Last Tuesday, Bright House Networks suffered the worst outage in the company’s history, knocking out cable, broadband, and telephone service for over one million Tampa Bay-area customers.

Bright House customers from the beachfront to Lakeland to Spring Hill were forced to rely on cellphones for much of the day.  The company’s own 24-hour news channel, Bay News 9, couldn’t keep their Florida viewers informed about the outage, because that channel went dark as well.

Company officials blamed a software glitch for the series of progressive failures which began after 10:30am and were not repaired until later that evening.

Although Pinellas County’s 911 system remained in operation, Bright House customers couldn’t call the number from their Bright House “digital phone” line.

While customers without broadband or cable TV service were left bored during the outage, Bright House’s business customers without telephone service incurred real losses, unable to process credit card transactions or receive business calls.

Bright House has no plans to issue automatic refunds for the day without service, but WTSP-TV reports customers can directly request three days’ credit for the outage:

1. Send an e-mail to Bright House Networks using their online form.
2. Cut and paste the following into the “Describe your issue or concern” box: I am writing to request credit for Tuesday’s (9/6/11) service outage affecting phone, Internet, and cable-TV.  As seen on WTSP-TV and Facebook, I am requesting three days’ credit that Bright House representatives have offered other customers. Please credit my account.
3. Hit submit.  A credit should be issued within 48 hours, to appear on your next billing statement.  The amount of the credit will vary, depending on the number of services you receive.

[flv width=”540″ height=”380″]http://www.phillipdampier.com/video/Bright House Outage 9-6-11.flv[/flv]

Bright House Networks’ worst-outage-in-history was a major news story in the Tampa Bay-St. Petersburg area.  Watch a selection of stories from WFTS, WTVT, WFLA, and WTSP-TV.  (9 minutes)

Cable, satellite and telco-TV subscribers around the country can now watch most of the hit shows on Turner’s TBS and TNT Networks for free, assuming two things are true:

1. You pay for a package of television channels from Comcast, DirecTV, Dish Network, Cox Communications, Cablevision Systems, Suddenlink Communications, Verizon FiOS, or AT&T U-verse.
2. You are not a Time Warner Cable subscriber.

The new TV Everywhere app, available for phones and tablets, comes free of charge.  Once authenticated as a legitimate pay television subscriber, users can watch hit series and some older shows from both networks.

Once again, Time Warner customers are on the outside, looking in.  The nation’s second biggest cable operator has not been a TV Everywhere team player, preferring to launch its own live streaming iPad application and steering clear, so far, from on-demand, online viewing from most of its partner networks, including HBO.  Time Warner Cable executives have, in the past, alluded to licensing fees and user authentication complications for not launching TV Everywhere on-demand viewing for its customers, but the company has not explained why it has not signed on for Turner’s app.

TV Everywhere, a concept on the drawing board for almost two years, is an attempt by the pay television industry to lock down online video programming for paying customers, in an effort to slow down “cord cutting” by consumers trying to save money on their cable TV bill.  The concept delivers unlimited access to popular cable programming, but only to those who already pay to subscribe.

Many TV Everywhere projects have been soft-launched without much publicity, but that is not true for Turner’s app.  The network has commissioned several clever advertisements featuring various network stars promoting the app, and now Turner wants to educate consumers about how to use it to watch shows online.

The most complicated part of the process is getting “authenticated” by the application for authorized viewing.  Some cable companies like Time Warner want customers to launch access to TV Everywhere programming from the cable company’s website, where customers have already been authenticated when they sign up for an online account.  Other companies are using customer account numbers, PIN codes, or passwords printed on monthly bills to let customers register directly for access.  When the application matches a customer account number or PIN code, the content becomes accessible.  It is typically a one-time-only hassle, but there have been cases where customers have had to grab a recent bill more than once to re-authenticate themselves.

Not every show will be made available for online viewing.  Many rerun off-network shows shown on TNT and TBS don’t currently include streaming rights.  So while users can watch past episodes of Conan O’Brien, they’re out of luck if they want to watch Friends.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Turner App.flv[/flv]

Watch a selection of spots from the new advertising campaign for Turner’s ‘TV Everywhere’ app.  (4 minutes)

Hurricane Irene did its worst damage in inland areas of New England and Upstate New York

While hardly the “storm of the century,” damages from Hurricane Irene’s whirlwind tour up the east coast cannot yet be estimated because flood waters in the northeast are still rising this afternoon.

But while millions remain without electricity, some for up to several weeks, telecommunications infrastructure has fared better than expected in a number of areas hardest hit by the Category 1 hurricane.

A review of media reports finds the most substantial damage to cable TV and landline telephone service, mostly due to downed trees and flooding which brought down utility poles in a number of states.  The Federal Communications Commission also reported 1,400 cell sites along the coast were down, and several hundred were running on backup power.

North Carolina & Virginia

The most substantial wind-related damage impacted the states of North Carolina and Virginia where hundreds of thousands are still without electricity, cable, and landline telephone service.  Time Warner Cable, which dominates North Carolina, had 160,000 customers without service Saturday evening, primarily due to power outages and line damage.  As of this morning, 38,000 were still without service with the most damage in Wilmington, Newport, Morehead City, Jacksonville, Havelock, Elizabeth City, Murfreesboro and Ahoskie.  Outage information is available from 1-866-4TWCNOW (1-866-489-2669) for residential customers and 1-877-892-2220 for business customers.

Landline service outages are impacting more than 100,000 customers, and the wind damage has made the outages most severe in these two states.  CenturyLink, AT&T, and Verizon all report substantial damages to their respective networks in several areas.

At least 500 cell towers in North Carolina and Virginia are now operating on battery backup power, which guarantees cell phone outages will only grow worse as the hours progress.  Once battery power is exhausted, cell phone carriers either have to go without service or provision generators to deliver emergency power until normal electrical service can be restored, which is expected to take several days.  Physical damage to cell sites was reported to be minimal, however.  The biggest impact is loss of electricity.

[flv width=”670″ height=”380″]http://www.phillipdampier.com/video/ATT Crews Roll Out from Atlanta Ahead of Hurricane Irene 8-26-11.flv[/flv]

AT&T released this video to the news media showing the company’s preparations for Hurricane Irene, including putting trucks containing temporary cell sites on the road from Atlanta heading into North Carolina to restore wireless service knocked out by the storm.  (3 minutes)

Downed poles in neighborhoods are responsible for most of the outages impacting cable and phone companies. (Courtesy: WNYC)

Maryland, Washington, DC, Delaware, Southern New Jersey

A mix of wind and water damage has left sections of this region without electrical service, but damages are reportedly less severe than in North Carolina and Virginia.  The biggest impact is loss of electrical service which has left cell phone towers on battery backup and cable systems offline.  The more urban areas have less infrastructure damage due to underground wiring, but flood waters have created outages on their own.  In southern New Jersey, water damage is still occurring because of slowly rising rivers continuing to flood their banks.

Pennsylania, Northern New Jersey, New York City & Long Island

Substantial damage from excessive rain and downed trees, especially on Long Island, will leave some customers on lengthy waiting lists for service restoration.  Verizon on Long Island is telling some customers it will be at least two weeks before service calls can be completed to restore phone or FiOS service. Substantial neighborhood outages are impacting Cablevision customers on Long Island as well, mostly from downed trees.  At least 700 trees fell in Oyster Bay alone.  In Pennsylvania, the worst damage was actually further inland.  Suburbs of Philadelphia were particularly hard hit.  Electric service repair has been given top priority.  Cable service restoration will probably take longer, especially where utility poles have been damaged.

Upstate New York & New England

The worst damage of all is expected to be in upstate New York and New England, particularly in western Massachusetts and Vermont, unequipped to deal with the floodwaters which have set records in several areas.  A resident of Prattsville, New York escaped with his life and managed to finally reach emergency responders to report the entire community had been washed away in unprecedented flooding.  A great deal of utility infrastructure has gone with it, and the damage for New England’s FairPoint Communications, particularly in Vermont, is still being assessed.  Some communities in the region have been told it may take up to a month restore electrical service, longer for telephone and cable service.  Because large sections of the region are rural, there are fewer cell towers to cope with power outages, but the impact is much more readily apparent.  In some areas, there is only one provider delivering any significant service, and when battery backups fail, no cell service will function.

Verizon and Time Warner Cable all report service problems in the region.

Communities or infrastructure positioned near rivers are most at risk, and flood waters are still rising in many locations.  The damage, according to emergency officials, is likely to become worse before it gets better.

Although winds only achieved tropical storm-force in the region, they came in unusual wind patterns.  The National Weather Service issued high wind warnings as far west as Rochester in western New York in part because trees are unaccustomed to strong northerly winds and were much more likely to be damaged or uprooted from them.  Nearly one million New Yorkers, mostly east of Syracuse, remain without electricity this afternoon.  Some will wait 1-2 weeks before service can be restored in the most difficult-to-reach areas.

Service Credits Are Yours, But Only If You Ask

Telecommunications providers are notorious for providing service credits only when customers ask for them.  If your service was interrupted by the storm, make a note of when the outage occurred and remember to contact your provider for a service credit after service is restored.  In virtually all cases, providers will not automatically reimburse you for lost service and you will lose the chance to request it 30 days after service is back up and running.

If you’ve been affected by a serious storm, consider tree removal Raleigh NC to clean up the debris.

[flv width=”640″ height=”372″]http://www.phillipdampier.com/video/Verizon Wireless Emergency Plan.flv[/flv]

Verizon Wireless encourages its customers to create a natural disaster response plan that includes the use of cell phones to stay in touch with loved ones and employers.  (4 minutes)

Residents in greater Philadelphia overpaid Comcast more than $875 million dollars, thanks to the cable company’s alleged anti-competitive practice of building regional cable clusters that scare would-be competitors away.

Those are the primary allegations in a 2003 class action case brought against the country’s largest cable operator — a lawsuit Comcast has appealed, so far unsuccessfully.  A three-judge panel of the 3rd Circuit on Tuesday delivered the latest blow to the cable company, denying Comcast’s efforts to get the case thrown out.

At issue is the cable industry’s practice of acquiring and trading cable systems with each another to create regional “clusters,” — large geographic areas all served by the same cable provider — and what that practice does to cable pricing.  All the rage in the late 1990s and early 2000s, cable clustering largely put an end to multiple cable systems serving individual cities.  In the 1980s and 90s, it was not uncommon to find up to four different cable systems serving different sections of a community.  Philadelphia was no different, served by more than a half-dozen cable operators in the greater metropolitan region and surrounding counties.

In the late 1990s, the Court noted Comcast launched a major shopping spree to consolidate the entire area around one cable provider: Comcast.  The lawsuit claims subscribers have paid the price ever since.

Comcast’s Cable Swaps and Acquisitions

• April 1998: Comcast acquires 27,000 Marcus Cable customers in Harrington, Delaware, which is part of the Philadelphia Designated Market Area (DMA);
• June 1999: Comcast acquires 79,000 Greater Philadelphia Cablevision customers in the city of Philadelphia;
• January 2000: Comcast acquires 1.1 million Lenfest Communications customers in Berks, Bucks, Chester, Delaware, and Montgomery counties in Pennsylvania, and New Castle County in Delaware;
• January 2000: Comcast acquires 212,000 Garden State Cablevision customers in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, and Salem counties in New Jersey, which is part of the Philadelphia DMA;
• December 2000: Comcast acquires 770,000 AT&T Cable customers in Eastern Pennsylvania (Berks and Bucks counties) and New Jersey, in return for trading 700,000 Comcast customers in Chicago with AT&T (Comcast would later win them back by acquiring AT&T Cable itself);
• January 2001: Comcast acquires 464,000 subscribers in Philadelphia and nearby communities in New Jersey in a subscriber trade with Adelphia Communications Corp., wherein Comcast obtained cable systems and approximately 464,000 subscribers located primarily in the Philadelphia area and adjacent New Jersey areas.  In return, Comcast turns over its subscribers in Palm Beach, Florida and Los Angeles, California to Adelphia.
• April 2001: Comcast wins another 595,000 subscribers in the region in a trade with AT&T Cable;
• August 2006: Adelphia implodes and cable companies including Time Warner Cable and Comcast pick over what’s left.  Comcast manages to pick up another 41,000 former Adelphia customers that were originally headed to Time Warner in yet another subscriber swap;
• August 2007: Comcast acquires Patriot Media and its 81,000 New Jersey customers located within the Philadelphia DMA.

When the acquisitions and transfers were complete, Comcast managed to build a major empire in southeastern Pennsylvania.  In 1998, the company had just a 23.9 percent market share in the Philadelphia DMA.  Comcast managed to control 77.8 percent of the market by 2002.  Despite competition from satellite television and one struggling cable competitor — RCN, Comcast still controlled nearly 70 percent of the market as late as 2007.

Who Pays for the Shopping Spree?  Comcast Customers, Say Plaintiffs

Six Comcast customers upset with the relentless rate increases that came with Comcast’s acquisitions joined forces and filed suit against Comcast in 2003.  The plaintiffs charged Comcast with anti-competitive business practices and violations of the Sherman Act for building a monopoly presence in the market that also helped keep competitors at bay.

One plaintiff’s expert was able to calculate what he called “a conservative estimate” of how much Comcast has effectively overcharged customers in Philadelphia by preventing effective competition: $875,576,662.

That figure was hotly disputed in Comcast’s court appeal, but last Tuesday the Court rejected Comcast’s arguments.  In fact, the Court found merit in the formula used to arrive at the amount of overcharging Comcast has allegedly engaged in — in Philadelphia alone.  Comcast’s argument that customers enjoy lower pricing through promotions and other special pricing arrangements fell apart when the Court learned at least 80 percent of Comcast subscribers pay regular “list prices” for service, and the expert who created the ‘wallet damage‘ formula had taken that special pricing into account.

The plaintiffs suggest that had Comcast not engaged in system clustering, one or more of the area’s cable systems might have decided to compete against the other cable systems.  In that scenario, customers might have been able to choose from Comcast, Lenfest Communications, Marcus Cable, and/or Patriot Cable for cable service, resulting in increased price competition.  While there have been instances of traditional cable operators overbuilding into each other’s territories, those instances have been rare — a point Comcast made in an effort to have the case tossed out.  Comcast’s case is that the majority of Americans are served by a single cable provider, but that’s not a problem because the industry faces increasing competition from satellite TV providers and, as of late, large phone companies.

But the Court found the reason for this lack of competition could be, as plaintiffs argue, the successful outcome of the alleged anti-competitive, cable system-clustering strategy.

As an example, a railway monopoly from 100 years ago could claim it isn’t economical for more than one railroad to serve a particular community, but that isn’t a problem because other forms of transportation exist to move goods and people.  That argument would be based on a market reality created by the railway industry, which routinely bought out the competition through withering price wars, cross-subsidized by higher prices in other monopoly markets. The end effect was a shrinking number of competitive markets, increasing profits (and prices), and a strong deterrent for would-be competitors to enter the business.

A similar case has been brought by the plaintiffs struggling with high cable bills.  In their eyes, cable customers paid for the Monopoly game board on which cable properties were traded or sold.  When the shopping spree was complete, higher rates were the result, indefinitely.

The Case of RCN — Programming Denied

Most traditional cable companies do not compete in areas already served by another cable company.  It’s a tradition some liken to a cartel, where companies carve up territories and enjoy the market benefits afforded by a lack of competition.  But this model is also considered standard operating procedure by Wall Street and other private investors, who fear all-0ut price wars cutting revenues and destroying value and profits.  But there are some companies whose entire mission is to challenge this economic model: the cable overbuilders.  The business plan of the cable overbuilder is to challenge the status quo and deliver service where cable TV already exists and do so profitably.

One such overbuilder is RCN Corporation, which delivers competitive cable service in Boston, Washington, D.C., New York City, Chicago, and parts of the Lehigh Valley.  RCN began operations in 1996 in Boston, just before the cable industry’s quest for clusters went into hyper-drive.  Their plans to compete have been challenged by the ever-increasing concentration in the cable-TV marketplace ever since, and the company has had a particularly tough time attracting subscribers in the Philadelphia area.  Much of RCN’s service area these days is limited to multi-dwelling units like high-rise condos and apartments, where wiring costs are lower.

One of the most effective ways to keep customers from switching to a competitor is to develop or maintain exclusive programming rights.  If a Comcast customer discovered his favorite sporting events could only be seen with a Comcast subscription, that could be a deal-breaker for signing up with RCN.  Before the 1992 Cable Act, the cable industry which owned and controlled a number of popular cable networks refused to sell those channels to would-be competitors (or charged unreasonable prices for access).

When this lawsuit was filed in 2003, RCN found itself locked out of Comcast’s SportsNet, just one of several regional sports networks that cable operators withheld from satellite and cable competitors.  That’s because the 1992 Cable Act included a loophole: it applied only to networks distributed on satellite.  Several regional sports channels were not on satellite, so they could, and were, legally withheld from competitors like RCN.  That loophole was finally closed by the FCC last summer.  But for more than a decade, RCN had to convince sports fans to sign up for a competing service that didn’t have one of the most popular sports channels on the lineup.

Satellite competitors DirecTV and DISH Network were in the same boat, and the legal case recognizes the impact: satellite TV competition in Philadelphia has a below-average percentage of the market, when compared to other cities.

Plaintiffs argued RCN never had fair access to programming, leaving them to compete with one hand tied behind their back.  Even worse, they allege Comcast compelled local contractors into non-compete contracts agreeing not to work for any Comcast competitor, and signing customers up to unusually long contract terms with hefty cancellation penalties in RCN service areas.

All of these accusations were deemed credible by the Court, much to the objection of Comcast, which argued RCN was in serious financial distress and would never be a strongly viable competitor in Philadelphia.  Last week’s Court decision found that ironic, accepting that RCN’s present condition could be, as plaintiffs allege, the result of the anti-competitive, unfair business practices Comcast is charged with.

The evidence on the record “demonstrates that Comcast’s alleged clustering conduct indeed could have reduced competition, raised barriers to market entry [by other competitors] … and resulted in higher cable prices to all of its subscribers in the Philadelphia Designated Market Area,” the court ruled.

Comcast: A Competitive Marketplace Begins And Ends Only at Home

One of the most-disputed elements in the case is determining how much, if any, damage was done to consumers in the greater Philadelphia area.  Much of the plaintiffs’ case rests on pricing anomalies found in the Philadelphia region, where customers are alleged to be paying significantly higher prices for cable service and not enjoying a significant amount of competition.  To build that case, lawyers measured cable rates and available competitors in the various counties in and around the city of Philadelphia.

This is also critical for determining the size of the “class” in the class action lawsuit.  The larger the class, the greater risk of significant damages if the court rules against the cable company (or if the case reaches a settlement.)  Plaintiffs claim their case should include all cable television customers who subscribe or subscribed at any time since December 1, 1999, to the present to video programming services (other than solely to basic cable services) from Comcast, or any of its subsidiaries or affiliates in Comcast‘s Philadelphia cluster.

They specifically defined the cluster as “areas covered by Comcast‘s cable franchises, or any of its subsidiaries or affiliates, located in the following counties: Berks, Bucks, Chester, Delaware, Montgomery and Philadelphia, Pennsylvania; Kent and New Castle, Delaware; and Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer and Salem, New Jersey.”

Comcast counters the geographic market is exactly the size of one, single household.  They argue that subscribers can only choose among video providers serving that customer’s specific home, so what cable competition exists in other counties or communities isn’t relevant.

The side effect of such an argument would be the end of a class action case, since the class size would be reduced from a number in the millions to just one, requiring every impacted consumer to file their own case.

The three judge panel was wholly unimpressed with Comcast’s argument, throwing it out and allowing the case to proceed.

When Time Warner Cable introduced its SignatureHome service, the company claimed it wanted to deliver a comprehensive experience to its most premium-customers.  But oddly, the best broadband speeds, phone service, and digital cable TV lineup from the cable company didn’t include any premium movie channels.

“I was ready to sign up for SignatureHome, but I assumed it included major premium channels, and it didn’t,” says Stop the Cap! reader Liam in Los Angeles.  “I thought it would be a real money-saver but I would rather have the premium channels than their phone service, which I don’t actually use as I depend on my cellphone.”

Scott elected for a cheaper promotional bundle foregoing phone service and the fastest Internet speeds, choosing to stick with Road Runner Turbo service.

“Powerboost on their Turbo product is more than enough for me and I don’t need faster upload speed — if SignatureHome included the premiums I would have taken it,” he says.

Now Time Warner has introduced an addition to their super-deluxe package — SignatureHome Premium View, which bundles HBO, Showtime, Cinemax, The Movie Channel and Moviepass with everything else on offer for $30 more a month — $229.99.  The package excludes Starz!, a premium movie channel Time Warner has barely promoted over the years.

With many markets increasing prices to as high as $15 for channels like HBO, getting five premium networks for just under $30 isn’t a bad deal, assuming you watch them and benefit from SignatureHome‘s other features.

“When my promotion expires, I’ll consider this new option,” Scott says.  “Yes, I realize $230 for cable service should really be an outrage, but the way the company is pricing services these days, the more you bundle, the less you ultimately pay compared to trying to build your own package of services.”

That may be exactly the point.  For customers who rely on Time Warner for phone, broadband, and cable-TV, SignatureHome can be a reasonable value if you crave the company’s highest 50/5Mbps broadband speeds.  Building a comparable bundle on your own is much more expensive.  Now the same is true for premium movie channels, which run between $11-15 a month each a-la-carte.

[flv width=”534″ height=”320″]http://www.phillipdampier.com/video/NY1 Signature Home Arrives 12-9-10.mp4[/flv]

NY1, Time Warner Cable’s 24 hour news channel in New York City, talked about the introduction of SignatureHome last December.  (2 minutes)