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Midwestern Cities Worry About Comcast’s Replacement: Already Debt-Laden GreatLand Connections

Phillip Dampier October 1, 2014 Charter Spectrum, Comcast/Xfinity, Competition, Consumer News, Public Policy & Gov't Comments Off on Midwestern Cities Worry About Comcast’s Replacement: Already Debt-Laden GreatLand Connections
The merger of Comcast and Time Warner Cable includes castoffs that will be served by a completely unknown spinoff - GreatLand Communications, that nobody can speak with and does not have a website.

The merger of Comcast and Time Warner Cable includes castoffs that will be served by a completely unknown spinoff – GreatLand Connections, that nobody can speak with and does not have a website.

At least 2.5 million Comcast customers in cities like Detroit and Minneapolis could soon find their service switched to a new provider that doesn’t have a website, doesn’t answer questions, and won’t give detailed information to municipal officials about its plans, pricing, or service obligations.

GreatLand Connections is the dumping ground for communities Comcast no longer wants to serve, including cities in Alabama, Indiana, Kentucky, Michigan, Minnesota, Tennessee and Wisconsin.

Formerly known as “SpinCo” for the benefit of Wall Street investment banks advising Comcast, the new cable company has been created primarily to help Comcast convince regulators to approve its merger with Time Warner Cable. Comcast believes supersizing itself with Time Warner Cable will win a pass with the FCC by self-limiting its potential television market share. The deal is also structured to dump a large amount of debt on the brand new cable company, allowing Comcast to avoid a significant tax bill.

GreatLand will, for all intents and purposes, be Charter Cable under a different name. Charter will act as the “management company,” which means it will be in charge of most consumer-facing operations.

Beyond that, almost nothing is known about the new cable company, except that it will open its doors laden with $7.8 billion in debt, according to a securities filing. That is equal to five times EBITDA, or earnings before interest, taxes, depreciation and amortization. In comparison, Comcast is 1.99 times EBITDA and Time Warner Cable is 3.07 times EBITDA, making the new cable company highly leveraged above industry averages. Charter Cable, which declared bankruptcy in 2009, is loaded down it debt itself, as it continues to acquire other cable operators.

Finances for the new company appear to be “less-than-middling,” according to MoffettNathanson analyst Craig Moffett, in a note to investors.

Because cable operators face little serious competition, the chances of any significant cable company liquidating in bankruptcy is close to zero, but a heavily indebted company may be very conservative about spending money on employees and operations. It may also leverage its market position and raise prices to demonstrate it can repay those obligations.

exitWith many customers having only one choice for High Speed Internet access above 15-25Mbps — the cable company — the arrival of GreatLand concerns many municipalities facing deadlines to approve a transfer of franchise agreements from Comcast to the new entity.

Jodie Miller, executive director of the Northern Dakota County Cable Communications Commission in suburban Minneapolis said it was impossible to find anyone to talk to at GreatLand. The commission needs to sign off on franchise transfers by mid-December, but nobody can reach GreatLand and the company has no track record of service anywhere in the country.

“We’re not even saying it’s unqualified,” she told Businessweek. “We’re saying we don’t really have information.”

Coon Rapids, Minn. has put franchise renewal negotiations on hold. Michael Bradley, a municipal cable TV attorney and the city’s longtime cable counsel said the deadline has been extended from Oct. 15 to Dec. 15.

“It’s a challenge,” he said. “No one knows who we can deal with locally. Nothing is certain yet and discussions are on hold.”

“We don’t have the answers we need,” added Ron Styka, an elected trustee with responsibility for cable-service oversight in Meridian Township, Michigan, a town served by Comcast about 80 miles west of Detroit.

“Answers have been inadequate at best and mostly not forthcoming,” echoed David Osberg, city administrator of Eagan, Minn. in a filing to the Federal Communications Commission.”It’s not clear whether GreatLand will be financially qualified.”

Eagan has had problems with Comcast in the past, and does not want new ones with GreatLand, especially with broadband service, which is vital to an effort to attract technology jobs to the community.

Comcast’s Streampix and Verizon’s Redbox Instant Gasping for Air; Netflix Killers They Are Not

Phillip Dampier September 30, 2014 Comcast/Xfinity, Competition, Consumer News, Online Video, Verizon, Video Comments Off on Comcast’s Streampix and Verizon’s Redbox Instant Gasping for Air; Netflix Killers They Are Not
Rumors abound of the imminent death of Redbox Instant.

Rumors abound of the imminent death of Redbox Instant.

Comcast’s Streampix and Verizon’s Redbox Instant have not lived up to the expectations of their respective owners and the two Netflix-like services have quietly been partly decommissioned or have stopped accepting new customers altogether.

Loathe to admit the services are roadkill on the TV Everywhere highway, Comcast claims it is simply downsizing its Streampix service and Verizon issued a terse “no comment” to GigaOm’s Janko Roettgers in response to rumors Redbox Instant would begin shutting down for existing customers on Oct. 1.

But truth be told, neither service made a competitive dent in Netflix, either because they were poorly marketed or found no audience. Comcast denies it is even trying to compete against Netflix. But it did admit in a regulatory filing Streampix found very few takers at its $4.99/month asking price.

“Though Comcast sought to create excitement around Streampix by offering the online version through a unique online site and app, and offered Streampix to a small number of XFINITY broadband-only customers in one region, these attracted minimal interest,” Comcast wrote.

Streampix will be a shadow of its former self, continuing on mostly in name-only.

“Going forward, Streampix will simply be part of the XFINITY TV app and website like other video-on-demand offerings,” said Comcast in the filing. The Google Play and Apple App stores seem to confirm as much when customers looking for the Streampix app instead find: “Streampix has moved to XFINITY TV Go. Comcast customers with Streampix should download XFINITY TV Go to view Streampix content.”

Comcast launched Streampix in February 2012 as a streaming-only offering, but added download capability in late 2013.

When customers balked at paying Comcast another $5 a month for the streaming add-on, Comcast began giving it away to customers who subscribed to multiple premium channels or high value triple play packages as part of ongoing promotions.

Comcast's XFINITY Streampix admittedly didn't draw much interest from customers.

Comcast’s XFINITY Streampix admittedly didn’t draw much interest from customers.

Critics of Comcast’s merger with Time Warner Cable suspect Comcast’s real intention was to launch the service to markets outside of its service area to compete for premium over-the-top video customers without cannibalizing its cable television revenue. With the merger under scrutiny at the state and federal levels, some suspect Streampix’s public demotion is a maneuver to protect the deal from a potential political liability over Comcast’s growing dominance in the cable and broadband business.

The troubles with Verizon’s Redbox Instant service go well beyond the realm of public policy debates. Since launching in mid-2013, the service has attracted only minor interest from the public. Critics contend a marketing deal with Redbox was wrong from the start. Redbox’s success comes from renting DVDs from kiosks, not competing with Netflix. Verizon hoped a promotional tie-in offering online viewers up to four free DVD rentals a month from Redbox kiosks would bring the two services closer together. Redbox Instant also rented current movie titles on a pay-per-view basis, and hoped it could convince kiosk users disappointed with out of stock DVDs or otherwise poor pickings to go online and stream a pay-per-view video instead.

But customers would have to be psychic looking for something to stream – Redbox does not publish online movie availability on its kiosk-service website. Unsurprisingly, kiosk users have stayed loyal to renting movies through the kiosk and online viewers usually won’t bother renting a DVD from a kiosk, even with a voucher.

Free trials of Redbox Instant service brought an underwhelming number of customers converting to paid subscriptions. That might be attributed to the heavy overlap of titles available from Redbox Instant and competitors Netflix and Amazon.com, making three services redundant for many. Although Redbox’s parent has invested $70 million in the service, it is dwarfed by the massive content acquisition budgets available to its larger competitors.

It would take a larger subscriber base to change that for the better, but Redbox Instant seems intent on sabotaging its success, still refusing to enroll new customers three months after a security breach. It seems Redbox Instant’s website was an excellent resource for credit card thieves to verify if stolen card numbers were still valid. Current customers are still able to use the service, but reportedly cannot update or change their credit card information, meaning they will lose service if their credit card expires or the credit card number changes.

no new users

A notice on Redbox Instant’s website prevents new users from enrolling.

Company executives have told investors they are not happy with Redbox Instant’s subscriber numbers. Not allowing new customers to sign up while gradually losing old ones because of an expired credit card could go a long way to explain this. Redbox’s parent company previously warned it has the right to pull out of the venture if the numbers don’t improve, and they won’t if the website remains locked down.

When Roettgers asked Redbox and Verizon to comment on a reddit rumor that the service was to close down on Oct. 1, the only reply was “no comment.” Roettgers believes that is telling, because no company would want such a false rumor to spread unchallenged. With Oct. 1 less than 24-hours away, we won’t have long to wait to see what happens next.

Roettgers would not be surprised to see Redbox Instant downsize itself with an end to its subscription video plan and move forward exclusively as a paid, video-on-demand service. It already powers Verizon’s On Demand video store. Having a traditional television partner like Verizon FiOS TV could help Redbox survive in an already crowded marketplace of online, on-demand video stores like iTunes, Google Play, Vudu, Amazon, and others.

In a larger context, the industry’s belief in “if we build it, they will come,” appears to be untrue, especially cable and telephone company efforts developing their TV Everywhere platforms. Content and viewing limitations that confine online viewing largely to the home, a barrage of online video advertising, subscription fees, and the lack of quality content have all hurt efforts to deliver a good user experience that can promote customer loyalty. Nothing now or on the horizon appears to be anything like a Netflix-killer app.

[flv]http://www.phillipdampier.com/video/Bloomberg Bibb Says Comcast Has Little Confidence in Streampix 2-21-12.mp4[/flv]

Two years ago, Porter Bibb, managing partner at Mediatech Capital Partners, panned the then-new XFINITY Streampix service for streaming the same television shows and movies customers can already see on Netflix and other services. From Bloomberg Television’s “Bloomberg West,” originally aired Feb. 21, 2012. (4:30)

Irish TV Venture in Talks With Comcast/Time Warner Cable for Nationwide Carriage Deal

Phillip Dampier September 30, 2014 Comcast/Xfinity, Consumer News, Online Video, Public Policy & Gov't Comments Off on Irish TV Venture in Talks With Comcast/Time Warner Cable for Nationwide Carriage Deal
Mhaoilchiaráin and O'Reilly launch Irish TV (Image: Picture: Frank Dolan )

Mhaoilchiaráin and O’Reilly launch Irish TV (Image: Picture: Frank Dolan )

Irish TV, focused on the Irish diaspora, is in talks with Comcast and Time Warner Cable to add its online channel to the national cable television lineups of both companies.

The network, not affiliated with Raidió Teilifís Éireann (RTÉ) — Ireland’s public broadcaster, is a Mayo-based commercial venture that launched in May 2014, and can be viewed only in part on some PBS stations and via Sky and Freesat in Europe.

John Griffin, chairman of Irish TV, has committed to spend up to $18.9 million on the network. He has the money, having earned millions while growing London minicab company Addison Lee. He sold his interest in the venture to the Carlyle Group for $486.3 million dollars last year.

The vision behind the Irish channel, which features homegrown cooking, music, and sports entertainment, originated with its founders Pierce O’Reilly and Máiréad Ní Mhaoilchiaráin. They agreed to let Griffin run the network after concluding negotiations carried out in a London pub.

Each Irish county (North and South) will have its own half an hour slot on the channel called County Matters.

In August, the Broadcasting Authority of Ireland, the country’s telecom regulator, began talks with Irish TV’s parent Teilifís Mhaigh Eo Teoranta for a broadcast license. Currently, the venture only operates in Europe because of a license issued by Ofcom, the British telecommunications regulator.

An Irish television license will allow the venture to operate directly within Ireland and facilitate programming agreements with RTÉ that could bring more mainstream Irish television programming to American television.

Winning a carriage agreement with Comcast and Time Warner Cable would bring the network more potential viewers than there are citizens of Ireland itself.

 

Updated: New York PSC Announces Delay in Comcast/Time Warner Cable Merger Consideration

Phillip Dampier September 26, 2014 Comcast/Xfinity, Competition, Consumer News, Public Policy & Gov't Comments Off on Updated: New York PSC Announces Delay in Comcast/Time Warner Cable Merger Consideration

The staff of the New York Public Service Commission has requested extra time for consideration of Comcast’s application to assume control of Time Warner Cable’s operations in New York State.

“Pursuant to a request from Department of Public Service staff in the above-referenced matter, Comcast Corporation and Time Warner Cable Inc. agree to action by the Public Service Commission on the Joint Petition at the November 13, 2014 Commission Session, with a final order being issued no later than November 19, 2014,” says a filing published late this afternoon by the Commission.

The merger was to be on the agenda for approval or rejection at a meeting in early October. New York public interest groups are continuing to mount opposition campaigns against the merger. Many feel the proposal has not been given enough attention and the public remains largely unaware of their ability to take part in discussions about the proposal.

Update: 9/29/14:

Public Service spokesperson James Denn sent this statement to City Newspaper on Monday:

“The Comcast proceeding, affecting 2.2 million cable customers in New York and representing an approximate New York transaction value of $3 billion, has led to an intense stakeholder focus producing nearly 3,000 public comments, making it one of the most active proceedings in commission history. Given the depth and breadth of the public record and the importance of the issues presented, the commission has accepted the extension of the period for review so that it may consider the matter more fully at its November 13 session.”

Comcast’s Home Security System Empties Customers’ Wallets; Chicago-Area Man Out $1,000

Phillip Dampier September 25, 2014 Comcast/Xfinity, Consumer News 3 Comments
Comcast's XFINITY Home won't help if the thieves are already inside your house.

Comcast’s XFINITY Home won’t help if the thieves are already inside your house.

Gary O’Reilly and his family moved into their new Libertyville, Ill. home last year and took advantage of a Comcast promotion offering the family a deluxe package of Internet, cable television, and XFINITY Home, Comcast’s home security and automation system. It was a costly mistake that would eventually threaten to leave the family out $1,000, their credit rating destroyed, and hours wasted fighting to get Comcast to live up to its service commitments.

O’Reilly was attracted to Comcast’s security system to protect his family — his wife was pregnant with their second child and they were moving to a new address. In March 2013, two Comcast technicians spent more than eight hours installing four exterior door alarm sensors and two digital thermostats.

Within hours, the family realized something had gone wrong. In the middle of the night, one of the thermostats began beeping relentlessly, indicating a problem.

“It was defective, and because the thermostat was digital, I could not control the temperature in that half of my house,” O’Reilly told the Chicago Tribune’s problem solver. “My pregnant wife and 2-year-old son were freezing in their own home.”

Comcast decided scheduling a service call several days in the future was acceptable under the circumstances, but O’Reilly learned patience isn’t a virtue at Comcast.

Comcast assumes any service call is a potentially billable event, regardless of who is at fault, and O’Reilly discovered they not only charged him for the service call, they also billed him for the replacement thermostat, requiring 8-10 hours of live chats and phone calls to eventually find someone willing to remove the charges from his bill.

The replacement thermostat managed to work for less than a month before it also failed, requiring yet another service call and replacement. Yes, Comcast billed him again for both, requiring another telethon-length session arguing with Comcast’s overseas call centers and live chat employees to remove the charges from his bill yet again.

As you might have guessed, the third replacement began acting up almost immediately, completely draining its AA batteries every 24-36 hours.

That’s your problem, responded Comcast, who would not schedule a return visit to explore the issue further. O’Reilly bought “a ton of batteries over the next few weeks.” The unappreciative third thermostat died anyway.

In mid-June, Comcast returned with thermostat number four, which lasted just a few weeks before it joined the earlier three in thermostat heaven.

Comcast's idea of compromise is a shotgun wedding: Agree to resume your service and we won't take you to court.

Comcast’s idea of compromise is a shotgun wedding: Agree to resume your service and we won’t take you to court.

Shockingly, O’Reilly decided against a fifth replacement and called to cancel his XFINITY Home service. The Comcast representative literally chuckled to O’Reilly after processing his cancellation to “keep an eye out for the termination charges.”

Comcast’s penalty for early cancellation of service: $1,000, conveniently billed on his next invoice.

After literally months of chats and phone calls, Comcast steadfastly refused to waive the charges, reserving the right to charge interest and impose other penalties if O’Reilly didn’t pay.

O’Reilly argues he owed Comcast nothing because the company never lived up to its end of the agreement by supplying reliable service. Nonsense, responds Comcast. After all, they were willing to replace his broken equipment each and every time, all five times.

Comcast wielded everything at its disposal to get paid. The cable company trashed O’Reilly’s over 800 credit score to below 650, preventing him from refinancing his mortgage. The collection calls have also been relentless, and increasingly threatening. On his last call with a Comcast collection agent he was told to pay them in full or they will see him in court.

Even with the venerable Chicago Tribune intervening and willing to serve as a referee, Comcast stubbornly refused to relent, although it offered O’Reilly its definition of a fair compromise.

Comcast spokesman Joe Trost claimed they had reached a settlement with the O’Reilly family.

“Together, [we] talked about the possibility of restarting services with Comcast with the agreement to waive the installation fees and (early termination fees) from the previous account, as well as clearing him from collections and the credit bureaus,” Trost said in an email. “We’re providing Mr. O’Reilly with different package options and composing a letter to overnight to Mr. O’Reilly with the information we discussed over the phone.”

Trost said O’Reilly and Comcast will “move forward together.”

In reality it was a 21st century digital version of a shotgun wedding.

Comcast first offered to remove him from collections, erase the $1,000 early termination fee and clear up his credit history, but only if he agreed to re-establish all of his previous services, including XFNITY Home.

O’Reilly held fast, saying he had no desire to have XFINITY Home back.

With a follow-up story looming in the newspaper, Comcast finally agreed to waive the fees and clean up his credit if he reconnected his Internet service with a higher-speed, more costly Internet tier. O’Reilly said yes.

Another satisfied Comcast customer. It only took 13 months, days of calling and chatting, and a last desperate plea to the Tribune to clear things up.

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