Stall, stall, stall. While Charter Communications and AT&T are working towards improving their broadband service offerings for Kentucky’s largest city, both companies are doing everything possible to slow down the arrival of their nemesis: Google Fiber, which is preparing to wire Louisville for gigabit fiber to the home service.

This past February, Louisville Metro Council unanimously passed a new ordinance called “One Touch Make Ready,” designed to streamline telecom provider access to utility poles, which are getting crowded with at least three telecom companies vying for consumers’ business. The ordinance was passed with the support of Google, which seeks a minimum of red tape from local permit and zoning bureaucracies and its competitors while network engineers begin installing fiber optics across the city. Installing Google Fiber on utility poles may involve moving other providers’ wiring to make room for Google, which in some cases could mean 4-5 different utility companies having to visit each pole to move their wiring. In the past, Google asked the pole owner for access, which has not always been forthcoming on a timely basis. The new ordinance requires the pole owner to respond to access requests within 30 days. If no response is forthcoming, Google can approach the city for a permit to hire a contractor to do all the relocation work on their behalf.

“Such policies reduce cost, disruption, and delay, by allowing the work needed to prepare a utility pole for new fiber to be attached in as little as a single visit—which means more safety for drivers and the neighborhood,” Google wrote on its blog. “This work would be done by a team of contractors the pole owner itself has approved, instead of having multiple crews from multiple companies working on the same pole over weeks or months. One Touch Make Ready facilitates new network deployment by anyone—and that’s why groups representing communities and fiber builders support it, too.”

Louisville, Ky. (Image: Chris Watson)

About two weeks after the ordinance passed, AT&T made it clear they did not support it and took the city to court, claiming it had no right to regulate its utility poles.

“Louisville Metro Council’s recently passed ‘One Touch Make Ready’ Ordinance is invalid, as the city has no jurisdiction under federal or state law to regulate pole attachments,” said AT&T spokesman Joe Burgan. “We have filed an action to challenge the ordinance as unlawful. Google can attach to AT&T’s poles once it enters into AT&T’s standard Commercial Licensing Agreement, as it has in other cities. This lawsuit is not about Google. It’s about the Louisville Metro Council exceeding its authority.”

Time Warner Cable (now Charter Communications) joined AT&T, adding the city is violating the cable company’s corporate constitutional rights by effectively seizing their property (cable lines) and granting a right for third parties to manipulate, move, or manage those lines without Time Warner Cable’s permission.

“The ordinance is simply unworkable,” said Time Warner Cable’s attorney Gardner Gillespie, a partner in the D.C. law firm Sheppard-Mullin. “It does not provide any meaningful way for Time Warner Cable to know what changes have been made to its existing facilities or to assure any damage is promptly cured.”

Gillespie also claimed customers could endure poorer service and outages as a result of unauthorized contractors relocating Time Warner Cable’s equipment, often without the cable company’s knowledge.

City officials dismissed the concerns, but failed to get either lawsuit dismissed.

Charter executives have also opened a new opposition front against Google Fiber’s presence in the city, accusing city officials of unfairly favoring the search engine giant while continuing to burden Charter with a franchise agreement that requires the cable company to provide free cable in city buildings and offer channel space and studio facilities for the city’s Public, Educational, and Government Access channels.

At present, Google is not obligated to provide any of those services and has also won a unique regional franchise that covers the city of Louisville and nearby suburbs in a single agreement. The Metro Council has also granted Google its own public right-of-way access for installing various communications infrastructure. Both AT&T and Charter claim they are only getting involved because they believe they should be given equal treatment. Critics contend they are attempting to slow down Google Fiber, which could begin offering service by fall of 2017.

Time Warner Cable began offering Maxx-upgraded service in March 2016, offering residents up to 300Mbps. AT&T is gradually expanding its U-verse with GigaPower gigabit broadband service in locations around Louisville.

Altice’s bean counters have completed the first wave of cost cuts as part of the company’s notorious practice of “cutting to the bone,” laying off about 100 Cablevision employees managing IT, human resources, accounting and other back office operations at the cable company’s Bethpage, N.Y. headquarters.

Newsday reports Altice’s ability to cut Cablevision employees is constrained by an agreement with the New York Public Service Commission not to lay off any customer-facing employees or technicians for the next few years, as a condition of approving Altice’s buyout of Cablevision, which was completed in June. But once that condition expires, Altice management has signaled it will seek to further consolidate their holdings in the United States.

An Altice spokesperson confirmed the layoffs, but claimed Altice also hired 49 new workers “to its U.S. operations” in the last two weeks, which also includes Suddenlink. Altice’s career website shows the company is still hiring, but likely at a substantially lower compensation rate than workers used to receive before the acquisition.

Altice also showed it had little interest in the newspaper business and sold 75% of its recently acquired interest in the Long Island-based Newsday newspaper back to the Dolan family.

Washington State Attorney General Bob Ferguson filed a $100 million lawsuit today against Comcast Corporation in King County Superior Court, alleging the company’s own documents show a pattern of illegally deceiving customers to fatten their bottom line by tens of millions of dollars.

The lawsuit claims Comcast violated Washington’s Consumer Protection Act (CPA) at least 1.8 million times as the cable operator misrepresented what is covered under its “Service Protection Plan,” improperly charged customers service call fees when they should have been free, and violated customer privacy by engaging in improper credit screening.

At least 500,000 Washington residents are victims of Comcast’s deceptive acts, the lawsuit alleges.

“This case is a classic example of a big corporation deceiving its customers for financial gain,” Ferguson said. “I won’t allow Comcast to continue to put profits above customers — and the law.”

Ferguson

Comcast routinely claims its $4.99/mo “comprehensive” service plan covered the cost of all service calls, including those related to inside wiring, customer-owned equipment connected to Comcast services and on-site education about products. That is, unless a customer wanted the wiring hidden by installing it inside a wall, which the majority of customers want. A so-called “wall fish” is not covered by Comcast’s plan, even though 75% of the time, Comcast representatives told state investigators the plan did cover all inside wiring.

It turns out many other things are not covered by Comcast’s “comprehensive” plan, including consumer-owned equipment troubleshooting and repairs involving cable jumpers, splitters, and other types of connectors. Some customers were billed for an entire service call if an excluded item happened to be checked by a Comcast technician. Ferguson claims Comcast does all it can to keep the fine print revealing the exclusions away from customers. Comcast does not offer customers enrolling in the plan a printed terms and conditions brochure or point to one on its website. Customers must dig around Comcast’s website to find the terms on their own. Just enrolling in the plan automatically gives Comcast a customer’s consent to whatever terms and conditions are in effect at the time.

Comcast also has a habit of charging Washington customers for trouble-related service calls that should have been free, the lawsuit alleges.

Comcast’s so-called “Customer Guarantee” promises that the company “won’t charge you for a service visit that results from a Comcast equipment or network problem.” Comcast discloses no limitations on this guarantee. But state investigators discovered Comcast routinely charged thousands of customers for service calls involving Comcast’s own equipment or service problems. Customers were also billed for service calls involving defective Comcast-supplied HDMI and component cables, cable cards, and installations of drop amplifiers, commonly installed to resolve a signal problem when Comcast’s network is not functioning properly.

Comcast allegedly facilitated the service call charges until approximately June 2015 by encouraging technicians to use a service call “fix code” that permitted Comcast to “add service charges to a normally not charged fix code.” That allowed technicians to properly track Comcast’s own network troubles yet still charge customers to roll a truck to their home, even when the service call should have been free.

Finally, as many as 6,000 Washington residents saw their credit scores drop after Comcast engaged in improper credit screening, causing a “hard pull” on credit reports which can negatively impact credit scores, at least temporarily.

Comcast requires an equipment deposit, but it is usually waived for customers with an adequate credit score. But the AG’s office uncovered at least 6,000 occasions where customers paid an equipment deposit, despite their high credit score. Ferguson’s office claims this indicates either:

• customers “opted out” of a credit check and paid the deposit instead to avoid a credit score hit appearing on their credit report, only to have Comcast run one anyway; or
• customers were forced to pay the deposit despite their high credit score, contrary to Comcast’s policy.

The case is the first in the nation of this size and scope, and comes after Ferguson spent more than a year trying to work with Comcast. Ferguson said he was not satisfied with Comcast’s response and filed the lawsuit.

For violating Washington’s Consumer Protection Act, the Attorney General’s Office is seeking:

• More than $73 million in restitution to pay back Service Protection Plan subscriber payments;
• Full restitution for all service calls that applied an improper resolution code, estimated to be at least $1 million;
• Removing improper credit checks from the credit reports of more than 6,000 customers;
• Up to $2,000 per violation of the Consumer Protection Act; and
• Broad injunctive relief, including requiring Comcast to clearly disclose the limitations of its Service Protection Plan in advertising and through its representatives, correct improper service codes that should not be chargeable and implement a compliance procedure for improper customer credit checks.

It is hard to imagine there are still cable systems serving customers with nothing more than a slim lineup of standard definition cable television channels in 2016, but not if you live in three Berkshire towns over the New York-Massachusetts border where Charter Communications will finally introduce HD television and internet service starting next week.

Lanesborough, West Stockbridge, and Hinsdale all suffer from the pervasive lack of broadband common across western Massachusetts. But these communities, along with Charter’s cable system in nearby Chatham, N.Y., are benefiting from regulator-mandated upgrades as a condition of approving Charter’s acquisition of Time Warner Cable. Charter Communications has almost no presence in New York, except for 14,000 customers in Plattsburgh and the seriously antiquated system in Chatham that isn’t too far from the dilapidated systems serving the Berkshires on the Massachusetts side of the border. Like in Chatham, customers in the Berkshires pay for service similar to what cable customers received in the 1980s – no video on demand, no internet access, and a capacity-strained system that lacks enough bandwidth to offer HD channels.

The upgrades will cost about $6,000 per customer — numbering 2,500 in Chatham and another 800 in the three towns in Massachusetts. Charter is paying the bill. Charter’s acquisition of Time Warner Cable will make things easier for the cable operator, because it will extend fiber connections between the Charter systems and existing Time Warner Cable infrastructure nearby.

In Massachusetts, Charter’s upgrades require customers to install new set-top boxes in time for the switchover on Aug. 2. A week later, on Aug. 9, internet access will be available at the two speeds Charter traditionally offers — 60 and 100Mbps.

Most customers care a lot less about improved cable television and are more concerned about getting broadband. Western Massachusetts’ broadband problems have affected property values and kept businesses from relocating or expanding in the area. Few areas in the northeast have languished with inadequate internet access more than Massachusetts communities west of Springfield.

The large consortium of 44 communities working under WiredWest have spent years working towards community-owned fiber to the home service in the western half of the state, but the project ran into political interference at the state government level. Lanesborough had been part of the WiredWest collaborative effort, reports iBerkshires. With Charter’s upgrade, the community may decide to drop out of the project, even though it would likely deliver superior broadband service over what Charter will offer.

On a morning conference call with Wall Street analysts, Comcast continues to misrepresent its vision of broadband usage caps and usage-based billing, claiming customer preferences echoed through Comcast’s performance in the marketplace will tell the company what is “best for consumers,” and guide Comcast how to realize the most value for shareholders.

Wall Street is very interested in usage caps and usage-based billing because cable operators can protect video revenue threatened by cord-cutting and boost revenue earned from customers who exceed their allowance.

Vijay Jayant, and analyst at Evercore ISI, quickly zeroed in on the potential loss of anticipated revenue from Comcast’s recent decision to boost its data cap from 300GB to 1TB, something Jiyant characterized as a “hurdle” for future usage-related charges.

“Well we have one terabyte. We moved it up from 300 gigabyte to one terabyte in 14% of our markets where we have usage-based pricing,” responded Neil Smit, Comcast Cable’s president and CEO. “We think we’re going to continue to adjust and look at it as the market evolves and as usage evolves. We have different pricing models, some based on speed, some based on usage, and we’re going to be flexible and kind of let the market tell us which way is best for consumers and how we add the most value. We continue to add speeds. We’ve upped speeds 17 times in 15 years. We’ve built out the fastest Wi-Fi. So we’re going to continue to invest in the network to stay ahead of things.”

Smit’s response was incomplete, however.

Smit

Comcast’s usage and speed-based pricing models are hardly “flexible” and do not co-exist in the same markets. Customers are compelled to obey Comcast’s usage cap, face overlimit fees up to $200 a month, or pay an additional $50 a month to buy back their old unlimited use service. In Comcast markets without usage caps, the cable company only sells speed-based internet tiers with no enforced caps.

Comcast has consciously avoided allowing customers to choose between speed-based or usage-based tiers, because years of experience among other cable operators quickly proved customers intensely dislike usage caps of any kind. In fact, the largest percentage of complaints filed with the FCC about Comcast are about its compulsory usage cap trial and the fees associated with it.

One reason for that hostility may be that Comcast’s broadband prices do not drop as a result of the introduction of usage caps in a service area. The customer effectively receives a lower value broadband product as a result of its arbitrary usage limit, and the potential exposure to overlimit fees or a very expensive “insurance” plan to avoid the cap altogether. Earlier trials offered some customers a small discount if they kept usage under 5GB a month, a difficult prospect for most and in any case not much of a revenue threat for Comcast.

If Comcast was seriously interested in what its customers think about its usage cap trial, it need only review the FCC’s complaint database. According to a Freedom of Information Law request from The Wall Street Journal, nearly 8,000 complaints received by the FCC in the second half of 2015 were about data caps, and most of those were directed at Comcast.

Comcast’s claim it will let the marketplace decide only delivers a distorted view about usage caps, because many Comcast customers have only one other competitive choice, and there is a significant chance that provider caps customer’s broadband usage as well. AT&T, for example, caps its customers at a level even stingier than Comcast. Those caps have not been enforced with overlimit fees on customer bills (except for AT&T’s DSL customers), although AT&T suggests it is getting serious about collecting future overlimit fees. If Comcast gains new customers leaving AT&T to avoid smaller caps, Comcast executives seem to believe they can claim consumers have ’embraced’ Comcast’s usage billing. But we know that is about as credible as an election in North Korea.

Time Warner Cable has been one of the few honest players about usage billing, giving customers the option of keeping unlimited or switching to a capped plan for a discount. More than 99% of customers have chosen to stay with unlimited and only a few thousand have chosen to limit their usage for a small discount. An honest market test from Comcast would extend a similar option to customers. Keep unlimited or voluntarily limit usage for a small discount. Given this kind of test, we expect the overwhelming majority of customers would keep unlimited at all costs. Doing so would hurt shareholder value, however.

The only value Comcast is concerned with is how much more money they can charge customers for broadband service. In America’s broadband duopoly, where speed-based broadband pricing is already outrageously high, usage caps and usage billing are nothing more than a greedy cash grab. When money is at stake, reputation comes in a distant second at Comcast, as the company continues to prove its poor reputation with American consumers is well-deserved.