Time Warner Cable today announced major improvements in its service, including a tripling of broadband speeds and equipment upgrades that will first arrive in New York City and Los Angeles.

With the cable company facing a hostile takeover effort by Charter Communications with Comcast’s help, CEO Rob Marcus sought to appease shareholders that worry the cable company’s recent lackluster results originate from outdated technology, poor customer service, and broadband speeds that are well below the cable industry average.

Time Warner Cable will have to increase capital spending to pay for the upgrades, expected to cost $3.8 billion annually for the next three years.

CEO Rob Marcus calls the effort a “transformation of the Time Warner Cable customer experience.” The upgrade program is called TWC Maxx for now inside Time Warner Cable, but will have its own brand when it publicly launches later this year.

Here are some highlights:

Marcus

TV Service

• Network infrastructure upgrades to enhance reliability
• New advanced set-top boxes
• A six-tuner DVR
• A cloud-based interface and navigation
• An expanded on-demand library

Internet

• Dramatic free speed boosts for all customers
• A new Ultimate speed tier of 300/20Mbps

Unfortunately, customers outside of Los Angeles and New York will have to wait up to two years for the upgrades to reach their community.

“With ‘TWC Maxx,’ we’re going to essentially reinvent the TWC experience market–by-market,” said Marcus. “We’ll triple Internet speeds for customers with our most popular tiers of service, add more community WiFi, dramatically improve the TV product and, perhaps most importantly, we’ll set a high bar in our industry for differentiated exceptional customer service. We’re focused on providing the features and benefits that matter most to our customers.”

The most noticeable improvement will be free broadband speed upgrades. Customers with Standard or above Internet service will also receive the latest generation cable modems including Advanced Wireless Gateways for customers with Turbo to Ultimate tier service. Marcus did not say whether the company is ending is monthly equipment fees for cable modems.

Here are the new speed tiers:

• Everyday Low Price – Currently 2/1Mbps – New 3/1Mbps
• Basic – Currently 3/1Mbps – New 10/1Mbps
• Standard – Currently 15/1Mbps – New 50/5Mbps
• Turbo – Currently 20/2Mbps – New 100/10Mbps
• Extreme – Currently 30/5Mbps – New 200/20Mbps
• Ultimate – Currently 50/5Mbps – New 300/20Mbps

New York and Los Angeles Upgrade Schedule

The first four network hubs scheduled for upgrade are those in West Hollywood and Costa Mesa, Calif. and portions of Woodside (Queens) and Staten Island, N.Y. The rest of both cities will be upgraded by the end of this year.

Los Angeles customers will also see analog cable television service discontinued in favor of digital later this year. New York City has already been converted to all-digital television. Customers in both cities will be able to schedule same-day appointments and one-hour service windows.

Who Gets Upgraded Next?

Analysts expect Time Warner Cable will upgrade cities where they face competition from U-verse and FiOS after completing NYC and LA.

Analysts say Time Warner Cable’s upgrade plans are more aggressive than initially anticipated and many expect the company to move quickly, especially in competitive markets, to boost subscriber numbers and cut customer defections to help convince shareholders it is worthwhile to reject Charter’s hostile takeover bid.

The most likely markets to be targeted for upgrades after New York and Los Angeles are those facing stiff competition from Google Fiber and Verizon FiOS. Cities where AT&T U-verse delivers competition are likely to come next, and those cities where Time Warner Cable only faces competition from telephone company DSL service will likely be the last to be upgraded. However, long before that, Time Warner Cable could be sold off to other cable operators that will make these upgrade plans moot.

Marcus today reiterated his rejection of Charter’s latest $132.50 a share offer. Marcus said the cable company is only interested in an offer above $160 a share, and that at least $100 of that must be in cash, with the balance in Charter stock. Charter will have trouble delivering that amount of cash without the assistance of other cable operators.

Craig Moffett with MoffettNathanson Research isn’t sure Marcus’ plans are enough to keep TWC from being sold. He expects Charter to soon increase its offer above $140 with the help of Comcast, which is willing to pay cash for Time Warner Cable systems in New York, New England, and North Carolina after a deal with Charter is complete.

[flv]http://www.phillipdampier.com/video/Bloomberg Rob Marcus Interviewed 1-30-14.flv[/flv]

Robert Marcus, chief executive officer of Time Warner Cable Inc., talks about the cable company’s fourth-quarter earnings and its forthcoming upgrades, and Charter Communications Inc.’s $37.4 billion buyout bid. Time Warner Cable beat fourth-quarter profit estimates and forecast subscriber growth. Marcus speaks with Betty Liu on Bloomberg Television. (8:38)

Robocallers pitching extended auto warranties, home alarm systems, lowered interest rates on credit cards, and more are back in business, despite the “Do Not Call Registry” from the Federal Trade Commission designed to stop the junk phone calls.

Rogue telemarketing has gotten so out of hand, the very federal agency responsible to help stop the torrent of unwanted sales calls had to post a warning about telemarketers misrepresenting themselves as FTC agents on its own website.

The FTC acknowledges it has an uphill battle.

“Our law enforcement actions have already halted billions of robocalls, but with today’s technology, tens of millions can be blasted each day — at a per-minute calling cost of less than 1 cent,” said Federal Trade Commission official Lois Greisman, who oversees the National Do Not Call Registry.

Identifying violators has become increasingly difficult as scammers learn to fake (or ‘spoof’) call origination data that shows up on your Caller ID display.

“Dozens and dozens of spoofed numbers can be used per robocall campaign, and telemarketing scripts are shared as well,” says Greisman, explaining why you may get the same rip-off recording from different incoming numbers.

The most recent trick is to spoof a Caller ID number that appears local, increasing the odds you will pick up the phone. Instead of a family friend on the other end, it is a recorded pitch offering to refinance your mortgage.

A desperate FTC concluded it might be in over its head and launched a contest offering $50,000 and a trip to Washington, D.C. for anyone offering a better solution.

The winner: Nomorobo

Nomorobo is the idea of Steve Foss and it tied first place in the FTC Robocall Challenge.

The free service works with most Voice over IP phone lines (think Vonage or a phone line supplied by your cable operator), but has gotten a mixed reception from wireless carriers and landline giants Verizon and AT&T.

It works with a phone feature called “Simultaneous Ring,” which means when a person calls your number, Nomorobo’s “phone” is also ringing just long enough to collect Caller ID information to compare against its master-telemarketer list. If the number is a known phone spammer, Nomorobo intercepts the call and hangs up on the caller after the first ring. Your legitimate calls still arrive with no interference.

Some phone companies known to support Nomorobo, but not necessarily the only ones:

• AT&T U-verse
• Cablevision Optimum
• SureWest
• Time Warner Cable
• Verizon FiOS
• Vonage

Phone companies like AT&T and Verizon have so far refused to support the service for its landline and wireless customers.

After registering, Nomorobo will guide new users through the simple set up process step-by-step.

The system does not track your incoming calls nor does it monitor them. If an unwanted telemarketer does get through, a report option on the website will help get the unwanted caller’s number into the database.

Stop the Cap! has tested the service and found it effective in blocking about 75% of the unwanted calls that arrive in our office. Our phone rings just once — long enough for caller ID information to be passed — and when the system identifies a known phone spammer, it disconnects them. But the system is not perfect. Telemarketers can theoretically change their spoofed Caller ID number(s) to get around the call block, and we found Nomorobo’s database only as good as the crowdsourced data allows.

Nomorobo also won’t stop political or non-profit groups from calling, at least for now. Our second biggest problem — calls from collection agencies hounding the last owner of our phone number, also remain unaffected.

[flv]http://www.phillipdampier.com/video/KNXV Phoenix Block robocalls for free with new website 10-15-13.mp4[/flv]

KNXV in Phoenix explains Nomorobo to its viewers. The service works mostly with Voice over IP providers, which leaves a lot of AT&T and Verizon customers unprotected. (2:04)

AT&T has got your number.

AT&T wants to know what you are doing on the Internet.

If you agree to share your browsing history and view targeted contextual advertising from AT&T and its partners, the company will give you a monthly discount off the price of its new GigaPower gigabit fiber network.

Now launching in Austin, AT&T GigaPower charges $99 a month for 300Mbps standard service (speeds will be raised to 1,000Mbps in 2014 at no extra cost — equipment, installation and activation fees are extra). But customers can knock $30 off the monthly price and skip the new customer fees by enrolling in AT&T’s new “Premier” package, which runs $70 a month.

GigaOm discovered some interesting language in AT&T’s fine print about its Premier service: “[The discount] is available with your agreement to participate in AT&T Internet Preferences. AT&T may use your Web browsing information, like the search terms you enter and the Web pages you visit, to provide you relevant offers and ads tailored to your interests.”

Exactly how AT&T intends to implement its contextual advertising program remains largely a mystery. Google includes contextual ads in its Gmail service, its search engine results, and in online advertising from participants in Google’s AdWords program. AT&T lacks an advertising platform as large as Google or Microsoft’s Bing, so questions are being raised about how exactly AT&T will be able to find enough places to present online ads.

GigaOm suspects AT&T might use deep packet inspection to monitor customers’ web traffic to collect browsing information for contextual ads. Others suspect AT&T will replace certain existing third-party ads found on independent websites with its own advertising. Either is likely to bring the company scrutiny, both from Internet Privacy advocates and website owners that find their advertising replaced by ads from AT&T and its partners.

AT&T’s response to GigaOm left a number of questions unanswered:

We use various methods to collect web browsing information, and we are currently reviewing the methods we may use for the Internet Preferences program. Whichever method is used, we will not collect information from secure (https) or otherwise encrypted sites, such as online banking or when a credit card is used to buy something online on a secure site. And we won’t sell your personal information to anyone, for any reason.

[…] We won’t sell your personal information. Rather, AT&T may use your personal information to direct another advertiser’s ad to you, but that advertiser would never have access to your Personal Information. For example, after you browse hotels in Miami, you may be offered discounts for rental cars, but that rental company doesn’t know who you are.

AT&T is experimenting with consumer acceptance of discounting service in return for giving up some privacy. It says it is giving customers the choice to opt out by signing up for the more expensive “standard” service.

U-verse television service is also available to customers of both packages for an extra $50 a month. Telephone service adds another $30 a month.

AT&T has started rolling out its GigaPower service in the French Place, Mueller, Zilker, and Onion Creek neighborhoods and will select future places to expand based on interest registered by local residents on AT&T’s GigaPower website.

“We’ve already received great input from thousands of Austinites eager for the fastest speeds,” said Dahna Hull, general manager of Austin’s AT&T Services, Inc. “These votes are helping us identify where the need for speed and advanced TV services is the greatest and will help guide our future GigaPower expansion plans.”

[flv]http://www.phillipdampier.com/video/KXAN Austin Internet speed race in Austin is on 12-11-13.mp4[/flv]

Options for super high-speed Internet are heating up in Austin as AT&T introduces AT&T U-verse with GigaPower this week. KXAN reports the service will initially launch with 300Mbps service in a handful of neighborhoods, but upgrade to 1,000Mbps speeds in more locations next year. (2:30)

Is your promotion with AT&T U-verse coming to an end? Are you actually paying regular price for Internet, phone, or television service? Why?

“AT&T will do whatever we can to keep your business,” an AT&T customer retention specialist tells Stop the Cap! “If you seem serious about canceling service by quoting us rates from one of our competitors, we will give you an even better deal to stay with us with faster speeds and a lower price.”

AT&T has been attempting to improve its “promotional churn” numbers — the percentage of customers who switch to AT&T U-verse with a special deal only to cancel after the promotion ends. So far, it seems to be working, especially in the Midwest where AT&T’s pricing has been so aggressive, Time Warner Cable admitted it has had trouble keeping customers and winning former ones back.

Providers are especially vulnerable when promotional packages expire and rates reset to the regular retail price, often $30-80 or more a month, depending on the number of services. When the first bill reflecting non-promotional pricing arrives, a lot of customers with bill shock consider their options and some leave for a better offer elsewhere.

Time Warner Cable handles this by offering a less generous, follow-up promotion when the original one expires. AT&T usually waits until customers try to cancel service before a “customer retention” specialist goes to work to save the account.

An AT&T customer service representative working in AT&T’s customer retention department talked with Stop the Cap! this week about AT&T’s current pricing and promotions, but requested anonymity because she was not authorized to speak with the media.

“When a customer calls in and asks to cancel service, those calls are automatically passed on to our department to change the customer’s mind,” says our source. “We take calls of all kinds including profanity-laced, ‘one-way’ conversations from angry customers upset about poor service, those fishing for a better deal, and those that have already set up an installation appointment with a competitor.”

“We are trained to resolve customer concerns, so the guy who loses U-verse service during Sunday football doesn’t need a lower rate, just a serious effort to stop those outages from repeating,” says our source. “We’re worried the most about customers who can quote our competitor’s best promotional offer and are prepared to switch immediately. These customers are clearly price shopping so we have to find ways to lower our price, improve our service, or a combination of both or the customer will walk.”

With U-verse still being a relatively new product, AT&T invests a considerable amount of money to provision service to new customers. To recoup that investment, AT&T needs customers to maintain service for at least a few years. If a customer cancels as soon as their promotion expires, AT&T will lose part of that investment.

“It is actually better for us to upgrade your service and even cut your price than to lose your business, so we do exactly that,” our source says. “That is why our best retention offers are not available to new customers. That is actually a good thing in my view because we’re treating our current customers better than those who are not,” she adds.

Stop the Cap! has assembled a guide to help current AT&T U-verse customers snag one of these retention deals and save. However, please be aware your results can vary based on a number of factors including: your past payment history (chronic late-payers will not qualify for the best offers), the level of competition in your area, the customer service agent you are dealing with, and the perceived seriousness of your threat to cancel service.

We have focused most of our attention on the broadband part of U-verse, but those with bundled service can also get some attractive retention deals.

“It doesn’t hurt to ask even if you are still on a contract,” says our source. “Although we won’t give contract customers the best deals, we can often offer a free speed upgrade through the customer retention department.”

What about U-verse’s 250GB usage cap?

“It’s not enforced in most areas and I’ve never seen a customer call to cancel because they had overage fees on their bill,” says our source. “If they did, I’m sure we’d just credit them. I don’t see us losing a customer over this.”

Getting Prepared

You will be calling AT&T. Do not bother using their online chat support, e-mail, or snail mail to ask for a better deal. You will not get one. AT&T’s approach to customer retention requires a specially trained representative to speak with the customer by phone.

Visit the website(s) of the cable company and any other competitors serving your area. You will need to have specific pricing and service details handy when asking AT&T for a better deal. “Don’t make it up, because we will likely take a look at the same information you found and point out any fine print that might make a competitor’s deal less attractive,” says our source. “We are asked to document these details in the notes we place on your account. These are available to any other representative that looks at your account.”

Think about what is most important to you, upgraded service for the same price or a lower bill. The representative will have a few different retention offers to choose from, and in some cases a supervisor may need to authorize the better-priced deals. Most will require a one-year term contract.

Making the Call

A lot of customers want a better deal but don’t want to feel stressed out asking for one. Don’t worry. In most cases the entire process will take less than 15 minutes. But it helps if you can call when you are free of distractions or pressured for time. Hold times might vary and in some cases a less-than-helpful representative might require you to start negotiations over with someone else.

Have paper and pen ready to take notes. You will want to write down the name and extension of the representative and details about the types of retention plans being offered, especially if AT&T manages to ‘lose the paperwork.’

Do -not- call AT&T’s regular customer service number. Instead, call 1-800-288-2020. You will be prompted to select your state, asked for the phone number associated with your account, and offered a menu of choices to proceed. You need to say or select the option to “cancel service.” This will route you directly to a customer retention specialist.

Making Your Case

You: I am calling to cancel my U-verse service. I have been offered a better deal with the cable company.

AT&T: Really? We don’t want to lose you as a customer so let me pull up your account. Can you tell me what our competitor is offering?

At this point, you want to quote the deal you found on the competitor’s website and quote the offer. Let the representative know you are switching because of the price and/or features.

An alternative approach that has also proven effective:

You: I just received an offer from my cable company that has made me seriously consider switching but I wanted to reach out to AT&T to see what you could do to keep my business. I’d like to learn what promotions I might qualify for.

AT&T: Let me check. Tell me what the competitor is offering you.

You: (Describing the offer) There are certain things I like about the offer from the cable company but I could be persuaded to stay with U-verse. I am just concerned because for the amount you charge for broadband service, I can get faster speed at a lower price with the cable company. Are there any promotions that can boost my speed and offer me a better deal?

When the representative comes back on the line, they will usually offer a small discount or service credit ranging from $5-10. But better deals come to those who hold out.

You: My neighbor is getting a better deal than that. He received a speed upgrade and is paying something close to half the regular price for the next year. Is there anything like that available?

AT&T: Let me check. Yes there is, but I will need to speak to my manager.

“When we put you on hold to ‘speak to a manager’ this usually means we are putting notes on the account to justify the higher value retention deal we are about to offer,” says our source. “But if something unusual comes up, like a one-time credit or waiving an equipment fee, we may need a supervisor’s approval.”

Stop the Cap! has verified some valid U-verse retention deals that are commonly available throughout the United States. In some highly competitive areas, these deals are often sweetened with a $100 service credit instantly applied to your bill. You can always ask. Although AT&T might offer some of these for six months, most can be extended to 12 months upon request. Be ready to commit to AT&T for the next year to avoid any early termination penalties in the typical 12 month term contract that comes with these offers.

It is important to be flexible and don’t fixate on any particular element in an offer. A representative may not be able to waive surcharges like a modem rental fee (buy your own) or a Local TV Surcharge, but they can usually find a deal that more than compensates you with a much-reduced rate.

If the representative seems reluctant to extend an offer to you, thank him or her for their time and call back and speak with someone else. Some AT&T representatives are more helpful than others.

Frequently Seen U-verse Promotions

• Broadband-only service: 3Mbps for $14.95/mo, 6Mbps for $23, 12Mbps for $25, 18Mbps for $28, or 24Mbps for $33 (Buying your own modem avoids rental fees but if you plan to rent, ask if there are any promotions that reduce or waive the fee);
• Bundled TV/Internet Service:  The most commonly available offers bundle 18Mbps broadband with U300 service at prices that range from $101-103, although $104/month can upgrade you to 24Mbps with U300 in certain parts of Florida. (1-yr contract)

“We really aren’t routinely offering many deals for speeds above 24Mbps because too many customers don’t qualify for faster service,” says our source. “Offering something they can’t get only further disappoints them, which is something we prefer to avoid.”

AT&T this month signed up their 10 millionth customer to U-verse High Speed Internet service, surpassing Verizon FiOS as the nation’s biggest telephone company supplier of broadband, television, and telephone service. Coinciding with that success, AT&T is raising prices for U-verse, despite AT&T’s record earnings from the fiber to the neighborhood service, now accounting for $1 billion a month in revenue.

AT&T is protecting its broadband flank by convincing current DSL customers to switch to higher-speed U-verse broadband as the network upgrade reaches into more homes across AT&T’s service areas. In the last quarter U-verse picked up 655,000 new broadband customers nationwide, many upgraded from traditional DSL. Where AT&T has not invested in U-verse upgrades and cable competition exists, results are not as good. AT&T lost 26,000 DSL customers last quarter, most moving to cable broadband.

“This latest milestone shows how U-verse is helping transform AT&T into a premier IP broadband company,” said Lori Lee, senior executive vice president, AT&T Home Solutions. As of the third quarter of this year, total U-verse high-speed Internet subscribers represented about 60 percent of all wireline broadband subscribers, compared with 43 percent in the year-earlier quarter.

Verizon FiOS, in comparison, has signed up just 5.9 million customers FiOS Internet subscribers on its stalled fiber optic network. Most Verizon broadband customers with no FiOS in their future either stick with DSL service or, increasingly, switch to a cable competitor for faster speeds.

Some of AT&T’s strongest U-verse growth came from its TV package. At least 265,000 cable and satellite cord-cutters looking for a better deal switched to U-verse TV in the last three months, a gain from 198,000 at the same time last year. That’s the second-best quarterly gain ever. A total of 5.3 million AT&T customers subscribe to U-verse TV.

Much of the growth has come from AT&T’s investment in expanding U-verse to new areas. Project Velocity IP is a three-year, $14 billion plan to upgrade AT&T’s wireless and wired broadband networks. AT&T has added almost 2.5 million more homes to its broadband footprint so far this year and hopes to expand broadband availability to reach about 57 million customers by the end of 2015.

Although $14 billion is a significant investment, AT&T has spent considerably more on its shareholders. John Stephens, AT&T’s chief financial officer told Wall Street analysts AT&T has bought back 684 million shares of stock that will save the company more than $1.2 billion in future dividend payouts.  Combined with its dividend payout, AT&T has handed shareholders $18 billion so far this year and more than $40 billion since the beginning of 2012. AT&T expects to spend $20 billion on wireless and wireline network improvements in 2014.

AT&T’s speed upgrades have also not run as smoothly as AT&T claims. Efforts to increase speeds to 45Mbps in 79 markets has had mixed results with a significant number of customers complaining they cannot get qualified for the faster speeds because of infrastructure problems with AT&T’s network. The company still says it is on track to offer 75 and 100Mbps speed tiers in the future and is building a fiber to the home network in Austin to compete with Google.

Many customers who have been with AT&T for more than a year are learning better service does not come for free. AT&T has filed rate increases for its television service beginning Jan. 26, 2014 for customers not on a pricing promotion. The monthly price for the following U-verse TV service plans will increase $3, along with fee hikes for local stations and equipment, bringing AT&T at least $15 million in extra revenue each month:

• U-family to $62;
• U200 to $77;
• U200 Latino to $87;
• U300 to $92;
• U300 Latino to $102;
• U450 to $124;
• and U450 Latino to $134.
• Grandfathered plans also will increase $3: U100 to $64 or $69, depending on when first ordered; and U400 to $119.

• The monthly price of each non-DVR TV receiver will increase from $7 to $;
• Beginning on February 1, 2014, the Broadcast TV Surcharge will increase $1 to $2.99 per month to recover a portion of the amount local broadcasters charge AT&T to carry their channels.

Those customers who have a U-verse TV pricing promotion will continue to receive the promotional benefit until the applicable promotion ends or expires.  Customers are being notified of these changes via bill messaging occurring in November and December and a reminder in January and February 2014.  In addition, customers will be notified of these changes online at www.att.net/uversepricechange and att.com/uversesupport.

[flv]http://www.phillipdampier.com/video/ATT U-verse with GigaPower — Reactions 11-13.mp4[/flv]

AT&T is trying to get ahead of Google by advertising AT&T U-verse with GigaPower, a 1,000Mbps fiber to the home service promised in Austin sometime in the future. (0:30)