Stop the Cap! reader James dropped us a note to let us know Cablevision customers calling to cancel their cable service are scoring $20 a month off their cable bills for two years if they decide to stay with the cable company. It’s all because of the ongoing dispute between Cablevision and Fox over programming fees.

That $500 goes a long way towards compensating Cablevision customers for at least a year of petty programming disputes between executives who think of $500 as tip money.

So if you are a Cablevision customer, here is how to get your money back:

1. Call Cablevision at this number – 1-800-918-2581, which takes you directly to the customer retention department.
2. Tell the representative you wish to cancel your cable service because of the ongoing dispute with Fox and your loss of local and cable channels.
3. When they argue with you about why you should stay, tell them you are tired of being put in the middle of these disputes and forced to pay for programming you are not getting.
4. They may offer a $20 credit for just 12 months.  Tell them that is not long enough and if the representative won’t do any better, hang up and call back.

Be polite, persuasive, but persistent.  Customers on existing promotional deals may not qualify for this, but if you are paying regular Cablevision prices, you do.

The sooner you call, the better as word is getting out about this deal which could be withdrawn at any time.

Big Apple Day

Residents on Long Island are learning what Cablevision subscribers in Bronx, Brooklyn, and Connecticut have known for a few years now — if you want to watch Cablevision’s TV lineup, be prepared to shell out almost $7 a month for every television in your home.

It’s part of Cablevision’s march to an all-digital, encrypted cable lineup.  If you want cable TV, you’ll need to lease one of Cablevision’s digital set top boxes or CableCARD devices.

Cablevision says it will provide customers with free boxes for their televisions for the first year, available in limited quantities at Optimum stores or shipped free to your door by UPS.  But after 12 months, customers with several TV’s will find steep increases to their monthly bills, just to cover boxes many don’t want in the first place.

“It’s just more gouging from Cablevision,” writes our reader Stephanie who lives in Lindenhurst, N.Y.  “We used to watch television box-free at the kitchen table or on the computer with our Slingbox, but now our home will need three more boxes when we already pay them $14 for the two we already have.”

Cablevision's Conversion Schedule for Western Long Island

For customers like Stephanie, that adds up to nearly $35 a month just in equipment fees.

“Our bill is already $170 a month and next year it will probably run over $200 with the boxes we don’t want and whatever their next rate increase turns out to be,” she writes.

Cablevision claims they are not doing anything their competition isn’t.

“In fact, every other TV service provider in the New York metropolitan area already requires digital boxes for each TV,” a Cablevision spokesman stressed.

Those upset with the change are considering making some changes themselves — some by switching to a promotional package from satellite TV or Verizon’s FiOS.

“I am well aware they both want you to use boxes on those services as well, but for a year or two, we could probably knock $30 or more a month off our current cable bill with a promotional deal,” Stephanie says.

What about after the deal expires?

“We’ll just switch back to Cablevision on one of their promotional deals,” she says.  “For this family, it’s about the ‘total amount due’ at the bottom of the bill.”

Cablevision’s ongoing transition to digital caused panic when it blanked out broadcast basic cable service for more than 500 residents of a Coney Island complex housing numerous senior citizens, almost all watching local television signals delivered in analog.  When Cablevision made the digital switch in August, every local channel suddenly disappeared.  The NY Post explained what happened next:

Cablevision also announced this week it had upgraded its set top boxes to support several new applications and services on the way.  Multichannel News covered the story:

Cablevision Systems has now deployed Zodiac Interactive’s interactive TV platform — including support for the industry’s EBIF specification — across the MSO’s entire New York-area footprint serving 2.9 million digital cable subscribers.

The operator is using Zodiac’s PowerUp framework software, running on Cisco Systems’ native set-top box environment, to run several interactive applications and services. These include iO TV Shortcuts, search, an enhanced program guide, video-on-demand navigation and dedicated ITV channels.

The companies also are working together on Cablevision’s remote-storage DVR — which the operator has been planning to launch this year — and the MSO is using Zodiac’s PowerUp Advanced Messaging Solution (AMS) software to integrate Web and mobile applications with set-top boxes.

Some other families are considering a different change.

“Maybe we just should stop watching TV in the kitchen,” Dominick Galletta of East Northport, N.Y., told WNBC-TV.

[flv width=”597″ height=”356″]http://www.phillipdampier.com/video/WNBC New York No Cable Box No TV for You on Long Island 9-16-10.flv[/flv]

WNBC-TV covers frustrated Cablevision customers on Long Island now forced to obtain digital cable boxes for every television in their home.  (2 minutes)

Back in July, Stop the Cap! shared the story of Mark Williams, an eager new customer for Time Warner Cable in Lee, Massachusetts.  The only thing getting in the way of Williams’ desire to shower the cable company with money for its triple-play Internet, cable, and phone service was the $12,000 fee the cable company sought to install it.

That sparked a major incident with Lee’s Board of Selectmen, who called the installation fee “ridiculous.”  It warned the cable company they were prepared to vote Tuesday night to sanction the company, taking money from the $10,000 Time Warner posted with the town as part of its local license agreement, if it didn’t relent.

At issue was Time Warner’s reasoning for the high installation fee, invoking a “long driveway clause” Malcolm Chisholm Jr., of Lee’s Cable Advisory Committee argued was an incorrect interpretation of the town’s license agreement.  Chisholm told The Berkshire Eagle the contract entitles all homes to cable service if electric and telephone service already are available.

Before the board voted, Williams reported the cable company verbally agreed to reduce the installation fee to $4,000.

“They’ve given me a price, but it’s still not cheap,” Williams said. “I’m looking to find an independent contractor who will do the job cheaper.”

Williams acknowledged the cost would be even lower, but he wants the cable buried between his home and the nearest utility pole, which is 500 to 600 feet away. He has his electricity service underground to his home on Fernside Road, near the Tyringham town line.

Time Warner’s typical installation fee of $35 covers up to 200 feet — above ground — with the rest of any necessary cost borne by the subscriber. Williams said he didn’t seek a cost estimate from Time Warner for an above-ground installation.

[…]In a similar case three years ago, Time Warner agreed to drop its claim that a homeowner on Antelope Drive in Lee pay $1,102 for cable installation. The company’s decision followed the town also threatening the company with financial penalties. However, Time Warner officials said the reversal was based on the individual case, rather than agreeing to the town’s interpretation of the contract regarding installation.

What is the last technology product you purchased that never declined in price after you bought it?  If you answered your broadband service, a new study proves you right.

Since there are no public data on what has happened to broadband prices over the last decade, Shane Greenstein, a professor of management and strategy at the Kellogg School of Management, and his co-author Ryan McDevitt, an assistant professor of economics and management at the University of Rochester and a graduate of Northwestern University, analyzed the contracts of 1,500 DSL and cable service providers from 2004 to 2009.

The results every broadband user already knows.

At best, prices have declined only slightly — typically between 3-10 percent, partly from a “quality adjustment” the authors included to account for gradually increased broadband speeds when measuring prices.

Greenstein blames a broadband duopoly for the stagnation in broadband pricing.

Greenstein

“So if you were in such a market as a supplier, why would you initiate a price war?” Greenstein asks. With no new entries on the market, suppliers can compete by slowly increasing quality but keeping prices the same. According to Greenstein, quality is where providers channel their competitive urges.

Meanwhile, once companies have installed the lines, their costs are far below prices. “At that point, it becomes pure profit,” Greenstein says. A company might spend around $100 per year to “maintain and service” the connection, but people are paying nearly that amount every other month. Greenstein says that it is not surprising that prices were high during the buildout phase in the early and mid-2000s, since the firms were trying to recover their costs. “However, we are approaching the end of the first buildout, so competitive pressures should have led to price drops by now, if there are any. Like many observers, I expected to see prices drop by now, and I am surprised they have not.”

The authors also confirm Stop the Cap!‘s long-standing contention that providers are enjoying dramatically reduced costs to deliver broadband to customers, yet are not spending some of those profits on important network upgrades.  That could lead to a broadband bottleneck, Greenstein contends, especially with the growth of online video.  We argue it is a recipe for Internet Overcharging — triggering increased pricing to “pay for upgrades” while limiting usage of broadband service, despite the mountain of profits available today to cope with usage growth.

McDevitt

Greenstein and McDevitt pored over 1,500 broadband contracts over several years, tracking pricing, service bundling, and speed improvements.  Pricing, adjusted for speed improvements, was generally flat.  Because the cable industry has delivered most of the speed growth Americans enjoy, the “quality adjustment” the authors used credited most of the modest price declines to the cable industry, especially for customers moving to bundled packages of services.  The authors found DSL and its providers almost completely stagnant — both in pricing and speed.

The most surprising discovery, Greenstein says, is that national decisions are being made without the type of data that he created in the consumer price index. “As an observer of communications policy in the U.S., I find it shocking sometimes how often government makes decisions by the seat of their pants,” he says. Without real data and statistics, decisions are based solely on who has better arguments—in essence, a debate. A better consumer price index will help produce better decisions for the future of the Internet and its users.

It may also serve as an effective challenge to telecommunications industry lobbyists who engineer their own statistics and claims about the performance of the nation’s phone and cable companies.

Thanks to Stop the Cap! readers Bones and Michael for sending along the story.

AT&T unveiled it’s U-verse system Monday in the Triad region of North Carolina, hoping to poach customers from Time Warner Cable’s “triple play” package of phone, broadband, and cable service.

AT&T U-verse services, which are delivered over AT&T’s Internet Protocol (IP) hybrid fiber-copper network, offer an alternative to cable with a DVR that can record more programming than the competition, features and apps not available from the local cable company, and additional channels new to the region. AT&T U-verse can combine every AT&T service a customer subscribes to onto a single monthly bill.

The most popular Internet-only tier of service has somewhat anemic download speeds up to 6 Mbps for $43 a month — other packages range from $38 for 3 Mbps to $65 for 24 Mbps.

U-verse TV packages include “local-channel only” service for $19 a month (with a stinging $199 installation fee), to more than 390 channels for $112 a month, with a $29 activation fee.  Other packages include U-100 with 130 channels for $54 a month and U-200 with 230 channels for $67.  High definition channels, now numbering more than 130, cost $10 extra per month.  Want premium channels in HD?  That’s another $5 a month.

Like other providers, AT&T has tinkered with pricing to deliver the most savings to customers who bring all of their business to AT&T with a triple-play bundle subscription.

“Today’s expansion of AT&T U-verse reflects our commitment to make the investments necessary to bring consumers across the Piedmont Triad a new era of true video competition,” Cynthia Marshall, AT&T North Carolina president said in a statement. “Local residents have asked for more choices in television service and today we’re delivering.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/ATT U-verse introduction.flv[/flv]

Watch this comprehensive video from AT&T explaining the many types of services U-verse offers and helpful tips to prepare for service installation.  Then view an actual installation in a customer’s home who shows off the equipment.  Stop the Cap! recommends you let AT&T do all of the required wiring for you.  That’s why you are paying that installation fee!  (22 minutes)

Brubaker

But despite the company’s claims that competition will deliver lower prices for consumers, the evidence suggests otherwise.

AT&T credits a statewide video franchising bill passed in the North Carolina legislature for making U-verse possible in the state.  Company officials showed their thanks by inviting the two state legislators instrumental in shepherding AT&T’s agenda through the General Assembly to be on hand to take credit for introducing cable competition in the state.  They also publicly thanked them in their press release.

Seventeen term House Rep. Harold Brubaker (R-Randolph) congratulated AT&T for its accomplishments.  Brubaker received $4,000 in campaign contributions from AT&T in the first quarter of 2010.

The representative from Asheboro co-sponsored the 2006 Video Service Competition Act which stripped local oversight of cable operators and made AT&T’s entry into North Carolina effortless.  For other would-be competitors, especially municipalities seeking to build their own fiber networks, Brubaker has been far less helpful.  Most recently, he voted against an effort to bring broadband service to Caswell County in areas incumbent provider CenturyLink has ignored for years.

Adams

“Prior to the legislation, you had geographic areas where you operated in, so it kind of like took the walls down. The legislation took the walls down to allow for more direct competition for the consumer. Competition is great.  The consumer’s the one that benefits,” said Brubaker.  “AT&T’s presence in the market will very definitely save customers money.”

Rep. Alma Adams (D-Guilford), another co-sponsor, said AT&T’s arrival was exactly what she hoped for when she supported the legislation.

“As policymakers, our goal was to increase investment in North Carolina and give consumers more choices and innovative new services,” said Adams. “Today’s announcement makes that goal a reality for Triad residents.”

Adams added that AT&T U-verse also provided a safety valve for consumers who want an alternative to incumbent provider Time Warner Cable.

“Even if they like a particular company, they always like to know that there’s some other opportunities out there that they can look at as well, so they can do some comparing,” she said.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/Important Information about ATT U-Verse system.flv[/flv]

AT&T delivered more time and attention to North Carolina legislators at their launch event than they ever will on U-verse.  AT&T segregates Public Access, Educational, and Government channels on a single U-verse TV channel that makes for tedious viewing.  Watch this demonstration from the California Public Utilities Commission.  (4 minutes)

AT&T announced the service would initially be available in limited areas of Forsyth, Davidson, Guilford, Rockingham and Alamance counties, and we do mean “limited.”  Many Triad residents who checked to see if the service was available in their area found it was not.  In fact, AT&T refuses to disclose exactly how many customers in the region can actually sign up for the service.  We couldn’t find anyone who could order the service when it officially launched.

“There will be small pockets around most of the entire area,” Chuck Greene, AT&T’s regional director for the Piedmont Triad told the News-Record. “Once we complete the build-out, it will include parts of Davidson, Caswell and Randolph.”

AT&T lobbied hard to sweep away earlier provisions in local video franchises that committed providers to rapidly expand service to every possible customer in their respective service areas.  Under the Video Services Competition Act, AT&T can take its sweet time, perhaps for years before service becomes widely available across the region.  Some areas will never receive the service.

Time Warner Cable welcomed competition from AT&T U-verse.

“For a long time, Time Warner Cable has faced competition from satellite and dish providers,” Scott Pryzwansky, the company’s local public affairs manager, wrote to the News-Record. “We continue to invest in our network and remain committed to bring the best products and services to the Triad. We are confident we will maintain positive relationships with our customers.”

Time Warner Cable has little to fear from AT&T’s arrival.  Pryzwansky said Time Warner Cable has not lowered its pricing in any of the markets where it faces AT&T U-verse competition.  Both AT&T and Time Warner Cable have raised prices at least annually for their respective subscribers.  The only exception in North Carolina has been in Wilson, where municipal provider Greenlight has kept Time Warner Cable from increasing prices.

Time Warner Cable maintains a special website to cope with competition from AT&T U-verse and satellite providers. Hilariously, the site quotes a piece from DSL Reports about U-verse price increases. Time Warner subscribers might not want to venture too far beyond that piece, because editor Karl Bode reports on the cable company's own rate hikes as well. (Click image to visit TWC site)

Stop the Cap! reader Sam in Greensboro thinks AT&T’s arrival is much ado about nothing.

“AT&T prices their U-verse service nearly the same or more as Time Warner Cable, especially after the introductory rate expires,” he says.  “Few people are going to be bothered switching back to Time Warner after the year is up, so they’ll be paying the same high prices for cable service to AT&T instead of the cable company — a distinction with no difference.”

Sam won’t bother with U-verse because he is disgusted with AT&T’s lobbying efforts to stop consumer broadband reform and Net Neutrality.

“It’s like dealing with the devil,” Sam writes.  “Why would I want to pay AT&T my money so they can turn around and spend it working against my interests as a consumer?”

The only good thing about U-verse’s arrival is that it may stall Time Warner Cable from trying another Internet Overcharging scheme in the area.

“Time Warner has to think twice about another usage cap and overlimit fee ‘experiment’ in the Triad if customers can simply flee to U-verse, although knowing AT&T they’d love to have the same rationing of the Internet they force on their wireless customers,” Sam said.

[flv width=”636″ height=”373″]http://www.phillipdampier.com/video/TWC Fights Back U-verse.flv[/flv]

Time Warner Cable maintains a sometimes-bizarre web campaign to convince customers not to switch to U-verse or satellite.  We’ve put together the various videos so you can watch them all at once.  (4 minutes)

Like Time Warner Cable, AT&T does not offer a-la-carte cable programming, either.  Customers can only choose from large packages of programming, not individual channels.

Triad area cable customers told local media they were tentatively glad U-verse is competing, but many are taking a wait and see approach as to whether they’ll actually see any savings.

WFMY News 2 spoke with cable customers today. One man said he feels like a “hostage” to his cable company because they have a monopoly on TV, Internet and phone bundles. A woman said cable and satellite companies drive her “crazy,” so she gave up and now simply rents movies.

“I am happy, but it’s hard times. I have three children. We live on one income,” Jamie Rettie, a Time Warner Cable customer told News 2. Whether she switches to AT&T or not, she’s said she’s hoping for a change in her bill.

“Hopefully they’ll keep competing against each another and have better and better prices for their services,” she said. “(I’ll) wait out my contract and we’ll see what happens.”

Some residents, like Thomas, are left picking the lesser of two evils:

“I don’t know who’s worse at their game, as Time Warner Cable and AT&T are both evil corporate entities that care only about their bottom line,” he writes. “Search the Internet and understand this service limits the amount of TV’s that can be used at one time.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Greensboro Media Cover U-Verse Launch 9-13-10.flv[/flv]

Watch several news reports from Triad area TV stations about the introduction of AT&T U-verse.  In order, we include reports from WXII, WGHP, and WFMY-TV.  (7 minutes)