The Don’t Care Bears

A few weeks ago, Stop the Cap! reported on the story of Conal O’Rourke, a Comcast customer billed for equipment he didn’t order, service he didn’t receive, and collection agents he didn’t deserve. When O’Rourke dared to complain to senior Comcast management in the company’s Controller’s Office, the controller himself called a senior partner at his employer and days later O’Rourke was fired.

Now O’Rourke is taking his case to court, claiming he lost his job because Comcast forced his employer – PricewaterhouseCoopers – to weigh his benefit against a $30 million consulting contract Comcast has with the major accounting firm.

The complaint names names and gives plenty of new details about how Comcast ruthlessly deals with customers who dare to bother its top executives with petty little service problems like $1,800 in unjustified billing, credit score-ruining collection activity, and the impossibility of canceling service.

The fateful call to Comcast’s Controller’s Office occurred back in February, and consisted mostly of his complaint that in the almost one year that he had been a Comcast customer, he had not received a single bill in which the charges were correct.

When he mentioned the constant billing errors might be of interest to the independent Public Company Accounting Oversight Board, it was the first time in more than a year Comcast efficiently targeted O’Rourke’s complaint for its brand of resolution: retaliation.

“Unfortunately, instead of redressing Mr. O’Rourke’s grievances, Comcast initiated a scorched-earth assault against him for expressing concerns over the legality of its conduct and the integrity of its accounting,” the lawsuit states. “On information and belief, defendants undertook these actions because they were concerned that Mr. O’Rourke would report them to the PCAOB, were angry that he had accused them of shoddy accounting practices, and wished to punish and destroy him for his temerity.”

O’Rourke claims Comcast ordered a background check on him and the results were forwarded to the controller himself — Lawrence Salva, who also happens to be a former partner at PricewaterhouseCoopers.

Quicker than you can say “rate increase,” Salva was on the phone to Joseph Atkinson, the U.S. Advisory Entertainment, Media & Communications Leader for the accounting firm. He specializes in the cable business, so it was no surprise Comcast reached out to him to vent.

“Less than an hour after Mr. O’Rourke’s second call with Comcast’s Controller’s Office, Mr. O’Rourke received a call from Mr. Atkinson,” the lawsuit claims. “Mr. O’Rourke was shocked to receive the call – he had never before had occasion to deal with Mr. Atkinson. An angry Atkinson informed Mr. O’Rourke that he had received a call from Comcast’s Controller about Mr. O’Rourke. Mr. Atkinson told Mr. O’Rourke that the client was very angry, very valuable, was in fact the Philadelphia office’s largest client, with billings exceeding $30 million per year, and that Mr. O’Rourke was not to speak with anyone from Comcast.”

A few days later, security arrived with cardboard boxes allowing O’Rourke to collect his belongings and exit the building… permanently.

The accounting firm has refused to disclose the contents of email exchanged between itself and Comcast. If Comcast divulged personal information about O’Rourke, it may be in violation of federal privacy laws.

O’Rourke remains out of work and Comcast is alleged to still be refusing all requests to refund him the money it overcharged.

O’Rourke is asking for $1 million plus punitive damages for violation of the Cable Communications Policy Act, defamation, breach of contract, unfair business practices and infliction of emotional distress.

[flv]http://www.phillipdampier.com/video/CNN Comcast Dispute Gets Man Fired 10-8-14.mp4[/flv]

CNN talked with Conal O’Rourke, fired after complaining too much about Comcast, worth $30 million a year in contracts to his employer. (6:43)

Speed bump

More than half of AT&T’s wireless customers are paying at least $100 a month for 10GB or more of wireless data on AT&T’s Mobile Share Plans at the same time AT&T continues to throttle its legacy unlimited data customers who use more than 3GB of data on its 3G network or 5GB of data on its 4G LTE network.

AT&T claimed in 2012 it implemented its “fair usage policy” for unlimited customers to assure all could receive reasonable service during peak usage times when cell towers become congested.

AT&T also blames “a serious wireless spectrum crunch” for the speed throttling, implying access to more spectrum could help ease the problem. But there is a much faster way to overcome AT&T’s “spectrum crunch:” agree to pay them more money by ditching that $30 unlimited plan for a tiered plan.

John Stephens, AT&T’s chief financial officer, told investors Wednesday that nothing boosts revenue more than pushing customers into usage-cappped data plans that customers are regularly forced to upgrade.

“On the ARPU (average revenue per user/customer) story, I think the biggest issue with the improvement is people buying the bigger [data] buckets and buying – upping plans,” said Stephens. “We had over 50% of the customer base at the 10GB or bigger plans.”

Stephens added that AT&T benefited from customers upgrading to 4G LTE devices that are handled more efficiently by AT&T’s mobile data network.

Increased usage and upgraded data plans delivered a 20% increase in data billings over the last quarter.

Since 2012 AT&T has paid out more than $50 billion to shareholders through dividends and share buybacks. The company benefited from nearly $20 billion a year in free cash flow and asset sales over the last two years and is expected to repeat those numbers this year. Consolidated revenue at AT&T grew to $33 billion, up $800 million since the same time last year.

Miraculously, despite the “alarming spectrum crunch,” AT&T found more than enough spectrum to award its best customers with a “double data” promotion that turns a 15GB data plan into a 30GB plan, a 20GB plan to 40GB, a 30GB plan to 60GB, a 40GB plan to 80GB, or a 50GB plan to 100GB. Importantly, AT&T boasts its double data promotion won’t “explode” — their language for “expire” — on customers until their contract ends.

Lowering the bar on “unlimited use” customers.

“Those exploding offers — customers hate those offers,” said AT&T Mobility CEO Ralph de la Vega at a recent investor conference. “Unless they change their mind, we won’t offer those kinds of promotions.”

But de la Vega doesn’t mind leaving the company’s most loyal legacy customers in the penalty box if they cling to their grandfathered unlimited data plans. The throttles stay and the allowances have remained unchanged since first announced, despite the bountiful spectrum obviously ready and available to serve AT&T’s deluxe customers. Unlimited customers are regularly reminded they can easily avoid the throttle — just abandon that unlimited data plan. According to Stephens, more than 80% of AT&T’s customers already have.

The excuses for wireless speed throttles and killing off unlimited data plans at AT&T and Verizon Wireless don’t seem to wash with FCC chairman Thomas Wheeler, who demanded Verizon offer the “rationale for treating customers differently based on the type of data plan to which they subscribe, rather than network architecture or technological factors,” after it announced it was planning speed throttles for its remaining unlimited data plan customers. Verizon canceled the plan after Wheeler began scrutinizing it, but the throttles are still in place at AT&T.

AT&T’s 10GB Mobile Share Plan starts with a $100 data plan. Customers also pay:

• $10 a month for each auto-based smart-locator;
• $10 a month for each tablet, camera or game device;
• $15 a month for each basic phone;
• $20 a month for each wireless home phone replacement;
• $20 a month for each connected Internet device;
• $40 a month for each connected smartphone.

A family of four with four smartphones, a tablet, and AT&T’s wireless home phone replacement would be billed $290 a month before at least $39 in taxes, fees, and surcharges — well north of $300 a month for most.

T-Mobile has asked the Federal Communications Commission to investigate AT&T’s “artificially high roaming rates” charged when its customers travel outside of T-Mobile’s home service area.

T-Mobile is heavily reliant on AT&T for roaming service outside of major cities and the country’s smallest national wireless carrier complains AT&T is using their market power to put it at a major disadvantage, which could force new limits on roaming access in some areas.

T-Mobile provided examples of the damage already done by AT&T’s roaming rates:

“Limitless Mobile has severely restricted its customers’ access to AT&T’s network ‘for the sole reason that AT&T’s data roaming rates are too high and by continuing roaming access, Limitless could not maintain a commercially competitive retail wireless data offering to the general public,’” T-Mobile told the FCC.

The Rural Wireless Association noted that competing carriers “cannot sustain the provision of data roaming services if [they] must provide that service at a loss.”

The problem of data roaming rates is getting larger as carrier agreements are due for renewal at many mobile providers. Independent cellular companies are finding AT&T unwilling to renew at prices and terms comparable to their existing contracts. Instead, they face renewal rates that average a minimum of 10 and as much as 33 times higher than the national carriers’ retail rates.

For example, T-Mobile’s agreement with AT&T includes a data roaming rate that is now 150 percent higher than the average domestic rate that T-Mobile pays for data roaming.

This is one thousand percent higher than the data roaming rate negotiated between Leap Wireless and MetroPCS prior to their respective acquisitions, wrote T-Mobile.

With the stark price increases, carriers have begun imposing limits, including speed throttling and data caps, on customers when roaming on AT&T’s network.

Because of AT&T’s artificially high roaming rates, T-Mobile wireless customers roaming in South Africa have a better user experience than customers roaming on AT&T’s network in South Dakota, argues T-Mobile. Their speed is twice as fast, and their data usage is unlimited.

T-Mobile is asking the FCC to intervene by establishing some type of standard about what constitutes “commercially reasonable” roaming rates as part of its 2011 Data Roaming Order, designed to protect competition.

This year, carriers dependent on Verizon Wireless or AT&T to help deliver “nationwide coverage” are negotiating roaming access to the companies’ 4G LTE networks for the first time. Most roaming agreements used to only cover 3G service, delivered at a slower speed.

If carriers like Sprint and T-Mobile are unable to negotiate fair terms, both companies will be at a major competitive disadvantage, relegated to providing only regional coverage or charging higher prices for roaming service.

AT&T vice president of regulatory affairs Joan Marsh said T-Mobile’s request bordered on being illegal, in direct violation of the Telecommunications Act. Marsh argued T-Mobile and other carriers should be incentivized to build their own networks instead of relying on cheap roaming access from companies like AT&T. Marsh added any move by the FCC to set rates or benchmarks would be beyond the FCC’s mandate. Wireless carrier rates are deregulated and not subject to common carrier regulation.

MeTV is getting some quasi-competition starting in the second quarter of next year as CBS and Weigel Broadcasting launch “Decades,” a new over-the-air television network that CBS is calling “the ultimate TV time capsule.”

The new network will launch as a digital sub-channel on many CBS-owned local television stations:

• KCBS Los Angeles
• KOVR Sacramento
• KPIX San Francisco
• KCNC Denver
• WFOR Miami
• WTOG Tampa/St. Petersburg
• WBBM Chicago
• WJZ Baltimore
• WBZ Boston
• WWJ Detroit
• WCCO Minneapolis
• WCBS New York
• KYW Philadelphia
• KDKA Pittsburgh
• KTVT Dallas

Weigel will handle affiliation agreements with non-CBS owned stations, most likely CBS affiliates owned by other companies. Weigel already programs MeTV, so the two networks will probably avoid direct duplication of each other, but the formats are expected to be similar.

The agreement gives Weigel expanded access to CBS’ library of produced and acquired classic television shows including I Love Lucy, Star Trek, Cheers, Happy Days and other shows generally out of syndication. Decades will also feature some original programming, such as Decades Retrospectical, that will include clips from CBS News and Entertainment Tonight.

“Decades takes the digital broadcast network platform to a new level,” said Norman H. Shapiro, president of Weigel. “Viewers will ‘Relive, Remember & Relate’ to the events that touched their lives and generations past. The events, themes and programming possibilities are endless.”

“Decades is the most ambitious and creative subchannel programming service that has ever been created,” said Peter Dunn, president, CBS Television Stations. “We are thrilled to partner with Weigel Broadcasting, the leaders in this space, to make smart use of our stations’ spectrums and our companies’ considerable programming assets. This service will be a tremendous new business for CBS and all of the other stations across the country that participate, regardless of their primary network affiliation.”

Decades is CBS’ first serious move into supporting digi-nets on its stations. CBS has been reluctant to allow digital subchannels, which can compromise the picture quality of its primary 1080i HD signal. But as digital compression technology has advanced, the network’s concerns have eased.

Decades will join Antenna TV, Cozi TV, Me-TV, and Retro TV, all of which focus heavily on classic TV shows, as well as This TV, FamilyNet, Bounce TV, and INSP, which also air some classic TV shows.

The growth in digi-nets may be waning, however. In late September, Weigel’s new Heroes & Icons channel devoted to crime and action shows like Cannon, The Man from U.N.C.L.E., Voyage to the Bottom of the Sea, The Wild Wild West, and Wagon Train only managed to pick up a small handful of affiliates, mostly Weigel-owned stations in the midwest. An ambitious project to launch four classic TV channels under the QUAD TV banner – one each for shows from the 60’s, 70’s, 80’s, and 90’s, was put on indefinite hold in August. The owners blamed uncertainty owing to the proposed merger of Comcast and Time Warner Cable, but the more likely reason is difficulty securing affiliate and carriage agreements at a time when rate sensitivity on cable and channel space on broadcast television are major concerns.

Arris DCX 3600 enhanced DVR for Time Warner Cable Maxx customers

Time Warner Cable’s enhanced DVR is here, at an enhanced price starting at $26/month.

Time Warner customers have long waited for an upgraded DVR capable of storing and recording more shows, and the Arris DCX 3600 is the result.

Available soon in Los Angeles and New York (and later in other TWC Maxx-upgraded markets), the enhanced DVR includes six tuners and 1TB of storage, enough to keep around 150 hours of HD programming.

The DVR includes QAM/RF-capability and a DOCSIS 3 modem built into the box. Time Warner Cable has set the monthly price for the box at $15.99 for single room DVR service, $19.99 a month for whole-house DVR service. An additional equipment rental fee also applies: $10.25/mo for the box and remote control, $11.75/mo if you are subject to Time Warner’s “additional outlet service fee.” That means customers will pay up to $31.74 a month for the DVR alone. Customers who subscribe to a bundled service package will likely pay significantly lower rates for the enhanced DVR.

Time Warner arrives very late to the DVR competition wars. Its current boxes can usually record only up to two shows at once and storage space, usually enough for 80 hours, may require customers to clear out older shows to make room for new ones.

Time Warner’s competitors are still able to beat Time Warner’s new DVR:

• AT&T U-verse comes closest to Time Warner, offering a four tuner DVR that can store up to 422 hours of SD programming, 155 hours in HD;
• Comcast is testing its new X1 video platform that can record 15 programs at the same time by linking together multiple HD-DVRs;
• Dish Network’s Hopper HD-DVR can record eight shows at once, and DirecTV’s Genie can manage five recordings at the same time;
• Verizon FiOS Quantum TV customers can record a maximum of 12 shows at once and its DVR package offers 2TB of storage.

The new equipment should be available in New York and Los Angeles by the end of this month and will gradually be introduced in other TWC Maxx cities planned for upgrades: Charlotte, N.C., Dallas, Tex., Hawaii, Raleigh, N.C., San Antonio, Tex., and San Diego. No word on when the new boxes will be available in Austin, Tex., where upgrades are already underway.

Customers in other Time Warner Cable cities will have to make do with older DVRs until either Time Warner schedules Maxx upgrades or Comcast succeeds in buying Time Warner.