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Cancel Your Cable TV and Watch Your Broadband Bill Skyrocket; $20 More Without TV Service

Phillip Dampier November 16, 2012 Comcast/Xfinity, Competition, Consumer News, Verizon, Video 10 Comments

Major cable and phone companies are rolling out new bundled packages and promotions designed to protect their cable television packages from cord cutting.

Verizon, Comcast and Time Warner Cable have all run promotions that carry a clear message: cancel your cable television and your wallet gets it.

The Wall Street Journal shared the story of Comcast subscriber Cathy Vu, who decided she no longer wanted cable TV and tried to downgrade to a broadband-only account.

Comcast gave her an offer she could not afford to refuse when the representative explained canceling cable television would increase her monthly bill $20. As a result, Vu decided she would save more money keeping her cable television turned on.

Welcome to the new world of double and triple play bundled pricing promotions that bring downgrade penalties customers cannot ignore.

The idea of repricing cable service to protect vulnerable cable television and phone service began in earnest after analysts like Sanford Bernstein’s Craig Moffett began noticing customers were no longer addicted to keeping cable television, no matter the cost. He proposed a solution: price broadband service higher and cut the cost of cable television.

The result: carefully constructed promotional and bundled package offers that entice customers to purchase services they might not even want, to get the best (and sometimes lowest) price. Gone were promotions that offered phone, broadband, and television service for $33 each. In their place, new pricing that charges $60-70 for the first service, and heavily discounted prices for each additional service.

You know the pitch:

“Yes, I am calling to sign up for broadband service,” you say.

“Certainly, I would be glad to help you with that. But did you know that for just $20 more a month, you can also get cable television?”

“Really, it’s only $20 more? Sure.”

“I am thrilled to hear you say that. But I hope you are sitting down because I have more good news. For just $10 more, we can give you a phone line with unlimited local and long distance calling. How much do you pay the phone company now?”

“Too much, that sounds like an amazing deal, so I get everything together for $99 a month?”

“You sure do, for the first 12 months anyway.”

One year later when the promotion ends, you call to begin downgrading service to lower your bill. But cable and phone companies are increasingly ready for you.

First they will offer you a slightly less attractive promotional retention offer to keep your business. If you accept, the company gets to book the extra revenue and probably locked you into an annual service agreement.

If you don’t bite and insist on a downgrade, they have some bad news for you — that broadband service you still want will now cost you $60-70 a month, including the modem fee.

If you bail early on a promotional discount offer, the bite on your wallet can be significant.

The Journal found unbundling just does not pay:

  • Comcast: TV + Internet for about $50/month for the first 6 months vs. standalone same speed Internet for about $70/month.
  • Verizon FiOS: TV + Internet for about $85/month (two-year contract) vs. standalone Internet for about $80/month.
  • Time Warner Cable: TV + Internet for about $50/month for 12 months vs. standalone Internet for about $45/month for 12 months, then up to $60 after that.

At the end of the day, Moffett and the rest of Wall Street get their wish — preservation of the all-important growing average revenue (ARPU) collected from each customer. Downgrades lower ARPU, so they must be discouraged at all costs.

Cable operators “recognize that their most advantaged product is broadband,” said Moffett. “They don’t want to sacrifice that advantage by giving the opportunity for customers to cherry pick their best product at a low price and take the rest of your services from somebody else. In effect, they are pricing the broadband at a price that discourages you from taking broadband only.”

Customers primed for cord cutting (or who have never bought cable TV) are likely to receive targeted mailings from Verizon, Comcast and Time Warner Cable encouraging subscriptions to cable TV and prices that nearly give the service away.

Comcast’s Blast Plus promotion in selected markets delivers 30Mbps broadband with Digital Economy television service, both for $50 a month for six months. Internet-only customers would pay $70 per month for the same speeds without television.

Time Warner Cable in New York City wants to be your cable TV supplier so much, it offers a package of broadband and throws in Broadcast Basic service for just $5 more per month. Combined, Turbo Internet and television will cost $49.99 a month for a year. Standalone Internet on a promotion runs $45 a month for 12 months.

On a strict cost basis, charging more for Internet does not make sense. The Journal reports that about 90% of your monthly broadband bill is pure profit for cable operators, because the cost of delivering the service has continued to plummet to all-time lows. Cable television is no longer the cash cow it used to be for cable operators because programmers increasingly demand a piece of the profit pie. Today, cable operators only get to book about 35% of your monthly cable television payment as profit.

[flv width=”640″ height=”369″]http://www.phillipdampier.com/video/WSJ Cable Cord Cutting Less Attractive 11-13-12.mp4[/flv]

The Wall Street Journal examines the trend towards repricing broadband service so that customers feel compelled to keep their cable television package or face even higher bills.  (5 minutes)

Debunking ALEC, Broadband Edition

Todd O'Boyle November 8, 2012 Comcast/Xfinity, Community Networks, Competition, Consumer News, Data Caps, Editorial & Site News, EPB Fiber, Greenlight (NC), LUS Fiber, Public Policy & Gov't, Rural Broadband, Verizon Comments Off on Debunking ALEC, Broadband Edition

Not long ago, the United States led the world in broadband connectivity. Now we are in 16th place, trailing most developed nations. We need broadband policies that connect our homes, schools, and business to the 21st century economy, but we’re pursuing public policies that are putting us in a hole, helping private telecommunications providers and harming the public interest. As the old adage goes, when in a hole, stop digging.

Why is this happening? One reason is that across much of the nation, commercial broadband companies are using their political and economic clout to stifle competition, particularly from municipalities. Individually and through trade groups and the American Legislative Exchange Council (ALEC), the industry is bent on shutting down existing publicly-owned broadband systems and blocking the development of new ones.

ALEC’s argument, detailed in a recent Daily Caller op-ed by John Stephenson, director of its communications and technology task force, is based on distorted and inaccurate claims that would be laughable if they weren’t part of a coordinated strategy to radically transform policy state-by-state.

Stephenson suggests that Chattanooga, one of several cities cited in his piece, made a poor decision in building the nation’s most advanced citywide broadband network – one that has helped companies create literally thousands of new jobs in recent years. In fact, contrary to Stephenson’s claims that municipal broadband drive up property taxes and depresses municipal credit ratings, S&P just upgraded the Chattanooga public utility’s bond rating, stating, “The system is providing reliable information to the electric utility on outages, losses and usage, which helps reduce the electric system’s costs.”

The larger point is that those who want to revoke local decision-making authority for broadband often justify their position by insisting that they want to protect taxpayers from mythical threats. The only impact Chattanooga’s system has had on taxpayers has been to create more jobs, lower electricity bills, and enhance choices in the market. Indeed, Chattanooga’s EPB Fiber service is saving the public money. After a recent storm knocked utility customers offline, EPB’s fiber-optic Smart Grid brought those uses back online more quickly, saving the public an estimated $1.4 million in repair costs.

It’s no surprise that such nonsense emanates from ALEC, which acts as a clearinghouse for corporately-sponsored model legislation that puts corporate profits ahead of the public interest and often public safety. ALEC is backed by some America’s biggest telecommunications firms, including Comcast, Verizon, and Time Warner Cable. Through ALEC task forces, corporations craft model bills and find compliant legislators to introduce them as if they were the legislator’s own. As Common Cause and its allies have documented, ALEC’s influence is pervasive: from privatizing education to limiting voting rights with restrictive Voter ID bills, and endangering public safety with “Stand Your Ground” gun laws, no aspect of public policy goes untouched.

ALEC’s attack on local decision-making authority is consistent with its efforts to benefit big companies like Time Warner Cable and AT&T that want to restrict choices for residents and businesses. So far, the big cable companies have all but crushed competition in the private sector and have been attempting to stop communities themselves from building the essential infrastructure in which these companies have been slow to invest.

But the arguments used to revoke local authority are based on misleading or outright false claims. Stephenson even tries to scare readers, claiming (with no proof) that Marietta, Ga. lost $24 million on a municipal network. What actually happened was documented in a report from 2005. Marietta had a wholesale-only network using a far different business model than the one followed by most publicly owned broadband systems.  It was on a path to operate in the black when it was privatized for ideological reasons. Stephenson’s $24 million loss figure ignores all the revenues it generated as well as additional spillover benefits. That’s fuzzy math.

Stephenson’s claim that LUS Fiber lost money every day last year preys on reader ignorance of telecom business models. Any high-capital investment could be said to lose money “every day” in the early years. Long term investments take time to break even – after which, they make money “every day.” Verizon’s FiOS “lost” money every day for many years but is regarded by many as a smart long term investment.

Publicly owned networks overwhelmingly help public safety, schools, libraries and other community anchor institutions. While AT&T has been caught ripping off taxpayers by overcharging schools for their connections, Lafayette, LA. dramatically increased the capacity of school and library broadband connections at nearly the same price AT&T charged for far lower quality services. Lafayette’s network is one of the most advanced in the nation and has attracted hundreds of new jobs while saving millions for the community by keeping prices lower, as documented in our report Broadband at the Speed of Light. In response to Lafayette’s investment, Cox Cable prioritized that community for its upgraded cable network – compounding local benefits.

Lafayette isn’t alone – consider rural Chanute, KN., which connected its schools and the local community college with a gigabit wide area network at only $250 per location per month. The city’s municipal fiber network has helped preserve jobs that were at risk of leaving because the cable and telephone company were not meeting the needs of local businesses. Additionally, the network pays a franchise fee to the general fund every year.

And then there’s Wilson, N.C. Stephenson claims its fiber-optic network might be obsolete before it is paid off – a ludicrous scenario given the strong consensus the fiber-optic is and will remain the gold standard in networking for decades. Regardless, the network is generating benefits today – lower prices for consumers and the best connection available for the hospital and schools. Oh, and their network is operating in the black also.

These benefits are some of the reasons that the FCC’s National Broadband Plan called on Congress to ensure that all local governments could build networks. No one has suggested that every government should do so – but it should be a local choice, and that is what ALEC has been trying to remove. Largely thanks to ALEC, 19 states limit local authority to build networks. Rather than foster competition and innovation, these policies introduce new barriers to connectivity and deny choice to consumers. It is beyond time to remove these restrictions and let local communities decide for themselves if a network is a smart public investment given their unique situation.

This piece courtesy of the Common Cause Blog. The article was coauthored by Christopher Mitchell from the Institute for Local Self-Reliance. He directs their Telecommunications as Commons Initiative. He is also editor of http://www.muninetworks.org/. Follow him @communitynets. 

Beleaguered Burlington Telecom Making a Comeback with 1Gbps Broadband: $149/Month

Phillip Dampier November 5, 2012 Broadband Speed, Burlington Telecom, Comcast/Xfinity, Community Networks, Competition, Consumer News, Editorial & Site News, Public Policy & Gov't 2 Comments

Burlington Telecom, the troubled publicly-owned fiber broadband network for Burlington, Vt., is working on a comeback by finally boosting its speeds well beyond what competitors FairPoint Communications and Comcast can offer residential broadband subscribers.

BT will offer residents 40/40Mbps service for $99.99 per month and 1,000/1,000Mbps service for just $50 more per month (with a 12-month contract), starting Dec. 1:

Stop the Cap! previously recommended BT consider offering faster speed packages that give subscribers a compelling reason to switch from Comcast or FairPoint. Community broadband providers with fiber optic networks need to leverage those superior networks to drive new customers to sign up, and BT certainly could use a influx of new business as it fights through its financial problems.

We strongly recommend BT consider boosting its 40/40Mbps offering to at least 100/100Mbps at the $100 price point to better compete with Comcast’s Extreme 105 tier, which offers 105/20Mbps for just $15 more per month. Pricing and speeds must be comparable with the cable competition to compel a customer to go through the hassle of changing providers, and most subscribers still don’t value higher upload speeds as much as download speeds.

BT’s gigabit offering succeeds on all counts, but it is unlikely to draw a large percentage of customers willing to pay $150 a month for residential Internet service.

Comcast Extends Free Wi-Fi Service Until Nov. 30 For All Affected by Hurricane Sandy

Phillip Dampier November 5, 2012 Comcast/Xfinity, Consumer News, Wireless Broadband Comments Off on Comcast Extends Free Wi-Fi Service Until Nov. 30 For All Affected by Hurricane Sandy

Comcast has announced it will extend free access to its Wi-Fi network in areas struggling to recover from the impact of Hurricane Sandy until Nov. 30, according to a company message on Twitter.

Further information about Comcast’s Wi-Fi network and how to access it is available here.

Kold-Hearted Kabletown Tells Sandy Victims to Return Comcast Equipment or Else

Phillip Dampier November 2, 2012 Comcast/Xfinity, Consumer News, Editorial & Site News, HissyFitWatch 4 Comments

Some of Comcast’s customer service representatives and their supervisors could care less more than a million east-coast residents remain without power and thousands may no longer have a home.

Priority #1: Where is our equipment? If you can’t find it, you are going to pay for it.

Yes, once again the company that redefines lousy customer service is back to illustrate why their reputation as the 4th Most Hated Company in America is well-earned. The Don’t Care Comcast Customer Service Bears in Kabletown call centers are only too happy to give the desperate in New York, New Jersey, and Pennsylvania a hard time.

Blogger Seth Clifford (via the Consumerist) doesn’t need Comcast’s attitude problem. His parents have already lost one home and are on the verge of losing another.

Comcast’s Shocking Realization: the Clifford family has bigger things to worry about than a set top box:

[My mother] was trying to explain to them that they stood to lose the entire house in an explosion and that the authorities were having trouble even reaching the area to cut the gas to prevent this. She mentioned that she wouldn’t be able to return the cable box and equipment because the storm had basically destroyed the area, and the house was perilously close to being destroyed completely as well.

Comcast’s reply to her?

We’re very sorry, but the price of the equipment will be charged to your account if you’re unable to return it.

That’s right: in the middle of a natural disaster, the worst our area has seen in decades, at a time when my parents have already lost one house and stand to lose the other, as well as everything in it (remember, it’s not a rental so it’s fully furnished and they live there for part of the year – there are family keepsakes, antiques, and the like) – at a time like this, Comcast has essentially told my mom “tough s***”.

She spoke to a supervisor who echoed the same thing. Comcast was very ‘sympathetic to the situation’, but according to policy, the company must assess fees against unreturned equipment, no matter the situation.

Devastation on the coast of New Jersey

This is hardly the first time we’ve seen Big Telecom Companies Behaving Badly when Mother Nature strikes.

After tornadoes devastated parts of Alabama in 2011, one of Charter Cable’s customer service minions told a victim they will wait on the phone while the customer searches the yard for missing cable equipment. Can’t find it? Pay us.

The worst companies just don’t care until someone in the media embarrasses them sufficiently to realize the cost of a cable box isn’t as great as the drubbing they are about to get on the 6 o’clock news.

Once exposed, damage control kicks in. The flower arrangement is on the way and the “we’re sorry” card is in the mail.

Too bad the flowers are not for everyone. For those whose stories never go viral, the response often remains “pay up or we’ll ruin your credit for years.”

Comcast is a long way from its “Comcast Cares” motto:

“It’s a wonderful thing to have people work together for the benefit of others.”

Clifford is disgusted with the realization Comcast only cares about itself:

  • Comcast does care. It cares about reclaiming equipment in the face of unspeakable disaster. And about charging fees for equipment that does not get returned, even if there is no physical way within the realm of possibility in which to do it.
  • Comcast, does not, in fact, care at all about you. Not even a little. House burned down? F*** you, pay me. House about to explode at any minute? F*** you, pay me.

After the Consumerist shined their flashlight on Comcast’s house of corporate evil, the inevitable apology was on the way:

We have already reached out to apologize for adding to his parents’ difficulties and to ask for his parents’ contact information so we can call to personally apologize and assure them that we are handling the equipment without the need for them to do anything further. Please know we are working with our teams to ensure we handle all customer calls on a case-by-case basis with sensitivity to the devastating effects Hurricane Sandy had on so many of our local communities and residents. Again, we are of course notating his parents account to ensure they are not charged for equipment they can’t return.

Hey Comcast: how about “notating” every customer account in the northeast pummeled by Hurricane Sandy to ensure the flying monkeys customer service reps in the call center don’t abuse anyone else? Comcast’s “case by case basis” is loophole language that could leave customers shelling out hundreds in lost or damaged equipment penalties.

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