Some Time Warner customers think there is more up the cable company's sleeve than "subscriber convenience."

Time Warner Cable customers across the country have been coping with some dramatic channel realignments over the past year, in some cases finding as many as a half-dozen channels gone missing from their analog basic cable lineup when it’s all said and done.

Communities in South Carolina, Ohio, and Nebraska are the latest to find dozens of channels assuming new positions on the dial, some now requiring a $7-10 digital set top box rental to keep watching.

The reasons for the changes?  To make room for an increasing number of HD channels, upgrade to DOCSIS 3 technology to support faster broadband, and to simplify finding networks on a lineup with hundreds of choices.

In Lincoln, Neb., Time Warner Cable will be aligning all of their analog and digital standard definition channel numbers with their HD counterparts.  So if CNN occupies channel 120 on the standard definition cable lineup, CNN HD will be found on channel 1120.  Customers simply have to add a “1” in front of the three digit channel number to get the same network, when available, in HD.

Lincoln residents may appreciate the fact some channels will be easier to find, but many analog customers without a cable box are not happy several of those channels will be gone from their lineup altogether.  The “victims” of the analog to digital switcheroo are familiar to those who have already been through channel realignments — C-SPAN 2, ShopNBC, TruTV, Travel Channel, and Oxygen will be available only to those who have a digital cable box or CableCARD.

In the Myrtle Beach, S.C., area, Time Warner Cable also moved the Speed channel to a new digital-only home.  Brett Phillips who lives in Georgetown called that a hidden price increase, telling The Sun News Time Warner was effectively taking away a channel while not reducing his cable bill.

In Nebraska and Ohio, Time Warner is handing out “free” digital boxes for 12 months, but only to those who do not have one now.  Those with existing digital boxes cannot obtain a second one or get their existing box for free.  Some critics, including our Lincoln reader Marta says that is a ripoff.

“As a good customer who already pays for two digital boxes and spends almost $200 a month on my cable service, why am I paying for my digital boxes when those who want the lowest priced analog service get one for free,” Marta asks.  “Clearly this is a way to get those boxes into peoples’ homes so at the end of the year they will reluctantly pay for the $7 a month to keep renting it.”

Marta was turned down when she asked if she could get a free extra box for her kitchen television.

“No, Time Warner only gives these free boxes to people who never had them before,” she said.  “I understand the company needs to make room for new things, but they have got to get these box prices down — they could turn the whole system digital as far as I care -if- the boxes were free, or at least much cheaper.”

Some other subscribers have their own conspiracy theories about the channel realignments.

One Nebraska resident noted Time Warner Cable was moving Fox News Channel to channel 44 — an ominous turn of events for this individual:

“It seems that the liberal unionized TWC is putting Fox News on channel 44. Obama is the 44th President. [George] Soros is behind this I just know it.”

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WEWS KSHB Time Warner Channel Changes 4-6-11.flv[/flv]

WEWS-TV in Cleveland and KSHB-TV in Kansas City tell their respective viewers about the grand shuffle in their channel lineups.  (3 minutes)

Time Warner Cable has experienced several significant outages this week in different areas of the country.  When service conks out, customers are entitled to service credits, but you must request them — they do not come automatically.

The most significant problems:

• Yesterday: Northeastern U.S. — Telephone and broadband service was knocked out for several hours, causing a flood of calls to area newsrooms and clogging up Time Warner’s own call centers;
• This Morning: Ohio — Telephone and broadband service down in many areas.

The easiest and fastest way to request credit is sending a message to Time Warner Cable using their Online E-Mail form, select Billing Inquiry, and send a message like this (edit it as appropriate):

I am writing to request one day service credit for the Internet and phone service outage that occurred in my area yesterday. Please credit my account.

Stop the Cap! has learned Comcast has had to beef up its call center staff to process orders for new and returning customers fleeing Frontier Communication’s rate increases for its fiber optic FiOS service, acquired from Verizon as part of a sale of landlines.

A source inside Comcast tells us the company has been busy welcoming back many customers in the Pacific Northwest who are canceling their Frontier FiOS service after learning about $30 monthly rate hikes for its fiber television service.

“We are adding call positions, diverting some orders to other customer service centers, and trying to accommodate a  jam-packed schedule of upcoming service installations all over the region as Frontier customers’ contracts expire,” our source tells us.

Frontier officially introduced its $500 installation fee Monday which many would-be customers consider absurd.

“I couldn’t believe reports were true about the installation price, so I called Frontier myself and even the customer service agent was incredulous over it,” Cate writes from his home in Oregon.  “We were actually both laughing about how ludicrous a $500 installation fee was for cable service.”

Cate tells us Frontier’s customer service representative admitted the company wasn’t expecting much new business with a steep entry fee like that.

“What it looks like to me is that they’re trying to price people out,” Newberg City Manager Dan Danicic told the Newberg Graphic.

Steven Crosby, senior vice president for Frontier never misses an opportunity to put a positive spin on a negative story.  He told the newspaper — to the contrary — the all-new $500 installation fee will help “price Frontier in,” noting each hookup costs the company $800.

Comcast, on the other hand, normally installs service for $28-40, but our source tells us the company often waives the installation fee upon request.  DirecTV and Dish also offer free installation with a contract.

“Sitting inside Comcast, everyone is talking about Frontier’s bungling and wondering whether this company is purposely trying to drive themselves out of business,” says our source.  “Even if you are not a FiOS customer, would you do business with a company that raises rates 40 percent or more and instantly raises installation fees to $500?  What will they do to their other customers?”

“Frontier: Not a winner.  Duh.”

Suddenlink, one of America’s smaller cable operators, has been undergoing a transformation as it tries to meet expectations of today’s cable subscribers and match whatever phone company competition comes their way.  While some of the upgrades are customer-friendly, others pose ominous signs for the future — particularly with respect to Internet Overcharging broadband customers.

Let’s explore:

The Good — New Broadband Speeds, New DVR, New Investments

Suddenlink cuts the ribbon on its new store in El Dorado. (Courtesy: Suddenlink FYI)

In parts of Suddenlink’s service area, particularly in Texas, the company is moving most of its cable service to a digital platform.  This transition is designed to open up additional space for more HD channels, keep up with broadband demands, and open the door for additional on-demand programming.

In Nacogdoches, Suddenlink announced it was adopting an all-digital TV lineup.  Starting this week, the company is offering subscribers free digital adapters — also known as “DigitaLinks,” to enable continued viewing on analog television sets that do not have a set top box or digital tuning capability.  Every subscriber purchasing more than the broadcast basic package (that only includes local stations and a handful of cable networks) will either need a digital tuner-ready television, a set top box, or a DigitaLink device to continue watching.

What is good about this transition is that Suddenlink is not charging customers a monthly fee for the adapters, either now or in the future.  That contrasts with other cable companies like Comcast and Time Warner Cable that have handed customers a set top box or a digital adapter they will begin charging for after a year or two.

Suddenlink expects to invest nearly $120 million this year in Texas, and by the end of the year will have invested nearly a half-billion dollars in the state since 2006.

Texas is extremely important to Suddenlink.  The third largest cable company in Texas serves about 450,000 households and approximately 27,000 business customers in Amarillo, Lubbock, Abilene, Bryan-College Station, Midland, San Angelo, Georgetown, Tyler, Victoria, Conroe, Kingwood and Nacogdoches.

Suddenlink's New TiVo DVR

The company has also lit new fiber connections to handle data communications, primarily for business customers, and is upgrading its broadband service to fully support DOCSIS 3, which will deliver faster speeds and less congested service.

Customers in the state are also among the first to get access to a new and improved DVR box built on a TiVo software platform.  Suddenlink’s “Premiere DVR” service ($17/mo) is now available in Midland, Floydada, Plainview, Amarillo, Canyon, and Tulia.

The Bad — “Suddenlink Residential Internet Service is for Entertainment” Purposes Only

The Humboldt County, Calif. Journal's "Seven-o-heaven" comic strip commented on Suddenlink's problems. (Click the image to see the entire strip.)

Do you take your broadband service seriously, or is it simply another entertainment option in your home?  If you answered the latter, this story may not be so surprising.

In Humboldt County, Calif., broadband users started noticing their favorite web pages stopped updating on a regular basis.  At one point, a blogger in McKinleyville noticed he couldn’t manage to post comments on his own website.  But things got much worse when several web pages started reaching customers with other users’ names (and occasionally e-mail addresses) already filled in on login screens and comment forms.

It seems Suddenlink started to cache web content in the far northern coastal county of California, meaning the first customer to visit a particular website triggered Suddenlink’s local servers to store a copy of the page, so that future customers headed to the same website received the locally-stored copy, not the actual live page.

But the caching software went haywire.

Web visitors began to receive mobile versions of web sites even though they were using home computers at the time.  Some were asked if they wanted to download a copy of a web page instead of viewing it.  And many others discovered websites were customized for earlier visitors.

While the caching problem was irritating, the privacy breaches Suddenlink enabled were disturbing, as was the initial total lack of response from Suddenlink officials when the problem first started in late January.

The Journal finally reached a representative who provided this explanation:

Suddenlink Senior Vice President of Corporate Communications Pete Abel knew that a cache system had recently been installed in Humboldt County, but was unaware of the particular problems reported by users. After speaking with the Journal and other Suddenlink employees, though, he released a statement explaining what appeared to have happened.

According to the release, the cache system was installed in Humboldt County on Thursday, Jan. 27 — the very day that users began experiencing problems — and was intended as an interim solution to relatively low Internet speeds in Humboldt County. The system, it said, was able to cache only unsecure websites — those which, unlike almost all reputable banking or commerce systems — do not encrypt communications. But the company eventually discovered the problems that its customers had been reporting and, having fruitlessly worked with its vendor to find a solution, turned the system off on Monday.

“The good news is that secure Web site pages will not have been cached,” Abel said in a follow-up call to the Journal. “And I have been assured 100 ways from Sunday that never would have happened.”

Andrew Jones, who runs a blog with his Suddenlink broadband account, tried to opt out of the web caching and received an interesting response, in writing, from a Suddenlink representative.  He was told he could not opt out of cached web pages with a residential account because, “the residential service is for entertainment only.”

Jones was told he would have to upgrade to a business account to escape the cache.

“If a small local radio station intermittently went off air for multiple days, the radio host would be apologizing and explaining the situation,” Jones wrote the Journal. “If a large utility company experienced sporadic power outages, people could hear a recording on a toll-free number to learn the cause and about ongoing repairs. What does an Internet provider do when web access becomes spotty and begins serving customers old copies of web pages? The company gets back to you in a couple days and suggests you pay more if you don’t like its recently degraded services.”

The Ugly — Suddenlink’s New Usage Meter Suggests 43GB is An Appropriate Amount of Usage for Standard Internet, 87GB is Plenty for Their $60 Premium Package

Although Suddenlink has not formally adopted an Internet Overcharging scheme of usage caps or metered billing, the company is sending automated e-mail messages to customers who exceed what they call “typical monthly usage for customers in your package.”  The e-mail tells customers they may be infected with a virus or someone else could be using your connection without your permission.  Boo!  For the uninitiated, this kind of message can bring fear that their computer has been invaded, either with malicious malware or the neighbor next door.

Customers have also received letters in the mail from the company telling them to check out their new “usage meter.”  Several have been sharing how much they’ve racked up in usage during the month on Broadband Reports.  One customer managed 243GB while another looking at the company’s super premium 107/5Mbps package managed a whopping 786GB.

Although the wording of the message has strenuously avoided telling customers they are wrong for this amount of usage, the implication is clear to many: they are counting your gigabytes and identifying the outliers.  One customer called it Suddenlink’s “You’re actually using your connection, and we really wish you wouldn’t”-message.

“No one with an ounce of sense would pay for a 20/3Mbps connection and only use 78 GB in a month. Let’s hope they’re just making cute suggestions, not easing us into a cap, because that just won’t fly,” wrote one West Virginia customer.

Another in Georgetown, Texas did the math and made it clear 43GB better not turn out to be a cap because it means customers can barely use the service they are paying for.

“It’s way too low. I got 10Mbps [service] because of price/value and not because I use less than 43GB,” he writes. “[Even] if I downloaded at 1.25MB/s for 30 days straight (1.25 * 2592000 seconds) I could [still] grab 3.164TB.”

Clyde (Courtesy: KUSH Radio/Donna Judd)

Meanwhile, some controversy over the quality of Suddenlink’s service during the upgrade process had some residents in Cushing, Okla., up in arms at a recent city meeting.  Lorene Clyde complained Suddenlink’s “new and improved” service is worse than ever.

“I’m tired of paying for a service I’m not getting,” Clyde said.  “And the Suddenlink commercials – they are like rubbing salt in a wound.”

KUSH-AM reporters were on hand to cover the event, noting Clyde was not the only one complaining.  The radio station noted that “the buzz around town echoes her sentiments – from the ‘mildly irritated’ to the ‘downright mad’ – citizens have been complaining.  Not only have they been complaining to Suddenlink – as difficult as that may be (the call center is in Tyler, Texas) – but to city leaders.”

What Clyde and others may not have realized is that Suddenlink officials were in attendance and were able to apologize for the problems, but a growing consensus among consumers and city leaders is that a broad-based refund for the poor service was warranted.

Commissioner Joe Manning said while he appreciated the promise to figure out the problem, it wasn’t good enough to just apologize and promise – that subscribers’ bills should be adjusted to reflect the poor service.

Commissioners Carey Seigle and Tommy Johnson agreed with Manning.  Seigle pointed out it would be “good P.R.” to give some sort of rebate across the board to subscribers while Johnson complained that the original “upgrade” was only going to take a few weeks and now 8 months later – things are not better, but worse, noted the radio station.

Suddenlink officials on hand said they did not have that kind of authority, but continued to promise things are going to get better.  “I pledge to you,” one said, “We will find it [the problem] and fix it.”

[flv]http://www.phillipdampier.com/video/KJTV Lubbock Borrowing Wi-Fi 2-7-11.flv[/flv]

KJTV-TV in Lubbock, Texas talked with Suddenlink about the growing trend of neighbors “borrowing” neighbors’ unsecured Wi-Fi networks.  Other than the accidental recommendation that consumers should “invest in Internet spyware” to keep your computer safe, the report does a fair job of shining a light on a practice that could have financial consequences if the provider implements an Internet Overcharging scheme.  (2 minutes)

Stop the Cap! reader Jeff from Palo Alto, Calif., dropped us a line over the weekend asking about a story published last week by the Salisbury Post regarding a bill that would banish community-owned broadband providers in the state of North Carolina.  The legislation, custom-written by Big Telecom companies, could eventually spell doom for truly competitive service from community-owned providers like Fibrant, based in Salisbury.

“I got the impression that it said Salisbury was agreeing not to oppose the proposed legislation, in exchange for being exempted from it,” Jeff writes. “That seemed like a long-term victory for Time Warner. Am I missing something?”

The reporter who accepted propaganda at face value from the cable industry certainly did.

The article, “Lawmakers Eye Blocks on Fiber Optic Systems,” was replete with demonstrably false statements from both Time Warner Cable and a high-powered cable industry lobbyist less-menacingly-labeled “a lawyer for the N.C. Cable Telecommunications Association.”  (Perry Mason he isn’t.)

In fact, communities across the state continue to oppose this special interest favoritism, bought and paid for by the telecommunications industry.  But getting people acquainted with the facts is a problem when reporters don’t bother to fact-check some of the rhetoric from the cable industry, which at times leaves some with the ludicrous impression they are “the little guy.”

Rep. Marilyn Avila — The Representative for Time Warner Cable

The Post seems to suggest local officials are negotiating passage to the lifeboats before Rep. Marilyn Avila’s legislative gift to Time Warner Cable becomes the legal iceberg that sinks community broadband in the state.

In reality, city officials are pointing out they harbor no resentment towards any telecommunications company operating in the state.  In fact, they welcome them to participate by securing space on their advanced networks at competitive rates in public-private partnerships.

Unfortunately, they are up against Avila’s “bull in a china shop” bill that would cut the legs out from community-owned networks before such partnerships can become reality.  In fact, Avila’s abdication of her responsibilities to her constituents for the benefit of Time Warner Cable is even worse because it could ultimately harm the state’s credit rating and image if such networks can be run out of business at the behest of a competitor.

For a “small government conservative” to write a bill laden with regulations, rules, and taxes anathema to the “free market” is a testament to just how willing she is to abandon her principles when Big Cable comes calling.

Avila has suggested that existing community-owned networks are exempt in the current language of the bill.  That statement is patently untrue because the micro-management regulations found within it would apply to all community broadband networks, but exempt privately-owned ones.  That’s fair, right?

For mayors in communities with these networks, securing a strong exemption is part of a full-court press against this bill.  If it were to become law, keeping a pre-existing network in business becomes an important priority.

Rep. Marilyn Avila (R-Time Warner Cable)

Mayor Susan Kluttz told the Post she is hopeful state lawmakers will rewrite the bill to exempt Salisbury and other cities with networks that are up and running.

But the mayor is smart enough to also realize at least some of the people at the table do not have the city’s best interests at heart when it comes to Fibrant.

Sources tell Stop the Cap! there are several members of the General Assembly, Republicans and Democrats, who are more than a little unhappy with Avila’s attempts to ram the bill through.  Not only does the water-carrying look bad inside (and outside) of the state, it will also destroy the potential of expanding broadband service to many poorly reached parts of North Carolina.

“This bill guarantees Time Warner will hold the keys to the broadband kingdom in North Carolina for years to come,” a well-placed source told us.  “Even public-private partnerships to develop broadband in rural areas of the state are directly threatened by her bill.”

Citizens across North Carolina are calling and writing legislators in opposition, but Avila doesn’t show signs of moving away from her pro-cable bill so far.

“Empty promises are being made to some legislators that suggest if they support this bill, Time Warner will magically wire unserved areas for service,” sources tell us.  “The company that had no intention of wiring these areas over the past two decades will continue to ignore them whether this bill passes or not.”

Indeed, Time Warner Cable and other companies use a standard business calculation when determining whether or not to wire outlying communities.  If too few customers live within a square mile radius, they don’t receive cable service.  Nothing has ever changed that unless it is mandated in a formal local franchise agreement.  At AT&T’s behest a few years ago, such local franchise agreements were banished from the state.  Rural residents in places like Caswell County pay the price as large sections of the county go without broadband service.

The implications are dire:

Jobs -are- threatened by Avila’s legislation.  They belong to the those who manufacture spools of fiber and the equipment that utilizes it, the contractors who install, maintain, and service the network, and the customer support staff that deal with customers on a daily basis.

One of the strengths providers like GreenLight and Fibrant bring to their respective communities is their networks are open to all-comers.  Time Warner Cable, AT&T, and other phone companies can obtain access on both to serve their own customers — business and residential.  The impetus for building these networks was to benefit everyone.

The only adversarial players here are cable and phone companies that want to own, manage, and control everything themselves.  The companies that spent years telling communities they saw no need to enhance service now want to legislate away the chance for others to try.

“We have several Republicans who read Time Warner’s claims about this bill, then looked over the inadequate broadband landscape in their districts back home, and are coming to the conclusion this is one bad bill,” one pro-broadband lobbyist told us.  “But this is still going to be a very hard fight unless ordinary consumers make their voices heard loud and clear.”

Fact Checking

The most disturbing thing about the Post story is the complete lack of fact checking the industry’s arguments, most of which are simply flat out false.  A few examples:

Melissa Buscher, Time Warner Cable’s vice president of communications for the Carolinas claimed the city of Wilson raised pole attachment fees by 300 percent after launching GreenLight, Wilson’s community-owned network.  Buscher suggests that is an example of cross-subsidizing networks.  In her mind, mean and nasty Wilson officials jacked up the fees  just to put the cable company at a competitive disadvantage.

But the facts tell a different story.

Wilson’s pole attachment fee, unchanged since 1975 while other communities around the nation raised them year after year, was adjusted well before GreenLight opened its doors for business.

“Before 2007, Wilson’s pole fee had stayed the same since 1975,” city spokesman Brian Bowman said. “The attachment fee increase was not related to GreenLight. The old fee schedule was outdated.”

How much money are we talking about here?  The old rate was $5 per pole annually.  Today it’s $15 per pole per year.  That means Time Warner will have to pay $246,000 a year instead of $82,000 in Wilson — petty cash to a multi-billion dollar cable company.

Time Warner itself provided data nearly five years ago in a Tennessee study on pole attachment fees that proves Wilson is hardly being arbitrary and capricious.  The cable company was paying up to $13.64 per pole four years ago in North Carolina.  The Tennessee Cable Telecommunications Association has been complaining as late as last year over average pole attachment rates of $14.86 per pole in that state, adjacent to North Carolina.

The irony of a cable company that has nearly tripled its basic cable rates over the same period of time complaining about rate increases is lost on them.

Buscher also claims their new competition in Wilson and Salisbury is run by the same city governments that regulate them:

“Cities have unfair advantages,” Buscher told the Post, noting when cities get into the broadband business, they become not only a regulator for incumbent providers, but also a competitor. “If municipalities want to get into a business already offered by the private sector, we welcome the competition, but we want to level the playing field.”

The only thing Time Warner wants to level is the competition from community networks that deliver better broadband service than they offer.

In reality, thanks to industry lobbying in the 1990s, the cable industry is almost completely deregulated.  No local, state, or federal government regulates broadband — where it is offered, at what speeds and at what prices.

There is no conflict of interest on the regulatory front.

Time Warner Cable and the North Carolina Cable Telecommunications Association: Waltzing Partners in a Dance of Deception

'Those community networks are not playing fair. How can we possibly compete?'

The North Carolina Cable Telecommunications Association, which helps deliver a one-two punch for Big Cable’s agenda, delivered the next false claim:

“Fibrant and GreenLight have lower operating costs.”

In reality, Time Warner Cable’s enormous size and scope provides them with benefits and cost saving opportunities across their national footprint that neither community provider can match:

• Volume discounts for programming, equipment, and other infrastructure;
• The power of incumbency, which makes them the default choice for most customers who must be compelled to switch providers;
• Access to grants and agreements like “payments in lieu of taxes” to protect cable jobs. Time Warner hardly pays “rack rates” for taxes across its entire footprint;
• Time Warner’s construction costs were mostly incurred in the 1990s when cable systems were last rebuilt.  Suddenlink Cable CEO Jerry Kent said it best: “I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” Kent said. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”  That isn’t true for community networks just opening for business or still in the initial construction phase.

Frontier Communications, a private industry player, discovered all of the benefits in programming costs go to large players like Time Warner, Comcast, Verizon and AT&T when claiming they were forced to raise rates $30 a month because they could not get the same volume discounts big cable and phone companies receive.

Marcus Trathen, the lobbyist running the NCCTA, hopes his fear, uncertainty and doubt campaign will be proven correct with the passage of Avila’s bill.  As law, it assures all of the competitive advantages go to the billion dollar incumbents, and any failures will be among the community providers that compete with them:

“Cities are particularly ill-suited to competition in a technology-based industry,” Trathen said in an e-mail to the Post. “Technology changes in an instant.”

Just not for Time Warner customers in Wilson and Salisbury.  The genesis of these, and other, community-based networks come from provider intransigence to deliver the kind of broadband service consumers and businesses increasingly seek, at an affordable price.

Fibrant delivers 15/15Mbps service today in its standard broadband package.  Time Warner Cable delivers 10/1Mbps service.  When Fibrant and Greenlight were first proposed, Time Warner delivered even lower speeds.

The industry cannot have it both ways.  On the one hand, they claim community broadband is an economic failure delivering redundant service and mis-managed by government officials who do not understand the business of broadband.  On the other hand, these companies and their respective mouthpieces are literally spending tens of millions of dollars lobbying for legislation to keep these “failures” from ever getting off the ground.

As we’ve always said on Stop the Cap!, following the money always leads you to the truth.