The Communications Workers of America has told the New York Public Service Commission it should reject Altice’s proposal to buy Cablevision for more than $17 billion, claiming it’s a bad deal for customers and employees alike.

Citing Altice’s massive debt and the company’s documented history of cutting expenses and investment, Dennis Trainor, vice president for the CWA-District One, said approving the deal would load Cablevision down in debt, making any significant investments in Cablevision’s future doubtful.

“This is a bad deal for Cablevision customers and employees,” Trainor said. “Altice overpaid for Cablevision, and is financing that overpayment by loading Cablevision with debt. That will inevitably lead to worse service for customers.”

The CWA also heavily criticized Altice and Cablevision for stalling sharing documentation with the labor union as ordered by a New York Administrative Law Judge. It filed initial comments opposing the transaction with the PSC under protest.

“As late as the morning of Feb. 5, [the Joint Applicants] have continued their grudging and incomplete disgorgement of relevant and probative material to which CWA is entitled,” the CWA wrote. “CWA now possesses documents and data which are contradictory and require reconciliation.”

The CWA considers the deal good for Altice and Cablevision’s owners and investors, but a raw one for customers.

“For example, Cablevision’s top five executives will have almost $160 million in ‘golden parachute’ compensation available to them under certain circumstances if the transaction is approved, of which almost $100 million will become automatically triggered and payable upon consummation of the merger,” the CWA stated. “In sum, after the transaction closes, Cablevision will be the same company, with the same plant and equipment, but with substantially more debt and relatively little cash on hand,” the CWA concluded.

The CWA also cited Stop the Cap!’s own reporting of the consequences of increasing debt and reduced investment at SFR, an Altice-owned telecommunications provider in France:

“We refer the Commission to publicly available reports of a collapse of service quality for customers of SFR, one of France’s largest telecom service providers, owned by Altice. This has caused a doubling of complaints from wired customers between 2014 and 2015 and a corresponding increase in complaints about wireless service of 50%. Altice had two responses: First, it blamed the company it purchased SFR from ‘we pay the price of underinvestment from the previous [owner]’. Second, it disputes whether the level of complaint is unacceptable ‘For now, we are not very good, but we are not bad.'”

New York City’s Office of the Public Advocate is no fan either. In its filing, the OPA also cited Altice’s enormous debt load, which has increased dramatically over the last four years.

“[Altice CEO Patrick] Drahi has already driven away customers and alienated employees in France since his acquisition [of SFR],” writes the OPA. “In SFR’s case, Altice eliminated costs to boost SFR’s profit margins. Among Altice’s practices with SFR were: efforts to stall payments for suppliers, initiating salary and job cuts, and a reduction in spending on meaningful service upgrades.”

The OPA also cites reporting by Stop the Cap! documenting how SFR performed after being acquired by Altice.

Leticia James, Public Advocate for the City of New York

“We know, for example, SFR was forced to completely stop paying suppliers in order to force a renegotiation for cheaper supplies,” writes the OPA. “The French government appointed a mediator to resolve the issues. Moreover, these business practices failed to effectuate Altice’s goals. Just four months ago, Altice reported ‘worse-than-expected’ third quarter results for SFR that drove the company’s shares down 10 percent. In fact, SFR lost one million customers in just one year. Investors correctly attribute customer losses to Altice’s aggressive cost-trimming. As one expert explains, ‘the savings came first immediately and now the churn (or customer defection) goes up.’ Another analyst describes Altice’s ‘dangerous’ actions as not only cutting out the fat, but also the meat and the bones.”

The PSC staff reviewing the transaction also expressed concern that Altice’s willingness to keep data caps at its other acquisition Suddenlink may result in similar data caps being implemented on Cablevision customers after the merger.

Especially notable to the PSC staff was the fact that under Suddenlink’s 1000/50Mbps data-capped plan, “if the connection is utilized at its rated speeds […] a customer could reach the data cap in less than two hours.”

“If Altice were to import Suddenlink’s pricing into Cablevision service territory and impose data caps on its existing plans, some customers would be forced to upgrade not for the increased speed, but for larger data caps,” the PSC staff wrote. “For example, customers on Cablevision’s low-end 5Mbps plan, if limited to a 250GB monthly cap, would technically be able to hit their cap after just five days of constant use. More practically, they would be limited to approximately 83 hours (a little less than three hours a day) of video streaming, if the connection were not used for anything else.”

“Simply put, the introduction of Suddenlink-type data caps in Cablevision’s New York service territory post-transaction would limit the ability of New York consumers to utilize their broadband connections at their own discretion, as they currently enjoy with Cablevision service today, and would lessen the ability of over-the-top voice and video providers to compete with Cablevision’s bundled services,” the PSC staff concluded. “The imposition of Suddenlink-type data caps would be a significant detriment to New York consumers, and should not be allowed as a condition of the transaction.”

Some Midco customers in Fargo, N.D. will be able to buy gigabit broadband from the cable operator in a field trial scheduled to start in March.

Midco (formerly Midcontinent Communications) is moving forward on plans to offer gigabit speeds to all 330,000 of its customers in more than 300 communities in Minnesota, North and South Dakota, and Wisconsin by the end of 2017. Launching field trials is the first step for the cable operator to get experience delivering 1,000Mbps service using the newest cable broadband standard – DOCSIS 3.1.

“Speed matters to our customers, and we have made it a priority to reshape our network to deliver the fastest, most reliable Internet service possible,” Jon Pederson, chief technology officer of Midco said in a statement. “Cisco shares our vision for a fully scalable, efficient network that will take us into the future and manage the bandwidth demands of our increasingly connected lives.”

“Midco has been full speed ahead with its plans to deliver a DOCSIS 3.1-ready network,” added Kelly Ahuja from Cisco. “Through our collaboration, Midco customers will be among the first in the country to enjoy the fastest Internet connection available, unleashing a host of new experiences that can help make their lives better.”

Although Cisco will power the gigabit platform, the company has yet to announce what DOCSIS 3.1 modem(s) it intends to supply customers.

After Midco gets initial results from its trial in Fargo, it will roll out a pilot program for gigabit service to customers in Sioux Falls, S.D. before the end of this year.

No pricing details have been announced.

TRAI Chairman R.S. Sharma

A plan by Facebook to deliver free limited Internet access to India’s poor and rural communities was delivered a blow this morning after the Telecom Regulatory Authority of India (TRAI) declared the plan would violate Net Neutrality and banned it.

TRAI’s ruling focused on the fact the proposed plan would only allow customers to access Facebook and other partnered websites the social network elected to let users access over its free service. The regulator declared no service provider in India will be allowed to offer or charge discriminatory rates for data services based on content.

The regulator relied heavily on the ISP License Agreement in its ruling, which requires subscribers to have “unrestricted access to all the content available on Internet except for such content which is restricted by the Licensor/designated authority under Law.” TRAI went further in its Net Neutrality declaration than regulators in the U.S. and parts of Europe, proclaiming price-based differentiation “would make certain content more attractive to consumers resulting in altering online behavior.” Under those terms, India has effectively banned the practice of “zero rating,” which exempts certain so-called “preferred content” from metering charges or counting against a customer’s usage allowance.

“This is a big win for Indian consumers and Net Neutrality,” said Independent MP Rajeev Chandrasekhar. “This is a very powerful and positive first step taken by TRAI. The days of telcos controlling regulations and regulatory policy is over and it is consumers to the fore.”

Facebook’s Internet.org and its companion free mobile web service, now dubbed Free Basics, offers stripped-down web services without airtime or usage charges, targeting basic so-called “feature phones” that were common in the U.S. before smartphones. Facebook has targeted the free service on about three dozen developing countries including the Philippines, Malawi, Bangladesh, Thailand and Mongolia. India would have been Facebook’s largest market for Free Basics, until the telecom regulator effectively banned it.

In India, Facebook CEO Mark Zuckerberg’s frequent entries into the debate, including a passive-aggressive OpEd widely panned in India, was seen by many as arrogant and counter-productive. Facebook’s ongoing campaign to enlist users’ active support of the project for the benefit of India’s telecom regulator created a row with the Office of the Prime Minister, that dismissed Facebook’s public relations defense of Free Basics “a crudely majoritarian and orchestrated opinion poll.“

A misleading astroturf campaign only infuriated the government more after Facebook users (including some in the U.S.) were greeted with an invitation in their timelines to support “digital equality,” sponsored by Facebook. Regulators were flooded with form letters, only later to be informed many were misled to believe it indicated their support for Net Neutrality.

Facebook users across India (and some in the U.S.) were invited by Facebook to defend “digital equality,” which critics define as “opposing Net Neutrality.”

“Facebook went overboard with its propaganda [and] convinced ‘the powers that be’ that it cannot be trusted with mature stewardship of our information society,” said Sunil Abraham, of the Center for Internet and Society in Bangalore.

Initially, Internet.org included Facebook and a handpicked assortment of content partners, including the BBC, that were allowed on the free service. Net Neutrality proponents accused Facebook of creating a walled garden for itself and its preferred partners, disadvantaging startups and other companies not allowed on the service.

Unlike in the United States where Net Neutrality was a cause largely fought by netizens, websites, and consumer groups, major media organizations in India helped coordinate the push for Net Neutrality. The Times of India and its language websites like Navbharat Times, Maharashtra Times, Ei Samay and Nav Gujarat Samay appealed to other broadcasters and publishers to remove themselves from Internet.org. NDTV, a major multi-lingual broadcaster running multiple 24-hour news channels, often promoted Net Neutrality on the air and encouraged Indians to support it.

Like in the United States, Indians faced a telecom regulator more accustomed to dealing with government officials and telecom companies. TRAI was quickly swamped with over one million comments in support of Net Neutrality, so many that invitations for future comments were moved to another government website that made it harder for consumers to address regulators. The unexpected level of support for Net Neutrality also led Facebook to change its Internet.org service and relaunch Free Basics as “an open platform.”

But websites included in the service still cannot contain data intensive product experiences, such as streaming video, high-resolution images and GIFs, videos, client or browser side caching or file and audio transfer services.

“Facebook defines the technical guidelines for Free Basics, and reserves the right to change them,” adds the SavetheInternet.in coalition. “They reserve the right to reject applicants, who are forced to comply with Facebook’s terms. In contrast they support ‘permissionless innovation’ in the US.”

In India, the argument has boiled down to whether the country would prefer a usage-limited open Internet platform for the poor or an unlimited experience for a handful of websites. TRAI prefers enforcing rules guaranteeing users can visit any website they want, even if the free service used comes with a usage cap.

It’s a major blow for Facebook and the telecom operators that were some of the service’s biggest defenders.

[flv]http://www.phillipdampier.com/video/NDTV Net Neutrality India 2-8-16.mp4[/flv]

Net Neutrality is now law in India, where the telecom regulator exceeded the United States by completely banning zero rated services, which allow users to avoid usage charges for certain applications or websites. (2:03)

Activists of Indian Youth Congress and National Students Union of India shout anti-government slogans during a protest in support of Net Neutrality in New Delhi on April 16, 2015. (Image: MONEY SHARMA/AFP/Getty Images)

”COAI had approached the regulator with the reasons to allow price differentiation as the move would have taken us closer to connecting the one billion unconnected citizens of India,” said Rajan Mathews, director general of the Cellular Operators Association of India (COAI). “By opting to turn away from this opportunity, TRAI has ignored all the benefits of price differentiation that we had submitted as a part of the industry’s response to its consulting paper, including improving economic efficiency, increase in broadband penetration, reduction in customer costs and provision of essential services among other things.”

In a statement, a Facebook spokesperson said: “Our goal with Free Basics is to bring more people online with an open, non-exclusive and free platform. While disappointed with the outcome, we will continue our efforts to eliminate barriers and give the unconnected an easier path to the Internet and the opportunities it brings.”

TRAI rejected industry claims that differential pricing will enable operators to bring innovative packages to the market.

India has 300 million mobile users but there are still nearly one billion Indians without Internet access. India is an important market for Facebook, with 130 million active Facebook users — second to only the United States.

Allowing Facebook to gain a foothold in rural India using zero rating was compared with British colonialism by Vijay Shekhar Sharma, the founder of PayTM — an Indian mobile payment system. He called Free Basics a trojan horse — “poor Internet for poor people” and referred to it as the colonial-era East India Company of the 21st century.

“India, Do u buy into this baby Internet?” Mr Sharma tweeted in December. “The East India company came with similar ‘charity’ to Indians a few years back!”

“Given that a majority of the [Indian] population are yet to be connected to the Internet, allowing service providers to define the nature of access would be equivalent of letting [operators] shape the users’ Internet experience,” TRAI said in its release.

Telecom operators should be able to adapt to a market that bans zero rating, analysts believe.

“Telecom service providers may not be happy with this notification,” Amresh Nanden, research director at Gartner, told NDTV News. “However, they still have the ability and freedom to create different kind of Internet access packages; as long as content is not a parameter to provide or bar access to anyone. Such practices have already started elsewhere with products such as bandwidth on demand, bandwidth calendaring etc. to create premium products.”

[flv]http://www.phillipdampier.com/video/AIB Save The Internet 1 4-2015.mp4[/flv]

All India Bakchod produced several humorous mostly English language videos teaching Indians about Net Neutrality and why it’s important. It’s a familiar case for North Americans dealing with our own telecom operators. (9:07)

An update from All India Backchod last summer alerted India to an astroturf campaign underway at Facebook and telecom operators to mislead Net Neutrality supporters. (8:02)

Stop the Cap! has filed a motion before California’s Public Utilities Commission (CPUC) to request party status in the Charter-Time Warner Cable merger proceeding, better positioning ourselves to influence the outcome.

As other consumer groups in California continue to formally oppose the merger, we are also filing to ask regulators to consider our request to impose conditions on the deal should the CPUC decide to approve it anyway. As we promised after the New York Public Service Commission approved the deal with significant conditions, we are once again taking a hard look at Charter’s three-year commitment not to impose data caps or usage pricing — a term we find completely inadequate.

It remains our belief three years is far too short a commitment, and it is unlikely consumers will find plentiful alternatives for broadband service should Charter impose caps in 2019 anymore than they can today. As a reminder to consumers and regulators, deal conditions imposed by regulators on the 2011 merger of Comcast and NBC-Universal have already begun to expire, with relatively little change in competition in the marketplace.

Our late filing for party status comes partly in response to inadequate public notice from Charter Communications and new information and suggestions that came as a result of the New York State PSC proceeding that would be directly informative and beneficial for California residents.

In states where public utility regulators have approved the transaction with ‘most-favored state’ provisions, any benefits we can win for consumers in California will also apply in New York and other states as well.

As always, we are extremely grateful to our newest member of the Stop the Cap! team, Matthew Friedman, who has dramatically strengthened our ability to monitor the marketplace on the west coast to broaden our consumer protection efforts.

We remain an all-volunteer organization, so if you’d like to join our team, use the Contact Us button at the top of the page and send a message. We’d love to have more volunteers helping identify and write about pressing broadband issues throughout the U.S. and Canada, and we’re happy to help with the editing.

The full text of our motion appears below:

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
MOTION OF STOP THE CAP! FOR PARTY STATUS

I. Introduction
Pursuant to Rule 1.4 of the California Public Utilities Commission’s (“CPUC” or the “Commission”) Rules of Practice and Procedure, Stop the Cap! respectfully requests to be granted party status in the above captioned proceeding.

II. Background and Interest in this Proceeding
Stop the Cap! is a consumer group founded in 2008 to fight against the introduction of artificial limits on broadband usage (such as data caps, usage based pricing, and speed throttling) and to promote better broadband speeds and service for consumers. Our group does not accept funding from lobbyists, companies, or any individual affiliated with the telecommunications industry. We return all corporate donations.

Stop the Cap! understands that this is a relatively late file for party status. While Stop the Cap! is generally opposed to this transaction, we feel that the Intervenors are strongly making the case that the Commission should deny the application, and we would refrain from contributing in that regard. However, should the Commission approve this transaction, Stop the Cap! has a deep and detailed knowledge of data caps and usage based pricing (DC/UBP) from our past 8 years of work on this very specific issue. This information and experience would definitely aid the Commission’s process of tailoring effective mitigation conditions, and our input would be complementary to the existing Intervenors’. Based on our direct experience at the recent Los Angeles PPH, we now understand that an issue as complicated as DC/UBP can’t be effectively dealt with by us as an informal commenter. We have no lawyers guiding us through this process —we are merely a group of individual consumers who have banded together to address a common concern. We therefore respectfully request that the Commission forgive our late filing, and note that we would still be able to take part in full in the discussion of relevant conditions, should this transaction reach that stage.

As a party, Stop the Cap! would aim to protect and promote the public interest of our members and other Californians on the issue of DC/UBP. We have attached the discussion we submitted at the Los Angeles PPH to this filing. It details how the issue of DC/UBP affects numerous other concerns in this proceeding, and presents significant and numerous harms to consumers, especially to low income ones. The submission lays out how DC/UBP can increase prices, foster anti-competitive behavior, circumvent net neutrality, hinder innovation and investment, slow broadband deployment, threaten network security, remove educational opportunities, and can even completely erase any “lifeline” broadband condition this Commission may design. The document also explains why the CPUC’s approval of this transaction would make DC/UBP much more likely to be imposed on existing Time Warner Cable subscribers. It details TWC’s repeated and public pledge to “NEVER” impose DC/UBP on its customers. It discusses why the Commission should be particularly suspect of New Charter when it comes to DC/UBP. Finally, it shows that Charter’s opening testimony actually supports a mitigation condition that sunsets based on a competition test, as opposed to an arbitrarily short three years. This is the kind of information we can present to aid in the Commission’s decision making process.

III. Notice
Service of notices, orders, and other correspondence in this proceeding should be directed to Stop the Cap! [extraneous information deleted]

IV. Conclusion
Stop the Cap!’s participation in this proceeding will not prejudice any party and will not delay the schedule or broaden the scope of the issues in the proceeding. For the reasons stated above, Stop the Cap! respectfully requests that the CPUC grant this motion for party status filing.

Dated: February 2, 2016
Respectfully submitted,

/s/ Matthew Friedman
Matthew Friedman
Stop the Cap!