The Great Wall of Pay

Now that the cable industry’s “TV Everywhere” online video platform has been established, some programmers are discovering they can become lucrative revenue streams as well as a deterrent to cable cord-cutting.

Time Warner (no relationship to Time Warner Cable) and CBS have decided giving away live sports programming for free is unacceptable and will now charge for online viewing of certain March Madness basketball games.

Since 2006, the basketball tournament, which may include hoops from https://www.megaslam.com.au/adjustable-basketball-hoops/, has been available for free online viewing, but starting March 7, viewers will need to pay $3.99 for full access to all 67 games [and basic cable viewers will need to verify] they are current cable, satellite, or telco TV subscribers. [See clarification below.]

Online viewing of games televised on CBS will be available for free, but the new paywall will block free access to selected games shown on cable networks TNT, TBS, and TruTV in certain cases.

Time Warner CEO Jeff Bewkes sees charging for online viewing as a substantial new revenue stream.

Monetizing online viewing is a high priority for programmers, even though much of the programming will continue to carry commercial advertising.  Last year, an estimated 2.6 million daily visitors watched March Madness online.  At $3.99 each, that would net the two companies nearly $10.4 million dollars.

The madness will now cost you $3.99

In a separate announcement, Comcast says it will launch a new Netflix-like on-demand streaming service tomorrow for its cable subscribers.

Streampix (free for triple play customers, $4.99/mo for others) will offer on-demand movies and TV series licensed from NBC-Universal, Warner Bros., Sony Pictures, and Disney.

Selected content can be watched while on the go, but a substantial amount of what Streampix is expected to offer is already available through services like Hulu.

Streampix is designed to appeal to customers who currently pay $7-8 a month for Netflix or Hulu+.

The move establishes Comcast’s own “paywall” for a deeper catalog of online video content, supplementing programming it gives away at no charge to “authenticated” cable subscribers.

Comcast will not sell Streampix to non-Comcast customers.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg Comcast Streampix 2-21-12.flv[/flv]

Bloomberg reports Comcast’s Streampix service is unlikely to pose a major challenge to services like Netflix.  (4 minutes)

Clarification:  A reader suggested we better clarify the viewing options.  It gets complicated depending on what kind of video/broadband subscription you have, where you want to watch, and what kind of feed you want:

CBS-televised games: Available for free with no restrictions from CBS website.

Basic Cable games: If you want to watch outside of the home, on certain portable devices, or do not have a combined broadband/cable-TV subscription, you will need to purchase a subscription for $3.99 from the NCAA.  Free streaming is only available to authenticated cable/broadband subscribers watching from their home broadband account on devices pre-approved by your pay television provider.

Open/Full Access: If you want full, unrestricted access you need to pay for the NCAA ® March Madness ® Live™ app ($3.99).  Since this app provides the NCAA’s own video and audio feeds, you don’t need a cable subscription.

Rabbit ears are making a comeback.

After this year’s cable and satellite rate increases, the average American is now spending $550 a year on basic cable television.  With declining middle class incomes and increasing energy and health care costs busting the budget, something had to give.  Increasingly, it is cable and satellite TV.  Now consumers are combining the past with the future to find a cheaper way to watch television — over the air “free TV” with streamed online video entertainment.  Many broadcasters even offer extra channels that are made possible through digital signal compression.

Some marketers are going over the top with the renewed interest in over the air television, pitching “futuristic” television antennas at a steep price to customers who want to cut cable’s cord.  While your parents and grandparents were well-acquainted with antenna technology, today’s younger generations are not, and are overpaying for antennas you can find for a fraction of the price at Wal-Mart.

The concept of cord cutting is simple.  You can watch live sporting events and local news and network shows from over-the-air broadcasters and catch up on favorite movies and TV series streaming shows online.  The days of the snowy picture are over since the country converted to digital TV.  But in many cases, an antenna is essential to getting the best reception.

Satellite and cable companies are trying to compete, offering discounts and, in some cases, pared down packages.  But prices will need to come down further: the average video streamer and over-the-air viewer pays $180 a year on average for a premium streaming package from Netflix, Hulu or other online viewing option.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/KIMT Mason City IA TV Antenna Making a Comeback 2-21-12.mp4[/flv]

KIMT in Mason City, Iowa explores the growing interest in the old-fashioned TV antenna.  (3 minutes)

...some of that juicy 700MHz spectrum Verizon is getting from the nation's biggest cable companies.

In an ironic turnabout, Deutsche Telekom’s T-Mobile USA, last year an acquisition target of AT&T, has filed comments with the Federal Communications Commission opposing Verizon’s spectrum purchase from the nation’s largest cable companies as “contrary to the public interest.”

Verizon Wireless is seeking to acquire a substantial block of unused AWS spectrum that is unlikely to provide any near-term benefits to Verizon Wireless customers (indeed, the company already holds other AWS spectrum and has not even put it to use yet). Rather, the principal impact of the acquisition would be to foreclose the possibility that this spectrum could be acquired by smaller competitors – such as T-Mobile – who would use it more quickly, more intensively, and more efficiently than Verizon Wireless. The acquisitions will limit the deployment of LTE by competitors of Verizon Wireless and the bandwidth available for such deployments.

If these transactions go forward, the end result will be less LTE capacity available overall and reduced competition in the provision of LTE, which would be contrary to the public interest.

T-Mobile, in particular, is upset because it owns no spectrum in the valuable 700MHz range — frequencies that can travel longer distances and easily penetrate buildings.  Verizon Wireless does, and will acquire much more if the FCC approves the deal to transfer spectrum from Comcast, Time Warner Cable, and Cox. [Correction: As one of our readers pointed out, the spectrum being acquired is in the AWS band, which T-Mobile argues in its filing is still suitable for a 4G network deployment.]  T-Mobile argues Verizon does not need the spectrum, and will effectively “warehouse” the frequencies to keep them off the open market.  Without prime spectrum, T-Mobile argues, it will be difficult for the company to deliver a 4G experience to its customers.

T-Mobile also has a bone to pick with Verizon Wireless and the cable industry over what it suspects is a non-compete agreement:

At least in effect, this has all the hallmarks of a pure horizontal allocation of markets.

From the limited information available, it appears as though Verizon, the majority owner of Verizon Wireless, has agreed (tacitly if not expressly) to halt its extensive efforts to expand into the cable business and the cable companies have, in turn, traded their control of valuable spectrum in exchange for this protection of their cable markets.

It has been publicly reported that, coincident with acquiring the cable companies’ spectrum, thereby eliminating potential new competition in mobile wireless, Verizon ended its FiOS build out plans and terminated its agreement to resell satellite television. This series of acts appears to limit Verizon’s activity as a potential competitor in the video market and limit the cable companies’ role as potential competitors in the wireless market, while at the same time foreclosing competing providers from one of the only available sources of spectrum.

As a result of this “triple play,” competition in both markets will be substantially reduced. The antitrust laws have long condemned such agreements, even among potential competitors.

Not All Frequencies Are Created Equal

Will Verizon ultimately warehouse its newest acquired spectrum?

Unless you are well-acquainted with the wireless industry, all most people know about their cell phones is that they turn them on and a signal strength meter indicates what kind of reception quality you are getting.  In fact, wireless companies use a range of frequencies across several different frequency bands to handle voice calls and data.  As an end user, you never know the difference.  But if your wireless company is forced to use higher frequencies, they often have a harder time penetrating buildings or provide only limited distance coverage.  That’s why AT&T and Verizon customers have a better chance of making and receiving calls in the middle of a supermarket or office building while others lose reception.

Clearwire has an extensive holding of very high frequencies at its disposal — frequencies the company cannot effectively use because they require considerably more infrastructure (ie. more cell towers) to provide an effective service to customers.  Clearwire customers already complain about poor reception inside buildings, a problem exacerbated by the very high frequencies the company has to use for its service.  Verizon and AT&T collectively control the majority of the best, more robust spectrum — the 700MHz band.  Verizon’s LTE network, for example, relies on spectrum that used to be used by high numbered UHF television channels.

Companies like T-Mobile rely on frequencies in the 1700MHz and 1900MHz bands.  While certainly adequate in urban and suburban areas, T-Mobile has to spend more on cell tower deployment and be especially concerned with rural coverage, especially in areas where the terrain makes “line of sight” reception from cell towers more difficult.

While today’s 2G and 3G networks have made due with current spectrum, companies like T-Mobile are having a hard time finding space to launch the next generation — LTE/4G technology — on their current spectrum.  Without LTE, T-Mobile (and others) will find themselves at a competitive disadvantage.  The company argues it should have the right to acquire some of the frequencies Verizon intends to capture from the cable industry, especially if Verizon has no immediate plans to use the spectrum.

Some of the wrangling by T-Mobile seems especially ironic because parent company Deutsche Telekom has indicated it wants to sell T-Mobile USA and leave the American wireless market.  It has shown little interest so far investing in a LTE/4G network upgrade.  Additionally, as part of AT&T’s failed merger bid, T-Mobile is expecting to receive frequencies from AT&T as part of the “failed transaction” clause in the original merger proposal.

Verizon Wireless is experiencing yet another nationwide outage of its 4G/LTE wireless network.

The problem seems to afflict the authentication process that authorizes your 4G device for access to Verizon’s data network.  If your phone remained on overnight, you likely still have either 3G or 4G service.  But if you are powering up your phone this morning, or reboot, chances are you don’t have any 4G service.

For certain Samsung phone owners, the problem is worse — you don’t have any data service at all unless you are in range of Wi-Fi.  Samsung phones are notoriously poor at stepping down consistently to 3G speeds when they cannot successfully handshake with Verizon’s 4G network first.

Verizon has yet to confirm there even is a service outage, despite reports pouring in from around the country, so it is probably going to be awhile before service is back.

[Updated 10:38am ET:  Service is now gradually returning across the country. If your service is still interrupted, it should now be safe to reboot your phone.]

Billing problems, promotions-not-honored, and passing the buck are all common complaints from cable and phone customers, especially when employees of large providers don’t communicate with each other and saddle customers with the role of “go-between.”

Two recent examples of Customer Service From Hell reached our desk this week, one involving Verizon which has the “not my job” mentality firmly entrenched in their call centers, and the other from Time Warner Cable, where “Diego” told a new customer he couldn’t install their service until they disguised themselves as an old customer to cancel someone else’s service first.

The Case of the Persnickety Promotion – You Don’t Qualify Because We Never Added It to Your Account

You can't touch this Verizon offer when the company forgets to apply it to your account for eight months.

Anthony Caruso received an offer he couldn’t refuse from Verizon FiOS: $69.99 a month for a triple play package of phone, Internet, and television service good for 12 months, with a reduced discount of $89.99 per month for the second year — still a great deal over what Comcast was selling.

He signed up for service in June and was happy with the installation and the service… until the bill came.

Over the last eight months, Caruso has never received a single bill that reflected the offer he signed up for, resulting in monthly calls to customer service lasting between 30 and 75 minutes each.  Every month, Verizon told Caruso the promotion he received never existed, but they would issue certain credits as a gesture of goodwill.

The Star Ledger exhaustively details the entire debacle, but suffice to say, Caruso was a victim because nobody at Verizon applied the promotion to his account.  The company also never bothered to investigate why a customer had to keep calling (eight times in the last eight months) to receive those credits.  The newspaper illustrates how complicated it all got:

In early July, Caruso received the first bill, for $176.44.

It was more than a little confusing: $470.32 in “Current Activity” charges minus $289.96 in “Specials & Promotions” minus $21.24 for a partial month. The bill also included a “Showtime Starz Entertainment Pack” for $16.99 and “Multi-Room DVR Package” for $24.99, neither of which Caruso ordered.

The bill also included a “first bill estimate” showing monthly charges would be $139.31.

“Very confusing collection of charges and credits,” he said. “I paid the full amount to avoid billing issues for my first payment.”

He called Verizon on July 29 to discuss the bill. Caruso was transferred three times, and a rep named Sandy helped. Caruso said she dropped the “Showtime Starz” package and applied a one-time $30 credit. Caruso decided to keep the “Multi-Room DVR Package,” so his future billing should be $104.43. Because of the overpayment on the first bill, the amount due on the August bill would be $43.21.

“I was also told I was getting $9.99 “Epix” movie channel free for three months,” he said. “The FIOS lineup shows Epix is included in my package, but I decided not to fight this.”

Caurso said he paid the August bill, but there were still problems. It showed the normal monthly price to be $133.63.

He called again, and this time spoke to a rep named Jason, who said he had never heard of a $69.99 bundle offer. Caruso faxed a copy of the offer letter to the rep, who then recomputed the bill to reflect the correct package amount.

But the September bill was for $127.26.

Caruso called Sept. 7 and spoke to two different reps. The second rep also denied the existence of a $69.99 bundle offer, but asked Caruso to again fax a copy of the offer.

The rep applied another one-time credit and said the correct amount would now be $92.16.

This continued for the next several months. The bill would be wrong, Caruso would call and the reps would apply credits.

Got it?

After months of endless frustration, Caruso had to appeal to the newspaper’s Bamboozled column for Star Ledger readers seeking a solution to their endless customer service nightmares.

Tom Maguire, a senior vice president for Verizon, figured out what at least 10 Verizon customer service representatives couldn’t — the company never applied the original promotion to Caruso’s account because the service order was not written in a way that would allow the promotion to be applied.  Instead of the two year promotion, Caruso was signed up for month-to-month service, at a price of $129.99 a month, not $69.99.

“They basically dropped the ball from my perspective,” Maguire admitted.

What irritated Maguire (and Caruso even more) is that repeatedly-faxed copies of the promotional offer made no difference.

Caruso’s consolation prizes for his eight month ordeal:

• A direct number to a senior customer service representative already aware of Caruso’s service history;
• A restart of Verizon’s promotion, effectively extending it for nine additional months;
• A multi-room DVR package at a discounted price for the life of his service.

Tips for Living With Verizon:

Keep a copy of the promotional offer you select until it expires. If Verizon does not apply it correctly, or it mysteriously drops off your account at some point, you will have evidence the offer existed.  If you experience a repeated billing problem, ask the representative that answers to transfer you to a senior customer service supervisor.

Time Warner Cable’s Mind Games Threaten Our Relationship

Courtesy: Jacobson

Julie Jacobson chose Time Warner Cable over AT&T for her new Carlsbad, Calif. condo located to the north of San Diego.  The deciding factor: no cable box required for extra sets hooked up to expanded basic cable. (Unfortunately for Jacobson, that won’t be true much longer as Time Warner embarks on a nationwide conversion to a virtually all-digital lineup, which will require extra equipment on most television sets.)

Unfortunately, ever since Jacobson signed up for service, Time Warner has been playing “hard to get.”

Jacobson painfully details her encounters with Time Warner customer service, who had no idea what a CableCARD was (much less an “M-Card” which allows multiple signal streams).  She was also not impressed to discover the “free” HD-DVR promotion on offer evidently only applied to the cardboard box it came in.

“Your ‘free’ HD-DVR comes with an additional $11/month box-rental fee and $11/month service fee,” Jacobson discovered. “The HD-DVR is free + $22/month, which puts TWC pricing into U-verse territory.”

But even that wasn’t enough for Jacobson to declare Time Warner Cable “sucky.”  It was this:

Julie,

Thank you for placing your Time Warner Cable order online. We were unable to complete your order with the information you provided.

Please call us at 855-889-4113 so we can proceed with your service order. Be sure to have your order confirmation number (########) and the four-digit PIN you created during your online order ready when you call. We look forward to hearing from you so we can complete your order as soon as possible.

Thank you for choosing Time Warner Cable.

So I called the number on a Sunday at 3:15 p.m., using the phone number in the email. The office was closed by then. Believe it or not, I started pining for Comcast back in Minnesota. At least their customer service is 24/7.

After being bounced from offices in Wisconsin and North Carolina, she was finally transferred to California, where Diego (with his barely decipherable English) was waiting to not provide customer service:

I’m sorry, but I had a really tough time understanding him. As it turns out, it didn’t really matter because he was flat-out wrong. He told me the old tenants returned their TWC equipment, but they didn’t call to cancel their service; my order wouldn’t go through because there was already an account associated with the address.

“You need to call them to cancel their service,” he said.

“What?! I don’t even know who they are!”

In that case, he said, I could go to the local TWC office and bring them a copy of my lease.

That’s real convenient, given we’re only in town for one day.

So I ask Diego for the store phone number, and he provides it.

“Where is it located?” I ask.

“I don’t know … somewhere in the LA/San Diego area.”

Thanks, that narrows it down.

A more encouraging experience with another representative later on seemed to have everything worked out, until a new message from the company reached her e-mail box earlier today:

3rd Attempt: Please call us to avoid cancellation of your Time Warner Cable order.

Tips for Living With Time Warner Cable:

Time Warner’s system for dealing with new customers always hangs up when it finds existing service already established at an address. We encountered this ourselves and had to arrange for the old owners of our home to arrange for a service disconnection before Time Warner could complete our order for new service. Usually it makes better sense to call and establish service directly with a Time Warner representative over the phone when a complication like this arises. The representative would have identified the problem immediately instead of dispatching cryptic e-mail messages about a generic “problem with your order.”  Calling the local office nearest you is also a great way to cut through red tape and stop your call from being transferred to different call centers.

If your order went horribly wrong and you were inconvenienced, ask a representative to throw in free installation or some other extra promotion for your time and trouble. 

We also suspect that “third attempt” notification was probably associated with the earlier e-mail and not the more encouraging, later experience with another representative by phone.