Marcus

Even as some of the largest investment banks on Wall Street are assembling a $24 billion loan package to further Charter Communication’s next effort to acquire Time Warner Cable, CEO Robert Marcus has learned not to take his eyes off the day-to-day business of running the country’s second largest cable operator.

Marcus turned up late last week at Le Parker Meridien in New York to speak at the 2nd Annual MoffettNathanson Media & Communications Summit, largely an affair putting Wall Street investors together with top cable executives to learn about industry trends.

Immediately peppered with questions about the failed merger between Time Warner and Comcast, Marcus sought to turn the page on the deal that would have handed him an $80 million golden parachute.

“The horse is dead,” Marcus said in response to continued questions about the deal.

But Marcus did say he felt the deal was rejected for reasons that were never explained to him or the industry, which could have an impact on future cable mergers and acquisitions. Regulator-inspired uncertainty could make some companies think twice about pursuing the next big deal, but so far that does not seem to apply to Charter Communications — still hot on the trail for a deal with the much larger Time Warner Cable.

Marcus claims he understood Time Warner Cable’s image with customers was a real problem that needed to be addressed immediately after becoming the company’s new CEO in  January 2014.

“The residential business was where the work needed to be done,” said Marcus.

Reliability became the top priority for Marcus’ team.

“It trumped features and functionality,” Marcus said, noting that if its network performed as it should, that would result in fewer calls into its customer care centers and reduced “truck rolls” to customer homes, saving Time Warner Cable time and money and improving its image. Marcus claims those efforts paid off.

“It works, we’re not pixelating, and we don’t have [huge] outages,” Marcus said.

Under Marcus’ leadership, Time Warner has adopted a “non-sexy stuff” approach to the cable business, focusing on making sure its existing products work before jumping into new products. That may explain why Time Warner has traditionally been behind other operators introducing vast broadband speed increases, cloud-based set-top boxes with improved user interfaces, more TV Everywhere contract arrangements allowing Time Warner customers to access online video content from third-party cable network websites, and the largest on-demand video libraries.

Not much is likely to change for the time being. Marcus reiterated his plan for major network upgrades under his Time Warner Cable Maxx program remain on track to reach 75% of Time Warner Cable service areas by the end of 2016.

When Maxx upgrades are complete, customers are transitioned to an all-digital television platform and Standard broadband customers move from 15/1Mbps service to 50/5Mbps at no additional charge. Although the top speed for Time Warner Cable broadband is currently 300/20Mbps in Maxx markets like New York, Los Angeles, Austin and Kansas City, Marcus said he was ready to bring 1Gbps broadband to Time Warner Cable customers sometime in late 2016, after DOCSIS 3.1 equipment becomes available.

“As the market evolves to that place, we’ll make it available,” Marcus said.

Recent movement at the Federal Communications Commission to introduce additional oversight over the cable industry has not made much impact at Time Warner Cable, which plans business as usual.

“I live in a different world than Chairman Wheeler in terms of the competitive dynamic,” Marcus said. “We’re fighting it out everyday in the trenches to gain and keep High Speed Data subscribers. The idea we would pull back and not press any competitive advantages of product enhancements we’re capable of delivering, just feels counter-intuitive and bad business.”

The idea that policy changes in Washington would somehow impact the investment in and introduction of new and better services from Time Warner Cable was ridiculous to Marcus.

“I cannot translate that into holding back the product and I can’t imagine what the policy objective would be that would encourage holding back the product,” Marcus said.

Tell me everything about me. (Image: BuzzFeed)

Since April 22, a website programming error has been responsible for exposing the personal information of up to nine million Verizon broadband customers.

BuzzFeed News reported a vulnerability in Verizon’s account portal allowed anyone capable of spoofing an IP address of a current customer to get instant access to account information and arrange a password reset to take full control of the customer’s account.

BuzzFeed was able to verify the vulnerability with the help of cooperating Verizon customers and immediately notified Verizon about the problem before publishing the story. The vulnerability has since been corrected, but not before three weeks of ‘open access’ to Verizon customer account information to those proficient at manually changing their IP address:

Within a few hours of the tip, and despite having no technical background, with the explicit permission of several Verizon account holders, I was able to convince Verizon customer service to reset an account password, giving me total control of a Verizon account. It was surprisingly easily done.

It took me only two downloads, copy and pasting some information from an email, and a few interactions with Verizon customer support. It was just a matter of following step-by-step instructions. In other words, if you can follow a recipe, you could have probably gotten a Verizon password reset.

[…] These pieces of information — name, telephone numbers, and email — were all I needed (and more frighteningly, all a malicious hacker would have needed) to convince Verizon customer service that I was a customer in need of a password reset.

Even worse, customer support gave me that reset information despite the customer having a security PIN set up.

With that information, a hacker could gain enough personal insight to trick other businesses into giving up additional personal information.

“Once it was brought to our attention, our experts immediately investigated the issue and repaired the error within hours,” a Verizon spokesperson told BuzzFeed. “We appreciate the responsible manner in which Buzzfeed brought this matter to our attention. Addressing issues like this collaboratively is a constructive addition to our continuous actions to safeguard the security of customers’ information.”

Verizon hoped to reassure customers the security damage was minimal, telling BuzzFeed. “We have no reason to believe that any customers were impacted by this, other than those who’s information was used by Buzzfeed. If we discover that any were, we will contact them directly.”

Time Warner Cable is notifying its customers in Charlotte, N.C. to prepare for the transition to all-digital cable television service which will be complete by the end of this summer. Further south, San Antonio customers can swing by their local cable store and pick up Time Warner Cable’s new terabyte DVR, which can record up to six different programs at the same time and store six times more content than current DVR boxes.

The changes are part of Time Warner Cable’s Maxx upgrade program, which will vastly increase broadband speeds and deliver an all-digital experience to current customers in cities where the upgrade is underway.

“The bad news is you need boxes on all of your televisions,” writes Stop the Cap! reader Susan in Charlotte, who had to pick up three new set-top boxes to keep cable television running in her home. “They are going to move channels in groups to digital-only service over the summer so you will gradually lose your cable television unless you have a box on every set.”

The transition begins in early June and will last into August. Time Warner is offering customers a digital adapter to bring back the digital-only channels on older televisions. Those ordering before Dec. 10 will get them free until Aug. 11, 2016. After that, they will cost $2.75 a month each.

“Weren’t they going to rent these things for $0.99 a month,” asks Susan.

Indeed, when Time Warner Cable unveiled the small devices, they promoted the post-promotional price as $0.99 a month. Earlier this year, the price jumped to $2.75 without explanation. Standard set-top boxes can cost $7 or more a month, but are equipped with an on-screen guide and can access on-demand shows that the digital adapters cannot.

In San Antonio, customers can ditch their old DVR for a major upgrade with more storage space and a better user experience, or so the company claims. Current DVR users should be able to swap out the equipment by bringing in their existing box for an exchange. Be aware all recorded shows will be lost.

Italy’s power utility Enel has offered to help the country build a massive fiber to the home broadband network capable of bringing ultrafast Internet speeds to 85% of the country within six years if it can sort out a potential conflict with Telecom Italia, the country’s largest telecom company.

Enel, still controlled by the Italian government, volunteered its domestic network infrastructure to help install fiber optics more cheaply than Telecom Italia could manage on its own, especially in rural and industrial areas.

The offer is controversial because it could put the new fiber network under public control by using Enel, whereas Telecom Italia is a publicly traded company now majority controlled by Spain’s Telefónica and several Italian banks.

Enel, which is focusing much of its domestic strategy on developing its power distribution grid and smart digital technology, has about 1.2 million kilometers of power lines and 450,000 power distribution cabinets across Italy. Smart grid technology is often dependent on fiber optic communications, so making room for Italy’s Metroweb fiber network seemed easy enough.

Prime Minister Matteo Renzi is backing the $13.35 billion project under the Metroweb brand, a company partly owned by state lender Cassa Depositi e Prestiti (CDP).

Such a deal could potentially lock out Telecom Italia, which is already upset with the government over ownership issues, technology and its inability to buy into the Metroweb project.

Enel insists their involvement would be “synergistic with what the telecom operators have done and planned,” not in competition with those efforts. But Telecom Italia remains concerned it could be left behind by a project that would likely dominate Italian telecommunications for decades.

This isn’t the first venture into telecommunications Enel has made. The power company earlier launched Wind, the third biggest of Italy’s four mobile network operators, which is today owned by Vimpelcom.

Telecom Italia is widely blamed for Italy’s lagging broadband rankings, having failed to invest in up-to-date network technology because of the company’s high debt and falling revenues. Fewer than 1 percent of Italians with an Internet subscription receive connection speeds of at least 30 megabits per second, according to the Agcom communications authority. That compares with the European average of 21 percent. The Italian government considers anything short of a modern fiber optic network a drag on the country’s competitiveness and wants the network built as fast as possible.