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

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

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

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

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

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

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

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

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

Time Warner Cable customers in southern California face substantial rate increases in 2012, including a budget-busting $49.99 service call fee to install increasingly expensive cable service.

The bad news is arriving in customer bills this month, with substantial price hikes for cable television —  including a 27.4% increase for the package that only includes local broadcast channels.  Time Warner Cable blames increasing programming costs for the rate increases, which are several times higher than the official rate of inflation — 3.5%.  Most customers with bundled television, telephone, and Internet service will see a smaller increase on the magnitude of a few dollars, but for those picking and choosing only a few items from Time Warner’s menu, the price tag for individual services will be higher.

The largest rate increase comes when the cable company sends a truck to a home or business.  Time Warner was charging $32.99, but will now charge $49.99 — a 51.5% increase.  The cable company has also been pushing its home networking Wi-Fi option, and will now charge $69.99 to install it, up from $49.99.

Time Warner Cable spokesman Jim Gordon tells the Los Angeles Times not everyone will pay those prices.  Certain promotions may lower those rates, or waive them altogether.  But the company offered little explanation to justify such a major price hike.

One of the cable company’s competitors, DirecTV, scoffed at Time Warner’s rate increase, noting the satellite company only raised prices an average of 4% earlier this year, and anticipates a similar increase in 2012.

The effect of the latest round of rate hikes is likely to drive even more customers to cancel or cut back on cable services.  An increasing number are dropping cable television service altogether, relying on broadband for video entertainment.  The cable industry’s response to cord-cutting has been a combination of increased online viewing options for cable-TV customers and usage caps and overlimit fees on broadband that either discourage online viewing or attempts to profit from it.  Time Warner Cable executives said as recently as December they plan to eventually introduce “usage based billing” of Internet service “the right way rather than quickly.”

A-la-carte cable: Still not on Rogers' menu

Carol Jameson simply can’t afford to spend $70 a month for cable television any longer.  Although Canada’s economy is doing better than some, Jameson’s husband recently had to endure a pay cut, and the costs of raising their two teenage children are not getting any lower.  The London, Ont. Rogers Cable customer ran several kitchen table meetings to discuss what expenses could be cut from the family budget.  Her teenage son and daughter targeted the family’s landline telephone — an archaic curiosity of the past for today’s cell-phone-obsessed youth, and cable-TV, which they saw as increasingly irrelevant.

“Just don’t touch the Internet connection,” Carol was advised.

Despite concerns from her sports-addicted husband, Jameson decided to start shopping around, and definitely decided the days of their landline was over.  In her neighborhood, “shopping around” meant choosing from Rogers Cable or a satellite TV provider.  Bell’s Fibe — fiber to the neighborhood — service was not up and running in her part of London.

“I had settled on a basic satellite package and keeping Rogers’ broadband and called the cable company to share the bad news,” Carol tells Stop the Cap! “But when I tried to cancel, I was transferred to someone who said I could stay and pick and choose only the channels I wanted to watch and pay for.”

Carol was shocked Rogers had a solution for her high cable bill that it never bothered to share until she tried to cancel.

“You can’t find a thing about this deal online or even on the phone with Rogers’ customer service, and who would think to ask after years of getting dozens of channels we never watch,” Jameson says.

Carol was being pitched Rogers’ new “Pick and Pay” service, currently undergoing a five month trial in the London area.

“I was offered the service until March 2012, after which I was advised to call Rogers back and discuss my options after the trial ends, if it ends,” Jameson tells us.

Rogers’ “Pick and Pay” is a modified a-la-carte suite of offerings.  It does not allow customers to pick and choose only the channels they wish.  It instead asks customers to sign up for a $20 basic cable package containing local broadcasters and certain other channels Canadian telecommunications regulators want all Canadians to have access to, and several channels Rogers wants their customers to have (home shopping, The Fireplace, Aquarium, and Sunset Channels, etc.)  Beyond that, customers can choose from mini-packages of Canadian superstations, U.S. broadcast stations, and digital music.  Customers then select 15, 20, or 30 channels of their choosing ranging in price from $26.38-$33.48 per month.

“It’s better than $70 a month, but not by too much,” Carol says.

Carol and her husband decided to consider the offer, but found an exact list of channels hard to come by.

“That’s not a problem limited to me,” Carol reports. “The Globe & Mail featured Rogers’ new cable package and the customer in that case had to obtain a photocopied list of channel choices because Rogers didn’t have one online.”

Carol ended up with the 20 channel add-on package and the U.S. network station suite, which runs $28.41 and $3, respectively.  That means her cable TV bill dropped to $52 a month, just over $22 a month less.

Rogers' scarce photocopied channel listing for their "Pick and Pay" package, obviously removed from an employee's three-ring binder.

“But here is where Rogers gets you by your pocketbook,” Carol warns. “You have to take Rogers’ phone service with the deal, so now the landline is back, although they charge less than Bell.”

Jameson also notes these prices do not include mandatory extras:

• $4.49 – Digital terminal rental (per TV)
• $2.99 – Digital service fee
• $0.70 – Local Programming Improvement Fund Fee
• + G.S.T. (taxes)

“So much for the savings,” Carol says.

The Globe & Mail speculates the Rogers’ trial is rigged to convince Canadian regulators there is little interest in a-la-carte cable, at least the way Rogers has packaged it (and kept it hidden from public view):

In September, the Canadian Radio-television and Telecommunications Commission said that it had received complaints from consumers about being forced to pay for too many channels they do not watch, and that it expects cable and satellite companies to change that. The CRTC ordered all TV providers to report back by April on what actions they have taken to give subscribers more choice.

But cable and satellite executives have told the CRTC in hearings that there is no consumer demand for cheaper, “skinny basic” packages that offer fewer channels at lower cost than today’s basic TV packages. And some think that Rogers will use the London example to tell the CRTC that there isn’t much demand for the product.

Customers like the Jameson family might end up unwittingly proving Rogers’ point.

“After all of the extras, we rejected the plan and were all ready to switch to satellite and keep the broadband, but at the last minute Rogers offered us new customer pricing on their standard package for a year if we agreed to stay, and we did,” Carol tells us.  “A-la-carte cable is exactly what we need, but this isn’t it.  Maybe that is why Rogers keeps it a secret.”

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/KRIV Houston Dont Cut Your Cable TV for Xbox 12-7-11.mp4[/flv]

Microsoft Xbox 360 owners who recently updated their consoles are discovering a range of new programming delivered over broadband.  But don’t cancel your cable television subscription just yet.  As this KRIV reporter in Houston discovered, an increasing number of online viewing choices require an active subscription with your cable TV provider to watch.  (2 minutes)

Time Warner Cable’s progression towards all-digital cable continues to spread across Maine as customers in Albion, Augusta, Belgrade, Benton, China, Clinton, Farmingdale, Gardiner, Hallowell, Litchfield, Manchester, Monmouth, Mount Vernon, North Vassalboro, Readfield, Richmond, Rome, Sidney, Vassalboro, West Gardiner and Winthrop lost many of their analog channels last week.

But customers losing AMC, Animal Planet, Cartoon Network, CKSH, CHLT, CNBC, E!, EWTN, GAC, Hallmark Channel, HGTV, History, HSN, INSP, NECN, Ovation, QVC, SyFy, Shop NBC, TCM, TNT, and USA also provoked the loss of something else: patience.

“Cable TV is the only service I pay for that increases my bill and frustration at the same time,” says Augusta Stop the Cap! reader Jeff E. Smith.  “The digital adapter Time Warner sent me was defective right out of the box, and two of my neighbors were also sent defective units that never powered on,” Smith writes.

Time Warner Cable is dramatically reducing the analog cable lineup to make additional room for new digital HD channels and faster broadband speeds.  The company is supplying palm-sized digital adapters for subscribers who don’t have a digital set top box on every television.  Although free until 2014, the boxes will carry a monthly fee of $0.99 each after that.

“The upgrade gives them the chance to cram on more channels we don’t want and more expensive broadband, and yet we have to eventually pay for the equipment,” Smith says. “And it doesn’t even work right.”

Smith’s neighbors have discovered patience-testing lines at some Augusta-area cable stores as customers rushed to obtain the equipment they assumed they didn’t need.

“The neighbor’s mother-in-law doesn’t understand how to use OnStar in her car, so it was no surprise she found out she needed the equipment when most of her favorite channels disappeared,” he adds.  “Time Warner really overestimated the level of understanding customers would have about this after buying new digital-TV’s a few years ago.”

Jim has several suggestions for Time Warner to adopt before the digital upgrade begins its progression across the country:

1. The equipment should be free of charge and included with your regular monthly service.  You can’t realistically expect to buy Time Warner Cable service without a box for every set after the digital conversion is complete, so just include the equipment;
2. A better and less intrusive way to manage this would be to install a single digital converter on the outside of the home or in a closet which could provide analog service to every TV not already equipped with a set top box.  That would mean no annoying box on every set in the home and would probably cost less (in time, money, and aggravation);
3. People assume they are ready for digital cable because they bought digital-ready TV’s after analog television service ceased. Most customers will not read generic letters carefully.  It would be better to send people customized letters telling them they specifically will need the equipment because records indicate additional outlets were installed in the home without corresponding cable set top boxes attached to them.  What are the chances customers are using CableCARD units these days?  Chances are, they’ll need the DTA adapters, so make this clearer.
4. Don’t you dare put customers through this, increase broadband speeds, and then slap usage caps or usage billing on us!