Phillip DampierJanuary 4, 2010VideoComments Off on Fox, Bright House Networks and Time Warner Cable Reach Agreement in Principle That You Will Pay For
After much sound and fury, and plenty of media attention, Fox programming remained on Time Warner Cable and Bright House Networks systems through the New Year’s festivities, as the three companies reached “an agreement in principle” to make cable customers ultimately pay more for the right to watch Fox broadcast stations and cable networks.
The wide-ranging agreement covers all of Time Warner Cable’s more than 12 million subscribers as well as 2.4 million Bright House customers. The deal encompasses Fox-owned, Fox-affiliated television stations covering nearly four million Americans and Fox’s sports and entertainment cable networks seen nationwide.
The major point of contention between Fox and the two cable companies was the fee for carriage rights to Fox television stations. Known as “retransmission consent,” cable operators must obtain permission from television station owners before they are allowed to put them on cable lineups. For years, broadcasters were happy just getting clear pictures to cable’s extended reach into suburban and rural communities. But over the years, broadcast interests have sought cash payments from cable operators in return for that consent.
Leveraging their popularity, station owners feel they have plenty to room to negotiate higher payments, and the cable industry has tried to avoid setting any precedent for cash payments, fearing a new benchmark set with one station owner will soon become the asking price for every other major station in a community. Cable operators have traditionally signed agreements that launch station or network-owned cable channels instead of large direct cash payments, but Fox’s game of hardball suggests those days are over.
While none of the companies involved would disclose the terms of the final agreement, industry analysts suggest the parties met somewhere near the middle of their respective asking price. Fox had demanded $1.00 a month per subscriber for each of its affiliated television stations, while Time Warner Cable suggested a quarter per month per subscriber was a fair offer. Most agree the final deal is in the 50-60 cent range, not including any extras Time Warner Cable threw in on the cable network side.
Chase Carey
All of the parties represented at the negotiating table were pleased with the outcome.
“We’re pleased that, after months of negotiations, we were able to reach a fair agreement with Time Warner Cable — one that recognizes the value of our programming,” News Corp. president and COO Chase Carey said in a press release. Time Warner Cable president and CEO Glenn Britt adds that his company is “happy to have reached a reasonable deal with no disruption in programming.”
Amusingly, Bright House Networks’ own press release is a mirror copy of Time Warner Cable’s — only the names have been changed:
“We’re pleased that an agreement has been reached with no disruption in programming for our customers,” said Steve Miron, Chief Executive Officer, Bright House Networks.
Who wasn’t represented at the negotiating table? Customers. Ultimately, whatever amount agreed to, it will be added to customers’ bills in future rate increases.
If other networks seek similar terms, cable operators may have to fork out as much as $5 billion a year — and would likely pass the cost on to subscribers, Craig Moffett, an analyst at Sanford C. Bernstein in New York told Bloomberg News.
“The broadcast networks are really struggling to find a viable business model,” Moffett said. “They’re looking at the cable networks that make money both on advertising and the money that the cable operators pay them and saying, ‘We need a dual revenue stream to survive too.’”
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CNBC reports on the deal reached just in time to prevents sports fans from missing out on their New Year’s football games on Fox. (2 minutes)
Phillip "But I Don't Even Want The Golf Channel" Dampier
Time Warner Cable unveiled a new website this afternoon, RollOverOrGetTough, asking customers whether they want the company to “roll over” and pay the prices cable programmers demand or “get tough” and threaten to drop channels that demand too much.
This, of course, is rich coming from the company that loves to raise your rates every year, overcharge you for your broadband service with experimental usage caps and “consumption billing,” and has had a long history of owning and/or controlling many of those ‘greedy cable networks.’ Oh, and they won’t give you the choice of paying for just the channels you want to watch, either.
Want to send a message to the cable network bad-boys that demand too much? Give your customers the right to opt out.
The cable industry has fought a long-running battle with cable programming networks over the fees they pay on a per-subscriber basis to carry those channels. The revenue earned by those networks helps them acquire programming that is attractive to potential viewers, and the advertisers that follow. Back in the 1970s and 1980s, most cable subscribers spent their time watching local broadcasters, “superstations” — imported TV stations from cities like New York, Chicago, Atlanta, and Los Angeles, and premium movie channels. The basic cable networks back then didn’t run off-network TV shows. Most ran cheaply produced documentaries, talk shows, imported shows from overseas, limited interest cultural programming, or music videos. Sports programming rarely involved major teams, or major sporting events for that matter.
By the early 1990s, virtually every basic cable network was either owned outright or in part by one of the major national cable or broadcasting companies. NBC and ABC dabbled in cable themselves, while CBS steered clear after being burned by a terrible experience with CBS Cable in the early 80s. Launched as a cultural network devoted to opera, theater, and dance, it shut down a year after launching, having attracted minuscule audiences.
The lesson learned — create or buy programming viewers will actually want to watch. That takes money, and the fees charged to cable operators for cable networks began rising rapidly. Suddenly, off-network TV shows viewers used to watch on WPIX, WGN, WWOR, KTLA, or WTBS suddenly started showing up on basic cable instead. The biggest turning point came when sports networks like ESPN started bidding for, and winning the rights to televise major league sporting events. Nothing costs more than sports, and broadcast and cable networks have been bidding up prices ever since.
As basic cable networks became popular with viewers, their ability to make demands on cable operators grew exponentially. Suddenly, certain cable networks demanded they be given low channel numbers, that cable companies had to also carry affiliated spin-off cable networks if they wanted access to their primary service, and that programming must always be carried on basic cable — not on some digital cable tier or other similar extra-cost tier.
For years, cable operators didn’t care too much as they just passed the increases on to customers. Where could viewers go except to the cable company? I recall the sticker shock customers had when basic cable first exceeded $20 a month, then $30. Today it’s headed for $60 a month in many areas. Cable companies attempted to placate angry customers by adding several new channels to the lineup just prior to the rate hike letter, telling them they were now receiving greater value than ever from their cable company. The following year, those new channels wanted more money, too.
The “500 channel universe” that sounded promising a decade ago is now a nuisance for many subscribers, irritated they are paying for hundreds of channels they never watch.
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WIVB-TV Buffalo reported on Time Warner Cable’s fight against programming prices, but itself (along with sister station WNLO-TV) was thrown off Time Warner Cable’s cable lineup over a contract dispute for most of October, 2008. LIN TV Corporation, owner of both stations, had reportedly demanded 25 cents per month per subscriber for permission to carry the stations on cable. (1 minute)
In a difficult economy, justifying a $150-200 cable bill for television, broadband, and phone service is harder than ever. Consumers want new options. Satellite television provided limited competition, and a few large phone companies are set to deliver a bit more. But some subscribers have decided paying this kind of money for television every month is outrageous, and they have finally jumped off the merry-go-round. Some younger people are never getting on, relying entirely on their broadband service to watch television programs and movies on demand.
Time Warner Cable’s attempt to enlist customers in their sudden war on programming rate increases is likely to be seen by many as a classic pot to kettle cable quandary. The company that still wants to force Internet Overcharging schemes on their broadband subscribers and is now raising rates in many areas has some chutzpah asking customers to fight for them:
No one likes paying more. You don’t. We don’t. Yet, every time our contracts with TV program providers come up for renewal, that’s what we face. Price increases. Big ones. Up to 300% more. Sometimes we can avoid passing them on to you. Sometimes we can’t. Sometimes, a network will threaten to take your shows away if we don’t roll over. Whenever that’s happened in the past, we’d make the best deal we could and hope that would be the end of it. But it never was. So no more. The networks shouldn’t be in the driver’s seat on what you watch and how much you pay. You’re our customers, so help us decide what to do. Let us know if you want us to Roll Over, or Get Tough. We’re just one company, but there are millions of you. Together, we just might be able to make a difference in what America pays for its favorite entertainment.
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Time Warner Cable ran this ad in its dispute with the NFL Network over carrying the channel on cable lineups. Warning: Loud Audio (30 seconds)
To be sure, cable companies are confronted by some pretty bad offenders during contract renewals. Some demand several dollars a month per subscriber, whether you watch the channel or not:
NFL Network: This one has been kept off Time Warner Cable for years because they want an enormous amount of money and demand to be carried on the basic cable lineup, where they can expose every subscriber to their monthly programming fee. TWC has repeatedly said no because a significant part of any rate increase will come from just this single network.
Sports Networks: In general, the biggest price hikers are sports channels. ESPN and its sister channels demand several dollars a month for every subscriber. Single sporting event channels, particularly YES, the Yankees network are also often very expensive. Regional sports channels are obscenely expensive, and many cable systems finally forced them into their own sports tier, where those who want them pay for them.
Fox/News Corporation: Fox News Channel in particular commands mind-boggling subscription fees, usually more than every other news channel combined. Many systems also got stuck carrying and paying for Fox Business News, a ratings dog attracting fewer than 20,000 viewers nationwide at any one time. Time Warner Cable faces expiring contracts for many Fox channels, and the renewal of them (at characteristically higher rates) will likely involve a brutal battle over what subscribers will be stuck paying for FX, Fuel, Speed, Fox Soccer, and several regional sports networks. That’s before the cable operator also has to conduct negotiations over how much Fox-owned local stations are going to demand in return for carriage on Time Warner’s lineup.
The nastiest battles are often fought with local television stations, especially when they are collectively owned by a single company. Sinclair Broadcasting, which owns several Fox and other network affiliated stations, is known for playing hardball with cable companies. Other station owners known for being willing to yank their stations off cable if the company won’t pay their price include: Gray Television, Journal Communications, Meredith Corporation, Nexstar Broadcasting Group, and LIN TV Corporation. Typically these battles pit cable and broadcasters against one another with viewers in the middle, wondering if their local station will still be on their cable lineup in the morning.
In the end, cable companies tend to cave in or negotiate slightly better deals to get the local stations back on.
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KXMC-TV in Minot, North Dakota reported that North Dakota Fox affiliate KNDX-TV was out in the cold after Midcontinent Communications yanked the channel off during a contract dispute. (4/2/2009 – 1 minute)
It’s no surprise that everyone wants a piece of cable’s action. Nor are we surprised by a number of comments left on news sites reporting this story that Time Warner Cable’s new campaign has often been met with derision by subscribers, who absolutely loathe the company for its past pricing practices. In the cities where the company tried to engineer a tripling in price of broadband service — to $150 a month for the same level of service customers used to enjoy for $50 a month, I wouldn’t hold my breath. Customers aren’t likely to hold hands with a company that wants to “save you a few dollars” off your cable bill while emptying your bank account for your broadband service.
If and when Time Warner Cable wants to permanently bury any notion of Internet Overcharging schemes, drop us a line. Perhaps then consumers will join a programming price revolt run by a company that’s got our back, instead of our wallet.
LUS Fiber - Lafayette, Louisiana's public utility municipal broadband provider, offers fast speeds with great rates
Frustrated communities across America, take note.
If your town or city government starts making serious noises about constructing your own, municipally-owned broadband network (especially one built with fiber optics to the home), existing providers who have repeatedly said “no” to requests for faster service at more reasonable prices have a track record of quickly turning around and saying, “yes — why didn’t you ask us before?”
Big existing telecommunications players loathe the thought of facing a new competitor in their midst. They are accustomed to the usual arrangement of one cable operator and one phone company. Cable companies provide cable modem service, phone companies mostly provide DSL. In smaller cities, and where a competitor is missing (or provides a lower quality service), there is almost no drive to upgrade. Cable will set speeds just above what the phone company is offering, and both will co-exist happily ever after.
For communities being bypassed by the fiber revolution now underway by Verizon, and to a lesser degree AT&T, requests from civic leaders, businesses, and consumers for upgraded service fall on deaf ears. ‘What you have now is good enough for this market, so be quiet and be lucky we give you what you’ve got now. Oh, and we’re raising rates, too.’
In Rochester, the one upstate New York city not on the “to-do” list of Verizon (which is merrily wiring urban and suburban communities across their service areas with fiber optic cable FiOS), Time Warner Cable sees little incentive to raise speeds or upgrade to DOCSIS 3 with a phone company competitor that has no apparent plans to move beyond traditional old school DSL service. Where FiOS does threaten, Time Warner Cable is in a hurry to provide “wideband” broadband as quickly as possible.
In Wilson, North Carolina, years of pleading from local officials to provide something beyond anemic broadband in their community was met with yawns from Time Warner Cable and Embarq, the local phone company. Wilson decided to build their own municipal fiber network, offering faster speeds at better pricing. Time Warner and Embarq did what most existing competitors do — they moved through the Four Stages of Telecommunications Competition Grief:
1) Behind the Scenes Threats and Anger: Companies work the phones with local officials trying to browbeat them into dropping the plans to construct municipal broadband, try to gin up partisan opposition, issue overinflated cost estimates, issue warnings about the trouble they’ll cause local politicians who support such initiatives, and snow a blizzard of documents illustrating how wonderful and reasonable their existing service is;
2) Stall Tactics Through Negotiation: Once home office is notified, a series of negotiations to attempt to forestall the project begins, such as throwing crumbs for incrementally better service, offers to build showcase mini-projects that represent a “win” for local politicians, or “looks good on paper” concessions that end up amounting to far less. Most of these discussions are designed simply to stall to allow the company to prepare for stage three.
3) PR and Legal Blitzkrieg: Assuming local officials haven’t been discouraged away from their idea, or dropped it after starring in a company-sponsored press event – ribbon cutting a small wi-fi or school connectivity project, the next stage is a multi-front battle involving company legal teams filing lawsuits to delay or kill projects, public relations and astroturf lobbying efforts to distort issues and build public opposition, legislative maneuverings to make such projects untenable through industry-friendly laws, and often vague promises about impending upgrades making the entire project unnecessary.
4) Acceptance, Competition, and Better Service: The final stage is the realization consumers don’t always get suckered by astroturf groups and company scare tactics. They accept the project is moving forward, and send out the press release saying they welcome the competition and are announcing their own significant service upgrade because “customers asked for it.” Price increases slow, speeds increase, and service improves, all because of the reality that an aggressive competitor is in their future.
Wilson city officials tried negotiations for better service, got nowhere, and had to fight back against a blizzard of nonsense from the telecommunications industry trying to legislate such projects out of existence with changes to state law. Americans for Prosperity, an astroturf group, even hassled residents in other nearby communities with robocalls to try and stop similar projects.
Chattanooga’s public power utility fought back against telecommunication company propaganda to construct fiber to the home service across the city, which launched this year. (5 minutes)
In Monticello, Minnesota, local telephone company TDS had spent years refusing requests to improve service in the city. Speed and access issues plagued the community, northwest of Minneapolis. Local officials had enough and voted to construct their own fiber to the home municipal network.
Enter the four stages. TDS started by telling city officials the company’s network was state of the art for Monticello, and couldn’t be immediately improved because there was insufficient return on investment. Companies want to be assured they are paid back for investments they make, and because Monticello is a relatively small city, there were questions whether the costs for a fiber network would be paid back quickly enough through revenues.
When that didn’t work, the company sued the city as a stalling tactic. Despite the fact Monticello won case after case, TDS kept filing. A full assault by large telecommunications interests also began, trying to gin up public opposition. While the project was approved by voters, and Monticello was tied up in court, TDS quickly moved to stage four and started rapidly building their own fiber network in Monticello, actually putting down fiber the city was prohibited to wire themselves as the lawsuits dragged through the courts.
The company told Ars Technica that despite its earlier refusals to provide fiber service, TDS didn’t act earlier because it didn’t actually know that people really, really wanted fiber; once the referendum was a success, the company moved quickly to give people what it now knew they wanted.
Then, in June, the company said with the advent of its own fiber network, the city of Monticello should back away from constructing theirs, because its economic viability report was partly premised on the fact TDS refused to provide that service.
To underline that, TDS’ new fiber network doubled customer speeds to 50Mbps, trying to keep customers from taking their business to FiberNet Monticello.
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Lafayette staged a multi-year battle with Cox and other providers to bring municipal fiber broadband to it’s corner of Louisiana. This 30 second ad promoted a “yes” vote on the project.
In Louisiana, Cox Cable is facing accusations it’s engaged in predatory pricing to kill Lafayette Utility System’s fiber to the home network and EATel’s fiber network in Ascension Parish. Cox Cable froze rates and moved in with DOCSIS 3 upgrades, delivering up to 50Mbps service. Cox chose to upgrade Lafayette before any other Cox-served community.
The Lafayette Pro-Fiber Blog found this EATel billboard taunting Cox
EATel, an independent phone company that wired fiber across Ascension Parish, also faced down Cox. When the cable company began promoting cut-rate pricing in Ascension, EATel took out advertising promoting Cox’s special prices — in other cities, much to Cox’s consternation. EATel’s ads, much like those run by Novus against Shaw in British Columbia, tell Cox’s customers to call the company and ask for the lower price they are advertising elsewhere.
“Cox came in with an incredibly aggressive promotion for TV service with every bell and whistle you could imagine. We couldn’t figure out how they could even make money on it. So we took out an ad in the Lafayette newspaper that basically said, ‘Hey Lafayette, look at the great prices you are going to get from Cox.’ Cox was not amused,” Trae Russell, communications manager for EATel told Telephony Online.
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p style=”text-align: center;”>Joey Durel, Jr., president of Lafayette parish, testifies before the House Committee on Energy and Commerce on Lafayette’s municipal fiber network on February 27, 2008. (7 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.
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p style=”text-align: center;”>
Lesson learned — just threatening to bring in a municipal competitor is often all it takes to turn a persistent “no” from the local cable and phone companies into “yes, Yes, YES!”
Of course, not every project is successful. Some, such as Burlington Telecom Stop the Cap! reported on yesterday face political and cost challenges. Others are killed through stage managed opposition and astroturf campaigns paid for by the telecommunications industry before they even get started.
In North St. Paul this year, “PolarNet,” a planned fiber optic broadband network to stimulate the local economy was killed by an astroturf propaganda campaign undertaken by Qwest, Comcast, and other telecommunications companies that would have to deal with PolarNet as a competitor. The telecommunications companies claimed it would result in higher local taxes and “more government” where it wasn’t needed. Citizens defeated the proposal 67-33%.
Windom, Minnesota faced similar challenges and their fiber project was shot down in 1999, but with lessons learned, proponents brought it back up and won in 2000. To this day, the community of 4500 in western Minnesota face considerable envy from adjacent communities — they want service from the fiber-to-the-home system as well.
Almost universally, opponents to municipal broadband systems claim they are financial failures and saddle communities with debt. In reality, most have forced those opponents to provide improved service in their competitive communities, or those companies will become the financial failure.
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Terry Huval of Lafayette Utility System talks with the Fiber Revolution blog about the challenges Lafayette experienced building their own municipal fiber network. Huval offers excellent advice for other municipalities exploring similar projects. (April, 2009 – 10 minutes)
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p style=”text-align: left;”>Thanks to Stop the Cap! readers Tim and Matt who suggested this story idea.
The reported deal between Comcast, the nation’s largest cable operator and NBC-Universal, part owner of Hulu, could have serious consequences for the Internet’s most popular destination for online television shows and movies.
In just a year, Hulu has enjoyed a quadrupling of visits well into the millions, streaming dozens of network television series, specials, and movies, all supported by commercial advertising. Devised to help combat online video piracy and earn additional advertising revenue from web watchers, Hulu partners NBC, Fox and Walt Disney Co., have been successful at drawing scores of Americans to the video website. Program distributors have also been pleased, earning money from shows like Lou Grant that haven’t been on network television in decades. But after the economic crash of 2008, the venture has proven costly for the partnership, challenged by an advertising marketplace on life support and outright hostility by broadband providers, cable operators, and Wall Street investors, upset that the service is giving it all away for free.
Among the loudest to complain is Comcast, which is now angling to acquire NBC, and its 30% ownership stake in Hulu.
Comcast CEO Brian Roberts has repeatedly complained about the implications of giving away online video, which for some have begun to replace cable television subscriptions.
“If I am any one of these programmers, not just ESPN but the Food Network and I have a business in that 50 percent, 60 percent, 70 percent of my business comes from subscriptions, I want to think long and hard before I just put that content out there for free and not think through what it is going to mean to my business,” Roberts said at an investors conference in May.
Roberts view was shared by the CEO of the nation’s second largest cable operator, Glenn Britt of Time Warner Cable.
“If you give it away for free, you’re going to forego that subscription revenue,” Britt said. “And if you actually think the ad revenue can make up for that, then God bless you and go on your way. But I don’t think that’s the case, and (networks) don’t really think that’s the case either.”
The difference between Comcast and Time Warner Cable is that the former could gain part ownership in the largest service now giving it all away for free, and that has major implications for Hulu’s future.
“Would Comcast put an end to the Hulu model of using the Web to distribute free TV content?” asked Michael Nathanson, senior media analyst at Sanford C. Bernstein & Co. “Will Comcast continue to support Hulu?”
The Los Angeles Timesreports there is already a precedent for Hulu limiting content for online viewers in response to complaints:
Hulu already has limited users’ access to certain cable programs, including FX’s “It’s Always Sunny in Philadelphia,” in response to an outcry from the TV producers and cable companies that object to paying TV programmers hundreds of millions of dollars each year for shows that are offered free online.
“Arguably, their ability to shape online content distribution, and to recast windows for video on demand, would be an important attribute of any deal,” wrote Craig Moffett, a cable industry analyst at Sanford C. Bernstein.
Comcast’s interest in NBC Universal would dramatically expand its entertainment portfolio with such attractive cable channels as USA Network, MSNBC and CNBC as well as the Universal Pictures movie studio. The proposed Comcast-NBC Universal venture also would give the cable operator a greater role in deciding how and when TV shows and movies are distributed online and at what price to consumers.
Comcast’s influence would primarily be felt in cable network programming streamed online, as Comcast has a vested interest from the millions it currently pays those programmers to carry their networks on Comcast cable systems nationwide. Comcast could advocate Hulu become a partner in the TV Everywhere cartel, providing video content only to “authenticated” pay television subscribers, or it could limit the number of episodes available for free, or when those episodes appear on the service.
Soleil Securities media analyst Laura Martin thinks an even more likely possibility would be charging a fee for some of its more popular content. Martin points to Hulu’s own financial problems, a consequence of the crash in the advertising market. Soleil estimates that the three partners subsidize $33 million of the losses at Hulu even after earning $123 million this year from advertising. Even worse, Martin says, is the cannibalizing of the networks’ own advertising earnings from broadcast runs of those shows now available online. She told the Times that for every viewer who migrates to the Internet, the companies forfeit $920 a year in ad revenue.
But not everyone believes the Comcast-NBC deal is such a great idea.
Time Warner CEO Jeff Bewkes today told an industry conference in Manhattan that large media mergers have had a lousy track record. Still, he said the merger would probably benefit the cable industry as a whole, because broadcast networks content with giving away content for free online will now be a part of the very industry hurt by that formula and will be more friendly towards arguments to stop it.
“We love to see our competitors taking risks,” Bewkes said.
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CNBC’s Julia Boorstin talked with Hulu CEO Jason Kilar in September about the desire for the company to partner with the cable industry’s TV Everywhere project.
Verizon FiOS today adds television to its lineup of services in several suburban towns in the Syracuse area, as competition heats up in central New York for cable, telephone, and broadband service. But the incumbent cable operator, Time Warner Cable, says it’s not worried by Verizon’s arrival, and a company spokesman predicts no price war will result.
Eight communities in the Syracuse area will now be able to choose Verizon FiOS television service in addition to broadband and phone service: Camillus, Clay, Cicero, DeWitt and Salina, and the villages of East Syracuse and North Syracuse in Onondaga County, and the town of Fleming in Cayuga County.
The arrival of television service is important for Verizon, because it lets them compete head-on with incumbent cable operator Time Warner Cable that already offers bundled packages of services, typically known as a “triple play” in the industry — telephone, cable-TV, and broadband.
Chris Creager, Verizon’s president of Northeast operations, claims competition for cable television in central New York will result in better service at lower prices.
“When we enter a market, customers win,” Creager said. “Usually, cable companies are more receptive to looking at prices.”
Time Warner Cable downplayed the competitive threat Verizon could pose to their operations in the region.
In a statement echoing the sentiment Time Warner Cable has expressed in most of the communities where FiOS competes with them, spokesman Jeff Unaitis said Time Warner Cable already has an advanced cable network and has experience delivering cable television service to Syracuse-area residents that Verizon lacks. Competition is nothing new to Time Warner Cable, he said, noting the company has faced satellite television competition for years. Unaitis also predicts no significant price cuts as a result of Verizon’s all-fiber FiOS system arriving in town.
Indeed, evidence suggests that Verizon’s FiOS service does not result in dramatic savings for consumers, with one significant exception.
New customer promotions often offer significant price savings, particularly for customers who sign contracts to remain with providers for one or two years, and choose bundled packages of multiple services. Central New York customers signing up for Verizon FiOS for at least two services can receive a $150 gift card. Customers choosing their “triple play” will receive $30 off their monthly bill for six months.
Once the promotional offers expire, so do most of the savings, unless a customer threatens to switch providers. That often brings a renewal of their promotional package price for an extended period, although some providers limit the number of times a customer can take advantage of a promotion. For consumers trying to optimize savings, that can start a ping-pong relationship with providers, as customers sign up for a promotion and then cancel service when it expires, taking their business to the other player in town.
Competition does often bring improved service, even when savings are elusive. Broadband service in particular often benefits, as consumers enjoy faster speeds with fewer limitations in communities with FiOS as one of the competitors.
In Syracuse, Time Warner Cable has adjusted speeds upwards for its Road Runner service, in advance of Verizon FiOS’ arrival. In contrast, speeds in Rochester, a city with no prospect for Verizon FiOS competition, has not seen a speed increase for standard service in several years. In New York City, a system upgrade to DOCSIS 3 technology has allowed the cable company to offer a premium 50Mbps service tier. The Syracuse Post-Standardexplored the competition angle, and what central New York residents might expect to come from it:
Competition from FiOS, which offers Internet download speeds of up to 50 megabits per second, may push Time Warner Cable to deploy available technology to match those speeds, said Thomas W. Hazlett, a law and economics professor at George Mason University and former chief economist of the Federal Communications Commission. Time Warner Cable recently upgraded its New York City network to offer a 50-megabit option, compared with the maximum 15-megabit speed in Syracuse.
“If it’s like elsewhere, you’re going to see Time Warner respond,” Hazlett said. “They will increase speeds.”
Likewise, Verizon and Time Warner Cable will push each other to offer better channel lineups, better picture quality, on-demand programming and novel services, said Jeffrey Kagan, an independent telecommunications analyst in Atlanta. Prices also will be lower that they would be without competition, but don’t expect a big drop, he said.
The newspaper explored what each company offers customers:
$110 per month: Includes unlimited phone calls in North America; Internet at 15 megabits per second for downloads, 5 megabits for uploads; 255 standard-definition TV channels and seven high-definition channels.
$120 per month: unlimited phone calls in North America; Internet at 25 MBPS for downloads, 15 MBPS for uploads; free Wi-Fi access on nationwide network of hotspots; 275 standard-definition TV channels and 70 high-def channels.
$130 per month: Same package as $120, but with Showtime, 16 more standard-def channels and eight more high-def channels.
Creager said Verizon will lock in the price for two years.
Time Warner Cable’s regular rate for its “All the Best” triple play is $135.50. But new customers can get an introductory rate of $115 for a year, including free use of a digital video recorder for six months, according to the company’s Web site. The service includes unlimited phone calls in North America; Internet downloads at 10 megabits per second, uploads at 1 MBPS; 214 standard-def TV channels and 70 high-def channels.
Time Warner also offers a $100-per-month introductory package that includes fewer TV channels — 154 standard-def and seven high-def.
Several TV news video reports, and a Verizon video press release can be found below the page break.
Be Sure to Read Part One: Astroturf Overload — Broadband for America = One Giant Industry Front Group for an important introduction to what this super-sized industry front group is all about. Members of Broadband for America Red: A company or group actively engaging in anti-consumer lobbying, opposes Net Neutrality, supports Internet Overcharging, belongs to […]
Astroturf: One of the underhanded tactics increasingly being used by telecom companies is “Astroturf lobbying” – creating front groups that try to mimic true grassroots, but that are all about corporate money, not citizen power. Astroturf lobbying is hardly a new approach. Senator Lloyd Bentsen is credited with coining the term in the 1980s to […]
Hong Kong remains bullish on broadband. Despite the economic downturn, City Telecom continues to invest millions in constructing one of Hong Kong’s largest fiber optic broadband networks, providing fiber to the home connections to residents. City Telecom’s HK Broadband service relies on an all-fiber optic network, and has been dubbed “the Verizon FiOS of Hong […]
BendBroadband, a small provider serving central Oregon, breathlessly announced the imminent launch of new higher speed broadband service for its customers after completing an upgrade to DOCSIS 3. Along with the launch announcement came a new logo of a sprinting dog the company attaches its new tagline to: “We’re the local dog. We better be […]
Stop the Cap! reader Rick has been educating me about some of the new-found aggression by Shaw Communications, one of western Canada’s largest telecommunications companies, in expanding its business reach across Canada. Woe to those who get in the way. Novus Entertainment is already familiar with this story. As Stop the Cap! reported previously, Shaw […]
The Canadian Radio-television Telecommunications Commission, the Canadian equivalent of the Federal Communications Commission in Washington, may be forced to consider American broadband policy before defining Net Neutrality and its role in Canadian broadband, according to an article published today in The Globe & Mail. [FCC Chairman Julius Genachowski’s] proposal – to codify and enforce some […]
In March 2000, two cable magnates sat down for the cable industry equivalent of My Dinner With Andre. Fine wine, beautiful table linens, an exquisite meal, and a Monopoly board with pieces swapped back and forth representing hundreds of thousands of Canadian consumers. Ted Rogers and Jim Shaw drew a line on the western Ontario […]
Just like FairPoint Communications, the Towering Inferno of phone companies haunting New England, Frontier Communications is making a whole lot of promises to state regulators and consumers, if they’ll only support the deal to transfer ownership of phone service from Verizon to them. This time, Frontier is issuing a self-serving press release touting their investment […]
I see it took all of five minutes for George Ou and his friends at Digital Society to be swayed by the tunnel vision myopia of last week’s latest effort to justify Internet Overcharging schemes. Until recently, I’ve always rationalized my distain for smaller usage caps by ignoring the fact that I’m being subsidized by […]
In 2007, we took our first major trip away from western New York in 20 years and spent two weeks an hour away from Calgary, Alberta. After two weeks in Kananaskis Country, Banff, Calgary, and other spots all over southern Alberta, we came away with the Good, the Bad, and the Ugly: The Good Alberta […]
A federal appeals court in Washington has struck down, for a second time, a rulemaking by the Federal Communications Commission to limit the size of the nation’s largest cable operators to 30% of the nation’s pay television marketplace, calling the rule “arbitrary and capricious.” The 30% rule, designed to keep no single company from controlling […]
Less than half of Americans surveyed by PC Magazine report they are very satisfied with the broadband speed delivered by their Internet service provider. PC Magazine released a comprehensive study this month on speed, provider satisfaction, and consumer opinions about the state of broadband in their community. The publisher sampled more than 17,000 participants, checking […]