As Time Warner Cable continues it channel re-alignments in markets across the country, some subscribers are coming up with fewer channels after the changes, but they are still paying the same cable bill — for fewer channels.

“It’s classic cable bait and switch,” shares Stop the Cap! reader Kyle from Kansas City, who spent hours fiddling with his TiVo box after Time Warner re-mapped the area’s channel lineup earlier this month.  “TiVo really underlined it for us, albeit unintentionally, when we discovered several channels no longer available to us unless we paid extra.”

While Time Warner Cable moved Kansas City to its theme-based lineup, which places similar channels together and aligns HD channels with their standard definition counterparts, they also used the occasion to re-tier some of their “free” channels into mini-pay tiers.

Among the channels out of the digital cable standard lineup:

• Encore MoviePlex — Seven theme-based commercial-free movie channels;
• IFC — Independent Film Channel
• Fox Movie Channel
• Flix
• RFD-TV
• Ovation

The movie channels are being re-tiered in a mini-pay package called TWC Movie Pass, which will eventually sell for $4.95 per month after some early promotional discounts.  RFD and Ovation are part of a new “Digital Choice” tier.

“It’s the usual deception from Time Warner, which claims to sell you ‘free HD’ service without also telling you a rented set top box is required, which adds at least $7 a month for the ‘free HD’ channels,” Kyle says.  “Now they don’t even give you that as they start stripping networks away from their HD lineup to sell you for more money.”

Some subscribers are less than happy with the outcome, considering they now have fewer channels and are still paying the same cable rate they were before the channel change.

“It’s a shell game they always win — find the channels, keep your eye on the channels, wait — they are gone.  Pay us anyway.”

Aaron Barnhart, who writes for the Kansas City Star, called it a PR failure.

“Time Warner proved once again to be its own worst enemy, hyping all the good things and leaving it to customers to discover the not-so-good-things on their own,” Barnhart wrote.

Time Warner’s reasons for the channel changes, reported by Barnhart, seemed less than convincing to customers.

Time Warner’s spokesman Matt Derrick pointed out that “in most places, Encore is bundled as a premium package with Starz.” Liberty Media, which owns both Encore and Starz, used to offer Encore to cable operators as a digital-cable value alternative to premium channels. But that has changed, and Time Warner negotiated this 12-month rate with Liberty to encourage customers to go along with the switch.

Derrick explained that Digital Choice was designed as a low-cost alternative to its larger Digital Variety package, where the same channels are also available.

“Wait, that doesn’t even make sense,” Kyle argues.  “Time Warner negotiated with Liberty to turn a free set of channels into a pay tier to encourage us to go along?”

Kyle doesn’t think the reasons for Digital Choice made any sense either.

“How many people are demanding to pay extra for Ovation and RFD, exactly?” Kyle wonders.  “What is missing from all this is why our rates did not decrease to compensate us for the lost channels.”

Kyle says the $4.95 a month rate for TWC Movie Pass may not seem as much as a pay network, but he reminds us Time Warner will continue to collect money from every subscriber for the channels they’ll no longer get.

“So if it costs them $4.95 a month for Encore, we’re all still paying that because our bill isn’t going down; if we actually want those channels, that costs another $4.95 — $9.90 a month.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WLWT Cincinnati Time Warner Channel Realignment 4-18-11.mp4[/flv]

WLWT-TV in Cincinnati explains to certain Ohio viewers how to accomplish a needed channel “re-scan” that comes along with the channel re-alignments Time Warner Cable is performing across the country.  (2 minutes)

(Source: JVC)

The National Association of Broadcasters (NAB), a trade association and lobbying group representing many of the nation’s television stations, says claims by wireless carriers of a nationwide spectrum crisis are troubling and counterfactual.  That conclusion comes in a new report issued by the NAB this morning that wants the FCC to keep its hands off UHF broadcast channel spectrum the agency wants to sell off to improve mobile broadband.

The paper, “Solving the Capacity Crunch: Options for Enhancing Data Capacity on Wireless Networks,” written by a former FCC employee, suggests claims by wireless carriers that they will “run out” of frequencies to serve America’s growing interest in wireless services are simply overblown.

Many wireless companies own spectrum they are not using, the report argues, and other licensed users are holding onto spectrum without using it either, hoping to make a killing selling it off at enormous profits in the future.  Besides, the federal government holds the largest amount of underutilized spectrum around — frequencies that could easily be allocated to wireless use without further reducing the size of the UHF broadcast TV band.

Many of the ideas in the NAB report emphasize the need for carriers to deploy innovative technology solutions to increase the efficiency of the spectrum they are already using.  Those ideas include additional cell towers to split traffic loads into smaller regional areas, and improving on network channel-bonding, caching, and intelligent network protocols.

But the NAB report has some obvious weak spots the wireless industry will likely exploit — notably their recommendations that seek a reduction in wireless traffic — ideas that would suggest there is not enough spectrum to handle every user.  Among those recommendations:

• Implementing Internet Overcharging schemes like “fair use” policies and consumption-based pricing to discourage use;
• Migrating voice traffic to Internet Protocol;
• Migrating data traffic to a prolific network of “femtocells” — mini antennas that provide 3G service inside buildings, but deliver that traffic over home or business wired broadband connections;
• Offering wider access to Wi-Fi networks in public areas;
• Encouraging the development of bandwidth sensitive devices and applications.

The National Broadband Plan’s conclusion of a spectrum shortage is based on little more than a wish list by wireless carriers, says the paper. Its author, Uzoma Onyeije, cites contradictory statements by high-ranking corporate officials to show the Plan’s calls for making 500MHz of spectrum available for broadband in ten years is a gross overestimate of the actual need.

“There is no denying that the corporate imperative of mobile wireless carriers is to obtain as much spectrum as they can,” Onyeije wrote. “However, the fact that wireless carriers cannot find a unified voice on the amount and timing of their spectrum needs suggests that this advocacy is more strategic gamesmanship than factual reality.”

The NAB has heavily lobbied Washington officials on the issue of spectrum because their members — broadcast television stations — are facing the loss of up to 120MHz of what’s left of the UHF dial, already shrinking because of earlier reallocations.  The FCC proposal would resize the UHF dial to channels 14-30 — 16 channels.  In crowded television markets like Los Angeles, up to 16 stations would be forced to sign-off the public airwaves for good, because there would be insufficient space to allow them to continue a broadcast signal.  Instead, the FCC proposes they deliver their signal over pay television providers like cable or telco-provided IPTV.  Or they could always stream over the Internet.  But that would mean the decline of free, over the air television in this country.

Considering the millions of dollars many stations are worth, it’s no surprise broadcasters are howling over the proposal.

Onyeije’s report suggests AT&T and Verizon, among others, are grabbing whatever valuable spectrum they can get their hands on.  What they don’t use, they’ll “warehouse” for claimed future use.  By locking up unused spectrum, potential competitors can’t use it.  The proof, Onyeije writes, is found when comparing claims by the wireless industry with the FCC’s own independent research:

AT&T predicts 8-10 times of data growth between 2010 and 2015 and T-Mobile forecasts that data will have 10 times of growth in 5 years. Yet, the Commission’s assessment that 275MHz of spectrum is needed to meet mobile data demand is premised on data growth of 35 times between 2009 and 2014.

The Data Tsunami Debunked

Some providers are sitting on spectrum they already own.

The NAB also takes to task the “evidence” many providers use to claim the zettabyte era is at hand, where a veritable exaflood of data will force America into a widespread data brownout if more capacity isn’t immediately made available.

[…] The [industry claims rely] on suspect data. In arriving at its conclusion, OBI Technical Paper No. 6 relies heavily on forecast data from Cisco that is both wildly optimistic about data growth and unscientific. In a blog entry entitled, Should a Sales Brochure Underlie US Spectrum Policy?, Steven Crowley states that “[t]here is overlap between the people who prepare the forecast and the people responsible for marketing Cisco’s line of core-network hardware to service providers. The forecast is used to help sell that hardware. Put simply, it’s a sales brochure.”

Onyeije takes apart the oft-repeated claim that a data explosion will be unyielding, unrelenting, and will be the wireless industry’s biggest challenge for years to come.  It also speaks to issues about broadband use in general:

In particular, the paper appears to be premised on the highly suspect assumption that the high demand curve for mobile data will not slow. While smartphone growth is significantly increasing now, it will no doubt plateau and slow. It has been widely accepted for decades that the process of technological adoption over time is typically illustrated as a classic normal distribution or “bell curve” where a phase of rapid adoption ends in slowed adoption as the product matures or new technologies emerge.

As recently reported, Cisco now projects that U.S. mobile growth will drop by more than half by 2015. As Dave Burstein, Editor of DSL Prime, explains: “The growth is clearly not exponential.”  Mr. Burstein went on to say “Every CFO and engineer has to plan carefully for the network upgrades needed, but the numbers certainly don’t suggest a ‘crisis.’” Jon Healey of the Los Angeles Times Editorial Board similarly explains that “Much of the growth in the demand for bandwidth has come from two parallel forces: a new type of smartphone (epitomized by the iPhone) encourages people to make more use of the mobile Web, and more people are switching from conventional mobile phones to these new smartphones. Once everyone has an iPhone, an Android phone or the equivalent, much of the growth goes away.” AP Technology writer Peter Svensson echoes this concern and explains “AT&T’s own figures indicate that growth is slowing down now that smartphones are already in many hands.” Thus, the assumption that data demand will continue to grow unabated is deeply flawed.

Internet Overcharging is About Rationing and Reducing Use

Although the NAB favors Internet Overcharging to drive down demand for use, Onyeije’s report inadvertently provides additional evidence to the forces that oppose data caps, meters, and speed throttles: they are designed to monetize usage while driving it down at the same time:

While unlimited data plans on mobile phones were once the standard, there is now more focus on using pricing as a network management tool. As AT&T Operations President John Stankey put it, “I don’t think you can have an unlimited model forever with a scarce resource. More people get drunk at an open bar than a cash bar.”  In the past year, AT&T and Virgin Mobile abandoned unlimited data plans. In 2010, T-Mobile announced that it would employ data throttling and slow the download speeds of customers that use more than five GB of data each month. And Bloomberg reported on March 1, 2011 that “Verizon Communications Inc. will stop offering unlimited data plans for Apple Inc.’s iPhone as soon as this summer and switch to a tiered pricing offering that can generate more revenue and hold the heaviest users in check.” Usage-based smartphone data plans substantially reduce per-user data traffic. As a result, data growth is likely to slow over time. And companies, including Cisco, are marketing products to carriers to help make tiered data plans easier to implement and help carriers “increase the monetization of their networks.”

AT&T has a deal for first responders.

Where cell service is wiped out in a natural disaster (or doesn’t provide adequate coverage even when it does work), the phone company is willing to sell emergency officials their own AT&T mini-cell-tower site — for up to $45,000, not including ongoing monthly service fees.

The Remote Mobility Zone is a briefcase-sized portable cell tower that will typically provide service for a dozen or more concurrent callers over AT&T-licensed spectrum.  The company sells the equipment, but buyers still have to pay a monthly service charge, users must have a qualifying AT&T voice plan, and the data service that comes with it operates at slower-than-3G speeds.

“In the pivotal first minutes of a natural or man-made disaster, AT&T Remote Mobility Zone provides a solution to help maintain critical mobile communications,” said Chris Hill, vice president, Advanced Mobility Solutions, AT&T Business Solutions.  “With AT&T Remote Mobility Zone, users can set up a cell site in less than 30 minutes.”

That’s much faster than AT&T can fix their own cell sites when they go offline in a disaster.

A consultant to first responders, Jim Davis, tells Stop the Cap! the portable cell tower may sound like a good idea, but will meet resistance because of the “optics” of taxpayers paying for private cell phone company equipment.

“You are effectively asking taxpayers to pay for AT&T cell towers, and that is going to present a political problem in a lot of areas,” Davis tells us.  “What is even harder to justify is the fact AT&T charges monthly service fees from the moment the device ships, whether you use it or not — and the service only works with AT&T GSM cell phones, which is fine as long as fire and EMS rescue services are equipped with those phones, and many are not.”

Davis tells us Sprint/Nextel has a significant portion of the cell-phones-for-emergency personnel-market, especially in the east.

“Sprint aggressively prices their services to this market, and their phones won’t work on AT&T’s cell site.”

Davis says the Remote Mobility Zone is likely to present a better fit in the corporate world, especially in the energy sector.

“This device makes sense if you are hydrofracking for natural gas in Pennsylvania, or drilling for oil in Wyoming, or even on an oil drilling platform,” Davis says.  “Those installations are up and running for longer periods of time and are in relatively narrow spaces, perfect for AT&T’s half-mile service area using this device.”

“AT&T is going to have to market this very carefully, because the company is effectively selling a product to cover gaps that AT&T has created themselves either through inadequate coverage or damaged cell towers they should be responsible for fixing fast enough to negate the need for this product.”

Phillip Dampier

Federal Communications Chairman Julius Genachowski is racking up those frequent flier miles as he travels from one telecom industry trade show to another.  In addition to less-than-thrilling appearances at industry events run by the wireless industry and broadcasters, the chairman is now scheduled to be the headline act at the cable industry trade show to be held June 15 in Chicago.

Instead of devoting time and attention to provider profiteering and the ongoing concentration of the wireless marketplace, Genachowski will be shaking hands with big cable executives, sharing the stage with former FCC chairman Michael Powell, who now runs the National Cable and Telecommunications Association.  (Powell is a classic example of Revolving Door Syndrome: Start a career in public service and finish it using your government connections to cash in with a six figure salary working for the industry you used to oversee.)

While the current FCC chairman gets to bloat his expense account, his performance on behalf of the American people leaves plenty to be desired:

1. His vision of our broadband future is all talk and little action, with National Broadband Plan goals seen as increasingly anemic when contrasted with broadband development abroad;
2. Genachowski has caved on important consumer protections for broadband consumers, most notably with a very-industry-friendly Net Neutrality policy that won him little thanks (Verizon sued anyway);
3. His “white space” broadband plan to carve up UHF broadcast spectrum for mobile broadband comes poorly conceived, infuriating broadcasters who promise to spend millions in a lobbying death match;

Julius Genachowski has plenty of time for speeches, but never enough time to protect consumers who want better broadband, more competition, and lower prices..

At the NCTA convention, Genachowski is likely to deal with the hot potato retransmission consent issue — the one that pits you in the middle of million-dollar squabbles over what pay TV provider gets to carry what networks (and how much you will pay for them).  Also on the agenda: CableCARD 2: Electric Boogaloo, also known as AllVid, the almost certainly Dead on Arrival replacement for the first generation CableCARD set top box replacement that practically nob0dy uses.

Although Google loves AllVid, the powerful entertainment and cable industry is less impressed.  The Motion Picture Association of America considers it a piracy gateway because it lacks sufficient copyright protection mechanisms, and the cable industry has always been wary of standardized set top equipment that could tie down on-demand programming, signal theft protection, and future innovations.

Genachowski is sure to get a warmer reception at the cable show than he got from broadcasters earlier this month, who were downright hostile over his proposal to carve up the UHF TV dial (channels 14-51), selling off “extra” channels for wireless broadband.

The National Association of Broadcasters is starting to get a little worried, not feeling the love the Commission has bestowed on big cable and phone companies who got their lobbying wish-lists largely granted.  Instead, a year after being dragged into an expensive digital TV conversion, the FCC is back for more from television broadcasters, taking back perhaps a dozen or more channels for “white space broadband,” a vaguely-explained plan to enhance the amount of space available for wireless data.

Unfortunately, with thousands of television stations, the FCC will have to find enough channels for everyone to share without interfering with each other.  The FCC still hasn’t released a definitive plan about how to accomplish this, and with big wireless interests suggesting TV stations should slash their transmitter power and share the same or adjacent channels, a lot of stations fear they will be crammed together like a Japanese train at rush hour.

But the wireless industry wants it, even if it drives some stations in densely populated areas off the air completely.  In many other areas, especially in the northeast and southern California, stations might have to cut their signal coverage areas to avoid interfering with stations sharing the same channel in an adjacent city.  Rural residents relying on over the air television could be out of luck, even with a rooftop antenna.

In a bidding war, who would likely win the spectrum up for sale?  AT&T, Verizon, and perhaps some large cable companies looking for enhanced wireless services to sell.  No wonder the NAB is worried.  The FCC could favor selling spectrum out from under your local stations and sell it to their biggest competitors in the pay television business.

Consumers should be concerned as well.  Should today’s biggest wireless carriers scoop up “white space” frequencies, it will do nothing to bring enhanced competition or lower prices.  It will just lock up even more spectrum for a wireless industry that threatens to become a duopoly.

Instead of flying all over the country to attend trade shows and shake hands with industry leaders, Chairman Genachowski should be spending more of his time looking for creative, effective solutions to enhance competition and protect consumers, not simply throw them under the bus for the benefit of a handful of industry players already too large for the common good.

While many AT&T residential customers continue their exodus from the company’s forthcoming Internet Overcharging scheme, there are many rural Americans who have just one choice for broadband service — AT&T DSL.  For them, escaping usage caps is not as easy as calling the local cable company and arranging for new service.

While consumers continue to register their displeasure with AT&T over capping Internet usage at 150GB for DSL or 250GB for U-verse, there appears to be a way to get away from the usage limits while still maintaining your AT&T DSL service — switch to a usage-cap-free business account.

AT&T sells business broadband service to at-home, small, and medium-sized businesses at a substantial discount for the first year — $30 a month for up to 6Mbps.  A one year term commitment is required, but that likely won’t present any problems for customers who don’t have any other option for service.  With an AT&T modem/router already in place, making the change should just require a phone call to AT&T.

The company may offer different pricing and service plans depending on the region where you obtain service.  Former BellSouth customers may get different promotions than former Ameritech customers do.  We also found a few customers who still were able to access AT&T’s “usage measurement tool” on their business accounts, but business customers have not been notified usage caps apply to them, and we suspect that will continue to be the case.  AT&T promotes business class service at $25-30 a month in one offer we found, and service was even available to those who don’t want a business phone line.

After the first year, rates increase substantially, but we’re hopeful AT&T will learn the error of their ways and rescind their unjustified usage limits before the year is up.

Thanks to Wayne in Madison, Wisconsin for capturing these screen shots from AT&T's website.

If you are going to switch to AT&T’s business class service, share your experiences in our comment section to help other readers.