GIVE us more money and TAKE what we offer you.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Broadband service is available to 99.1% of the Bronx and 99.8% of the Rochester and its suburbs, but just 38.5% of Bronx residents are using the internet at broadband speeds (at least 25/3 Mbps) and only 54% of Monroe County residents are receiving a true broadband experience.

These two New York communities, one in the dense New York City area, the other straddling the Finger Lakes region and Western New York, are examples of the FCC’s vast over-count of consumers getting suitable broadband service and speed, according to Microsoft. The problem is much worse in rural areas where DSL speeds predominate and providers like Verizon and Frontier are in no hurry to upgrade their rural networks.

“These significant discrepancies across nearly all counties in all 50 states indicates there is a problem with the accuracy of the access data reported by the FCC,” Microsoft said about its findings. “Additional data sources like ours, as well as work by others to examine data in a few states or regions, are important to understanding the problem.”

Microsoft’s performance data is not alone representative of a local cable company not delivering advertised speeds. For example, in the Bronx, affordability issues mean that more residents rely on their cell phones and mobile connectivity for internet access. In Rochester, where true broadband speeds usually cost $50-65 a month depending on the provider, affordability is also a factor. But there is also the presence of local telephone company Frontier Communications, which has saddled Rochester with inferior DSL service it has no concrete plans to upgrade. Frontier DSL usually offers substandard speed of 12 Mbps or much less, making its customers part of Microsoft’s estimation of those underserved.

Schumer

Sen. Charles Schumer (D-N.Y.) complained about the state of broadband in New York, claiming internet speeds are “horrible” in much of the state and broadband providers are not being honest about advertised speed.

“When there’s slow internet, it drives you crazy​.​ ​You just sit and wait and wait and wait. It’s horrible,” Schumer said at a news conference held Sunday in Manhattan. “There’s a new report out that says our internet here in New York may​ ​be moving more like molasses than like lightning.”

Schumer is taking direct aim at the recent positive report from the FCC that broadband has dramatically improved in the United States, a conclusion the Republicans serving at the FCC took credit for, explaining policies of deregulation and elimination of net neutrality spurred private investment and better internet service for all.

“But Microsoft did its own report, and it shows that over four and a half million New Yorkers and Long Islanders are not getting the speed on the internet that the carriers say they’re getting​, [and] that’s a real problem,” Schumer argued, adding that most consumers are not getting consistent access to at least 25/3 Mbps service. “It’s like paying for the speed of a car but getting the speed of a bicycle.”

Schumer wants the FCC to hold providers to account for their broadband speed and performance. But last week, the FCC had other ideas, delaying broadband performance testing requirements until 2020 for internet service providers receiving taxpayer or ratepayer funds to build out their networks.

“T​he FCC is falling down on the job,” Schumer said. “I don’t think it’s nefarious but the providers, to upgrade to the required speed​,​ would have to pay for more equipment. They should. We’re all paying big bills for that.”

Telecom companies that receive Connect America Fund (CAF) dollars to deploy rural broadband service will not have to prove suitable internet speed and performance until early next year, after the FCC’s Wireline Bureau today announced it is delaying mandatory testing because of telecom industry objections.

The delay puts back the schedule for proof of performance testing that was originally intended to begin later this year. The rule would require those companies getting taxpayer funding to aid in network construction costs to test whether those networks meet the FCC’s minimum broadband standard of 25/3 Mbps.

Last summer, the FCC notified internet service providers that it intended to hold all carriers, including those receiving CAF funding before the FCC established its 25 Mbps minimum speed benchmark, to the same standards.

Frontier Communications is selling its wireline and fiber assets in Idaho, Montana, Oregon and Washington in a $1.35 billion all-cash deal with two private investment firms.

Frontier will continue operating its FiOS and traditional landline networks in the four states until the transaction closes with regulator approval.

The buyers are WaveDivision Capital, a private investment firm run by the founder of Wave Broadband, an independent broadband provider serving the Pacific Northwest and Searchlight Capital Partners, a Wall Street investment firm seeking to “accelerate value creation” for its investors. The new owners plan to launch a new company to service existing Frontier customers and will honor existing contracts and service commitments.

“The sale of these properties reduces Frontier’s debt and strengthens liquidity,” said Dan McCarthy, Frontier’s president and CEO, in a statement. “We are pleased to have a buyer with extensive experience building and operating advanced fiber-based communications assets in these regions. We will be working very closely with the new owners to ensure a smooth, successful transition for our customers and the communities we serve.”

About 150,000 fiber, 150,000 copper and 35,000 fiber video customers are impacted by the sale in the four affected states. Frontier’s service area in the region is made up of large former Verizon service areas, many upgraded to fiber-to-the-home service, and a significant number of rural telephone exchanges operating with traditional copper wire networks. WaveDivision Capital claims it wants to invest in Frontier’s existing network to upgrade service and potentially retire additional copper infrastructure in favor of fiber.

Frontier service areas in Oregon, Washington, and Idaho.

“We are excited to transition these operations to a local ownership team and to invest in building out the network of next generation fiber throughout our region,” said Steve Weed, CEO of WaveDivision Capital, and founder and former CEO of Wave Broadband. “We are big believers in the Northwest’s future growth opportunities and that future runs on broadband. As the former leaders of another successful Northwest internet provider, Wave Broadband, we know what it takes to bring fiber and other advanced services to residential and business customers, give them choices, and keep them happy.”

Frontier, which has been struggling with a tremendous debt load and underinvestment in its network, sees the sale as a way to improve its balance sheet and cut both debt and expenses. The Pacific Northwest is a difficult region to serve because it is sparsely populated and can be a high cost area because of difficult terrain or long distances between customers. Although Frontier had committed to spending on upgrading its fiber customers, it promised little for its copper wireline customers still relying on low-speed DSL. Weed says his company hopes to change that.

“Our plan is to invest further in our markets, specifically by extending fiber to more homes and businesses, to bring them the high speeds they want,” Weed said in a statement.

Frontier’s Montana operations are in the northwest corner of the state, near the Kootenai National Forest.

The transaction is subject to regulatory approvals by the Federal Communications Commission, the U.S. Department of Justice, the Committee on Foreign Investment in the United States (CFIUS), applicable state regulatory agencies, and certain local video franchise authorities where Frontier FiOS operates. Frontier expects little opposition to the deal.

Weed’s involvement in Wave Broadband is no more, but at the time he left the company, Wave had reached 140 cities and towns in Washington, Oregon, and California. Wave was formed in 2003 with a series of strategic acquisitions of “distressed” independent cable systems and those owned by pre-bankruptcy Charter Communications, Northland Communications, and Cedar Communications. In May 2017, Wave Broadband was sold to TPG Capital for $2.36 billion, and today operates under TPG’s leadership with its close cousins RCN and Grande Communications.

Weed has a reputation for successfully deploying fiber networks in a region where capital can be difficult to find and easy returns on investment are rare, so there is considerable good will he will successfully upgrade Frontier service areas that have been neglected for years.

Although the transaction could deliver temporary fiscal relief for Frontier, shareholders remain displeased with the current leadership team at the company, and there are still significant signs Frontier remains in serious financial and operational distress, especially because of its ongoing customer losses. Frontier is likely to be pressured to find other sales opportunities, assuming it can find willing buyers.

Online video-driven broadband usage has reached an all-time high, increasing 27% in just one year, with internet-only customers now consuming an average of 395.7 GB — almost double the average 209.5 GB consumed by households that still have traditional cable television.

The OpenVault Broadband Industry Report, issued quarterly, reports that significant differences in usage between households with a traditional cable TV package and those that have cord-cut make it clear online video is driving much of the increased usage. To maximize your usage of the internet, you may use web directories like 세상의모든링크 to easily find the websites that you need.

“Cord cutting behavior is impacting bundling and bandwidth consumption,” OpenVault explained. “Service providers rode a significant wave over the past ten years with triple and double-play bundling of services. There is evidence to suggest that wave has crested, as more consumers opt for internet-only packages.”

The results suggest the one effective tool providers still have to curtail heavy video streaming is mandatory data caps or consumption-based billing. An internet provider with a low data cap deters online video streaming, protecting traditional cable television revenue.

In the last year, the number of “power users” (those using 1 TB per month) doubled to 4.2% of all subscribers, with “power users of the future” (2+ TB of usage a month) more than doubling from 0.16% last year to 0.38% this year. “Power users” of 1 TB or more account for 6.5% of all internet-only households vs. 2.2% in homes still subscribing to a bundle of TV and internet service.

The clearest evidence of how data caps deter usage is found among “power users” that use 1 TB or more of data each month. With several large providers enforcing a 1 TB data allowance, OpenVault found dramatic differences in usage patterns between uncapped and capped customers. As customers become wary of exceeding their 1 TB cap, many “power users” ration usage out of fear of incurring overlimit fees, especially towards the end of a billing cycle.

Subscribers treat an assigned “data allowance” more like a hard data cap. OpenVault found that with flat-rate/unlimited plans, the percentage of power users is 32% greater than those with usage-based billing, and the percentage of subscribers using over 2 TB is 76% greater on unlimited plans where customers don’t have to fear using up their allowance.