Phillip “The Company Paid by Suddenlink to Issue a Third Party Guarantee Makes All the Difference” Dampier

When Stop the Cap! and Broadband Reports reader Simon contacted us about Suddenlink’s fact-free usage measurement tool that managed to rack up nearly 23GB of usage for one West Virginia customer on the same day his service was out for most of the evening, he probably did not think one customer catching the cable company’s fingers in the usage cookie jar would make much difference.

But it did.

Suddenlink spokesman Pete Abel, initially responding to complaints about the usage tool’s accuracy, told Light Reading last week its meter was “consistently accurate, as was demonstrated in the tests we ran before we launched this program.”

Four days later, the company effectively disavowed that, put the meter’s built-in overlimit fee scheme on hold and plans to hire a third party company to “validate the accuracy of its system,” after finding it was faulty after all.

Suddenlink won’t say what is causing the inaccuracies, but blamed “unusual” circumstances for the problem. The company is now refunding customers billed overlimit fees of $10 per 50GB and waiving future charges until its system is reviewed and validated by “a trusted third party.”

Stop the Cap! believes that does not come close to satisfying the company’s responsibility to its customers for accurate billing.

Suddenlink has never demonstrated it actually needs an Internet Overcharging scheme with usage limits and overlimit fees. The company proves that when it claims only a “relatively small number of customers” were ever billed overlimit fees. With no demonstrable usage problem, the company’s need to implement its Project Imagine “Allowance Plan” is sorely lacking.

Easy as counting anyway we like.

Additionally, the accuracy of providers’ usage measurement tools has proven highly suspect, and not just with Suddenlink. All of the companies caught with inaccurate meters always strongly defend them, until overwhelming evidence suggests they should not. Even super-sized companies like Bell Canada (BCE) and AT&T have enforced usage limits with meters the companies later had to disavow. Suddenlink is only the latest.

The scale in your grocery store is checked and certified. So is the corner gas pump, your electric meter, water meter, and gas meter. Why should broadband usage be any different?

Consumers are right to suspect Suddenlink’s usage meter. No official regulatory body verifies the accuracy of usage measurement tools and whatever company Suddenlink chooses to “verify” its meter has a built in conflict of interest — it works for a company that depends on a certain result in its favor. Suddenlink clearly has no business in the usage measurement business when it insists on the accuracy of a meter it disavows just a few days later.

With only murky details available to consumers about what caused the problem and why Suddenlink did not see it until a customer managed to catch them in the act, there is little confidence the company will actually solve a problem it never realized it had. There is also nothing to assure us — “third party guarantee” or not — it cannot happen all over again.

Suddenlink customers need to reach out and tell Suddenlink its “Allowance Plan” is completely unacceptable. Tell the cable company you don’t want to worry about their unverifiable and proven-inaccurate metering program. Ask them why you should remain a customer when they spend time and money on a scheme that the company itself admits is not really needed — targeting just a small number of “heavy users.”

Suddenlink’s customer service team does not think much of customers who use their broadband service a lot, as this recent “Who’s On First” exchange illustrates:

Lisa (Suddenlink): “Well, you show heavy OVERUSAGE of the Internet, you drew 14GB of data yesterday.”

Customer: “Okay, let’s back up, explain to me how I drew 12GB of data when my power was off and I wasn’t home on June 30.”

Lisa: “I didn’t say anything about June 30.”

Customer:  “If you have sooo much faith in your meter, explain to me how I drew 12GBs of data on June 30, while I didn’t have power, and wasn’t home.”

Lisa:  “I didn’t say anything about June 30.”

Customer:  “I’m asking, how did I draw 12GB of data without power to my house?”

If Suddenlink has a problem with a handful of users creating problems for other subscribers on its broadband network, it has always reserved the right to contact those customers directly and work out the problem one on one. That is a far better solution than inconveniencing all of their customers with endless rounds of “usage roulette,” where the big winner could find themselves with Bill Shock from overlimit fees, whether they actually deserve them or not.

[flv]http://www.phillipdampier.com/video/CNBC Internet v. Cable 8-20-10.flv[/flv]

CNBC interviewed Suddenlink CEO Jerry Kent in August 2010 on how his company intends to deal with “invasive online video,” threatening to erode cable-TV profits. Kent proved Suddenlink doesn’t really need any extra money from overlimit fees — the days of big spending on capacity are over, but the money is nice to have anyway.  (8 minutes)

Suddenlink’s decision to implement an Internet Overcharging scheme that couples usage caps with overlimit fees can be a real revenue-booster for the cable company, especially if a usage measurement tool decides to nip at your allowance with phantom usage that can eventually expose you to overlimit fees.

Simon, a Suddenlink customer in northern Texas contacted Stop the Cap! with news he managed to catch Suddenlink in the act of ginning up his broadband usage, measuring around 23GB of broadband usage in just one day:

Here is what Suddenlink’s usage measurement tool reports Simon has used during the month of August. Not the 23GB measurement recorded for Aug. 18.

“Suddenlink believes I used ~23GB and my router confirms I only used 2.22GB (a difference of 936%),” Simon writes. “It’s insane.”

Even more unusual is Suddenlink’s measurement tool recorded that usage on a day when a thunderstorm knocked out his cable broadband service for nearly six hours during peak usage times. It is not the first time Suddenlink’s meter has gone haywire.

Consumers are at the whim of broadband provider-supplied measurement tools, which are unregulated and unmonitored by federal, state, or local authorities. What those tools measure is what customers will be billed for, with no verification or proof of accuracy required.

Companies utilizing these measurement tools require customers to accept the provided measurements as the final word on the matter.

“I think it’s a repugnant money grab that needs to be regulated by the state or federal government,” Simon shares.

Unregulated metered billing is a dream come true for providers who can bill customers whatever they want.

Here is what Simon’s router measured on that same date – 2.22GB, almost a 1,000% difference… in Suddenlink’s favor.

Suddenly Bought

Well-compensated management at Suddenlink are teaming up with private equity firm BC Partners and the Canada Pension Plan’s CPP Investment Board to buy out Suddenlink Communications in a deal for the $6.6 billion company.

The transaction will leave Suddenlink’s founder and current CEO Jerry Kent in charge and part-owner of the company. Some other members of top management are also participating in the buyout deal.

Suddenlink is currently owned by investment bank Goldman Sachs through its private equity arm, Quadrangle Group LLC and Oaktree Capital Management LP.

The buyers will assume $4 billion of Suddenlink’s outstanding debt and BC Partners and CPP Investment Board are taking on $500 million of additional debt to fund the purchase.

Kent

Kent says the deal is designed to infuse additional capital into Suddenlink’s operations, which primarily serve smaller communities in Texas, West Virginia, North Carolina, Oklahoma, Louisiana, Arizona, and Arkansas. Suddenlink launched in 2003 with the acquisition of discarded cable systems originally owned by Cox and Charter Communications. Today the company serves 1.4 million residential customers, making it the seventh largest cable operator in the country.

With Kent remaining in charge, few changes are expected. In 2011, Suddenlink adopted an Internet Overcharging scheme including usage caps and overlimit fees that it is gradually rolling out to all of its customers.

Investors see revenue growth opportunities from Suddenlink, particularly as it further monetizes broadband.

“This represents a unique opportunity to acquire a leading cable operator that has consistently generated industry-leading results,” said André Bourbonnais, who heads private investments for CPPIB.

Kent had been reportedly shopping the cable system around to private-equity firms over the past several months, on the condition he got to remain in charge and early investors could cash out.

Easy as counting in the dark.

Suddenlink customers in West Virginia who have been dealing with the aftereffects of a damaging derecho for a week found a nasty little surprise from their cable company when the lights cut back on — gigabytes of usage recorded on the company’s suspect “usage meter,” despite the fact customers were without power for up to a week.

Broadband Reports readers have begun to check back in after extended downtime to report Suddenlink is racking up usage whether customers are using their broadband connection or not:

• “Tylr” reports he was without power for two days but Suddenlink’s usage meter kept the party going, recording 12GB of phantom usage during the two days the customer was without service;
• “Jdmm72” found exactly the same thing, shocked to discover he racked up 10.8GB of usage on a day when he and his fellow neighbors in Nitro, W.V., were completely in the dark.

Suddenlink’s usage meter is not verified by any third-party or government agency to ensure its reliability and the company is under no obligation to change this policy. But customers are expected to cover any overlimit fees Suddenlink imposes for “exceeding your allowance.”

Does the company need the extra money? Not really, according to Suddenlink president and CEO Jerry Kent, who earlier admitted the days of expensive system upgrades were over and it was now time to rake in profits:

“I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” Kent said. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”

KJRH’s newsroom has been spending a lot of time this spring dealing with viewers ripped off by their telecommunications providers.  When Tulsa residents can’t get satisfaction from the local cable or satellite company, they often call Channel 2’s Problem Solvers for help.

DirecTV’s Phantom Gift Cards: The Promised Rebate That You Qualify For, Until You Don’t

Satellite TV companies are increasingly aggressive pitching discounts and rebates to win customers away from traditional cable TV or the phone company’s new IPTV service.  In addition to cheap teaser rates, many providers also sweeten the deal with high value rebate cards for customers signing multi-year service contracts.

Local resident Michael was attracted to DirecTV’s $200 Visa card rebate offer and signed up for satellite service.  Weeks later, with no rebate card in hand, he called the company to find out why, only to be told he did not qualify.  When Michael tried to cancel service because the company didn’t deliver what it promised, the customer service representative informed him he would owe $480 in early cancellation penalties.

DirecTV's fine print: Emphasis ours.

DirecTV initially stonewalled KJRH when they called on Michael’s behalf, eventually claiming he was told he did not qualify for a rebate a week after signing up for service.  But when KJRH asked to hear a recording of the call DirecTV routinely makes when customers sign up for service, they changed their tune.

“The next day, we were told Michael had been given the wrong information about the promotion and he could cancel without that $480 penalty,” the Problem Solvers’ team reports.

Michael says it is important to get everything in writing — including the names of representatives you speak with — because that can make all the difference when a company tries to squeeze out of its own promotional promises.  He’s now an ex-DirecTV customer for free, and decided to watch his favorite shows over local broadcast TV.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/KJRH Tulsa TV gift card 3-19-12.mp4[/flv]

KJRH got called by Michael when DirecTV reneged on a $200 rebate offer that locked him into a contract that could cost him $480 to escape.  (2 minutes)

Suddenlink: Suddenly Owe $400 in April for Service You Canceled In January

Tulsa resident Lucille got the shock of her life this month when she opened a bill from Suddenlink charging her $400 for cable service she canceled in early January.

The past due bill came without warning and Lucille says she never received any phone call, bill, or letter notifying her charges were still accumulating on her account.

When she called Suddenlink, they told her that service was never discontinued, and she owed the money.

Lucille may have been born at night, but not last night.

Angered by Suddenlink’s intransigence, she called KJRH for help.  The station went to the top — calling Suddenlink’s corporate headquarters.

In short order, a company representative researching the dispute found Lucille’s cancellation request, as well as the customer service representative who never processed it.

That representative will be attending Customer Service 101 re-training classes, and a company executive called Lucille directly to apologize.

Not only that, a local Tulsa Suddenlink worker arrived with a $100 refund check — the credit balance owed her for service she paid one month ahead to receive.

While both Lucille and Michael benefited from the threat of both companies being portrayed in a bad light on the evening news, an unknown, uncounted number of customers may not win similar satisfaction.

Many customers simply give up pursuing unpaid rebate promotions (or forget about them altogether), and DirecTV’s nearly $500 early termination fee is a strong incentive to grudgingly stay with the satellite provider until your contract runs out.  Lucille, 88 years old, was not going to be intimidated by Suddenlink’s insistence she owed the money (or the implications of being called a past due deadbeat — an especially scandalous notion for older Americans).

Both consumers did something else: they wrote down names, times, and dates of their communications with the companies.  That can go a long way to winning satisfaction. So can filing complaints with the Better Business Bureau, which can usually prompt a contact from a higher-level customer service representative more willing to give a complaining customer the benefit of the doubt.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/KJRH Tulsa Past due cable bill 4-18-12.mp4[/flv]

KJRH got a call from Lucille about an unexpected $400 Suddenlink cable bill for April… for service she canceled in January.  (2 minutes)