Home » Search Results for "time warner $3.95":

A Look Inside Time Warner Cable’s Quarterly Results and Forthcoming Plans

Phillip Dampier February 12, 2013 Broadband Speed, Data Caps, Online Video 12 Comments

timewarner twcIt’s time to take a look inside Time Warner Cable’s latest quarterly financial report and pick out some interesting developments that will impact customers during the first quarter of 2013.

Time Warner Cable managed 9 percent revenue growth in 2012, primarily from its broadband service, its strongest product. The company added another 500,000 broadband customers over the last year, primarily poached from telephone company DSL service. This growth in subscribers continues despite rate increases and the introduction of a $3.95 monthly modem rental fee introduced last fall.

CEO Glenn Britt noted that Time Warner Cable customers use and love their broadband service.

“The average customer used roughly 40% more capacity last year,” Britt noted.

But Time Warner Cable has plenty of capacity to handle that traffic growth.

Britt plans to leave as CEO of Time Warner Cable by the end of this year.

Britt plans to leave as CEO of Time Warner Cable by the end of this year.

Irene Esteves, Time Warner’s chief financial officer noted Time Warner Cable continues to decrease its capital spending. Overall, Time Warner spent $3.1 billion on capital expenditures in 2012, or just 14.5% of its revenue. That represents a 40-basis point decrease from 2011. The bulk of that spending was on business services, primarily from the costs of wiring business office parks and buildings for cable. Less than 12% of Time Warner Cable’s spending targeted residential services.

“Overall, we expect capital intensity will continue to decline modestly, with full year capital spending around $3.2 billion in 2013,” Esteves told investors.

Time Warner’s new modem fee is earning the company a major boost in Average Revenue Per User (ARPU). The average Time Warner customer now spends $103.79 a month for service, an increase of 6.3%. Three-quarters of that increase is attributable to the modem fee alone.

Customers are clamoring for higher broadband speeds. At the end of 2012, Turbo, Extreme and Ultimate subscribers comprised over 23% of the company’s residential broadband customer base, up from 19% a year ago and 11% three years ago.

Britt, expected to retire by the end of this year, noted the company’s biggest challenge during his tenure continues to be programming costs. But the company is contributing to that problem itself, spending $110 million in 2012 on its new regional sports networks in southern California, which feature the Los Angeles Lakers and the Los Angeles Dodgers.

“Our programming costs per subscriber has grown 32% in the last four years,” Britt complained. “Over that same period, the Consumer Price Index has risen by 9%. So the math is pretty simple, programming costs have been rising at more than three times the rate of inflation. Our residential video ARPU increased 16% over that same period, so we’ve effectively raised pricing a little faster than inflation but only half as fast as programming costs have risen.”

The rising price of cable service has caused Time Warner to lose a larger number of customers, particularly when promotional pricing deals expire. The company has retrained its retention agents to avoid losing customers to the competition as new customer promotions expire. Time Warner noted some of its strongest competition is coming from AT&T U-verse promotional pricing for double-play offers in Texas and the midwest. In Kansas City, Time Warner continues to dismiss competition from Google Fiber as largely irrelevant, although the company has boosted its maximum broadband speeds to 100Mbps in that city.

Time Warner's TV Everywhere app.

Time Warner’s TV Everywhere app.

Other highlights:

♦ TWC completed its DOCSIS 3.0 broadband enhancement rollout in 2012 and began a process of reclaiming bandwidth previously dedicated to the delivery of analog video. These steps will allow the company to continue to devote more network resources to enhancing broadband service, including handling more traffic and selling faster service.

♦ Optional usage-based tiers are available from most Time Warner Cable regions. The offer of a $5 monthly discount for customers keeping their usage under 5GB each month has received almost no interest from subscribers. Sources inside Time Warner tell Stop the Cap! the company never expected much customer interest, but the offer allowed Time Warner to introduce the concept of usage-based pricing without alienating current customers.

♦ Time Warner Cable’s “TV Everywhere” platform continues to expand. Various TWC TV apps now offer as many as 300 streamed video channels on both smartphones and streaming set-top boxes. In December the company expanded its offering to include video on demand, and last week those on-demand programs became available on the desktop. Time Warner expects to grow its on-demand library and introduce local television channels to its streaming apps in 2013.

♦ Time Warner is trying to improve the standing of its residential telephone service with the introduction of a Global Penny plan, which offers international calling to over 40 countries for one cent per minute. This helps the company market its phone service to subscribers choosing its various ethnic and foreign language television packages.

One-hour service windows are now available in most Time Warner Cable areas. In New York City, a 30-minute window is available for the first appointment of the day. The company is also expanding its self-install packages, letting customers do simple equipment installations themselves. The equipment is delivered free of charge by package delivery services and can be returned by mail as well.

♦ Although Time Warner is earning more from its broadband customers, the introduction of a modem rental fee did cause a significant number of customers to disconnect service, presumably in favor of a competitor. But the extra money in the cable company’s pockets more than makes up for the loss.

♦ Time Warner Cable’s forthcoming “hosted navigation product” represents a major change for the company’s set-top boxes. The “gateway” device will include 1TB of storage, can record up to six shows at once, and will automatically transcode video for an IP platform, letting customers view recorded and live programming on set-top boxes or wireless devices like smartphones and tablets inside the home. Expect to see the new device arrive in the second half of this year in many Time Warner cities.

Time Warner Cable’s New Customer Promotions Sound Better Than They Actually Are

Phillip Dampier February 5, 2013 Competition, Consumer News 8 Comments
Zombie bill.

Zombie bill.

Time Warner Cable has pulled back on their winter promotions for new customers, bundling slower broadband and significant equipment fees into the bottom line price that may cost as much as $20 or more than the cable operator’s advertising suggests.

Several readers contacted Stop the Cap! over the last few weeks about the disparity between Time Warner’s advertised new customer pricing and the out the door price that arrives on the first month’s bill.

Diane, a Stop the Cap! reader in Brockport, N.Y., was attracted to an $89.99 triple play promotion for TV, Internet, and phone service until she learned what did not come with the deal.

“By the time I got off the phone, that $89.99 offer turned into more than $130 a month once adding a DVR, faster broadband service, and a second cable box,” Diane complains. “You really have to read the fine print. They only give you 3Mbps broadband speed on most of their offers now and DVR service is rarely included. In fact, all the equipment turned out to cost extra.”

Stop the Cap! checked out the offer Diane was interested in, and it turns out the $89.99 advertised price only tells half the story.

The wall of text. Time Warner's rebate offer treats hoops customers must jump through as an Olympic event.

The wall of text. Time Warner’s rebate offer has hoops customers will consider an Olympic event.

First, Time Warner requires customers on this promotion to pay for at least one cable box, at $8.99 a month. A CableCARD is also available for $2.50 a month for televisions equipped to support that. Most consumers stick with traditional boxes. Diane wanted one DVR box and a second box for a bedroom. DVR Service from Time Warner, which does not include the box itself, has dramatically increased in price over the years. In 2013, the combined rate for the “box” and the “service” is $21.94 a month in western New York. A second cable box for Diane’s bedroom ran another $8.49 a month. The new Internet modem rental fee is also not included, so that adds an additional $3.95 a month.

Diane is also correct about broadband speeds. Time Warner bundles only 3Mbps service in most of its promotional packages. Increasing to Standard speed (15/1Mbps) generally costs an additional $10 per month. Now Diane’s monthly bill is well over $130 a month.

In fact, Diane should have selected a more deluxe package from Time Warner at the outset. Their $104.99 promotion bundles Turbo (20/2Mbps) Internet, free Showtime, and at least covers DVR service (although Diane still has to pay $9 a month for the DVR box). Her out the door price for that package is less than $127 a month.

Customers served by AT&T U-verse or Verizon FiOS stand to come out better if they plan to dump the phone company in favor of Time Warner. The cable operator is throwing in a debit card worth up to a $200, but only for customers switching away from a competitor. Diane just had Frontier phone service, so no $200 reward card for her. Time Warner requires customers to switch from services comparable to those selected from Time Warner to qualify for the maximum rebate.

For those that do quality, the rebate hoop-jumping begins:

  • Customers qualifying for the reward card have to write down a promotion code and register their rebate request online within 30 days of starting service.
  • Customers must remain active, in good standing and must maintain all services for a minimum of 90 days after installation.
  • Customers are required to upload a scanned copy of their last provider’s bill, showing active service within the last 90 days. Card should arrive 4-6 weeks after a 90 day waiting period.
  • Comparable services do not include wireless telephone service or online-only video subscriptions.
  • Offer is not available to customers with past due balances with Time Warner Cable during the program period or customers who have been disconnected for non-payment during the twelve months preceding this offer.
  • The customer’s name and address on file with Time Warner must exactly match the name and address on your former provider’s bill.
  • Customers better spend the money quickly. After six months, the issuing bank deducts a $2.50 monthly “service fee” from the debit card until empty, except where prohibited by law.
  • If the card is lost or stolen, there is a $5.95 Re-Issuance Fee. If you need to dispute a charge on the card, you are out of luck. The issuing bank will not intervene on your behalf.
  • Customers cannot apply the rebate to their Time Warner Cable bill.

Time Warner Cable Hiking Rates: Basic Cable Up 8.2% – $72.50/Month in Southern California

Phillip Dampier January 29, 2013 Competition, Consumer News, Editorial & Site News 5 Comments

timewarner twcTime Warner Cable customers in southern California are bracing themselves for a rate increase that will raise prices by 8.2 percent — almost four times the rate of inflation.

The price for digital basic cable, the most popular cable television package, will rise from $67 to $72.50 per month. The price charged to record shows from that package is also going up. “DVR service,” which does not include the DVR equipment itself, is rising 18.6% — from $10.95 to $12.99 a month.

Stop the Cap! reader Steve in Carlsbad adds his rate increase notification also mentions price increases for bundled packages:

All Standard and Basic packages and bundles will increase by $5.00 and all digital video packages and bundles will increase by $3.00.

The rate increases are by no means over. As Time Warner mails its price change notifications for 2013 to customers, it also signed a 25-year deal with the Los Angeles Dodgers for yet another regional sports channel showcasing the baseball team. Industry insiders estimate the deal is worth between $7-8 billion and could eventually cost cable subscribers an additional $5 a month, whether they watch the channel or not.

Flag_of_California.svgIt is likely the latest rate increase does include the cost of the 2012 launch of Time Warner Cable SportsNet, which features the Los Angeles Lakers. Time Warner asks competing satellite and telephone company video services to pay between $4-5 a month to provide SportsNet to their customers.

The rate increases will not affect customers on retention or promotional packages until they expire. As usual, Time Warner blamed the rate hike on increasing programming costs, notably for sports and broadcast television stations.

Although many Californians have alternatives, ranging from AT&T U-verse to two satellite television providers, those companies are raising prices as well:

  • Comcast (San Francisco Bay area) rates went up 4.3% last year and will increase again this summer;
  • DirecTV rates will increase Feb. 7 by about 4.5 percent;
  • Dish Networks’ most popular packages rose $5 a month on Jan. 17;
  • AT&T U-verse will boost prices on components of its service by around $2 a month each on Jan. 27.

money savingCustomers facing price increases can use the rate increase notification as the trigger to threaten to cancel service to win a lower price with a customer retention offer. Stop the Cap! published a comprehensive guide on how to win a lower rate from Time Warner in 2012 and those tips are still working for our readers today.

If Time Warner seems unwilling to bargain, customers can also consider taking their business elsewhere by signing up for a promotional introductory offer with a competitor. When that offer expires, Time Warner will take you back with a new customer promotion as well.

In general, bundling all of your services with one provider will save the most money. Triple play packages consisting of television, broadband, and phone service are the most economical when considering the cost of each service. But it is also a good idea to consider whether you need all three services.

The weakest link of the triple play package is the landline. If you subscribe to broadband and cable service, consider switching to a broadband-based phone company like Ooma, which received a high rating from Consumer Reports. After an initial investment of around $150 for the equipment, the price of the phone service itself is next to nothing and includes nationwide unlimited calling. Ooma basic customers only pay for FCC-mandated fees and local taxes and surcharges. Combined these are usually well under $7 a month. Ooma Premier customers pay $119.99 a year and get a free number transfer, free calling to Canada, the choice of a Bluetooth Adapter, Wireless Adapter or Extended Warranty, a large list of calling features, a second line, voicemail, and free mobile calling minutes.

This cable box is free through 2015. A traditional set top box from Time Warner costs $8.49/mo.

This digital adapter cable box is free through 2015. A traditional set top box from Time Warner costs $8.49/mo.

Next consider your current cable television package. Scrutinize your bill for add-on fees, especially for digital/HD add-on packages for channels you may never watch. Do you still need to pay for HBO, Cinemax, Showtime, and Starz? Consider Netflix, Redbox, and Amazon video — among others — to satisfy your movie needs without paying more than $15 a month for HBO alone.

Equipment fees may also make up a substantial portion of your bill. If you pay separately for DVR equipment and service, you are probably paying Time Warner’s regular customer rates. Seize the opportunity to demand a better deal. Customers with multiple set top boxes may want to consider ditching them on secondary sets, especially if they don’t need an on-screen program guide or access to on-demand programming.

Time Warner is offering customers “digital transport adapters” (DTAs) at no cost through 2015. These boxes, a fraction of the size of a traditional set top box, will allow older sets to access most digital channels that are included in your cable television package. But a DTA won’t work with on-demand programming or premium channels, at least for now. The devices also do not support a handful of digital channels that Time Warner provides under a bandwidth-saving scheme that only delivers a network if a customer with a traditional set top box actually starts to watch. In western New York, we found about 10 unavailable channels, virtually all very minor networks that won’t prove much of an inconvenience. Using a DTA instead of a set top box can save up to $8.50 a month for each cable box it replaces.

If you subscribe to Time Warner Cable broadband and are paying the company’s $3.95 a month modem rental fee, you are throwing your money away. Invest in purchasing your own cable modem. They are simple to install and are reliable. You’ll earn back the purchase price in as little as a year. Now may also be a good time to review your speed needs. Time Warner recently boosted its standard broadband speed to 15/1Mbps. If you pay extra for Turbo, this might be a good time to consider dropping it if you don’t need the incrementally faster 20Mbps download speed Turbo offers.

N.Y. Assemblyman Tells Time Warner Customers to Buy Their Own Cable Modems

Phillip Dampier January 14, 2013 Consumer News Comments Off on N.Y. Assemblyman Tells Time Warner Customers to Buy Their Own Cable Modems
Cahill

Cahill

A New York assemblyman is telling his upstate constituents to stop wasting money on Time Warner Cable’s monthly broadband modem equipment fee and buy your own device.

“I want consumers to know that they do not have to waste their hard-earned money on a product which was considered free for years,” said Assemblyman Kevin Cahill (D-Kingston) in a statement to members of his district. “Over the course of a year or two, depending on the model, the purchase of a new modem will pay for itself. Additionally, the models for purchase have more features than leased modems, like faster speeds and the capability to handle unlimited wireless devices.”

Time Warner expects less than three percent of its customers will take Cahill’s advice and avoid the $3.95 monthly fee, which opens a new, lucrative revenue stream for a cable operator that already enjoys up to 95 percent gross margin on its broadband service.

Cahill complained the 1996 U.S. Telecom Act prohibits the state’s Public Service Commission from intervening, but reminded customers there is a joint New York-New Jersey class action lawsuit against the cable operator over how the modem fee was implemented.

As of Jan. 14, Time Warner Cable has approved the following modems-for-purchase that can be activated for use with its broadband service, with our recommendations in red:

Turbo, Extreme and Ultimate Service Plans

Vendor Model
Motorola SBG6580
Motorola SB6141  Recommended
Netgear CMD31T
Motorola SB6121
Zoom 5341J
Zoom 5350

Lite, Basic and Standard Service Plans

Vendor Model
Motorola SBG6580
Motorola SB6141  Recommended
Motorola SB5101
Motorola SB5101U
Motorola SBG901
Netgear CMD31T
Motorola SB6121
Zoom 5341J
Zoom 5350

HissyFitWatch: Rattling Time Warner Cable’s Cage Nets Reader Cable Modem Fee Rebate

Phillip Dampier November 14, 2012 Consumer News, Data Caps, Editorial & Site News 6 Comments

Time Warner’s maze of explanations and excuses still don’t add up.

Instead of waiting for the outcome of a class action case against Time Warner Cable’s new $3.95 monthly modem fee, readers might do better taking their case direct to the company. Longtime Stop the Cap! reader “PreventCAPS” rattled the cages of Time Warner’s social media customer service representatives, which resulted in credits worth six months of modem rental fees.

Our reader tells us he brought pointed questions about the modem fee, complaints about the inconsistent reasons for imposing them, and irritation about the lack of notification.

Some Q&A:

Q. Why is Time Warner Cable now charging a modem fee? Earlier reports that the fee would cover the cost of equipment do not make sense because the company is not automatically supplying customers with new cable modems and already assesses $24-150 penalty fees to “cover costs” of damaged or unreturned cable modems. 

A. Time Warner Cable now says the fee is to cover the costs of increasing broadband speeds. A representative explained that the company wants to make sure everyone can be assured of getting the speeds advertised, and there are still customers with DOCSIS 1x equipment that can only support broadband speeds up to 9Mbps, which already conflicts with the company’s advertised 10Mbps Standard Service speed (soon to be 15Mbps).

Our Take: DOCSIS 1x equipment was recalled from western New York customers years ago. It was first introduced locally in 1998 and is long past its expiry date. It is a safe bet only a very tiny percentage of Time Warner customers still have first generation equipment. The overwhelming majority of current broadband customers have DOCSIS 2 modems, many installed years earlier. Those customers will keep that equipment for years to come unless they choose to upgrade to 30/5Mbps speeds or higher because a DOCSIS 3 modem is required for faster speeds. Our reader pointedly asked if the new modem fee guarantees every customer will receive the newest equipment and increased service. The answer in response was “no.”

These phony explanations and justifications tapdance around the reality this modem fee is being introduced as a revenue enhancer — nothing more, nothing less.

Customers are not buying this!

Q. Why is the list of supported DOCSIS 3.0 modems so thin and limited?

A. The representative speculated the reason Time Warner Cable so heavily favored Motorola equipment came from contractual support agreements and guarantee obligations with that company. But the representative claimed Time Warner Cable “will activate and support any modem model they currently lease to customers.”

Our Take: This claim represents a new development, but one unlikely to prove consistent across the country. Time Warner Cable’s national call centers have employees currently trained to activate and support only those modems on the approved list. However, local technical support and “Tier 3” agents inside of local offices seem to have a more flexible attitude about accepting other equipment. This is a classic case of “your results may vary.”

Q. Why are there modem fees for Internet service but no modem fee if I use the exact same equipment for my Time Warner Cable phone service.

A. The representative claimed it has to do with Federal Communications Commission rules governing phone equipment.

Our Take: We are not certain what rules would apply in this case, but it is possible the company’s lawyers found some “exposure” if Time Warner began charging the fee for phone service equipment. Again, we suspect the fee applies to broadband primarily because it is the service customers are least-likely to cancel over a price hike. Phone service is more tenuous. Increase the price and disconnect requests are likely to rise.

Q. Why are these fees being instituted to “cover costs” when records show capital expenses for Internet service (and cable modem equipment) have dropped for the past three years in a row?

A. The representative claimed that capital costs don’t cover cable modems.

Our Take: That answer is completely inaccurate. Nice try. Stop the Cap! earlier reported that capital expenditures for customer premise equipment dropped for the last three years in a row. For the benefit of readers (and Time Warner Cable), here is the company’s own definition of that equipment¹:

“Such equipment includes digital (including high-definition) set-top boxes, remote controls, high-speed data modems (including wireless), telephone modems and the costs of installing such new equipment.”

 ¹- Time Warner Cable 2011 Annual Report, “TWC’s capital expenditures,” p.60

Search This Site:

Contributions:

Recent Comments:

Your Account:

Stop the Cap!