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Altice Launches Optimum Fiber on Long Island; Gigabit Service $79.99/Month

Phillip Dampier September 11, 2018 Altice USA, Broadband Speed, Competition, Consumer News No Comments

Altice USA this week launched symmetrical gigabit broadband over its new fiber-to-the-home network in parts of Long Island.

The cable company, which acquired Cablevision a few years ago, is gradually mothballing its part-copper wire network and going all-fiber across its footprint in New York, New Jersey, and Connecticut. The fiber buildout will allow Altice to increase internet speeds and have more flexibility providing television, broadband, and phone service.

Where the fiber network has been switched on, customers are being offered 940/940 Mbps (near-gigabit) internet-only service at a price of $79.99 a month. Stop the Cap! has confirmed with our readers that parts of Central Islip now have gigabit fiber service available.

“Altice USA is focused on offering the best network and connectivity experience, and the activation of our full-fiber network with smart Wi-Fi, the most advanced of its kind in the nation, demonstrates our commitment to creating converged customer experiences,” said Hakim Boubazine, Altice USA co-president and chief operating officer. “Delivering our symmetrical Altice Gigabit fiber service is just the start as we continue to scale our fiber network to bring our customers up to 10 gigabit internet speeds to support the explosive growth of data usage while laying the groundwork for the future of the connected universe.”

The company is keeping its precise fiber rollout schedule a closely guarded secret, as it competes with Verizon FiOS across much of its service area. Because the fiber upgrade project will take five years to complete, existing customers still served by Optimum’s older HFC network will not have to wait to get speed increases thanks to DOCSIS 3.0. The company is introducing 400 Mbps speeds this year with gigabit service anticipated in early 2019. Altice will not deploy DOCSIS 3.1, preferring fiber to the home service as a better choice.

Dolan Family Suing Altice USA Over Layoffs at Cablevision’s News 12 Operation

Phillip Dampier September 5, 2018 Altice USA, Consumer News, Public Policy & Gov't No Comments

The founding family of Cablevision is suing Altice USA, the company that acquired the suburban New York cable operator in 2016, for violating terms of the merger and committing fraud after laying off staff at Optimum’s News 12 operation.

This week the Dolan family — the founders and original owners of the suburban New York City cable system, filed a lawsuit in Delaware Chancery Court after learning the notorious budget-slashing executives at Altice laid off dozens of workers, with plans to cut many more, despite a merger commitment to maintain at least 462 workers at the news operation and accept financial losses of up to $60 million until 2020.

News 12 is unique in the downstate New York, New Jersey, and Connecticut area where Cablevision provides cable service, delivering “hyper-local” coverage of news events across individually programmed regional news stations, each targeting a different service area. News 12 was among the first cable operator-created local news operations, founded in 1986 by Cablevision founder Charles Dolan.

Over the next three decades, News 12 launched several unique channels to serve customers:

  • News 12 The Bronx/Brooklyn (shared studios/talent, but branded individually to each borough)
  • News 12 Connecticut
  • News 12 Hudson Valley
  • News 12 Long Island
  • News 12 New Jersey
  • News 12 Traffic and Weather
  • News 12 Westchester

Originally exclusive to Cablevision, News 12 has since been licensed for viewing by cable customers of Charter Spectrum, Comcast, and Service Electric across the Tri-State area. Altogether, News 12 reaches about three million viewers in the region.

The lawsuit is an effort to preserve the legacy of News 12 in light of Altice’s legendary reputation for layoffs and budget cuts.

Charles Dolan

“Unfortunately for the employees of News 12, Altice has disregarded its solemn promise to operate News 12” as promised, the lawsuit claims. “The purpose of today’s lawsuit is to enforce Altice’s contractual commitment to stand by the employees of News 12. The Dolan family intends to hold Altice accountable for commitments Altice made at the time of the sale and to protect the quality programming News 12 provides the community.”

The lawsuit alleges Altice USA already laid off 70 News 12 employees in 2017 and notified the Dolans last month it would begin laying off additional workers beginning this week, including popular News 12 anchor Colleen McVey. McVey is a co-plaintiff in the lawsuit.

The fate of News 12 was a key issue for the Dolan family during merger talks with Altice. At one point, the family demanded News 12 be spun off as an independent entity not controlled by Altice because of fears the company’s cost-cutters would decimate the news operation. Ultimately, the merger agreement contained language forbidding Altice from laying off News 12 staff except in certain circumstances. The Dolan family claims there is no justification for the layoffs. Altice disagrees, claiming the suit has no merit.

“Altice USA remains committed to offering meaningful news coverage, enhancing our news product for our local communities, and growing our audience,” an Altice USA statement said. “Under Altice USA’s leadership, News 12 remains the most viewed TV network in Optimum households. This achievement reflects the uniqueness of News 12’s hyperlocal content and the high value viewers place on news that is tailored to their neighborhoods. Local news has never been more important, and we’re proud that News 12 continues to be a trusted source of news and information in the communities we serve.”

Altice Dismisses Wireless Broadband as Inadequate, “There is No Substitute” for Wired

Goei

While Wall Street and the tech media seems excited about the prospect of 5G and other fixed wireless home broadband services, Altice, which owns Cablevision and Suddenlink, dismissed wireless broadband as inadequate to meet rapidly growing broadband usage.

“In terms of usage patterns, our customers are taking an average download speed of 162 Mbps as of the second quarter of 2018, which is up 74% year-over-year,” Dexter Goei, CEO of Altice USA told investors on a recent conference call. “[Our customers now use] over 220 GB of data per month, which is up 20% year-over-year, with 10 in-home connected devices, on average. If you take the top 10% of our highest data consuming customers as a leading indicator, they are using, on average, almost 1 terabyte of data per month with 26 in-home connected devices. To support these usage patterns, which are mainly driven by video streaming and the proliferation of new over-the-top [streaming] services, it requires a high quality fixed network like ours. There is no substitute.”

Goei argued America’s wireless carriers are not positioned to offer a credible, serious home broadband alternative.

“For example, so-called unlimited data plans from the U.S. mobile operators start capping or significantly throttling customers at 20 GB of usage per month,” Goei said. “Over 60% of our customers are now using over 100 GB of data per month right now, which the mobile operators do not and will not have the capacity to match on a scaled basis unless they overbuild with a new dense fiber network.”

Altice just so happens to be building a dense fiber network, scrapping Cablevision’s remaining coaxial cable in New York, New Jersey, and Connecticut in favor of a fiber-to-the-home network that will eventually reach all of its customers.

Altice-Cablevision Advertises $99 Promotion, But It Really Cost This Customer $160+

Cable and satellite companies are notorious for baiting customers with cheap offers for internet, phone, and television service and then shocking them when the first much-higher-than-expected bill arrives, but Altice’s Optimum/Cablevision takes the bait and switch promotion to a whole new level.

Jim C. (who didn’t want to reveal his last name) is a Cablevision customer of over ten years who recently saw a rare promotion targeting existing customers offering 200 Mbps internet and “Core” television service for $99/month. That was nearly $40 less than what he was paying for service, and was his chance to slim down his TV package and get a speed upgrade as well.

“I called the number to ask about the promotion because I know how these companies work,” Jim told Stop the Cap! “You always have to get them to read off the fine print because many fees and surcharges get buried there.”

Jim was right. An impatient Optimum representative was willing to admit “there are some extra fees,” and sighed as Jim asked for details. By the time Jim was finished writing them down, he needed a second sheet of paper.

“This should be illegal — it is clearly ‘bait and switch’ designed to lure you at one price and then stick you with so many fees it turns out to be not much of a deal at all,” Jim shared. “In fact, it turned out to be more expensive than what I am paying right now!”

For the benefit of customers seeing similar promotions, here is a breakdown of just some of the extra fees not included in the $99 price:

Promotion: $99 Optimum Core Double Play Upgrade (Core TV + 200 Mbps internet) for existing customers
Term: 2-year agreement, with penalties for ending contract early

Gotchas:

  • Promotion for HBO and Showtime expires after 12 months; customers pay a regular price of $14.95 for HBO and $11.95 for Showtime during months 13-24. If you want access to on-demand titles, add $4.95/mo for each premium network.
  • Cloud DVR promotion ends after 12 months; next 12 months you owe them the regular price, which is a whopping $17.95 a month.
  • Service, equipment rates and random fees are subject to tax in some areas, up to 5.3%.
  • FCC “User Fee” of $0.08/month and fees for public, educational, and government local access channels cost up to $1.35/month.
  • Mandatory sports surcharge is $7.97/month.
  • Mandatory Broadcast TV surcharge is $4.99/month

Equipment Fees:

  • Modem rental is $10 a month.
  • Altice One cable boxes needed for TV service carry a $20/month fee. “Mini boxes” are available for $10/month per TV.

That $99 promotion actually costs the average customer with two boxes at least $163.39 a month during the first twelve months, not including taxes, and assuming the customer owns their modem and has one Altice One and one Mini set-top box. During the second year, that “$99 offer” will cost customers in excess of $218 a month, assuming one keeps both premium networks and wants on-demand access as well.

“This is completely dishonest and outrageous,” said Jim. “You absolutely must pay very close attention to the fine print in these offers, because they can get very expensive, very fast.”

Conn. Regulator Bans Public Broadband to Protect Comcast, Frontier, and Altice from Competition

Connecticut’s telecommunications regulator has effectively banned public broadband in the state, ruling that municipalities cannot use their reserved space on utility poles if it means competing with the state’s dominant telecom companies — Comcast, Altice, and Frontier Communications.

The ruling by Connecticut’s Public Utilities Regulatory Authority (PURA) is a death-blow for municipalities seeking to build gigabit fiber networks to offer residents the broadband speeds and services that incumbent phone and cable companies either refuse to provide or offer at unaffordable prices.

Among the petitioners appealing to PURA to protect them from competition is Frontier Communications, which owns a large number of utility poles across the state acquired from AT&T. The company was unhappy that municipalities were planning to use reserved space on state utility poles to construct fiber to the home networks that are generally superior to what Frontier offers consumers and businesses in the state. Other providers, like Frontier, said little about the early 1900s Connecticut statute that guarantees municipalities “right of use space” on poles until it became clear some communities were planning to threaten their monopoly/duopoly profits.

The law was originally written to deal with the dynamic telecommunications marketplace that was common in the U.S. during the late 1800s and early 1900s. Utility pole owners were confronted with a myriad of companies selling telegraph and telephone service — all seeking a place on increasingly crowded poles. Local governments could have been crowded out, were it not for the “Act Concerning the Use of Telegraph and Telephone Poles,” approved on July 19, 1905. It was one sentence long:

Every town, city, or borough shall have the right to occupy and use for municipal purposes, without payment therefor, the top gain of every pole now or hereafter erected by any telephone or telegraph company within the limits of any such town, city, or borough.

The law stood as written until 2013, when the legislature clarified exactly who could benefit from the use of “municipal gain.” Where the original law effectively protected reserved pole space for “municipal” use, the language was broadened in 2013 to read “for any purpose.”

Observers said the law was modified because of ongoing disputes with pole owners relating to planned municipal broadband projects. Frontier, in particular, has sought restrictive pole attachment agreements with communities trying to build out their broadband networks. In addition to accusations of foot-dragging over issues like “make ready” — when existing pole users move wiring closer together to make room for new providers, Frontier has tried to impose restrictive language on communities that would permanently restrict their ability to offer service. The most common restriction is to compel towns to agree to use their pole space exclusively “for government use,” which would restrict third-party providers hired to manage a community’s municipal broadband service.

PURA’s decision surprised many, because it completely ignored the 2013 language changes and relied instead on its perception of a conflict between state and federal laws. PURA ruled “municipal gain” establishes “preferential access” for towns and communities, and could be in conflict with the federal Communications Act, which mandates “non-discriminatory access” to utility poles, and prohibits local governments from blocking companies from providing telecommunications services.

“Providing municipal entities free access to the communications gain for the purpose of offering competitive telecommunications services … appears to be inconsistent with these principals and other aspects of federal law,” the decision reads.

In the early 20th century, vibrant competition meant a lot of utility poles were crowded with wires.

Except communities are not seeking to block providers looking to offer broadband service. These communities are seeking to become a provider. Pole attachment controversies typically relate to unreasonable limits on access to poles and allegations of price gouging pole attachment fees, not “preferential access.”

The end effect of PURA’s ruling: communities can use their pole space for government or institutional purposes only, such as building closed fiber networks available only in public buildings like libraries, schools, town halls, and police and fire departments. It also means any community seeking to build a fiber broadband network serving homes and businesses will either have to pay market rates for pole space, give up on the project, or place all the project’s wiring exclusively underground — a potentially costly alternative to aerial cable and one likely to cost taxpayers millions.

“We are very disappointed in the decision,” Consumer Counsel Elin Katz told Hartford Business. Katz is a strong supporter of municipal broadband. “It ignores the plain language of the statute, and by deciding that [municipal gain] cannot be used by our cities and towns to provide broadband to those affected by the digital divide, denies our municipalities a tool provided by the legislature for just that purpose.”

Frontier and the state’s cable and wireless companies, however, are delighted PURA has come to their rescue, calling its decision “fully consistent with the law.”

“Frontier Communications continues to support efforts to expand broadband access in Connecticut,” said spokesman Andy Malinowski. “PURA reached the correct result. This decision helps ensure the continuation of robust broadband competition in our state.”

The New England Cable & Telecommunications Association (NECTA), the cable industry’s regional lobbying group in the region, was also happy to see an end to unchecked municipal broadband growth and the competition it will bring.

“Our members, who pay millions of dollars annually to rent space on utility poles, offer competitive broadband services with speeds ranging up to 1 gigabit-per-second for residential Connecticut customers, in addition to offering speeds up to 10 gigabits for business customers,” noted NECTA CEO Paul Cianelli.

Other supporters of PURA’s decision include the wireless industry lobbying group CTIA and the Communications Workers of America — unionized employees at Frontier Communications who fear their jobs may be at risk if a municipal provider gives Connecticut customers an additional option for broadband service.

PURA’s decision leaves little room for municipal broadband expansion efforts that have been underway in the state for a decade. Most projects that cannot afford to pay for space on utility poles or the cost to switch to underground cable burial will probably not survive unless a court overturns the regulator’s decision or the state legislature clarifies state law in a way that makes PURA’s current interpretation untenable.

A number of groups are considering suing PURA to overturn its decision, noting the regulator completely ignored the very clear and understandable 2013 language that allows municipalities to use their allotted space on utility poles “for any purpose.” That purpose includes giving the state’s telecom duopoly some competition.

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