.”

But acting FCC chairwoman Mignon Clyburn also admitted the FCC has few powers to intervene and compel an agreement.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/TWC Melinda Witmer on CBS Blackout 8-24-13.flv[/flv]

Time Warner Cable’s Melinda Witmer, head of the team negotiating with CBS, suggests the network is demanding unprecedented control over your viewing experience — a deal breaker for the cable operator.  (6 minutes)

Sell! Sell! Sell! – Wall Street Wants Cablevision Sold Yesterday

Phillip Dampier August 27, 2013 Cablevision (see Altice USA), Charter Spectrum, Competition, Verizon Comments Off on Sell! Sell! Sell! – Wall Street Wants Cablevision Sold Yesterday
forsale

Motivated seller?

Perennially rumored-for-sale Cablevision is getting new pressure to sell its cable systems to the highest bidder, thanks to an increasingly impatient Wall Street hoping to cash in on the next wave of cable consolidation.

Bloomberg News reports “time may be running out” for the suburban New York City cable operator, which has achieved its highest valuation in two years. The $4.8 billion enterprise founded 40 years ago by the Dolan dynasty has always fought to stay independent of larger media companies that have snapped up most of America’s cable landscape, but cracks are forming in the hard-as-concrete resistance to leave the cable business.

Many of America’s still-independent cable systems are watching their values increase as Wall Street speculators predict their days are numbered. Charter Communications, now under the influence of Dr. John Malone, is seen as the primary instigator of cable industry consolidation. Malone advocates fewer than five cable operators in the business, which means companies like Bright House, Cox, Mediacom, Cablevision, and even Time Warner Cable may have to go. Those that want to avoid the Malone consolidation treatment are starting to adopt an “eat or be eaten” mentality, opening the door to potential system acquisition wars in the days ahead.

Optimum-Branding-Spot-New-LogoCablevision has tried to avoid being picked off by the likes of neighboring Comcast or Time Warner Cable by trying (and failing) to go private in 2005 and 2007. Cablevision’s service area formerly extended well into western New York — especially in small communities and rural towns, before selling out to Time Warner Cable and retreating to its home base of Long Island, a few New York City boroughs, and parts of Connecticut and New Jersey.

Regardless of the nostalgia the Dolan family has had in the cable business, shareholders want maximum value for their Cablevision holdings, and that increasingly means selling the operation. Among the likely buyers: a deep-pocketed Time Warner Cable or Charter Communications, the latter willing to take on considerable debt to finance its acquisitions.

“You never say never,” said Cablevision CEO Jim Dolan in response to questions about a possible sale raised during a recent earnings conference call. But Dolan showed no signs of enthusiasm for a sale either.

Most analysts still expect Cablevision to demand a significant premium to sell. Retiring Time Warner Cable CEO Glenn Britt has steadfastly refused to overspend for acquisitions and the company has a history of dropping out of potential deals once prices rise. But Time Warner Cable’s cable properties are adjacent to Cablevision in New York, making a deal a natural fit. Comcast dominates New Jersey.

fishCablevision has recently taken steps that only make a sale more likely, shutting down ancillary businesses like Newsday Westchester, OMGFAST! — a start-up wireless broadband provider in Florida, and selling off Clearview Cinemas, AMC Networks, and reducing holdings in sports programming.

The biggest downside to a Cablevision buyout remains dealing with Verizon FiOS, which competes in most of Cablevision’s territory. The superior fiber network has forced Cablevision to spend on network infrastructure upgrades and cut prices, yet it is still losing customers to the phone company.

A buyout is unlikely to change much unless a company like Google decides it would like to enter the cable business and build an all-fiber network to compete, for now considered a far-fetched notion by most.

Why the interest in cable consolidation? Malone claims much-larger cable operators can stand toe to toe with programmers during negotiations and get better prices for programming and more leverage to move deals along.

Todd Lowenstein, a Los Angeles-based fund manager at HighMark Capital Management Inc., agrees with that assessment, telling Bloomberg the only ways to combat increasing costs for programming are blackouts or getting bigger.

“We’re at an inflection point,” Lowenstein said in a phone interview with the news service. “We’ve hit the upper limit of consumers’ willingness and ability to pay for cable. To get the upper hand, cable needs to scale up and get bigger — and fast.”

Ask DirecTV for Pricing Information, They Quietly Run a Score-Dinging Credit Check on You

Phillip Dampier August 27, 2013 AT&T, Comcast/Xfinity, Competition, Consumer News, DirecTV, Verizon 2 Comments
MYOB

MYOB

Asking about the cost of DirecTV could turn out more expensive than you think.

The Los Angeles Times found DirecTV a little more nosy than it should be, opening the door to identity theft and some minor credit damage from unwanted credit inquiries from the satellite provider.

As customers in southern California grow weary over Time Warner Cable’s dispute with CBS, some are shopping around for a better deal with another provider.

57-year old Los Angeles resident Michael Bell got more than he bargained for when he called DirecTV looking for some price quotes. Before the representative would answer, Bell found himself grilled for a lot of personal details that seemed irrelevant in response to a question about the price of HBO.

In addition to name, address, and type of residence, DirecTV wanted to know if Bell owned or rented his home.

“That stopped me,” Bell told the LA Times. “Why should he care? I told him I just wanted a price quote. He said we’d get to that. And then he asked for my Social Security number.”

That was T.M.I. for Bell’s tastes and he quickly hung up.

Requesting a Social Security number these days is a red flag, often giving warning the person asking is about to run a credit check on you.

credit dropSure enough, Robert Mercer, a DirecTV spokesman, explained the satellite provider pulls a credit report on every potential customer to determine their financial viability. DirecTV doesn’t want deadbeat customers, not after spending close to $900 to install satellite television in the average home.

If you don’t like it, you can pay DirecTV a $300 deposit and keep the number to yourself. The money is gradually refunded in the form of $5 monthly service credits each month you maintain service.

Cable companies are also notorious for running credit checks on customers, which can appear to other creditors as a request to extend credit. Too many credit inquiries can temporarily cut your credit score or worse, deny you credit.

AT&T and Verizon are also sticklers for good credit so expect them to run credit checks as well.

Time Warner Cable stands out among others for at least taking an interest in protecting customer privacy and preventing possible identity theft.

Dennis Johnson, a company spokesman, told the newspaper it can run a preliminary credit check with only the last four digits of a Social Security number and your date of birth.

Consumer privacy advocates argue that in the age of identity theft, nobody should be providing a Social Security number to anyone without a clear understanding it is being used to establish credit, open an account, or get earned retirement benefits. Consumers asked for a Social Security number for any other purpose should ask if they can avoid providing it or at least carefully scrutinize the request. If uncomfortable, simply end the conversation.

Mediacom Usage Caps Annoy Customers; Usage-Based Billing Excuses Don’t Fit the Facts

Mediacom, logo_mediacom_mainthe worst-rated cable operator in the United States, claims it needs usage caps and consumption billing to force heavy users to pay for needed upgrades. But that isn’t what Mediacom’s executives are telling investors and the Securities and Exchange Commission (SEC).

Thomas Larsen, group vice president of legal and public affairs for Mediacom told The Gazette the consumption-based billing program was intended to pay for the cost of network upgrades incurred by “individuals who are the highest users.”

But Mediacom’s August 10-Q filings (Mediacom LLC and Mediacom Broadband LLC) with the SEC indicate Mediacom’s revenues are increasing faster than the cable operator’s costs to provide service, as customers upgrade to more costly, faster speed Internet tiers.

internet limitRevenues from residential services are expected to grow as a result of [broadband] and phone customer growth, with additional contributions from customers taking higher speed tiers and more customers taking our advanced video services,” Mediacom reports. “Based upon the speeds we offer, we believe our High Speed Data (HSD) product is generally superior to DSL offerings in our service areas. As consumers’ bandwidth requirements have dramatically increased in the past few years, a trend we expect to continue, we believe our ability to offer a HSD product today with speeds of up to 105Mbps gives us a competitive advantage compared to the DSL service offered by the local telephone companies. We expect to continue to grow HSD revenues through residential customer growth and more customers taking higher HSD speed tiers. “

Mediacom’s consumption billing program, already in effect for new customers, will be imposed on all Mediacom broadband customers starting in September. Larsen claims only about three percent of customers will be impacted by the usage allowance, which will include 250GB of usage for customers selecting the company’s most popular speed tier. Larsen also claimed the average Mediacom customer uses only 14GB per month.

That usage profile is below the national average, and leads to questions about why Mediacom needs a usage allowance system when 97 percent of its customers do not present a burden to the cable company.

“Once a customer reaches their monthly allowance,  for $10 they can purchase an additional 50GB a month of capacity,” Larsen explained. “Each time that they reach that next level, they’ll be able to purchase another allotment. We’re never going to stop you from using data, we’re just going to charge you more if you exceed your monthly allowance. Before, we could cap you, there was no mechanism for them to purchase more.”

Mediacom did not frequently enforce its usage caps in the past except in instances where usage levels created problems for other customers. Despite Larsen’s assertion Mediacom would spent the overages collected from heavy users on broadband upgrades, Mediacom’s report to the SEC indicates broadband usage has never been a significant burden for the cable operator:

Our HSD and phone service costs fluctuate depending on the level of investments we make in our cable systems and the resulting operational efficiencies. Our other service costs generally rise as a result of customer growth and inflationary cost increases for personnel, outside vendors and other expenses. Personnel and related support costs may increase as the percentage of expenses that we capitalize declines due to lower levels of new service installations. We anticipate that service costs, with the exception of programming expenses, will remain fairly consistent as a percentage of our revenues.

Although Mediacom reported field operating costs rose 7.6%, much of that increase was a result of greater fiber lease and cable location expenses on its wireless backhaul business for cell towers and greater use of outside contractors. In the company’s latest 10-Q filing, Mediacom reports its revenues increased 2.9 percent in the past year while its costs rose only 1.5 percent. Mediacom’s revenues from its broadband division are even more rosy, rising 9% in the past year alone. In fact, broadband is the company’s highest growth residential business.

Many of Mediacom’s long-standing customers were initially promised they would be exempt from usage caps, with only new customers subject to usage limits. But Mediacom has unilaterally changed their minds, much to the consternation of some customers.

As of this afternoon, Mediacom is still promising customers usage caps only apply to new customers and those making plan changes.

As of this afternoon, Mediacom is still promising customers usage caps only apply to new customers and those making plan changes.

“It is my belief a man’s word is gold and when Mediacom customers have been told for ages they were grandfathered in with no usage data charges unless they changed plans, that is how it is supposed to be,” said D. Gronceski. “I have explicitly turned down service increases in the past to stay on the unlimited usage plan originally offered by Mediacom […] so I get screwed twice, once for bandwidth caps and again because I’m not getting the services I would be getting if I had not refused the automatic increases.”

annoyedOther customers incensed about the new usage limits have called to cancel service only to be threatened with steep early termination fees.

“Why do I have to pay an early termination fee?” asked AustinPowersISU. “The way of billing for the service is changing and I do not agree to this method of billing. I should be allowed to terminate my service without paying a fee.”

A Mediacom social media team representative offered one suggestion for customers finding themselves quickly over their usage limits: upgrade to faster speed tiers at a higher price. As for complaints about the unilateral introduction of usage caps with overlimit fees, it’s tough luck for customers, on contract or off:

All Internet users will be held to the new terms of service and usage based billing as of Sept. 7, 2013.  There is no agreement to sign, no acknowledgement needed.  Continuing to utilize Internet services is acceptance of these changes. If for any reason you do not feel that your current service level meets your needs, let us know and we can have a representative contact you with further options.

[…] Per the posted terms of service and acceptable use policy, there has always been an established data consumption threshold (data allowance) to be enforced at Mediacom’s discretion.  With this change, we have clarified these methods of enforcement and have expanded the allowance to offer different levels of users different options.  We have notified the proper departments of possible additions, but these statements are and have been posted.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KCRG Cedar Rapids Mediacom Going Usage Billing 8-21-13.mp4[/flv].

KCRG in Cedar Rapids reports Mediacom is switching to consumption billing for broadband service in September.  (2 minutes)

AT&T Upgrades 40 Cities to 45/6Mbps U-verse Broadband; Part of Project VIP Expansion

att-uverse40AT&T has boosted the maximum available broadband speed for its U-verse Internet offering to 45/6Mbps service in 40 cities across 15 states.

The broadband speed boost is part of AT&T’s Project Velocity IP (VIP), a three-year plan to expand U-verse’s capabilities and coverage into more communities within AT&T’s local landline service areas.

Most of the funding for Project VIP is being directed into expanding AT&T’s profitable wireless 4G network, but about $6 billion will be spent upgrading AT&T’s aging copper wireline facilities.

A big priority for AT&T is to retire copper-based distribution networks and replacing that wiring with fiber optics. U-verse depends on a significant amount of fiber to provide enough bandwidth for its television, phone and broadband service. But unlike Verizon FiOS, which delivers a fiber connection straight to the home, AT&T still relies on traditional copper wiring into the home.

Until AT&T replaces that copper with fiber, top broadband speeds are unlikely to keep up with its biggest competitor — cable broadband.

AT&T’s says the 45Mbps speed boost represents an incremental upgrade and plans further speed increases to 75Mbps.

In more rural areas, U-verse will rely on IPDSLAM technology to increase speeds up to 45Mbps. AT&T eventually hopes to further bump download speeds to 100Mbps.

For the most rural communities within its service area, AT&T hopes to offer service exclusively over its wireless network, eventually scrapping rural landlines altogether.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/KTAL Shreveport U-verse Coming to Louisiana 8-23-13.mp4[/flv]

KTAL-TV reports AT&T’s upgraded U-verse could soon be coming to Shreveport, La. as part of Project VIP, which may give Comcast some much-needed competition in the Ark-La-Tex region. (3 minutes)

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Stop the Cap!