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Time Warner Cable CEO Reports Basic Cable Suffers While Broadband Gains, Still Thinks ‘Usage Based Pricing’ is the Future

Phillip Dampier November 10, 2009 Data Caps, Video 12 Comments

brittDespite challenging economic conditions, Time Warner Cable CEO Glenn Britt told CNBC broadband from the cable operator has remained strong during the downturn.  The company reported the addition of 117,000 new Road Runner customers during the third quarter, many switching from rival telephone company-provided DSL service.

A CNBC anchor who visited a conference recently and absorbed cable industry talking points about consumption-based pricing asked Britt about whether Time Warner Cable’s network had the capacity to handle skyrocketing data consumption.

“Our physical plant is very capable and we invest in it in a steady way, so I think we’re able to keep up with demand.  I think the other question you’re really raising is who pays […] is an evolving thing.  Also the history has been everybody pays the same for unlimited access.  I suspect that will change going forward to some more usage based model, but that in itself is controversial so we’ll have to see what happens,” Britt said.

Britt’s comments about investments in their network are challenged by the company’s own financial reports which showed a decline in those investments and in the cost of obtaining network bandwidth.

Still, Time Warner Cable is upgrading some areas to DOCSIS 3 technology to market higher speed service to broadband enthusiasts.

The company continues to face significant challenges in its mainstay cable television business, losing 84,000 cable televison package customers in the last quarter, a result of the loss of home ownership during the economic crisis according to Britt, and a general downturn in the economy.  Still, through a combination of price increases and marketing bundled services, the company grew average revenue per subscriber to $102.48 a month in the third quarter.

[flv]http://www.phillipdampier.com/video/CNBC – Glenn Britt on Earnings 11-6-09.flv[/flv]

Time Warner CEO Glenn Britt is interviewed on CNBC about the company’s third quarter earnings. (11/6/09 – 4 minutes)

Stop the Cap! reader Nonya advised us about Britt’s latest appearance on CNBC.  If you find news our readers might be interested in, send us your news tip under our “Contact Us” link above.

HissyFitWatch: Rupert Murdoch Declares War on Freeloading Internet Users & Google: Pay Us Or Go Away

Phillip Dampier November 10, 2009 Data Caps, HissyFitWatch, Video 5 Comments
News Corporation chairman Rupert Murdoch

News Corporation chairman Rupert Murdoch

The days of finding free access to News Corporation’s online content, from Fox News to the New York Post to Sky News are numbered, according to chairman Rupert Murdoch.

Murdoch spent several minutes with Sky News Australia political editor David Speers lamenting the mistake News Corporation made in providing free access to its news stories and content websites, declaring the free ride is about to end with the near-universal introduction of “paywalls” requiring Internet users to open their wallets to read or watch their content.

Murdoch says he wouldn’t mind a substantial decline in web traffic from visitors who currently find his companies’ content through Google news and content searches, claiming advertisers don’t place much value on one-time visits.  He prefers customers willing to pay.

Murdoch suggested most of News Corporation’s content will end up looking similar to today’s Wall Street Journal — a few sentences for free and then an invitation to subscribe to read more.  Videos could cost more.

Murdoch accused Google and other indexing services of “stealing” content, and when asked if he would be willing to request that Google stop indexing his websites, Murdoch replied, “I think we will.”

MSNBC’s Rachel Maddow had fun with that answer last night, pondering how Murdoch will attract audiences to his content when the company refuses to allow search engines to index it.

[flv width=”536″ height=”316″]http://www.phillipdampier.com/video/MSNBC Rachel Maddow on Murdoch 11-09-09.flv[/flv]

Rachel Maddow comments on Rupert Murdoch’s apparent plan to ban indexing of his websites’ content by Google. (11/9/09 – 1 minute)

Sky News Australia was in no position to seriously object, as they are partly owned by News Corporation themselves, and Murdoch had little to fear from Speers’ gentle treatment of the media icon.

Among the company’s global media properties:

Beliefnet
Channel V Philippines
Fox Business Network
Fox Kids Europe
Fox News Channel
Fox Sports Net
Fox Television Network
FX
My Network TV
MySpace
News Limited News
Phoenix InfoNews Channel
Phoenix Movies Channel
Speed Channel
STAR TV India
STAR TV Taiwan
STAR World
Times Higher Education Supplement Magazine
Times Literary Supplement Magazine
Times of London

Local Media Properties

Massachusetts: New Bedford Standard-Times
New York: Brooklyn Paper
New York Post
Italy: SKY
United Kingdom: News of the World
Sun
Sunday Times
Times of London
Australia: Australian
Sydney Daily Telegraph
Sydney Sunday Telegraph
Northern Territory News
Brisbane Courier-Mail
Adelaide Advertiser
Adelaide Sunday Mail
Mercury
Melbourne Herald Sun
Sunday Herald Sun
Perth Sunday Times
China: STAR TV Hong Kong
Georgia: Imedi TV
Philippines: Channel V Philippines
Thailand: Star TV Thailand

Other News Corporation Properties

20th Century Fox Home Entertainment
20th Century Fox International
20th Century Fox Studios
20th Century Fox Television
BSkyB
DIRECTV
Festival Mushroom Records
Fox Broadcasting Company
Fox Interactive Media
FOXTEL
HarperCollins Publishers
MySpace.com
National Rugby League
News Interactive
News Outdoor
Radio Veronica
ReganBooks
Sky Italia
Sky Radio Denmark
Sky Radio Germany
Sky Radio Netherlands
STAR
Zondervan

Murdoch also got time to plug his son’s pet political project — getting Great Britain to do away with the television license fee, which creates the necessary financial support to run and maintain the BBC.  James Murdoch said such mandated government support stifled independent journalism.

“Most importantly, in this all-media marketplace, the expansion of state-sponsored journalism is a threat to the plurality and independence of news provision, which are so important for our democracy,” James Murdoch said.

Critics fired back that James’ statements were incredibly self-serving, considering the Murdoch family’s long history of “trash journalism” and agenda-based reporting in the British newspaper industry, and their business history has never shown a regard for preserving institutions of democracy, pointing out many Murdoch operations are politically positioned to the right of center and are not well known for airing every point of view.

Murdoch also directly competes with the BBC through its part ownership of a satellite television company. The BBC, as a public broadcaster, has a strict firewall prohibiting government interference in its content or newsgathering operations, a wall critics accuse News Corporation lacks.

Rupert went further in his Sky News Australia interview, claiming the BBC’s newsgathering operations were partly based on poaching content from his operations.  The BBC is an undisputed world leader in independent global newsgathering, while News Corporation is not.

Murdoch also spent time in the interview defending America’s Fox News from accusations it is partisan, said President Barack Obama was performing his duties “badly,” and answered questions on Australian and American domestic political matters.

Sky News Australia’s full 37-minute interview with News Corporation’s chairman Rupert Murdoch (11/9/09)

Washington State Utilities and Telecom Staff Recommend Rejection of Verizon Sale to Frontier

Phillip Dampier November 6, 2009 Frontier, Public Policy & Gov't, Verizon, Video 3 Comments

Washington State

Washington State

Saying the sale would harm customers, Washington state utilities’ commission staff is recommending rejecting a proposed sale of Verizon’s landline residential and commercial telephone business in Washington to Frontier Communications.

In raising objections to the proposed Frontier-Verizon transaction, Washington Utilities and Transportation Commission (UTC) staff members concluded the business deal is not in the public interest. The proposed purchase does not include Verizon Wireless customers.

The three-member UTC, which will make the final decision early next year, will consider whether state ratepayers would be harmed by the proposed transaction, which is part of an $8.6 billion bid by Frontier to acquire 4.8 million Verizon phone lines in 14 states.

“There may not be any way for Frontier to provide benefits to Washington customers that offset the financial harm and operational risks,” said commission staff in their written testimony. “The failure of the companies to offer adequate consumer benefits or protections puts customers at risk of being served by a company without enough financial strength to make necessary improvements to local telephone facilities and widen deployment of broadband access.”

The Commission staff believes Frontier’s proposal to improve service is loaded with risk:

  • The company’s credit rating is lower than Verizon, making capital difficult to obtain in a credit-challenged economy.  Without such capital, Frontier cannot make improvements to the telephone network.
  • Frontier’s ranking as a relatively small independent phone company means it will face “higher per unit” costs because of the unavailability of volume discounts super-sized companies like Verizon enjoy.
  • Frontier could easily face the same fate as three other Verizon spinoffs – a fast trip to bankruptcy court, but only after providing lousy service and broken promises to customers along the way.

logo_wutcFrontier said it would file a formal rebuttal to the comments later this month.  The company disputes the conclusions reached by the utility commission staff, saying the company will reduce its dividend to free up financial resources and will aggressively expand broadband availability in their service areas.

But the findings from Washington state are familiar to readers of Stop the Cap! They are largely the same echoed by the campaign to stop the sale of West Virginia’s landlines to Frontier.  The Communications Workers of America issued a press release reminding West Virginians Frontier enjoys abysmal approval ratings for its broadband service, based on an independent survey done by PC Magazine we covered a few months back.  Verizon ranks number one in customer satisfaction, in part thanks to its FiOS fiber to the home service.

Union spokeswoman Elaine Harris said, “The economic growth and development of West Virginia depends on having modern, high-speed Internet access. It’s not in the public’s best interest for West Virginia to replace the leader in broadband service with a smaller company whose customer satisfaction is appallingly low.”

Frontier’s defense to union objections is that Verizon hasn’t yet wired any customers in West Virginia for FiOS, and many parts of the state don’t have any broadband, so customer satisfaction numbers don’t matter if you don’t have any service.  Frontier claims it has good customer reviews in West Virginia, but offered no evidence to back up their claim.

So far, the Washington state commission has received 93 public comments with five in favor, 40 undecided and 48 opposed to the proposed sale. Washington customers who would like to comment on the case are encouraged to send correspondence to:

Washington Utilities and Transportation Commission
P.O. Box 47250
Olympia, WA 98504

e-mail comments: [email protected] or call toll-free 1-888-333-9882.

The commission’s deadline for accepting public comments is Jan. 11, 2010.

[flv width=”640″ height=”480″]http://www.phillipdampier.com/video/Bloomberg News Frontier Maggie Wilderotter 11-4-09.flv[/flv]

Frontier CEO Maggie Wilderotter appeared on Bloomberg TV on November 4th to discuss the company’s challenges from declining wireline telephone service. Wilderotter’s spin is that disconnected dial-up residential lines and business data circuits represent some of that loss.  Wilderotter agrees with the anchor’s contention that delivering broadband in rural areas where there is not a lot of competition is good for Frontier. But is it good for consumers?(3 minutes)

Frontier Communications reported its third quarter results earlier today with an 11% increase in net profits “attributable to shareholders,” but a 6% decline in revenue, mostly due to losing an additional 34,000 consumer and business line accounts in the third quarter.  Thanks to selling add-ons like calling features and broadband, the company managed an average 1% increase in revenue per line.  Wilderotter said improved customer metrics and disciplined cost control was responsible for the increase in profits.

Another “Metered Service” Ripoff: Pacific Gas & Electric’s ‘Smart Meters’ Are ‘Cunning Little Thieves,’ Critics Allege

smart meterWhen utilities want to “charge you for what you use,” it would be nice to trust the meter is accurately measuring your usage, California consumer advocates say.

In a growing controversy, Pacific Gas & Electric (PG&E) is now being accused of installing so-called “smart meters” that were smart for PG&E profits, but financially devastating for California consumers who face higher bills and growing questions about just how accurate those “smart meters” really are.

Customers across California who have had new meters installed, which are supposed to help consumers save energy by charging lower prices at off-peak usage times of day, report enormously higher bills from PG&E after installation.

State Sen. Dean Florez, D-Shafter (Kern County), reports he has seen bills from customers that don’t begin to make sense.

California Senator Dean Florez (D-Shafter/Kern County)

California Senator Dean Florez (D-Shafter/Kern County)

“One farmer was charged $11,857 for running a piece of equipment that was never turned on. A local attorney at the hearing clutched a $500 bill from July, a month in which she was visiting family out of state and almost every appliance in her house was shut off,” he reports.

Florez quotes the woman — “My smart meter keeps reading these spikes in usage at noon. But no one was in the house,” she said. “It’s obvious to me that this technology is not ready for prime time.”

Customers across the state with smart meters have reported similar stories, and are angry with PG&E’s response to their concerns, which can be boiled down to, “the meter is right, you are wrong, now pay us.”

PG&E claims that during its own internal reviews, it found nobody being overcharged. Spokesman Jeff Smith says “in all 1700 of those cases we have not found an instance thus far of the smart meter transmitting inaccurate information or incorrect usage information.”

The California Public Utilities Commission doesn’t think that’s enough and has begun ordering an independent review of the “smart meter” program and accuracy of meter readings.

Liz Keogh spent 14 years collecting and analyzing data at the Institute for Social Research in Ann Arbor, Michigan, and now lives in Bakersfield, California.  She has been pulling out her old PG&E bills and records showing her utility use all the way back to 1983.  What she found since the “smart meter” was installed on her home was disturbing.

Her analysis was printed in the San Francisco Chronicle:

My July, August and September 2009 bills showed the highest usage and cost in 26-plus years, even though I rarely go over “baseline usage.” The dollar difference from 2008 to 2009 was $20 to $30 each month. Billing costs are a product of usage multiplied by kilowatt-hour rates, which, like the federal income tax structure, is “tiered,” so that the more you use, the more you pay – and at higher and higher rates. Analysis of usage is the first step toward understanding fluctuations in cost.According to the smart meter installed on Sept. 12, 2007, the increase in my 2008-09 usage over 2007 was:

2008 2009
May +5.6% +28.6%
June +7.5% +32.6%
July +10% +50.2%
Aug. +3.1% +41.1%
Sept. -4.8% +67.9%
Oct. +4.9% NA

PG&E’s own data show there was not a significant difference in temperatures for each comparable month. Why, then, did my “usage” increase range from 30 percent to 70 percent in 2009, while the 2008 increases were no more than 10 percent?

Simple answer: Meter malfunctioning, whether accidental and idiosyncratic, or, as some claim, intentional.

The suspicion that funny business is going on might be justified when considering Bakersfield residents have been through this all before.

“[Several years ago] Bakersfield is where PG&E first realized it had made a $500 million mistake, installing tens of thousands of inferior meters that would never live up to the promise. So the utility purchased a new generation of meters from Silver Spring Networks Inc. of Redwood City. PG&E insists that these new meters are glitch-free, though it concedes that it has tested only 50 out of 250,000 meters in Kern County,” Florez said.

At a time when some broadband providers want to install their own meters to overcharge customers for their Internet service, the PG&E experience is telling.  Independent oversight of any meter comes down to the enforcement mechanism available to guarantee accuracy.  But broadband service in the United States is unregulated, and no such enforcement mechanism exists.

And just when you thought you could believe the rhetoric that utility customers who conserve their usage will save more money, another electric and gas utility in San Diego filed a rate increase request that will charge customers who have managed to cut their usage even higher prices than those who have not.

[flv width=”640″ height=”480″]http://www.phillipdampier.com/video/KGET Bakersfield Senator Florez Questions SmartMeters 9-23-09.flv[/flv]

KGET-TV Bakersfield talked with Senator Florez on September 23 about the SmartMeter controversy (4 minutes)

More video coverage below the jump.

… Continue Reading

The Fallout of T-Mobile’s Second Outage: Twitter Storm

Phillip Dampier November 5, 2009 Video, Wireless Broadband Comments Off on The Fallout of T-Mobile’s Second Outage: Twitter Storm

T-Mobile explained its second network outage in two months with a brief post on its support forum:

On Tuesday, some T-Mobile customers may have experienced service disruptions impacting voice and messaging services.  We restored full service to all affected customers later in the day.   After investigating the cause, we have determined that a backend system software error had generated abnormal congestion on the network.  T-Mobile has since implemented additional measures to help prevent this from happening in the future.  We again apologize to those customers who were affected and may have been inconvenienced.

But PC Magazine mined several messages from the storm of customer discontent suggesting not all of the problems were actually fixed at that time, and several customers still without service were told to turn their phones off and on to re-register them with T-Mobile’s network.  Some reported that didn’t work either.

Meanwhile, a company with an outage that significant can create its own headlines when it becomes one of the most important topics being discussed on Twitter, as social media critic Jenn Van Grove discusses.

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