While consumer groups were busy fighting the Comcast-Time Warner Cable merger, AT&T’s $49 billion purchase of DirecTV has largely flown under the radar, with no comparable organized consumer opposition to the deal. But that does not mean the FCC will approve it as-is.

Negotiations with federal regulators and an exchange of regulatory filings and comments between AT&T, the FCC, and deal critics have apparently forced AT&T to agree to several concessions to make regulators amenable to approving the transaction.

The Washington Post reports that chief among those concessions is AT&T’s willingness to voluntarily abide by certain Net Neutrality rules regardless of any court challenges, including banning the slowing or blocking of websites and agreeing not to accept payments from website operators to speed up their content. AT&T has not said how long it intends to keep that commitment.

Deal opponents are also seeking other concessions from AT&T:

No paid interconnection deals: AT&T must route incoming content to customers without any fees charged to the companies originating the traffic. This became a hot button issue when Netflix felt it was forced to pay Comcast a fee to assure its streamed video content would reach Comcast customers without buffering or other errors. AT&T is expected to fiercely oppose this condition and says it should have the right to make private deals with content delivery firms.

AT&T must offer standalone broadband: With AT&T’s acquisition of DirecTV, more than ever it will have an incentive to sell customers a television bundle with Internet service. Regulators want AT&T to assure broadband-only service remains readily available. AT&T has offered 6Mbps DSL for $34.95 a month as its standalone option. Content delivery firms like Cogent want AT&T to offer 25Mbps service in all of AT&T’s markets for $29.95 a month for at least seven years. The FCC recently defined 25Mbps the minimum speed to qualify as broadband.

No end runs around Net Neutrality with data caps and exemptions: AT&T wants the right to exempt its preferred partners from its usage caps and claims that is beneficial to consumers. But cap opponents claim that is simply another way to collect money from content companies for preferential treatment — an end run around Net Neutrality rules. Opponents of these cap exemptions, known as “zero-rating” claim all content should be treated the same. AT&T could resolve this by removing data caps from its DSL and U-verse services altogether.

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United States of Surveillance: Don’t Worry… We’re Watching You… ALL OF YOU. (2:29)

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“After tracking your every move and spying lovingly on each and every one of you, I feel like I know you all personally, because I do!”

Is this the end of our domestic spying pal, Snuggly the Security Bear? Most likely not. Snuggly will probably still be in business and up to his usual tricks, he just may have to work with Verizon or AT&T or some kind of NSA-corporate partnership. (1:27)

A system audit by Comcast has created a firestorm across Florida’s Panhandle after customers lost dozens of channels while Comcast used it as an opportunity to sell customers more expensive television packages.

The cable company has been installing new technology that will help it verify customers are not getting channels or services they are not entitled to receive. After auditing subscribers in the Tallahassee area, many long-time Comcast customers found their TV lineup dramatically reduced, often with no warning.

“We found customers had access to channels not included with their service level,” Comcast spokeswoman Mindy Kramer told the Tallahassee Democrat. “Meaning, they were getting some channels that they had not subscribed to in their specific package.”

Comcast used the audit to upsell customers to a pricier package to get those missing channels back, annoying customers.

“During a recent system audit, it was discovered that you may be receiving channels that are not part of the video service to which you currently subscribe,” a Comcast letter said. It then gave an example of a channel the person had been receiving in error and suggested the customer upgrade if they wanted to continue receiving the same service.

“We apologize for any inconvenience this change may cause,” the letter said. “We appreciate your business and thank you for being a loyal Comcast customer.”

Numerous Tallahassee customers contacted the newspaper and local media outlets to complain they lost dozens of channels without notice, many they had received for years. More recent subscribers also discovered their packages were suddenly much smaller.

Among seniors, the loss of Turner Classic Movies brought the most complaints. Customers who had received the network erroneously as part of a Digital Starter TV package ($43.45-68.95/mo) were told they must upgrade to Digital Premiere service to get that single channel back. That represents a rate increase of $22.94-47.54 a month, depending on the area. Digital Premiere costs $90.99-$131.99/mo., according to Comcast’s website.

Ron Crolla ended up paying a promotional rate increase of about $20 a month to restore his 85-year-old father’s Comcast service in a Tallahassee assisted living facility. Crolla said Comcast dropped about half of his father’s TV channels and did the same for many others in the same facility.

“The TV is his primary form of entertainment; he can’t drive, he can’t walk much,” Crolla told the newspaper. “It just seems all underhanded,” he said. “It just seemed like a crappy thing to do.”

Others thought about the same, judging from the newspaper’s Facebook page, overwhelmed with so many complaints about Comcast, a reporter covered the angry responses in another story:

Man, do people hate Comcast.

I can say that because that’s what many people told me this week, after a story ran in this newspaper about Comcast stripping cable customers of channels they weren’t paying for.

Dozens of emails and hundreds of Facebook and online comments came in hot. Most people shared their stories in gritty detail, breaking down their channel line-ups, what they paid and when. Some even passed on the name of the customer service representative they were dealing with, others just spun into a tirade.

People freely tossed out words like “furious,” “worst,” “sucks,” “hate” and others not fit for print. Something was triggered. People were pouring their hearts out in emails. It was personal. They were feeding off each other, finding solace in having a common enemy.

For many, it wasn’t about justifying the fairness of getting the extra channels for free, it was about Comcast’s method of ferreting out customers and dropping the channels with what many claim was no warning.

“If they wrote me a letter and told me I was getting extra channels for free, I probably wouldn’t even realize it because Comcast’s packages and lineups are so confusing,” said Tallahassee resident and Stop the Cap! reader Neil. “The classy way to handle it would be Comcast admitting it was entirely at fault and offering a special deal to keep the channels on at their wholesale cost for 6-12 months. I don’t want them to have to pay for something I am getting for free, but they decided to profit from their mistake at the customer’s expense. That is why Comcast is so despised around here. It is always an angle with them to get more money. If I make a mistake, I own up to it. If they make a mistake, they want to bill me for it.”

“Dealing with Mediacom is like stepping on a mound of fire ants,” says June Watts, a Mediacom customer in Alabama. “You are going to get stung no matter what you do.”

Watts is one of many unhappy Mediacom customers that once again bottom-rated the cable company into last place in Consumer Reports annual survey of telecommunications providers. In every case, Mediacom scored the worst or nearly the worst on bundled services, Internet, phone, television, service quality, and pricing.

“Missing channels, stuck channels, inconsistent Internet speeds, Internet and phone outages, boxes that won’t stay authorized, and wait times up to 45 minutes to get them on the phone are all part of my experience with them,” Watts tells Stop the Cap! “It never gets better because once they fix one thing something else breaks.”

Mediacom’s customer service forums offer some clues about what makes Mediacom such a problem for its customers. “Cyberpunk 1161” pays for 100/20Mbps service but is lucky to get 10% of that speed on a good day. He started corresponding about his speed issues with Mediacom’s social media team on Feb. 19. He is still having issues as of June 2, nearly four months later, and his conversation with Mediacom has now extended to 15 pages. “WhiteBengal50” has already managed three pages of complaints starting on May 18. Another customer spent one year and four months with his cable line left unburied on his lawn.

“They run a poorly maintained operation in mostly rural communities larger companies don’t want to deal with,” said Jerry Butler, a Mediacom customer in Iowa. “They are trying to keep up with larger operators but they have not invested nearly enough in reliability, which alienates customers with regular service outages and ongoing technical issues.”

Butler notes he can buy 100Mbps broadband service from Mediacom, but he won’t actually see 100Mbps speeds because the cable infrastructure between him and the cable office has deteriorated over the years.

“They need new overhead cable on their poles but they won’t spend the money to do it,” Butler said. “Cable operators should be budgeting to replace system components approaching their expected end of life instead of waiting for them to fail. They could also use more monitoring tools to find deteriorating infrastructure and replace it before it fails.”

Each of 15.4 million Time Warner Cable customers will effectively pay $19.48 to cover executive golden parachutes and Wall Street bank advisory fees if the merger with Charter Communications is approved by regulators.

Five senior executives at Time Warner Cable will split $200 million with an additional $100+ million going to a variety of investment banks that provided advice for the merger deal.

A required filing with regulators disclosed the exit bonuses likely to be paid to the departing executives of Time Warner Cable, some who have been in those positions for less than two years:

• CEO Robert Marcus, who has served in that role for only a year and a half, will receive roughly $4.5 million in salary, $23 million in bonuses and stock worth $74 million. His total golden parachute: $102 million;
• COO Dinesh Jain: $32 million;
• CFO Arthur Minson: $32 million;
• General Counsel Marc Lawrence-Apfelbaum: $22 million;
• Chief Strategy Officer Peter C. Stern: $18 million.

Ironically, golden parachutes were originally designed to protect shareholders from executives’ self-interest. Instead of interfering in merger and acquisition deals to protect their salaries and positions, the incentive of a generous exit bonus encouraged executives to do the right thing for shareholders.

Wall Street investment banks participating in the deal are also handsomely compensated for a few weeks of “advice.”

Together, the banks will share an estimated $100 million to $150 million in fees, according to Thomson Reuters and Freeman Consulting Services. The lucky ones — Morgan Stanley, Citigroup, Centerview Partners and Allen & Company — advised Time Warner Cable and get 60 percent of the proceeds. The pickings are slimmer for a larger pool of banks that advised Charter, some that will only get to earn based on their role financing the deal. The biggest winners on the Charter side are omnipresent Goldman Sachs along with the tiny firm LionTree Advisors (which barely has a website). LionTree enjoys the confidence of John Malone, who uses them often in similar deals. These two firms will split $30-50 million.

Charter executives will benefit from the deal later, when future demands for bigger compensation packages are met.

Among investors, a handful of hedge funds will likely walk away with the most money. Paulson & Company, run by the billionaire John Paulson, owned 8.7 million shares of Time Warner Cable stock, according to a March 31 public filing. He is expected to walk away with a profit of at least $250 million by buying low and selling high. Time Warner shares have risen ever since Wall Street found out Time Warner was a willing seller.

So who is likely to lose the most from the deal? Customers, employees and middle management.

If approved, Time Warner Cable and Bright House Networks customers will become customers of Charter Communications, a considerably indebted company with mediocre customer service ratings and a menu of service options carefully designed to boost the average revenue Charter collects from each of its customers. Charter is likely to endure growing pains common when a company swallows another four times larger than itself. Bright House customers will likely see the changes the most. Its customer service ratings are stellar when compared against Charter and Time Warner Cable.

Middle management positions at Time Warner Cable and Bright House deemed redundant in the era of New Charter will be eliminated. At even bigger risk are call center and customer service positions. Charter Communications has already beefed up its own customer service operations, partly for its customers and those it assumed it would gain from a deal with Comcast and Time Warner Cable. Charter was also to be closely involved in supporting the GreatLand Connections spinoff proposed in that failed deal. With excess customer service capacity, Charter is in a position to consolidate or close several Time Warner Cable and Bright House call centers. Charter has also aggressively pursued savings by offering customers more self-service options, such as mailing set-top boxes and cable modems customers can install themselves. Whether Charter decides to outsource more of its cable service technician positions is not yet known.