A New York bankruptcy judge cleared the way for Windstream Holdings to pay its top executives up to $24 million in special retention bonuses to convince them to stay at Windstream while the company continues restructuring under Chapter 11 bankruptcy.

U.S. Bankruptcy Judge Robert Drain, who also oversaw the bankruptcy of Sears, agreed with Windstream the company executives were entitled to the special bonuses, which will pay out up to $5 million to key employees willing to remain with the company and an additional amount up to $20 million for meeting certain performance metrics.

U.S. Trustee William Harrington strongly objected to the bonuses, claiming some of the money could end up in the pockets of executives that made key business decisions that would later come back and force the company into bankruptcy. Harrington also objected to the low bar Windstream proposed to pay out performance bonuses. Under the proposal, key executives will receive bonuses if the company’s revenues reaches an amount 10% less than the company’s forecast revenues for 2019.

Windstream’s attorneys argued the company’s performance has been historically so poor, it failed to meet its own projected revenue targets multiple times. The attorneys also argued Windstream was likely to face “increasingly aggressive competition,” making it harder to convince customers to sign up for possibly less compelling service plans than those offered by its cable competitors. That would make the company’s ability to meet its financial targets less than certain, attorneys argued.

Windstream was forced into bankruptcy in February after a federal court ruled its spinoff of certain assets in 2015 violated the terms of its senior loans. A hedge fund successfully sued the company and won a judgment of more than $310 million, causing Windstream to seek bankruptcy protection.

Details of Windstream’s Key Employee Incentive Plan (KEIP)

AT&T claims it is willing to play hardball to force cell tower owners to reduce the cost of leasing space for AT&T’s wireless services. If tower owners won’t lower their prices, AT&T is threatening to find someone else willing to build a new, cheaper tower nearby.

AT&T is closely coordinating its tower strategy with its biggest competitor, Verizon Wireless. Together, the two companies are looking to force costs down by seeking opportunities with newer tower companies Tillman, CitySwitch, and Uniti Towers that are willing to build new towers next to old ones, while offering “much cheaper” pricing than industry leaders American Tower, Crown Castle, and SBA Communications.

Light Reading notes AT&T would like to pay roughly half the current rent for its wireless infrastructure. But it is running into a roadblock because 65% of American cell towers have no competition within a half-mile radius. Getting zoning approval to construct new towers, especially in suburban and residential areas, can be difficult and costly. But the three upstart tower companies AT&T and Verizon are working with claim they will commit to tower construction when there are signed contracts in hand. AT&T is using this fact to leverage existing companies to lower prices or lose AT&T’s business.

But Wall Street analysts suggest AT&T is bluffing. Research of FCC public records between January 2017 and April 2019 found 1,000 new tower applications, but only 500 had been built. Only 40% of those applications were to build new towers near existing ones. When one considers there are about 110,000 cell towers in the U.S., fewer than 0.5% of cell sites are likely to face competition based on the applications already filed.

The wireless industry prefers to co-locate infrastructure on existing towers, which means Verizon Wireless, AT&T, T-Mobile and Sprint could all theoretically be leasing space on the same tower. This was originally both a cost-saving measure and a bow to reality because new tower applications often take years to approve and often face local opposition. Most wireless companies sign 10-year contracts with tower companies, so any organized effort to force competition will probably take years.

AT&T complains it is the victim of a lack of competition and is fed up with the “vicious model” of monopoly tower companies charging excessively high prices and raising fees anytime AT&T changes their contract. Many of their customers can relate.

WarnerMedia’s forthcoming streaming service will showcase HBO and Cinemax at the heart of a one-size-fits-all streaming package priced at $16-17 a month, featuring premium movies and Warner Bros. vast movie and TV show collection. We wanted to enjoy those streams. Find out more about what makes a stunning home theater from this website.

AT&T plans to begin beta testing of the service later this year, with plans to sell the service to consumers as early as March 2020, according to the Wall Street Journal.

John Donovan, CEO of AT&T Communications, signaled AT&T’s “radical reshape” of television on a Credit Suisse Communications conference call event on Wednesday.

“The streaming strategy, whether you call it an OTT or IPTV or thin client, we’re going to transform our product,” Donovan said. “It is the consumer product I am most excited about since the iPhone. It radically reshapes what your concept of television is.”

The “new concept” is a radical departure from AT&T’s earlier plan to offer “good,” “better,” and “best” price points, varying the amount of content depending on how much subscribers were willing to pay. Instead, Donovan proposes one price point for every subscriber, with access to an unprecedented amount of content produced by one of the country’s largest Hollywood studios. Warner Bros. has produced thousands of movies and series since the early days of television in the 1950s and the advent of commercial filmmaking in the early 20th century.

Donovan

“The idea of three tiers never made much sense and is too complicated to fly in the marketplace,” analyst Craig Moffett of MoffettNathanson told the newspaper.

Despite the potential of an enormous library of streamed content, consumers may balk at WarnerMedia’s asking price, especially if they have no interest in HBO or Cinemax. Netflix’s most popular two-stream plan costs $12.99 a month and second place Hulu is available for $5.99 a month with ads or $11.99 a month without. Most niche streaming services like MHz Choice, CBS All Access, Acorn Media, BritBox, and other similar services are all under $10 a month. AT&T proposes to set its price higher than traditional premium movie network services like HBO, which usually costs $14.99, to protect the relationships and revenue it earns from cable, satellite, and telco TV providers. But AT&T’s new service may be a tough sell, especially considering forthcoming streaming services like Disney+ plans to launch Nov. 12 at $6.99 a month, and Viacom’s Pluto TV and Sinclair’s STIRR are ad-supported and free. In fact, most of the newly announced streaming services yet to launch are targeting much lower price points, fearing consumers may be nearing their budget limits for more content.

AT&T warns it may adjust pricing before the service launches next year, and there may eventually be a cheaper, ad-supported version, making the service comparable to Hulu. AT&T has also not disclosed how much original made-for-streaming programming it plans to include in the venture, which may be an important consideration to attract price-sensitive customers not interested in watching repeats and movies they can watch elsewhere. Consumers may also be overwhelmed and fatigued by the amount of content already available to watch through established players like Netflix and Hulu, so WarnerMedia may find their streaming service a difficult sell, especially as cord-cutters find prices for streaming live TV services already rising as fast as their old cable TV subscriptions.

Arris/Motorola’s SB6121 SURFboard DOCSIS 3.0 Cable Modem used to be considered “eXtreme,” but now most cable companies consider it obsolete.

The legacy of the hated modem rental fee is coming back to bite providers that charge $10 a month or more for a device that likely cost the company well under $100.

To opt out of the fee, a growing percentage of customers buy their own equipment, but now many of those modems are becoming functionally obsolete and customers are wary of efforts by providers to convince them to accept a newer, company-supplied modem.

With the arrival of DOCSIS 3.1 and faster speeds, the problem is only getting worse for companies like Comcast, Charter Spectrum, and Cox. With an installed base of hundreds of thousands of obsolete modems, customers frequently can no longer get the internet speed they pay for, and the equipment’s limitations can cause congestion on cable broadband networks, because older modems cannot take advantage of the exponential increase in available “channels” that help share the load on the neighborhood network.

“Some customers have cable modems that are incompatible (such as DOCSIS 2.0 and DOCSIS 3.0 4×4 modems) with the current class of service or internet speed that they’re receiving. As a result, these customers may not be experiencing the full range of available bandwidth that they’re paying for,” Comcast informs their customers. “If a device is no longer supported by Comcast or has reached its end-of-life (EOL), this essentially means that we will no longer install the device, either as a new or replacement device. In addition, we will no longer recommend that customers purchase the device, whether new or used.”

But many Comcast customers do not realize their equipment is effectively obsolete until they visit mydeviceinfo.xfinity.com and sign in to their account or enter a device make and model in the search bar on the homepage or hear directly from the company. Comcast will send online alerts to customers verified to still be using outdated equipment and occasionally send notifications through the mail. Customers can order new equipment online or swap out old equipment in a cable store. Comcast prefers its customers rent its Xfinity xFi Wireless Gateway ($13/mo) or xFi Advanced Gateway ($15/mo). As an incentive, Comcast is testing offering free unlimited data in some central U.S. markets to those choosing its more costly Advanced Gateway.

Charter Spectrum sold its merger with Time Warner Cable and Bright House Networks partly on its argument that modem fees would no longer be charged. Despite that, many former Time Warner Cable and Bright House customers still use their own modems, which has been a problem for a company that raised the standard internet speed available to residential customers from 15 Mbps to 100 Mbps (200 Mbps in some markets, mostly those also served by AT&T). Older modems often cannot achieve those speeds. Spectrum notifies affected customers in periodic campaigns, offering to replace their obsolete equipment, but many customers suspect hidden fees may be lurking in such offers and discard them.

“Some modems that were issued years ago have become outdated. If you have a modem that was issued by us and hasn’t been swapped in the last six years, it might need to be replaced,” Spectrum tells customers. “To get a replacement modem, contact us or visit a Spectrum store. Please recycle your old modem or bring it to a Spectrum store for proper disposal. If you do a modem swap with us, you’ll receive a mail return label in your package, which can be used to return your old modem.”

Cox is also in a similar predicament. It runs seasonal checks on its network to identify customers using older DOCSIS modems, often DOCSIS 3.0 4×4 modems, which can only support four download channels. When it finds customers eligible for an upgrade, it mails postcards offering a “free modem upgrade,” usually supplying a SB6183 or SB8200 modem that can arrive in 24-48 hours. But many Cox customers suspect trickery from Cox as well, or run into poorly trained customer service representatives that reject the postcards, claiming the customer is ineligible.

“DOCSIS 3.0 8×4 or higher (or a DOCSIS 3.1) devices are required for all new Cox High Speed Internet customers,” Cox tells their internet customers. “Current Cox customers should ensure they have a minimum of a DOCSIS 3.0 device in order to consistently receive optimal speeds. Additionally, Ultimate customers are required to have a minimum of a DOCSIS 3.0 device with a minimum of 16×4 or higher channel bonding to achieve package speeds.”

In fact, most modem upgrade offers from your provider are likely genuine, but customers need to pay attention to any fine print.

Customers can also purchase their own upgraded modem if they want to avoid Comcast’s Gateway fee. Cox does not charge customers for modems sent as part of a free upgrade offer, but watch for erroneous charges on your bill and report them at once if they do appear. Charter Spectrum has recently introduced a $9.99 modem activation fee, applicable to new customer-owned or company-supplied cable modems. We do not know if that fee would apply in cases of an obsolete modem upgrade. Be sure to ask, and if the answer is no, make a note of the representative’s name in case a dispute arises later on.

GIVE us more money and TAKE what we offer you.

Bloomberg News is reporting what many of you already know — it is getting tougher to get a better deal from your cable or phone company.

As Stop the Cap! has documented since the completion of the Time Warner Cable/Bright House/Charter Spectrum merger in 2016, companies are pulling back on promotions, taking advantage of a lack of competition and offering best pricing only to new customers.

Charter Spectrum and Cable One (soon to be Sparklight) are the most notorious for implementing “take it or leave it” pricing. In fact, one of Charter CEO Thomas Rutledge’s chief complaints about Time Warner Cable was its “Turkish Bazaar” mentality about pricing. Rutledge claimed Time Warner Cable had as many as 90,000 different promotions running at the same time, typically targeted on what other companies were theoretically providing service and how serious the representative felt you were about canceling service. Time Warner Cable had basic retention plans available for regular representatives to offer, better plans for retention specialists to pitch, and the best plans of all to customers complaining on the “executive customer service” line or after filing complaints with the Better Business Bureau. There were plans for complaining over the phone and different plans for complaining at the cable store. Rutledge was horrified, because customers were now well-trained on how to extract a better deal every year when promotions ran out.

Last month, Rutledge said he was indifferent about cash-strapped consumers that cannot afford a runaway cable TV bill on a retired/fixed income or the urban poor who can’t imagine paying $65 a month for basic broadband service. To those customers, pointing to the exit is now perfectly acceptable. In fact, companies make more profit than ever when you drop cable television service and upgrade your broadband connection to a faster speed. That is because there is up to a 90% margin on internet service — provisioned over a network paid off decades ago and designed for much less space efficient analog television. Charging you $20 more for faster internet service is nearly 100% profit and costs most companies next to nothing to offer, and Time Warner Cable executives once laughed off the financial impact of so-called “heavy users,” calling data transport costs mere “rounding errors.” 

Even with a much tougher attitude about discounting service, Charter and Comcast are still adding new broadband customers every month, usually at the expense of phone companies still peddling DSL. So if you cancel, there are probably two new customers ready to replace you, at least for now.

Cable One redefines rapacious pricing. The company specializes in markets where the incumbent phone company is likely to offer low-speed DSL, if anything at all. As a result, they have a comfortable monopoly in many areas and price their service accordingly. Cable One’s basic 200 Mbps plan, with a 600 GB data cap, costs $65 a month, not including the $10.50/mo modem fee, and $2.75 monthly internet service surcharge. To ditch the cap, you will pay another $40 a month — $118.25 total for unlimited internet.

In fact, Cable One charges so much money for internet, they even have Wall Street concerned they are overcharging!

When Joshua May tried calling Spectrum to deal with the 29% more it wanted (around $40 a month) after his promotion expired, the customer service representative told him to go pound salt.

“I expected they’d at least offer free HBO or Showtime,” May, 34, of Springfield, Ohio, told Bloomberg News. “They did nothing.”

He did something. He cut the cord. The representative could have cared less.

The product mix cable and phone companies offer has not really changed, but the era of shoving a triple play bundle of internet, TV, and phone service sure has. Charter and Comcast now treat cable television as a nice extra, not the start of a bundle offer. Broadband is the key item, and the most profitable element, of today’s cable package. Beleaguered phone service gets no respect either. Time Warner Cable used to sell its triple play bundle including a phone line for less money than their double play bundle that omitted it. Today, it’s a simple $9.99/mo extra, given as much attention as a menu offering premium movie channels.

Comcast differs from Charter by offering a plethora of options to their customers. If you don’t want to spend a lot for high speed internet, spend a little less for low speed internet. Their television packages also vary in price and channel selection, often maddeningly including a “must-have” channel in a higher-priced package. Like Spectrum, their phone line is now an afterthought.

AT&T and Verizon have their own approaches to deal with reluctant customers. Verizon FiOS customers face steep price hikes when their promotions expire, but the opportunity to score a better deal is still there, if Verizon is in the mood that quarter. Verizon remains sensitive about their subscriber numbers and growth, so when a quarter looks like it will be difficult, the promotions turn up. AT&T prefers to play a shell game with their customers. Most recently, the company has given a cold shoulder to its U-verse product, treating it like yesterday’s news and best forgotten. AT&T literally markets its own customers to abandon U-verse in favor of AT&T Fiber. Verizon and AT&T treat their DSL customers like they are doing them a favor just by offering any service. All the best deals go to their fiber customers.

AT&T Randall Stephenson is a recent convert to the “who cares about video customers” movement. Services like DirecTV Now were originally channel-rich bargains, but now they are a place for rate hikes and channel deletions. Over a half-million streaming customers have already canceled after the most recent price hikes, but Stephenson claims he does not mind, because those bargain-chasers are low-quality customers worthy of purging. AT&T’s dream customer is one who appreciates whatever AT&T gives them and does not mind a parade of rate hikes.

Comcast’s chief financial officer Mike Cavanagh said it more succinctly: seeking subscribers that “really value video and our bundle despite the increases in prices,” and has “the wallet for a fuller video experience.”

Customers who decide to take their business to a streaming competitor are already learning the industry still has the last laugh. As package prices head north of $50/month, that is not too far off from the pricing offered by cable and phone companies for base video packages. In fact, Spectrum has begun undercutting most streaming providers, offering $15-25 packages of local and/or popular cable channels with a Cloud DVR option for around $5 more a month.