Rogers Communications, Canada’s largest cable operator, told investors at an investment bank conference it intends to accelerate plans to monetize wireless and broadband data usage this year.

Anthony Staffieri, chief financial officer of Rogers Communications told attendees at Morgan Stanley’s Technology, Media & Telecom Conference that Rogers’ future revenue outlook was going to be data-centric.

“We think data, monetizing data, is going to be a key aspect of that, both on the wireless side, as well as on the cable side of things,” Staffieri said.

Staffieri

Key to Rogers is the development of data plans that maximize revenue potential by exploiting the customer’s discomfort with overlimit fees. Staffieri admits the company has plans that can cost the company revenue if customers downgrade to a usage bucket that brings them very close to their usage limit.

But most customers do not choose those “exact fit” data plans. They typically select more expensive, larger-bucket plans so they can rest easy knowing they will not get slapped with a overlimit fee.

“And so they’re coming into data plans that are probably more than they need,” Staffieri said. “But for most users, what they’re looking for is comfort in usage. And so what we found is there’s a preponderance to buy more than what you need. So there’s no surprise at the end of the month in terms of billing. And so it’s all about that comfort in usage that we’re focused on in the price plans.”

In wireless, Rogers is also counting on the explosive growth of usage that comes after introducing 4G LTE coverage.

“Simply on 3G to LTE, you see an immediate growth in data usage,” Staffieri said. “Same users, but if you were to look at the data set, it’s just within a defined period of time, they can just access more. And so for whatever reason, whatever they’re doing with it, it’s just driving more usage, more efficiency and they’re using it in the business context.”

Staffieri says Rogers is experiencing 30-50% increases in data usage year over year. Rogers introduced new wireless plans in the fall of 2012 that refocus customers on their anticipated data usage, with gradually more expensive wireless plans to match.

“That really gets the customer focused on choosing something that continues to drive data growth,” Staffieri noted.

Rogers Cable broadband customers have also faced data caps and consumption-oriented billing for years. Although Rogers competitively responded to a Bell offer introduced in January that includes unlimited use service for customers who want it, that option comes at an added cost — one that can be priced up or down according to marketplace conditions.

Rogers primary focus is on encouraging its cable broadband customers to move towards higher-speed, more expensive data plans.

MONETIZED: Rogers sells a 25/2Mbps broadband plan for $52 a month that includes only an 80GB monthly usage allowance. A $2/GB overlimit fee applies, up to a maximum of $100 per month. Taxes, a modem rental fee or purchase, a one-time activation fee of $14.95 and up to a $99.99 installation fee also apply.

“On the cable side, making sure we have the best Internet experience was the other piece of it,” Staffieri said. “We ended the year with 90% of our footprint able to get 150Mbps data speed ($122.99/mo with 250GB usage allowance). And so to the extent that we continue to lead on Internet, we think that’s going to be important ingredient for the top line [revenue] growth.”

On the wireless side, Rogers is following the lead of big providers in the United States and gradually shifting the cost of new smartphones away from itself and onto its customers by adjusting its subsidy program.

“As we see data [usage] pulling [revenue] growth, overall, that bodes well for a continuation of the subsidization,” Staffieri said. “For us, it’s really been about making sure that we give the customer choice. And so when we combine that with the introduction of the Flex Plan, which we did in 2012, what we’re seeing is more and more customers opting into new handsets. But more and more, it’s on the customer’s nickel as opposed to our nickel on the Flex Plan programs.”

Rogers Wireless’ Individual plans. Rogers’ customers have to pay extra for long distance calling — most plans only cover local calls. Data plans are stingier and more expensive than what most Americans pay, and steep overlimit fees up to $0.02 per megabyte ($20/GB) apply. Like in the United States, Rogers is moving to bundle unlimited calling and texting into more of their plans. What differentiates more plans today is how much data usage is included.

Staffieri admitted Bell is giving Rogers the most competitive headaches in Ontario because of their aggressively priced promotions.

“Certainly, [Bell’s Fibe IPTV] has been competitive for us. In the short-term, we continue to deal with what I would consider to be aggressive pricing in terms of acquisition and retention offers by our IPTV competitor,” said Staffieri. “We’ve always been competing with their satellite product and so that competition has always been there. But I would describe it as certainly having picked up and continuing to pick up. And it’s largely been through pricing offers as opposed to product.”

Staffieri says Rogers is competing with improved set-top equipment like the NextBox 2.0 — a whole-home DVR with an improved user interface. It also offers customers Anyplace TV, a TV Everywhere service that allows customers to watch the Rogers’ TV lineup on tablets inside the home.

The Toronto Maple Leafs, the National Hockey League’s most valuable sports franchise, is today 75% co-owned by Bell Canada Enterprises (BCE) and Rogers Communications.

As is the case in the United States, Canadian cable companies are also facing dramatically increasing programming costs, particularly for sports programming.

But to a greater degree than in the U.S., Canadian media conglomerates own and control a larger share of cable and broadcast networks, programming producers, would-be competitors like satellite television, and even sports teams and the networks that show their games.

That positions them to negotiate with themselves over content costs, because they own or control the sports franchise, the cable or broadcast network that televises their games, and the cable, satellite, or telephone provider through which most Canadians watch.

“We’ve tried to be disciplined on the extent that content price increases are there because consumers want it, then we want to make sure we’re disciplined in passing on that cost to the customer,” Staffieri said. “And so we strive to make sure that in the TV and video business our gross margins are consistent.”

“So if you were to look at how that’s played out over the last several quarters and several years, it’s been fairly consistent. And so that’s what we strive to do is to make sure that those programming costs ultimately are passed on to the consumer, which is ultimately driving up the cost through their demand.”

While Windstream continues to heavily lobby the Georgia legislature for a bill that would ban competition from publicly owned broadband providers, the company is doing little to address the growing concerns of its own broadband customers getting poor service.

Mark Wyatt, a Windstream customer fed up with not getting the broadband speeds he pays for, launched a Facebook group in January to collect evidence and attempt to leverage the company to fix its problems. Wyatt, like many other customers in rural Georgia, has only one option for broadband service — Windstream.

Now the growing Facebook group has gotten attention from an Atlanta reporter who wants customers to record videos detailing their broadband problems with Windstream for an upcoming news report.

Jeff Chirico at WGCL-TV, the Atlanta CBS affiliate, has a call out for videos due by March 6:

I’m a reporter for CBS Atlanta News. I want to hear from Windstream customers in Georgia about their experiences with the company’s Internet service. Please shoot a video (30 seconds or less) explaining the speed of Windstream’s service and how it impacts you, your family or your business. Please include your name and city and download it to our dropbox account. http://dropbox.yousendit.com/JamesEstes539379

Also, feel free to follow me on Twitter @CBSATLChirico or find me on Facebook http://www.facebook.com/JeffChiricoCbsAtlanta

The horror stories are already clear all over Windstream’s service areas:

Don Jackson, who lives outside Milledgeville pays Windstream for 6/1Mbps service. On a good day, he gets 750kbps after 4pm every day, and speeds do not improve until the early morning hours.

“I talked with a local manager and he said that there is no solution anytime soon,” Jackson reported. “I have screen shots of speed tests from different sites for months to demonstrate that this is not a fluke but a fact. I have complaints on file with the FCC and BBB of Arkansas, [which handles complaints regarding Windstream].”

Adam Ridley qualified and pays for 3Mbps broadband service from Windstream, but that is not the speed he actually receives.

“It’s 9:40pm and I’m rocking my 210kbps connection — 7% of the speed I pay for,” he reported last night.

Rodney Gray pays Windstream a premium for 12Mbps service, but the phone company does not come close to delivering those speeds. His service actually ranges from 580kbps-1.4Mbps.

“My upload speed is faster than my download,” Gray complains.

A representative answering Windstream’s Complaint Line threatens a customer in Odum,. Ga. with legal action for “harassment” in June, 2012 after he complaints about Windstream’s mailers advertising DSL Internet service that is actually “not available to him this year.” (2 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Kimberly Brown’s broadband problems with Windstream are so pervasive, even the company admits there is a problem, and they have given her service credits.

“Our primary problem is dropped connections — constantly,” Brown says. “They sent a technician out because surely it must be in our lines. He told us that there is something going on in one of the main hubs or whatever, and that it should be months (if ever) that it’s fixed. Then, customer service was suddenly able to look into our account and see that we had hundreds of dropped connections in just a few days. Hundreds. To their credit, they did give us a smallish break on our monthly bill because of the aggravation.”

A typical day for the Brown family is to wake up, reset the modem, send an e-mail or two, reset the modem, try to go to a web page, reset the modem.

“It’s crazy and extremely frustrating,” says Brown. “I work from home and rely heavily on the Internet to get my job done, so this problem affects us in many ways, not just casual web surfing.”

Things are worse for Mark B. Watson, who lost his service entirely for two days.

“The bad thing is that mine and my wife’s business is located in our house,” says Watson. “Being without Internet means we are not making an income for two days. It is getting old.”

While Windstream’s broadband service is suffering, company executives are celebrating a planned major reduction in extra investment in its broadband service, telling Wall Street its broadband expansion and fiber-for-cell-tower projects are nearing completion. That could leave rural Georgia broadband customers without improved service indefinitely.

At the same time, Windstream is reportedly the primary proponent of legislation that would make sure rural Georgians have no alternatives to choose from. The company’s support for HB 282, now working through the Georgia legislature, would prohibit communities from launching their own broadband services to improve connectivity and speeds.

Let the gouging begin. Here was the price being charged by an eBay vendor this past Tuesday for the SB6141 cable modem.

A few days ago, Stop the Cap! notified readers Time Warner Cable was planning to charge a $3.95/mo modem rental fee for current High Speed Internet customers planning to keep using company-supplied equipment.

With over $300 million in potential new revenue, this new surcharge from the folks living high on 1% Mountain is guaranteed to make the cable company a tidy sum for doing… absolutely nothing. Time Warner is not improving your broadband service — they are just charging you separately for a piece of equipment needed to use the service you already paid for. It would be like selling you a lamp and then start charging an extra monthly fee to keep the power cord.

We’ve had our own illuminating experience here at Stop the Cap! headquarters finding our way around this newest surcharge — by purchasing our own DOCSIS 3 cable modem and sending the soon-to-be $47.40 a year (until the end of time) Ubee modem packing back to Time Warner. Only we can’t.

I am unsure what bothers me more: Time Warner’s scanty “approved modems for purchase list” — mostly Cadillac-priced models that would fit in at Barney’s New York or Nordstrom, the bottom feeder eBay and Amazon Marketplace sellers who are capitalizing on the modem fee by increasing their prices for customer-owned equipment to gouging levels, or Time Warner’s failure to activate customer-purchased modems because it “changed its billing system this week” in preparation for the new modem fees “and can’t activate customer owned modems at the moment.”

As Time Warner Cable customers began ordering the SB6141 online, the price doubled. This is the same vendor that charged $99.95 two days earlier.

Out of the five “approved” models, the obvious best choice for those who do not require a modem-router combination is the Motorola SurfBoard SB6141 DOCSIS 3.0 Cable Modem. It features support for 8×4 DOCSIS 3 channels, which in non-technical terms means it will handle the best speeds Time Warner is likely to offer in the foreseeable future. We do not recommend customers invest in DOCSIS 2 modems, because that technology is closer to the end of its useful life and simply will not support broadband speeds customers will crave in the next few years.

Once Time Warner Cable made the announcement, the race was on… for the handful of online retailers carrying the SB6141 to jack up the price as quickly as possible. I predicted this was likely in the comment section of our earlier piece. When the nation’s second largest cable operator plans to subject millions of broadband customers to unnecessary modem rental fees and smart customers are clever enough to avoid them, demand is going to rise. Prices would rise much faster.

In the last 48 hours, the cost of the SB6141 has literally doubled from $99 to $200 thanks to some eBay sellers looking for quick profits. This unit is now barely available from Amazon.com Marketplace vendors, typically with a waiting list, for around $130. It was selling for as little as $89 just a few weeks earlier. We even found some refurbished units on eBay that formerly sold for less than $100 now selling for $199, just after Time Warner’s new fee hit the media.

Buying a refurbished unit won’t save you much. Two days ago, this eBay vendor was charging $100 for the same used cable modem.

Finding retailers for this particular model has proven difficult and because of the relentless price gouging, we are now recommending customers hold off on buying their cable modems, at least until Time Warner expands their list of approved models or a broader number of retailers start selling the model to help force prices back down to earth. Don’t pay an eBay gouger twice the usual price!

For customers who mistakenly ended up buying our earlier recommended model we quickly crossed off the list (the SB6121), we’ve found Amazon.com especially accommodating, even supplying a prepaid return shipping label, after explaining the modem model mess to Amazon’s customer service and requesting a free return. So yes, we got stuck with the wrong model too. Sending the 6121 back is our best recommendation as Time Warner Cable customer service explained as late as this evening they cannot activate customer-owned equipment not on their approved-for-purchase list (or anything else at the moment).

Our second order, for the SB6141 at the pre-gouge price of $99 arrived this afternoon, and that led to more frustration with Time Warner Cable, who ultimately failed to activate the modem.

After a very lengthy hold time, a Time Warner representative took my modem’s MAC address to activate the device, and it failed to register. A supervisor eventually explained Time Warner Cable updated their billing system to accommodate the forthcoming modem rental charge and in the process brought down the customer-owned equipment activation system (the one that will let Time Warner know who will not have to pay the fee) earlier this week. In other words, while adjusting their billing system to charge you more, a “glitch” made it impossible for customers across the eastern United States to prevent that from happening.

The problem, it was explained, was temporary and they expected to fix it by the end of the week. After explaining today is Thursday (the end of the week is already near), I was told to “call back this weekend or Monday” and “hopefully” the problem would be fixed. Hopefully before October 15th, when the fee kicks in for the Big Apple anyway. That was 40 minutes of my life I will never get back.

One would think if Time Warner was planning to throw a Money Party for themselves, they would at least take some of the forthcoming $300 million to invest in a better way to keep customers from long hold times and inconvenience to avoid the latest unnecessary fee, only to be told everything was broken and to call back some other time. This is why cable companies regularly earn the disdain of their customers.

Most Time Warner Cable broadband customers across the country will soon pay a $3.95 a month cable-modem lease fee in an effort by the cable operator to boost revenue by as much as $300 million annually.

New York City-area customers will be the first to see the modem rental charge, and customers began receiving postcards this week informing them of the new fee, which begins Oct. 15.

“It’s an outrage considering how much Time Warner Cable is already charging for broadband service,” says Stop the Cap! reader B.J., who received notification in yesterday’s mail. “My Ubee cable modem is four years old and they want to charge almost $50 a year for something that costs $40 retail brand new? Not a chance. I am calling Verizon. Goodbye Time Warner.”

A Time Warner Cable spokesperson said the company is busily printing notification cards that will arrive in customer mailboxes across the country in the next two months.

“Customers have the choice to purchase a modem from a third-party retailer to avoid paying the $3.95 per month,” according to the cable company.

Last year, Time Warner began gradually rolling out a $2.50 modem rental fee for new customers, but exempted current ones. Now the cable operator has increased the rental fee and intends to impose it on everyone except Starter Internet, Connected Learning, SignatureHome and certain IntelligentHome customers.

The cable operator may get resistance from customers, but Wall Street analysts state other cable operators, including Comcast, already charge up to $7 a month for modem leases.

Many customers will elect to buy their own cable modem, but the cable company has severely limited its approved device list in many areas to just a single manufacturer: Motorola Mobility, despite still leasing out often less-costly models from seven other manufacturers.

“It’s convenient how they will lease out inexpensive Ubee cable modems made in China but they won’t let you buy one,” says B.J. “There is nothing wrong with Motorola modems, but it reduces customer choice.”

Time Warner Cable (and Stop the Cap!) recommends all customers who plan to buy modems choose a DOCSIS 3 model for future compatibility. The company has switched out cable modems for customers at least twice over the decade plus history of cable broadband service. If history holds, the estimated useful life for a DOCSIS 2 cable modem will probably be five years or less before future standards make them obsolete. DOCSIS 2 modems are not capable of supporting the fastest broadband speeds, while DOCSIS 3 modems often cost just a little more.

Time Warner Cable’s Approved Modem List in the Northeastern U.S. And Our Reviews (all prices approximate, from Amazon.com — consult Time Warner Cable’s website for specific modems approved in your area):

DOCSIS 3

Recommended Motorola SurfBoard SB6141 DOCSIS 3.0 Cable Modem ($100): The SB6141 is now on the approved list for most TWC service areas and has gotten excellent reviews. It is an upgrade from the 6121, now off the list of approved devices. The 6121 could only support four-channel bonding for upstream and downstream, while the 6141 supports up to eight downstream channels and four upstream channels increasing data rates to over 300Mbps for received data and over 100Mbps when sending data. The only downside is that it is harder to find in stock for purchase.

Motorola SURFboard Gateway SBG6580 DOCSIS 3.0 Wireless Cable Modem ($117): The 6580 includes built-in gigabit Ethernet and a Wireless-N router, so it theoretically could replace your home router. My personal experience with cable modem-router combinations has been less than glowing, however. Consider this only if you do not already have a Wireless-N router. This model gets overall good, but not excellent reviews.

DOCSIS 2 – Consider a DOCSIS 3 modem to guarantee future compatibility.

Motorola Surfboard SB5101 Cable Modem ($50): This workhorse DOCSIS 2 cable modem has been around since 2003 and is popular with cable companies and customers, with a proven track record of performance. But it is not DOCSIS 3-capable, which means its useful life may be shortened as cable broadband standards continue to evolve.

Motorola Surfboard SB5101U Cable Modem ($53): Functionally equivalent to the 5101, the 5101U was introduced in tandem with Motorola’s cheaper 5101N model that omitted the USB port and driver CD. Choose the 5101 or 5101U based on which model is currently selling at the lowest price.

Not recommended Motorola SURFboard Gateway SBG901 DOCSIS 2.0 Wireless Cable Modem ($84): Overpriced and mixed reviews plague this aging Motorola DOCSIS 2 modem with built-in wireless G support. You would do better buying a Wireless N router yourself, or consider the SBG6580 if you absolutely need built-in Wi-Fi.

Updated 4:54pm ET: Readers report the SB6141 now has the best chance of being on TWC’s list of approved equipment, so we’re deleting the 6121 and replacing it with the 6141. If you happened to place an order for the 6121, make sure you verify whether it is on your area’s approved list. If not, cancel the order.

Update #2 10:00am ET 10/17/12: After publishing, Time Warner Cable overhauled their entire website. We have updated the link for the current approved list. None of the models have changed as far as I can see. I have also deleted the model 6121 entirely from the story — it is not on any approved list I’ve seen. As of today, the gouging continues on eBay with the 6141, still selling for up to $200. Amazon.com sellers have also jacked up the price to take advantage of current demand, though not as much.

Do NOT pay eBay sellers $200 for the 6141, which normally sells for $99. It only encourages the bottom-feeding speculators. If you want the 6141, I recommend you wait until prices drop to between $99-125. Do not pay more.

Some readers are finding used/refurbished cable modems that work perfectly fine on Craigslist and eBay. There is generally nothing wrong with these, unless they happen to be stolen or unreturned modems that really belong to Time Warner Cable, which will in turn not activate them. Be careful.

Time Warner Cable executives told investors on a morning conference call the cable company has embarked on a gradual transition to an all-IP-based distribution platform which could eventually mean the end of today’s set top boxes and radically increase the amount of bandwidth available for its broadband and video networks.

“Whatever the merits of that from an engineering sense, all things IP are the standards that the world is building devices to,” said Time Warner Cable CEO Glenn Britt. “So that’s the standard we’re going to end up migrating to until something better comes along.”

The transition will help Time Warner Cable support additional customer-owned equipment, including video game consoles, streaming online video boxes, and televisions with built-in support for cable-delivered channels.

“If you look at the cable in 1980s, there weren’t a lot of set-tops, and I think we’re going back to that over time,” Britt said.

Britt has repeatedly criticized set top box equipment as cumbersome, expensive, outdated, and disliked from the perspective of customers. He noted the only reason Time Warner uses the boxes is to support traditional televisions that cannot handle all of the services the cable company offers today, including video-on-demand and encrypted premium channels. Moving to a different technology platform can result in significant savings if cable operators adopt open standard devices and technology.

Later this year, Time Warner will also be launching a nationwide channel realignment, affecting virtually every subscriber around the country. The cable company is adopting a unified, genre-based, national channel lineup, putting popular cable networks on identical channel numbers in every city.

Time Warner’s reported results found the company losing an additional 169,000 video subscribers during the quarter, a new record loss for the cable operator. Despite that, the company still booked an 8% increase in profits, thanks to higher prices for service and increases in the number of broadband customers. Time Warner blamed the video subscriber drop on seasonal losses from departing college students and those heading to vacation properties, as well as the downturned economy.

But the nation’s second biggest cable operator reports it has several initiatives under way for subscribers which they feel will boost earnings and subscriber numbers:

• Over the last 60 days, Time Warner deployed a new set-top box guide throughout the eastern region. After the Olympics conclude, the company will introduce the new guide across the western half of the country. The new guide features a new color scheme and better graphics, and is supposed to make navigation and search easier to use;

• The company will introduce IP-based set top boxes and home gateway devices by next year. The newest gateway is a combination DVR, DOCSIS 3.0 cable modem, and a video transcoder that can convert QAM-based video to IP for devices including game consoles and new IP set top boxes. Time Warner’s newest DVR will include the capability of recording five shows at the same time while watching another and 1TB of storage.

Install it yourself.

• Time Warner Cable’s TV Everywhere service will expand to include video on demand and the possibility of watching certain networks while outside of the home. The current service only works when you watch over your home Wi-Fi network.

• The cable operator’s Internet Essentials offer, which includes a 5GB monthly usage cap, will move beyond Texas and reach everywhere the cable operator serves by the second half of next year. When a usage meter shows up on your My Services page on Time Warner Cable’s website, you will know this new, optional plan is on the way.

• Time Warner is revamping their website to let customers shop, order, and buy more services online.

• Self-install kits will become increasingly common for customers comfortable installing their own services. The Easy Connect packages are available in stores or by mail, and are free of charge with no installation fee.

• Service call windows will continue to be refined. In most cities, two hour windows are currently offered, but the company is now moving to one-hour windows in many markets. In some cities, 15-minute windows for the first appointment of each shift are now available to customers who don’t want to sit at home and wait all day for the cable guy. The company is now also including an estimate of how long it typically takes to complete the type of service call requested.

• Customers continue to gravitate towards faster broadband service plans. The company’s Turbo, Extreme and Ultimate tiers together garnered 157,000 new adds in the second quarter and now comprise over 21% of high-speed data customers, up from 17% a year ago and 9% three years ago.

Britt also took questions about the impact Google Fiber will have on Time Warner Cable’s operations in Kansas City.

“There’s a lot of effort going on around the country to see what we could do as a society with more bandwidth in kind of a laboratory sense,” Britt said. “I view the Google effort as that. […] And I think that’s good for our business. We have a wonderful infrastructure, we have bandwidth, we have a way to go much faster with DOCSIS 3.0 by adding [higher speeds] to the offering. And the more the people figure out how to use broadband, the better off we’re going to be. So I think this is a good thing, not a bad thing, that people are trying to figure out how to use this technology.”