America’s largest cable company, the one seeking permission to become even bigger with a buyout of NBC-Universal, has spent the last two weeks alienating customers, vendors, and some members of Congress.  After Stop the Cap! reported on another cable company’s service outage, our reader Jared wrote to say Time Warner Cable customers should feel lucky because they can get service credits for outages.  Good luck getting them from Comcast.

He, along with more than a million other Comcast customers spent the early hours of CyberMonday offline thanks to a widespread Comcast outage on the eastern seaboard.  Outages happen, but what annoyed Jared was Comcast’s “Don’t Care” attitude, which began when he picked up the phone to call the company.

WBUR Radio in Boston explored, in plain English, the reasons for the Comcast CyberMonday outage and how it affected customers. (5 minutes)
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“I, along with probably several hundred thousand other people called Comcast’s 800 number to find out what was going on,” he writes.  “After more than a dozen minutes of busy signals, when I finally got through, a recording came on literally telling me to go to Comcast’s website for assistance!  Duh!”

Moments after that, another recording came on the line telling him Comcast was too busy to take his call (or even leave him on hold) and he should call back later, at which point the line disconnected.

Infuriated, he called back and managed to navigate the voice menu to a human being who seem offended he was forced to take Jared’s call.

“This guy told me he didn’t know about any outage, which must have meant he was sitting in some call center well away from the region,” Jared says. “By now, anyone trying to use Comcast broadband in the northeast who still had a pulse knew it was down.”

But Comcast never misses an opportunity to miss an opportunity, further alienating Jared when the representative tried to change the subject and sell him Comcast phone service.

“I was stunned,” Jared says.  “I asked him if he was serious — why would I want to buy phone service from a cable company that cannot even manage its own phones and hangs up on customers?”

Jared asked if he could obtain a service credit for his Internet downtime.

“No,” came the reply.  “Your service has to be out for at least 24 hours.”

Jared countered he might not be a Comcast customer in 24 hours.

“That’s your choice,” said the voice on the other end of the line.

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WMUR-TV in Manchester, N.H., and WBAL-TV in Baltimore were just two of many television stations that reported on Comcast’s CyberMonday outage.  (4 minutes)

Getting a copy of Comcast’s terms and conditions is not easy for non-customers.  The company wants your contact and customer information before it will admit you to its online forum and other website documents.  We found numerous instances of customers getting rejected for service credits on several websites covering the story.  But not all.  Those escalating their demands to a service manager or ending up connected to a customer retention specialist have managed to grab up to $10 in credit for the multi-hour outage, but prying them loose from the cable giant is not easy.

Our efforts to get a Comcast representative to explain the service credit procedure for the benefit of their customers reading Stop the Cap! met with silence.

Meanwhile, the Chicago Sun-Times got into it with Comcast and managed to get a spokesperson to relent — customers could get a credit by applying for one individually, but don’t count on a big payback.  Spokeswoman Angelynne Amores told the newspaper subscribers were eligible to receive a $1 credit for the trouble, but only if they asked.

Comcast does provide a flowery feel-good customer guarantee that includes a link to a customer contact form, which might cut through some red tape for customers seeking a refund, even if just a dollar, for the service they did not receive.

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No credit for you from Comcast, notes WWLP-TV in Springfield, Mass.  Their viewers in New Hampshire will get nothing from Comcast for their broadband troubles.  (1 minute)

USI Wireless' TV Ad was rejected by Comcast

“Our competitor’s CEO made $27 million last year. Ever wonder why you pay so much for Internet?”

That question is posed on an enormous billboard over downtown Minneapolis.  It comes courtesy of US Internet of Minnetonka, a tiny wireless provider competing against Comcast in Minneapolis.  The Wi-Fi upstart has taken center stage in another dispute with Comcast that threatens to have national implications.

For US Internet, the cable giant is already big enough to throw its weight around, because the Wi-Fi competitor has been notified it is not going to get its television ads seen by Comcast subscribers.

That struck Joe Caldwell, CEO of USI Wireless, as anti-competitive.

“I spent thousands of dollars to get this ad produced, and now Comcast won’t run it,” Caldwell told the Minneapolis Star-Tribune. “I think maybe they’re mad at me because I said the CEO of Comcast made too much money.”

Although Caldwell’s billboard only names Comcast in fine print, barely visible from Minneapolis streets, his company’s door-hangers are more direct:

“We at USI Wireless would like to congratulate Qwest & Comcast for both having sports arenas named after them. Ever wonder why you pay so much for Internet?”

Comcast told Caldwell it could not run his ads because they are a competitor.

USI Wireless charges $14.95 a month for wireless access across the city.  Comcast charges between $40-115 for its standalone broadband service.

It’s not the first ad controversy for USI, which irritated some residents back in May with some edgy billboards featuring a woman some described as a prostitute next to big, bold print: “Fast, Cheap, and Satisfaction Guaranteed.”

USI got into some controversy with its earlier billboards, which raised more than a few eyebrows.

Caldwell’s television ad features Fancy Ray McCloney, head of Minneapolis-based ad agency Chocolate Orchid Productions, as its pitchman, loudly asking, “Why pay $30 to $60 a month when you can get the same quality service for as low as $14.95?”

McCloney adds salt to USI’s wounded bank account because, as he tells it, it was Comcast that invited him to produce the ad and get it running on the system.  McCloney claims a Comcast advertising representative contacted him after seeing the billboard and invited USI to buy TV advertising.

“They saw the billboards, and they asked if they could get some of that advertising business on Comcast cable,” McCloney told the Star-Tribune.

After Caldwell spent $7,500 producing the TV ad, Comcast now says it cannot run on their system.

A local Comcast spokesperson told the newspaper he didn’t know if McCloney’s story was true or not.  A national spokesperson for the cable company said Comcast decides on a case-by-case basis whether to take advertising for services that compete with Comcast.

The dispute threatens to have national implications as Comcast pushes to have its merger with NBC-Universal approved.

With ownership of additional broadcast outlets, would-be competitors to Comcast could find themselves banned from advertising on broadcast stations with ties to the cable operator.

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USI Wireless’ “banned” TV ad, which makes no mention of Comcast by name, or the current controversy.  (1 minute)

When the FCC delivers for Big Telecom's agenda, stocks soar. Comcast shares exploded on news the company could largely do as it pleases with its broadband service. (CNBC)

Comcast’s stock price soared today as Wall Street was cheered by news America’s largest cable operator would likely face little regulatory restraint from consumer protection policies designed to keep broadband providers from meddling with Internet traffic.  But investors were also excited by the green light signaled by Federal Communications Commission chairman Julius Genachowski that launching Internet Overcharging schemes like “usage-based” billing, speed throttles and hard usage caps on broadband consumers was also acceptable marketplace behavior.

Craig Moffett, a Wall Street analyst with Sanford Bernstein said Genachowski’s remarks left the marketplace with little doubt it can get away with price increases and new limits on broadband consumption.

“The FCC here is expressly acknowledging the need to ration broadband, and that’s a really big deal,” said Moffett, appearing on CNBC this afternoon.  “I think you are going to start to see usage-based pricing plans from the broadband providers pretty quickly.”

Moffett also acknowledged his firm’s own research showing consumers despise such pricing schemes and admits the impact on America’s broadband landscape is likely to include a dramatic shift in how customers use their Internet accounts.

“When customers think they are going to be charged when they click on that link and watch a movie, they are going to be inclined to watch fewer movies,” Moffett said.  “You can’t expect linear progression of online video because there are going to be feedback loops like usage-based pricing that are going to limit usage.”

Moffett says cable operators are benefiting from Chairman Genachowski’s new approach because it opens the door to repricing wired broadband accounts to limit broadband consumption.  Since most analysts guessed regulators would allow usage-based pricing to remain on wireless broadband, the unexpected green light for similar rationing plans on cable broadband, DSL, and other wired services was welcome news, at least for providers and Wall Street.

Consumers that don’t deliver a resounding negative response to elected officials, the FCC, and the White House better start thinking twice about clicking that YouTube video, because that few minutes could cost plenty if providers slap higher prices and limits on broadband service in the coming year.

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A Wall Street telecom analyst predicts the end of unlimited home broadband accounts is going to come quickly, now that the FCC has capitulated on Net Neutrality policies.  (3 minutes)

Comcast wants to be paid twice for carrying Netflix online video content to its customers: once from customers themselves and a second time from Level 3 Communications, Inc., the company providing much of Netflix’s streamed video traffic.

“On Nov. 19 Comcast informed Level 3 that, for the first time, it will demand a recurring fee from Level 3 to transmit Internet online movies and other content to Comcast’s customers who request such content,” said Level 3’s chief legal officer, Thomas Stortz, in a statement. “By taking this action, Comcast is effectively putting up a toll booth at the borders of its broadband Internet access network, enabling it to unilaterally decide how much to charge for content which competes with its own cable TV and Xfinity delivered content.”

The backbone and content distribution company accused Comcast of threatening the open Internet and of abusing its market position as America’s largest cable broadband provider.  Comcast disageed, calling Level 3’s position “duplicitous” and accused the company of sending far more traffic from its content partners than the cable giant sends in the other direction.

Joe Waz, senior vice president of External Affairs and Public Policy Counsel at Comcast posted a response on the company’s blog claiming Level 3 was trying to have it both ways, running a lucrative content delivery business for clients like Netflix while also acting as a major Internet backbone provider.  Waz claims Level 3 is purposely confusing the fair exchange of backbone traffic with the commercial content delivery business it also runs:

Comcast has long established and mutually acceptable commercial arrangements with Level 3′s Content Delivery Network (CDN) competitors in delivering the same types of traffic to our customers. Comcast offered Level 3 the same terms it offers to Level 3′s CDN competitors for the same traffic. But Level 3 is trying to gain an unfair business advantage over its CDN competitors by claiming it’s entitled to be treated differently and trying to force Comcast to give Level 3 unlimited and highly imbalanced traffic and shift all the cost onto Comcast and its customers.

To quantify this, what Level 3 wants is to pressure Comcast into accepting more than a twofold increase in the amount of traffic Level 3 delivers onto Comcast’s network — for free. In other words, Level 3 wants to compete with other CDNs, but pass all the costs of that business onto Comcast and Comcast’s customers, instead of Level 3 and its customers.

Level 3′s position is simply duplicitous. When another network provider tried to pass traffic onto Level 3 this way, Level 3 said this is not the way settlement-free peering works in the Internet world. When traffic is way out of balance, Level 3 said, it will insist on a commercially negotiated solution.

But Level 3 claims Comcast threatened to pull the plug if they didn’t agree to the cable company’s demands, which would have cut off Comcast customers from a wide range on content.  The company agreed to pay Comcast under protest, and took the issue public just as attention has become re-focused on Net Neutrality at the Federal Communications Commission.

The dispute increasingly resembles cable TV carriage fights where programmers threaten to yank programming if their terms are not met.  Had Comcast delivered on its alleged threat to cut ties to Level 3, widespread disruptions of content delivery could have been the result, starting with a blockade against Netflix streaming video.  That would leave Comcast broadband customers paying for a hobbled Internet experience, missing popular websites because of Comcast’s roadblocks wherever Level 3 traffic was involved.

It’s a classic case of a Net Neutrality violation, with money being the motivating factor.  Pro-consumer public policy groups immediately pounced on the news.

“Comcast’s request of payment in exchange for content transmission is yet another example of why citizens need strong, effective network neutrality rules that include a ban on such ‘paid prioritization’ practices,” said Andrew Jay Schwartzman, senior vice president and policy director of Media Access Project. “It is also yet another clear demonstration of why Comcast should not be permitted to acquire NBC Universal, given its clear tendency to exercise control in the video marketplace.”

“On its face, this is the sort of toll booth between residential subscribers and the content of their choice that a Net Neutrality rule is supposed to prohibit,” said Harold Feld, legal director of Public Knowledge. “In addition, this is exactly the sort of anticompetitive harm that opponents of Comcast’s merger with NBC-Universal have warned would happen — that Comcast would leverage its network to harm distribution of competitive video services, while raising prices on its own customers.”

Although Netflix and officials at the Federal Communications Commission both refused comment, analysts predict consumers will ultimately pay the price for Comcast’s newest fees in the form of higher prices for online content.  Comcast does not impose these fees on its own TV Everywhere online video service, Xfinity Fancast.  Waiving expensive content delivery fees for “preferred content partners” could leave independent competitors like Netflix vulnerable to the whims of the broadband providers charging extra to deliver traffic to paying customers.

The FCC is rumored to be considering enacting some broadband reforms before new Republican members of Congress take their seats in January.

(Thanks to several of our readers, including Terry and ‘PreventCaps’ for sending word.)

[flv]http://www.phillipdampier.com/video/Bloomberg Comcast Internet Toll Booth 11-30-10.flv[/flv]

Bloomberg News briefly covered the dispute in this morning’s Business Briefs segment.  (1 minute)

Good News! (For the station's advertisers)

WTXL-TV’s The Good News Show fell all over themselves last week gushing about Comcast’s rebranding as Xfinity.  The noon weekday program, apparently produced by the station’s news department, managed to obliterate any firewall between journalism and the advertising & sales department at the station.

A sampling of praise from the host, in between tossing softball questions at the two Comcast representatives followed by vigorous nodding in agreement:

• “Wow, that -is- amazing.”
• “It’s so much more for less, really.”
• “I know, unbelievable!”
• “Yeah, definitely,” in response to Comcast’s community coordinator’s statement that she thinks everyone should sign up for Comcast service.
• “Yes, true — especially with the holidays coming this is something everyone’s going to want to get in on!”

The journalistic malpractice doesn’t stop with Comcast.  Other features practically evangelize local Tallahassee businesses and restaurants, a whole mess of which also turn out to be sponsors or “partners” offering discount coupons on the station’s website or “advice” to viewers.

A little exploration of WTXL’s website uncovered a page inviting those interested in appearing on the program to contact… the station’s advertising & sales department!:

Reach your potential customers in Tallahassee, Thomasville, Valdosta and beyond with the power of television and innovation of the internet.

ABC 27 can…

• reach over 290,000 households in North Florida and South Georgia
• produce your commercial in high definition
• create custom promotions to help you reach new customers
• increase traffic to your website and position your company more effectively through customized online advertising and sponsorships
• put together an advertising plan that will meet your  marketing goals and fit your budget.

Your ABC 27 account executive will be dedicated to helping you grow your business and assist you through every step in creating your advertising campaign.

Of course the last people to understand this special relationship between the station and its advertisers are the viewers, who don’t appear to be told if the guests appearing on the program are also paying clients.

This is not unprecedented.  Many small city television stations beef up their ad revenue inviting sponsors to appear on morning and interview shows.  But WTXL is among the first to package it under the moniker “news” and deliver it to Florida and Georgia viewers on a Comcast/Xfinity Silver Platter.

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An excerpt from WTXL’s ‘The Good News Show,’ featuring two representatives from Comcast who received a glowing reception from the program’s host.  (4 minutes)