Storm Damage (WBRC)

A firestorm of criticism over reports of Alabama cable companies trying to charge customers for equipment lost or destroyed during April’s devastating tornadoes has forced some companies to rethink their policies, at least for this storm.

As Stop the Cap! reported earlier this week, some Alabama customers of Charter Cable and Bright House Networks were asked to pay the full value of cable boxes lost, damaged, or destroyed by the massive storms that struck last month.  Some customers complained about fees in excess of $200 for the set top boxes.  Fees for lost, stolen or damaged equipment are common at cable companies and customers are routinely asked to file insurance claims to cover the loss or damage.

But when tornadoes devastated several Alabama communities, several upset customers began taking their stories to the media, and now those policies are changing, at least for this storm.

Customers of Charter Cable have shared their stories with reporters at local newspapers and television stations, and a few are sharing them with Stop the Cap! Kelly, who requested we not publish her last name for privacy reasons, lost her home last month and is now living in Georgia.  When she called to suspend service shortly after the storm, she was told she would either have to pay for her cable box or make an insurance claim on behalf of Charter Cable.

But Charter Cable tells Stop the Cap! that policy has now been changed.

“Charter will not charge customers for missing, destroyed, or damaged equipment as a result of the recent tornadoes,” said Dylan Hall, one of Charter’s communications specialists. “We adjusted our policy shortly after the tornado in response to the large-scale and catastrophic nature of this storm. This was the right thing to do for our customers. We understand that this is a difficult time for many in Alabama.”

After Kelly reached out to Charter once again earlier today, the company not only waived the box fee, it also credited her account for an entire month of service, resulting in a substantial refund she says will be a big help for her family.

“I greatly appreciate your website bringing this more attention,” Kelly says.  “Earlier today, one of your readers who claims to work for Charter said I was making the story up, and it felt like being abused all over again.”

But after Kelly called Charter directly, things had changed.

“It was like a whole different company, and the representative I spoke with apologized at least six times and felt very bad about everything,” Kelly reports.  “I want to go back to Alabama in the summer, and the fewer bad memories I have of the last several weeks, the better.  This helps.”

Hall believes customers like Kelly likely encountered the lost or damaged cable box fee because they called right after the storm, before the company adjusted its policy.

“Unfortunately, some time elapsed before our Care agents got word to adapt our equipment policy, as we have in the past during other disastrous storms,” Hall says. “So customers who called immediately following the storm were misinformed. The policy changed to reflect the need and Care agents conveyed that to customers. Our employees continued to delivered water, tarps and other supplies to storm victims and help the Red Cross out with financial aid. The policy was changed because it was the right thing to do.”

Bright House Networks has also changed their policies in light of the horrific storm damage.

Karen Broach, regional vice president of operations for Bright House, reports the cable company has sent crews to assess damage and has automatically suspended billing for all customers it can identify were blown out of their homes by the storm:

• Bright House Networks has proactively credited accounts of customers who experienced a loss of service(s) due to the storms.
• Bright House Networks took the initiative and completed a detailed walk out of the area to identify all known destroyed homes and we suspended their billing.
• This is important for two reasons, one is financial and the second is customer convenience.  For example, if a customer subscribes to Bright House Networks Home Phone or High Speed Internet Service, this will preserve the customer’s phone number and email address so they can transfer it to their new residence.
• Suspended customer bills include suspension of equipment charges so customers can make contact with us at a time convenient to them to address their individual needs.
• Bright House Networks will not charge customers for equipment damaged or lost as a result of the storm.
• Bright House Networks never charges a disconnect fee – no matter what the reason.

Bright House customers with questions or problems can call 1-866-876-1872.

Comcast, which delivers cable service in certain parts of Tuscaloosa and Huntsville, normally requires a police report or copy of an insurance claim for lost, stolen, or damaged cable boxes.  But they too have changed their minds after noting the extent of storm damage.

Comcast has notified customers in the Tuscaloosa and Huntsville areas of the following policies:

• For consumers displaced from their homes due to the storms, their service may be placed on a temporary six-month “hold” status at no cost, which enables those with voice and data services to save their telephone numbers and email addresses.
• Equipment (such as converter boxes and cable modems) that was damaged by the storm may be exchanged at the local Comcast offices at no charge. Consumers should notify Comcast if equipment was lost in the storm and cannot be recovered.  Although routine policy requires that a police report or insurance claim be filed on lost equipment, that requirement is waived for six months due to the extreme nature of the extensive storm damage. Customers will not be charged for the exchange or replacement of equipment under these circumstances.
• Customers who lost service will be automatically credited for that period of time.  It is not necessary to notify Comcast for this credit, which will appear automatically on customers’ next bills.  Customers who still do not have service after their power was restored should contact Comcast.

Stop the Cap! notes these are ongoing issues with some cable companies, and we’ve covered similar stories in other states where customers faced demands for payment of cable equipment lost in fires.  We continue to urge cable companies to abandon lost/damaged box fees for incidents involving natural disasters or fires that are not the fault of customers.  It’s good public relations and it is the right thing to do.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WBRC Birmingham Charter Cable Boxes 5-17-11.flv[/flv]

WBRC-TV in Birmingham shares the story of Cleon Spain, a Charter customer who was requested to pay more than $200 for his lost cable box before Charter changed its policies.  (2 minutes)

Gov. Purdue

If North Carolina Gov. Bev Purdue does not veto H.129, the cable industry-written bill to throw up roadblocks for community broadband, it will automatically become law at midnight tonight.

We need every North Carolinian on the phone this afternoon, even if you called her office before. Let the governor know that you expect her to veto this anti-consumer, anti-jobs, anti-development bill that will keep broadband out of rural areas and competition at bay.  Let them know you cannot be fooled: doing nothing is the same as signing it into law as far as you are concerned.

The Governor’s Phone Number: +1 919 733 2391

The open source community has joined the fight.  Community Broadband Networks shares the open letter sent to the governor, published on Rootstrikers.org, a community dedicated to fighting all the corruption in politics that allows massive companies like Time Warner Cable to buy legislation:

Dear Governor Perdue,

We are strong supporters of your leadership and your campaign, and we would like to be heard on the important issue of community broadband. I know you are not afraid to use your veto pen, and so I ask you to veto H129, a bill that will take the future away from North Carolina and put it into the pockets of cable company monopolists.

On Sunday May 15th you may have read about our latest investment in North Carolina, Manifold Recording. This was the feature story in the Arts & Living section, and the top right-hand text box on the front page. One of the most difficult and expensive line-items in this multi-million dollar project was securing a broadband link to the site in rural Chatham County. I spent more than two years begging Time Warner to sell me a service that costs 50x more than it should, and that’s after I agreed to pay 100% of the installation costs for more than a mile of fiber. As part of a revised Conditional Use Permit (approved last night), I presented to the Commissioners and the Planning Board of Chatham County data on the economic investment I made, and the fact that according to the statistics from the Rural Broadband Coalition, that such an investment was worth about $300,000 to the 100+ neighbors who live along the new fiber link that I paid for.

Such heroics should not be necessary, nor should they be so costly.

I spent 10 years in Silicon Valley, and I know how quick they are to adopt new technologies that help people start and grow businesses. Manifold Recording would have remained a pipe-dream without broadband. But not everybody can afford to pay $1000/month for the slowest class of fiber broadband. Community broadband initiatives reach more people faster, at lower costs, leading to better economic development. Take it from me: had I been able to spend the time and money on community broadband that I spent in my commercial negotiations, there would be more jobs in Chatham County today.

For more information, which I strongly encourage you to have someone on staff research, please review https://www.rootstrikers.org/#!/story/community-broadband/. There, you will see that “as goes North Carolina, so goes the nation.” We cannot afford to ruin either our own prospects for an economic recovery led by new technologies and new business nor the prospects for an America recovery.

When Stop the Cap! reader Nancy learned earlier this year AT&T was pushing yet another deregulation bill in the Michigan legislature allowing the company to abandon landline service if and when it chooses, she called AT&T and her state representatives to protest.

“When I called AT&T, the representative literally told me if the company ever did decide to stop offering basic phone service in Michigan, I should just ‘get a cell phone,'” Nancy reports.  “Naturally they tried to sell me one of theirs and I replied I was not likely to be loyal to a company that was willing to abandon me and hundreds of thousands of other rural customers.”

As in Wisconsin, AT&T’s lobbying efforts follow the same basic playbook: use friendly legislators and dollar-a-holler groups financed in part by AT&T to push deregulation as “improving competition” and making the state “business friendly.”  But as Nancy learned from experiences in Wisconsin, those are empty promises when rates go up.

“These same people pushed to deregulate cable in Wisconsin so they could offer AT&T’s cable TV service, promising lower prices if we had AT&T competing against Time Warner Cable,” Nancy remembers.  “Time Warner and AT&T raised their rates for both services, instead.”

Nancy has a good memory.  So do we.  Yet again, AT&T’s chief Astroturfer is Thad Nation, this time under the name of the Midwest Consumers for Choice and Competition.  While consumers get ignored, Nation gets time to testify before the House Energy and Technology Committee.

Nation, who runs a lobbying firm, told legislators companies like AT&T should not have to invest in old copper-lines that consumers don’t care about.  He claims it prevents AT&T and other companies from investing in broadband and wireless.

The only thing missing from this group are actual consumers. Instead, their "partners" include: AT&T, groups funded by AT&T, and several chapters of the Chamber of Commerce.

In reality, legislation pushed by AT&T will allow them and other phone companies to abandon providing even basic landline service in the rural areas they no longer care about. There is no evidence (and no regulation) AT&T will invest in either broadband or improved wireless service in rural areas where the company is unlikely to quickly recoup its investment.

Our friends at the Michigan Telephone Blog pointed us to a piece in the Huron Daily Tribune, a newspaper at ground zero for rural Michigan’s potential loss of landline service should the deregulation bill pass.

Located in Michigan’s “thumb” — the northeastern part of the state separated by Saginaw Bay, Tribune reporters drilled down into the implications for the loss of traditional landline service in this largely-rural area of Michigan.

Huron County Commissioner John Bodis, who chairs the Legislative Committee, said he’s aware of the bill and foresees some issues with it, particularly in regard to the provision allowing phone companies to discontinue landline service in an area where Voice over Internet Protocol (VoIP) or cell phone service is available.

“If it’s not mandated, they’re not going to do it,” he said. “So, I’m hoping the Senate version will tweak that a little bit and hold their feet to the fire, but I don’t know.”

In its May Capitol Currents, the Michigan Township Association reported its concerns center around residents losing their land-line phone services when other options are not adequate (i.e. poor cell phone coverage because of hills, trees, etc.).

In written testimony to the House Energy and Technology Committee, Brian Groom, president of the International Brotherhood of Electrical Workers, Local 1106, stated over the past decade, the Michigan Legislature has gradually removed telecommunications providers from the oversight of the MPSC, and HB 4314 would complete that process by eliminating the last vestige of regulation — the Primary Basic Local Exchange Service.

“This service, as currently mandated in state statute, requires residential service providers to offer — at the very least — a basic calling plan to customers in their service territory,” Groom stated. “In 2005, when (M)PSC regulation of larger calling plans was eliminated, proponents argued that the public would continue to be protected by the existence of a Primary Basic Local Exchange Service requirement.”

“This means telecommunication companies providing basic local exchange or toll service will be able to discontinue or deny service to any customer who has access to ‘a comparable voice service.’ Nothing in the bill ensures that such service would be affordable, reliable or of a minimum quality,” Grooms continued. “For customers living in remote areas which are of a higher cost to serve via landlines, this legislation could result in them having to depend on higher cost and less reliable forms of telecommunication services. This bill would create a telecommunications environment where large areas of the state have no access at all to traditional landline telephone service.”

“That means people like me and my friends in places like Bad Axe, Elmwood, and Minden City — communities few people outside of Michigan would have heard of, get disconnected because they are too rural to get much attention from these companies,” Nancy says.

Frontier Communications, which provides service in some areas of the state, claims monopolies don’t exist in the phone business:

In written testimony, Bob Stewart, Frontier Communications state director of governmental affairs for Michigan and Indiana, indicated the current atmosphere is no conducive toward monopolies.

“The telecommunications industry in Michigan has moved to a highly competitive environment where monopoly powers even in rural areas do not exist,” he stated. “Unneeded and outdated regulations in the Michigan Telecommunications Act are cleaned up by HB 4314. Michigan needs to celebrate the success of the MTA by declaring victory; not over regulating simply for the sake of regulation.”

But many rural Michigan residents far from cable television and strong signal cell phone service would beg to differ.

“The further inland you head on the ‘thumb,’ the worse things get,” Nancy reports.  “Much of this is farm country and they can’t even get DSL service, and cell reception might be barely adequate outside, but walk inside and your signal is gone.”

Despite consumers like Nancy getting upset when they learn the long term implications of these bills, without a public outcry it is easy for legislators to vote with AT&T.  In the House, HB 4314 passed 102-6.  The six standouts that stood up for consumers?

Reps. Vicki Barnett (D-Farmington Hills, Jeff Irwin (D-Ann Arbor), Steven Lindberg (D-Marquette), Lesia Liss (D-Warren), Edward McBroom (R-Vulcan) and Phil Potvin (R-Cadillac).

Phillip 'Not Picking Up What Moffett Puts Down' Dampier

Tech, business, and even a few mainstream media outlets have been booking Sanford Bernstein’s Craig Moffett as an independent observer of all-things-broadband, without revealing he literally has a vested interest in boosting profits for the telecommunications industry.

The latest of Moffett’s heavily-slanted ideas appeared over the weekend on ZDNet, where Larry Dignan’s Between the Lines column used one of Bernstein’s “research notes” to provoke readers into a discussion about Internet Overcharging:

Metered broadband access is inevitable and may even be good for adoption of speedy Internet access.

That’s the argument from Bernstein analyst Craig Moffett in a research note. Moffett sets the scene:

• The FCC’s open Internet push allows for metered broadband.
• AT&T has introduced usage caps across its wireline business. DSL customers are limited to 150 GB of monthly consumption. U-Verse subscribers get 250 GB, or the same as Comcast. Users will be charged an extra $10 a month if they exceed the cap and it’s $10 per 50 GB after that.
• AT&T has already introduced tiered wireless plans.
• Time Warner Cable has a few usage based pricing pilots underway.

Moffett

Nowhere in Dignan’s column does he disclose Moffett is a paid Wall Street analyst working for the interests of investor clients of Sanford Bernstein who want to maximize the value of their telecommunications stocks.  Moffett’s long history of statements about industry pricing reflect those interests, which are often very different from those of most consumers.  Moffett’s world view: anything that brings in more revenue is good for shareholders (rate hikes, metered billing), anything that drives down shareholder value is not (infrastructure upgrades, pricing cuts, customer defections).

On that basis, Moffett has been called a “cable stock fluffer” by our friends at Broadband Reports for his relentlessly pro-cable industry commentary, even while ridiculing transformational projects like Verizon’s FiOS fiber to the home network for being “too expensive” and not delivering enough return on shareholder investment.  Consumer Reports delivers the opposite view: high marks for Verizon FiOS, mediocre to lousy marks for most of the nation’s cable operators.

While there is nothing inherently wrong with Moffett doing his job on behalf of his paying clients, using his views outside of that context — particularly when those interests go undisclosed — is journalistic malpractice.

Oh, and Time Warner Cable abandoned their usage-based pricing pilots in 2009 after customers declared war on the cable company.  Those darn customers, ruining the industry’s plans!

The rest of Moffett’s research note doesn’t get much better in the “true facts”-department:

The goal of moving to usage based pricing is not to undermine competition from Netflix (or anyone else… although it certainly wouldn’t be good news for Internet video). And it is most decidedly not to simply “raise prices for broadband” as Public Knowledge or New America would have it (although it might well do precisely that, too). Instead, it is nothing less than to re-align the entire business model of today’s infrastructure providers with the next generation of communications… so that broadband providers might stop fighting against the tide and embrace it instead.

With usage based pricing, broadband providers, and Cable operators in particular, can create an “iso-profit” curve, where the amount they make from a physical connection is about the same whether someone uses that connection for linear video or, alternatively, web video. The goal is not to stifle competition, but instead to create indifference not just to the end state of video by-pass, but indeed for all points along the way. The adoption of usage based pricing would be transformational to the debate for Cable operators, inasmuch as it would essentially indemnify them against all potential outcomes.

Moffett represents his interests, not yours.

Yet some of Moffett’s earlier statements would seem to argue with himself.

For instance, back in March Moffett was making plenty of noise about AT&T’s caps precisely targeting video providers like Netflix:

Moffett believes usage caps have everything to do with stopping the torrent of online video.  He notes AT&T’s caps are set high enough to target AT&T customers who use their connections to watch a considerable amount of video programming online.

“Only video can drive that kind of usage,” Moffett writes.

Moffett has repeatedly predicted any challenge to pay television models from online video will be met with pricing plans that eliminate or reduce the threat:

“[I]f consumption patterns change such that web video begins to substitute for linear video, then the terrestrial broadband operators will simply adopt pricing plans that preserve the economics of their physical infrastructure,” Moffett said. “Of course, any move to preserve their own economics has far-ranging implications. Any move towards usage-based pricing doesn’t just affect the returns of the operators, it also affects the demand of end users (the ‘feedback loop’).”

The only thing usage-based pricing indemnifies is the industry’s confrontation with revenue-eroding cable-TV cord-cutting.  And Moffett knows this, although he would probably give rave reviews to bringing similar usage-based-billing to cable television packages, which would charge you for every show you watched on top of your monthly bill.

These pricing models, already firmly rooted in Canada, have done nothing to bring the “next generation of communications” to our neighbors to the north.  Indeed, Canada’s ranking in broadband continues its decline as large cable and phone companies pocket the profits instead of committing to wholesale upgrades of their networks to deliver the kind of service increasingly common in Europe and Asia.

But the real laugh out loud moment comes last: Moffett’s prediction that AT&T’s usage pricing will increase broadband adoption.  Perhaps that’s true if you prefer telecommunications companies abuse you, but as we’ve documented over the past three years, these pricing schemes never save anyone money — they just increase the price of your service while decreasing the value of it.