Customers of some of the largest cable, phone, and satellite companies will pay an average of 3-6 percent more for service in a series of rate increases taking effect between now and the end of February.

AT&T U-verse

If your introductory offer has expired, expect to pay more for just about everything as of Feb. 9.

Cable TV:

• U-family will increase from $54 to $57,
• U100 will increase for some from $54 to $59 and for others from $59 to $64,
• U200 will increase from $69 to $72/U200 Latino will increase from $79 to $82,
• U300 will increase from $84 to $87/U300 Latino will increase from $94 to $97,
• U400 will increase from $109 to $114,
• U450 will increase from $117 to $119/U450 Latino will increase from $127 to $129.

For high speed Internet customers who ordered their current speed before June 12, 2011, effective with the February 2012 billing statement, the monthly price for Basic will increase from $19.95 to $25, Express will increase from $30 to $33, Pro will increase from $35 to $38, Elite will increase from $40 to $43, and Max will increase from $45 to $48. If you are paying a monthly high speed Internet equipment fee for the Residential Gateway, the amount will increase from $4 to $6.

For Voice Unlimited, effective on February 1, 2012, the monthly price will increase from $33 to $35.

AT&T blames increased programming costs and “the cost of doing business” for the rate increases.  AT&T is increasing broadband pricing despite enjoying further cost reductions from their Internet Overcharging scheme implemented in 2011.

Comcast

Comcast implements rate increases at different times of the year throughout its national service area.  But a preview of what is forthcoming can be seen in south Florida and Minnesota, where Comcast’s new rates for 2012 have increased an average of 5.8 percent.  That comes after a 2 percent rate hike last year.  It’s a bitter pill for many customers to swallow, because Comcast has also been moving popular cable channels like Turner Classic Movies into the more expensive Digital Preferred package.  The price of that full basic package will now run just short of $85 a month. Customers in Minneapolis are staring down these new rates:

• Basic 1: no change in most franchise areas.
• Digital Economy: increases from $29.95 a month to $34.95 a month, or 16.7 percent.
• Digital Starter: increases from $62.99 a month to $66.49 a month, or 5.6 percent.
• Digital Preferred: increases from $80.99 a month to $84.49 a month, or 4.3 percent.

Comcast blames increased programming costs and upgrade expenses associated with its now completed DOCSIS 3 project.  Comcast also has converted many of its service areas to all-digital service, which has opened up additional room to sell more expensive broadband packages, add additional HD channels, and make room for new product lines relating to home automation and security.

Cox Cable

Broadband Reports readers are sharing anecdotal evidence Cox has begun its own 2012 rate increase campaign.  In Florida, cable TV rates are up yet again:

Prices for Cox TV and Cox Advanced TV will be as follows:

• Cox TV Starter will change from $19.55 to $22.85/mo.
• Advanced TV will change from $5.50 to $4.20/mo.
• Advanced TV Standard Definition receivers will change from $5.55 to $6.99/mo.
• Advanced TV High Definition, High Definition/DVR & DVR receivers will change from $7.45 to $7.99/mo.

Advanced TV Paks will change:

• Any 1 Pak (excluding Variety Pak) from $4.00 to $4.25/mo.
• Any 2 Paks (excluding Variety Pak) from $8.05 to $8.50/mo.
• Any 3 Paks from $12.00 to $12.50/mo.
• Variety Pak will be $4.00/mo.

Premium pricing will change:

• 1 premium channel from $13.99 to $14.99/mo;
• 2 premium channels from $23.99 to $24.99/mo;
• 3 premium channels from $30.99 to $34.99/mo;
• 4 premium channels from $36.99 to $44.99/mo.
• (Pricing for the 3rd and 4th Premium channels will be grandfathered at the current price for existing customers.)

Cox’s Preferred Internet tier is increasing from $49.99 to $53.99 a month.  Basic phone service increases from $11.75 to $13.18, and popular calling features like Caller ID are also increasing (from $5.95 to $9.00 per month).

Rates vary in different franchise areas.

DirecTV

The satellite TV provider will raise rates on Feb. 9 by 4 percent on average. Its costs are going up by more than that, the company said on its website: “The programming costs we pay to owners of TV channels will increase by about 10 percent.”

DirecTV defends its rate increase, noting it will introduce new features in 2012 that include more than 170 HD channels and the most 3D viewing options of any television provider.  The full breakdown is provided from DirecTV:

Consumer Tips

1. Customers who subscribe to bundled services will see the fewest rate increases.  The more services you bundle, the lower the typical cost of each component within the bundle.  It rarely pays to have one company as a TV provider and another delivering your broadband because standalone service pricing is increasingly the most expensive option.
2. Ask for an extension of your introductory or promotional rate.  Request pricing from the competition and be prepared to summarize it with your current provider when arguing for a lower rate.  If your current provider thinks you are serious about jumping to another provider, they may lower your rates to keep your business.
3. Be prepared to switch.  Cable companies base their retention offers on several factors: what the competition offers, how long you have been a customer (2+ years guarantees a better retention deal) and how you pay your bill.  If you are a late payer, expect a much more difficult time negotiating a lower rate.  You may encounter a brick wall if you are labeled a “flipper” that jumps between providers’ introductory pricing offers.  But even these customers will be welcomed back, with lower rates, when they inevitably return.  They just won’t get their promotional offer renewed.
4. Some companies reserve their most aggressive pricing for customers who actually schedule a disconnect or turn in their equipment.  Cable companies have gotten wise to empty threats from negotiating customers.  If you schedule a complete service disconnection two weeks in advance, some companies will take you seriously and call you with the most aggressive “win back” offers available, especially if you turned in your cable equipment.
5. Dump extras overboard.  Premium channel pricing has skyrocketed recently after remaining relatively stable for nearly two decades.  HBO is now at or above $15 a month in many areas.  As customers try to economize, premium movie channels are usually the first to go, and many cable operators are starting to lose preferred wholesale volume pricing discounts.  They are passing along new, higher prices to the dwindling number of premium customers left.  Scrutinize your cable bill carefully for potential savings.  Look for mini-pay tiers of HD channels you never watch, consider downgrading your “digital phone” package to local-only calling if you rarely make long distance calls, and consider tossing “Turbo” broadband speed packages that only incrementally increase download speed.  Many customers originally signed up to obtain higher upload speeds, but as cable companies boost speeds for all of their customers, the extra boost may no longer be worth the money.

Ebenezer Scrooge could successfully serve as the CEO of any large telecommunications company these days, and the New York Times knows a Christmas tale of woe when it sees one.  That is why the venerable newspaper printed a Christmas Eve editorial blasting Verizon’s new “non-aggression treaty” with America’s largest cable companies that puts coal in the stocking for any Verizon customer waiting for FiOS fiber-to-the-home service.  The newspaper believes the days of FiOS are numbered:

Verizon — Verizon Wireless’s main shareholder — relieved itself of the need to expand FiOS, its high-speed, fiber optic network, beyond the 18 million homes it set out to reach six years ago, a rollout that cost $23 billion. For the other 114 million homes in the country, it can simply bundle its wireless service with the cable and wireline broadband services of its partners. The agreement between Verizon and the cable carriers includes a joint venture to develop technology to integrate the wireline and wireless platforms.

Verizon’s cable deals squashed hopes that cable carriers’ purchases of wireless spectrum would lead to more competition against the dominant players, AT&T and Verizon Wireless. And it puts in doubt whether FiOS will ever be a serious competitor to cable, reducing the likelihood that video transmitted over broadband could break up cable’s regional oligopolies.

[…] Verizon’s deals suggest a future in which cable carriers will get uncontested control of high-speed broadband into the home while AT&T and Verizon will get uncontested control over wireless. For consumers with expensive wireless plans, pricey bundles of cable channels and costly, slow broadband, this does not look like good news.

Verizon’s economic future lies in the lucrative world of wireless.  Its FiOS network was an expensive gamble to reinvent its antiquated telephone network to drive customers to keep their landlines and spent a hundred dollars more on video entertainment and super fast broadband.  Wall Street hated the price and loathed the potential for costly competition that would force earnings down through aggressive price-cutting.  In some markets, Verizon FiOS has forced Comcast, Cablevision, and Time Warner Cable to be a little more generous with broadband speed and lighten up a little on the annual rate increases.

But convincing cable customers to switch remains a difficult proposition even when Verizon offers the superior service.  Verizon has not achieved the level of penetration it expected in many markets.  In short, people just don’t want to wait around for installers.  Besides, cable companies slash prices for customers threatening to depart.

Verizon’s deal with Time Warner and Comcast delivers Verizon Wireless desirable spectrum.  But the agreement to cross-market and cross-bundle product lines smacks of collusion, and is exactly the kind of turf protection that has kept cable companies from competing head-to-head with each other for more than three decades.  Is it more lucrative for Verizon to build out its FiOS network to compete or simply refer people to Time Warner or Cablevision for cable TV.  So long as cable doesn’t offer a competing wireless product, Verizon seems to think there is little harm done.

But for consumers, the absence of competition brings rate increases, reduced innovation, and declining customer service.

The one thing the telecom marketplace needs less of is the “take it or leave it” attitude that earned the scorn of cable customers everywhere.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Broadband Blindness.flv[/flv]

Toast Sacramento produced this 28-minute documentary which succinctly tells the story of North American broadband, and how commercial providers have set us up for long-term failure, especially in rural and suburban areas.  Whether you live in the United States or Canada, phone and cable companies dominate the telecommunications landscape.  Unlike other modern-day necessities, broadband is almost entirely in the hands of an unregulated free market that fails millions.  Where competition exists, customers can get reasonably fast service, but it costs more than it should.  Where competition is hard to find: slow speeds, spotty access, and out-of-sight prices predominate.

The documentary explores:

• the neglect of suburban and rural DSL from large phone companies like AT&T;
• how phony, industry-influenced broadband availability maps convince public officials there isn’t a big broadband problem;
• why the country’s broadband demands may be too great for providers to handle without major new investments, leading to usage limits and slowdowns to delay needed upgrades;
• and how the latest broadband technologies being installed overseas fall victim to Wall Street temper tantrums back home.

Bell Canada is misleading potential customers when mailing them invitations to sign up for Fibe TV, which the company calls “a new TV service delivered through our new state-of-the-art fibre optic network.”

Only it isn’t “state of the art” or fiber to the home.

Bell characterizes its Fibe service as Canada’s “most advanced” telecommunications network, even better than traditional cable television.  But in fact, it’s a marriage between fiber optics and the decades-old copper wire phone network Bell continues to rely on to provide a triple-play package of phone, broadband, and television, all without investing in superior fiber to the home technology.

Only it's not a true fiber network.

That the company claims it is running the most advanced network in the country must come as quite a surprise to Bell Aliant, the dominant provider in Atlantic Canada.  Aliant is busily building a true fiber-to-the-home network for at least 600,000 customers in the most eastern part of the country.

While Fibe is an evolutionary move for Bell Canada, it is hardly revolutionary because of its dependence on traditional copper phone lines.  Canada remains behind the United States in deploying fiber technology of all kinds, including Fibe‘s fiber-to-the-neighborhood system.  Bell’s closest cousin AT&T has been running its own comparable U-verse system for a few years now.

Providers like the benefits of fiber-to-the-neighborhood technology and the fact it costs considerably less than rewiring every home for fiber optic connections.  Fibe can deliver speedier broadband than traditional DSL, but cable operators like Rogers and Videotron are already positioned to beat Fibe speeds, and a true fiber to the home network can beat anything on offer.

Phone and cable companies in the United States who have pitched older technology as a “state of the art fiber network” without actually providing one have been challenged by true fiber to the home competitors like Verizon, and forced to retreat.  But with so few Canadian providers in a position to challenge Bell’s fiber claims, it will be up to regulators to declare the advertising and marketing materials misleading.

Cablevision's top executives head on out. Tom Rutledge (left) and John Bickham (right) left within weeks of each other.

The unexpected and sudden departure of two senior executives at Bethpage, N.Y.-based Cablevision has pushed the rumor mill into overdrive the cable company is about to be sold or taken private.

John Bickham, president of cable communications and chief operating officer Tom Rutledge will both be spending more quality time with their respective families after departing Cablevision.  Last Thursday’s announcement that Rutledge would resign caused Cablevision’s stock price to drop by nearly 14% during trading Friday.

The inevitable conclusion on Wall Street: Cablevision is about to be sold or taken private.

Major shareholders and investment firms have criticized Cablevision over the years for being “too successful” signing customers to fixed price double or triple-play packages that provide a full suite of products and services, but deliver few growth opportunities shareholders demand. With heavy competition from Verizon FiOS in most of their service areas, Cablevision’s ability to simply raise rates is limited, especially when customers bounce between promotional offers from the phone and cable companies.

Rutledge’s departure, in particular, has been seen as a major negative on Wall Street because he was responsible for many of Cablevision’s most innovative products, including streamed video, his advocacy for boosting broadband speeds, and the company’s aggressive move into home security.

Craig Moffett, a Wall Street analyst from Sanford Bernstein, thinks Comcast and Time Warner Cable are set to divide the spoils in a shared buyout — Comcast grabbing northern New Jersey and Connecticut and Time Warner Cable assuming control of Cablevision’s systems in New York.  But other analysts don’t think that scenario is so likely, especially when considering the Dolan family’s long history in the cable business.

ISI Group Inc. analyst Vijay Jayant told Light Reading Cable he believes the more likely scenario would have the Dolan family buying out shareholders and taking the cable company private.

Time Warner Cable has repeatedly informed shareholders the company will not engage in bidding wars or overpay to win new acquisitions, and the Dolan family’s selling price for Cablevision is likely far higher than Time Warner would be willing to pay.  Comcast might have a political problem assuming control of more cable systems after its recent merger with NBC-Universal.  Shareholders may also rebel, as they did in a 2007 effort to take Cablevision private.  Investors felt they were offered too low a price to compensate them for their shares.

Moffett believes Cablevision’s days of high earnings and rapid growth are behind them, because just about everyone who wants cable service already has it, either from Verizon FiOS or Cablevision.

“No, we don’t think [Cablevision] can grow. And, no, we don’t think the rest of cable is doomed to the same fate,” Bernstein’s Moffett wrote in a report in late November. “The cause of [Cablevision’s] growth decline is straightforward: it has been so successful in achieving high product penetrations that growing further is quite challenging.”

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg Joyce Says Cablevision May Be a Takeover Target 12-16-11.mp4[/flv]

David Joyce, media analyst at Miller Tabak & Co., talks about Cablevision Systems Corp. Chief Operating Officer Tom Rutledge’s resignation and the outlook for the company.  Bloomberg News.  (5 minutes)