MYOB

Asking about the cost of DirecTV could turn out more expensive than you think.

The Los Angeles Times found DirecTV a little more nosy than it should be, opening the door to identity theft and some minor credit damage from unwanted credit inquiries from the satellite provider.

As customers in southern California grow weary over Time Warner Cable’s dispute with CBS, some are shopping around for a better deal with another provider.

57-year old Los Angeles resident Michael Bell got more than he bargained for when he called DirecTV looking for some price quotes. Before the representative would answer, Bell found himself grilled for a lot of personal details that seemed irrelevant in response to a question about the price of HBO.

In addition to name, address, and type of residence, DirecTV wanted to know if Bell owned or rented his home.

“That stopped me,” Bell told the LA Times. “Why should he care? I told him I just wanted a price quote. He said we’d get to that. And then he asked for my Social Security number.”

That was T.M.I. for Bell’s tastes and he quickly hung up.

Requesting a Social Security number these days is a red flag, often giving warning the person asking is about to run a credit check on you.

Sure enough, Robert Mercer, a DirecTV spokesman, explained the satellite provider pulls a credit report on every potential customer to determine their financial viability. DirecTV doesn’t want deadbeat customers, not after spending close to $900 to install satellite television in the average home.

If you don’t like it, you can pay DirecTV a $300 deposit and keep the number to yourself. The money is gradually refunded in the form of $5 monthly service credits each month you maintain service.

Cable companies are also notorious for running credit checks on customers, which can appear to other creditors as a request to extend credit. Too many credit inquiries can temporarily cut your credit score or worse, deny you credit.

AT&T and Verizon are also sticklers for good credit so expect them to run credit checks as well.

Time Warner Cable stands out among others for at least taking an interest in protecting customer privacy and preventing possible identity theft.

Dennis Johnson, a company spokesman, told the newspaper it can run a preliminary credit check with only the last four digits of a Social Security number and your date of birth.

Consumer privacy advocates argue that in the age of identity theft, nobody should be providing a Social Security number to anyone without a clear understanding it is being used to establish credit, open an account, or get earned retirement benefits. Consumers asked for a Social Security number for any other purpose should ask if they can avoid providing it or at least carefully scrutinize the request. If uncomfortable, simply end the conversation.

Alito

Justice Samuel Alito was forced to recuse himself from nearly six dozen cases brought to the Supreme Court in the last 10 months because the Alito family owns stock in many of the corporations involved in litigation.

When Alito’s wife Martha Ann’s father died last year, the Alito family inherited a wealth of stock worth up to $1.25 million in some of America’s largest companies, including AT&T and Verizon Communications.

The Associated Press reports Alito’s tardy financial disclosure for 2012 revealed the justice’s reasons for recusal: his sudden ownership of shares in large telecom, pharmaceutical, oil and gas, and tobacco companies.

Federal law requires justices to step away from cases where there is a financial conflict of interest. Alito’s inherited stock represents just such a conflict.

In one case, however, Alito found himself holding Comcast Corp. stock after hearing arguments in a massive class action antitrust case representing two million customers the plaintiffs argued were being overcharged by an illegitimate cable monopoly.

Alito’s Comcast stock was purchased and sold last December. The Court’s 5-4 decision, written by Justice Antonin Scalia, was announced March 27. Alito’s deciding vote fundamentally raised the bar on future lawsuits, making it much more difficult for class action cases to be brought before the courts.

The Comcast suit, in the courts since 2003, argued that cable subscribers in Pennsylvania, New Jersey and Delaware were overcharged at least $875 million because of Comcast’s efforts to monopolize cable service in the Philadelphia area. Comcast amassed its dominant position by buying or swapping cable systems in the region to create a single large cable provider serving the majority of southern New Jersey, Delaware, and southeastern Pennsylvania. By 2002, the lawsuit claimed, Comcast had achieved a 77.8 percent market share.

Comcast argued the lawsuit was too complicated and its proposed method of calculating damages was faulty. The Court’s conservative justices agreed with Comcast, finding the lawsuit fell “far short of establishing that damages are capable of measurement.”

• Voting for Comcast’s position: Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito.
• Voting against Comcast: Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.

A study recently published in the Minnesota Law Review found the current Supreme Court is by far the most corporate-friendly of any court in at least 65 years, noting “the Roberts court is indeed highly pro-business — the conservatives extremely so and the liberals only moderately liberal.”

The top two most likely to vote in favor of big business among all justices seated since 1946 are Chief Justice Roberts and Justice Samuel A. Alito, Jr.

“There was a time when being ‘business-friendly’ meant giving corporations a leg-up and a level playing field because doing so creates jobs and bolsters the economy,” wrote Supreme Court reporter Jonathan Valania. “Today, ‘business-friendly’ means letting corporations socialize their costs while privatizing their profits. It means letting corporation literally write the laws that govern them. It means rolling back regulations and de-fanging oversight [….] What we are really talking about is corporatism.”

…fiction into “fact.”

Although America’s perennially worst-rated cable company is advertising “always faster Internet,” it is also moving “full speed ahead” to enforce usage limits to make sure customers don’t take too much advantage of those speeds.

Broadband Reports notes Mediacom is preparing notices stating effective Sept. 7 usage limits and overlimit fees that used to only apply to new customers or those changing plans will now be enforced for all customers.

A member of their social media team blamed bandwidth hogs for the caps.

“We have a small subset of customers that are using a very large portion of the available bandwidth, which can have a negative impact on the other Internet users in the surrounding area,” said Mediacom’s Social Media Relations Team. “By curbing this behavior, other customers can benefit with faster speeds.”

Actually, Mediacom will benefit from lower usage and higher revenue it will collect from the $10 overlimit fee for each additional 50GB of usage. Neighborhood congestion issues are largely a thing of the past because of upgrades to DOCSIS 3 technology.

Although the usage caps for higher priced tiers are generous by current standards, the company can adjust the caps up or down at any time. Mediacom traditionally serves rural areas or small cities that lack significant telephone company competition, so customers may have few alternatives. Both CenturyLink and AT&T have their own usage caps, barely enforced. Frontier Communications, another common provider in Mediacom territory, has tested the water with usage caps in the past but does not regularly impose them.

Broadband Reports assembled the pricing and caps for each Mediacom broadband tier:

If Time Warner Cable is concerned about the rising cost of cable television, it sure didn’t show it after sources revealed the cable company quickly accepted CBS’ demands for more compensation but is refusing to budge until it wins rights to show CBS programming on mobile platforms.

Sources tell the Daily News Time Warner quickly agreed to a major increase from 50 cents a month per subscriber to $2 a month for CBS content, but is keeping CBS-owned stations and cable networks off the dial until the network agrees to let the cable company distribute on-demand and live programming on cell phones, tablets, and personal computers.

Earlier this week, Time Warner Cable CEO Glenn Britt made an offer CBS couldn’t wait to refuse: the cable company would put CBS programming back on the lineup if it could be sold to customers a-la-carte instead of bundling it with other channels.

That would “allow customers to decide for themselves how much value they ascribe to CBS programming,” Britt said in a letter to CBS CEO Leslie Moonves that was promptly posted online.

CBS called the idea a sham, noting a-la-carte runs contrary to the economic model the cable industry itself regularly and loudly defends. Try telling ESPN, which costs every cable subscriber more than $5 a month, it will now be offered only to customers that want to pay for it.

Phillip “Capitulation Corner” Dampier

In fact, for most cable operators, the concept of selling customers only the channels they want is the nightmare scenario. Average revenue per subscriber would tumble as consumers rid themselves of networks with three digit channel numbers they didn’t even know they had. Goodbye ‘Yarn Creations’ on Generic Home Shopping Channel 694, Bosnian music videos, reruns of Simon and Simon, mysterious networks showing episodes of Law & Order that USA Network already burned into your permanent memory, and that “fine arts” network that shows endless hours of Antiques Roadshow dating back to 1998.

Digital rights is an important issue for both cable companies and programmers. Although both sides deny “cord cutting” is real, the intensity of the fight allowing online viewing says otherwise. If CBS gives away rights to Time Warner Cable to show live and on-demand programming to subscribers, CBS can’t make as much money offering shows on its own website (with its own ads), much less sell programming to customers. Time Warner fears if CBS only offers online programming through its own website, customers might decide they don’t need the cable company to watch those shows any longer.

“At the moment the cable operators have the leverage because the more that CBS is off the cable, the more that they realize the viewers don’t need it,” said media expert Michael Wolf, former Yahoo! board member and president of Viacom-owned MTV Networks.

For now, many viewers are turning to pirate video sites to catch the CBS shows they are missing. TorrentFreak reports huge spikes in illicit download traffic of CBS content over the weekend. Under the Dome was the source of much of the spike, although customers are also downloading pirated copies of Showtime programming. The evidence is clear: take away popular programming and customers will simply download it illegally from third-party websites.

As summer wanes and the fall football season approaches, just about everyone expects the war will quickly end, because football fans are more than willing to drop a provider if they can’t spend several hours in front of the television Sunday afternoon. Considering Time Warner has reportedly already caved in on CBS’ money demands, it is likely CBS will be able to eventually extract even more money from the cable company to secure digital distribution rights. Subscribers will pick up the tab for both during the next round of rate increases beginning this fall in the south and by January in the northeast.

Time Warner Cable’s latest regulatory notice admits current deals with more than 50 networks are due to expire soon, and the company may cease the carriage of one or more of the networks. They include: Lifetime, E!, Style, Turner Classic Movies, and the NHL Network. So just like Law & Order reruns, we will see this episode again in the near future.

The PGA is offering a way for golf fans to watch some of the PGA Championship online, bypassing the CBS-TWC dispute.

[flv]http://www.phillipdampier.com/video/CNBC PGA Time Warner 8-8-13.mp4[/flv]

Perhaps the biggest loss viewers without CBS will experience this weekend is the PGA Championship. CNBC talks with tournament officials in Rochester, N.Y., about the possibility of viewing alternatives. But golf fans can watch parts of the tournament for free from the PGA’s website. (3 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg The Future of Cable Post CBS-TWC Battle 8-6-13.flv[/flv]

Bloomberg News reports that while many cable viewers could care less about the loss of CBS and Showtime, broadband customers may care very much when cable operators start charging extra for Netflix or add punitive usage caps to make sure customers don’t cut cable TV’s cord. (3 minutes)

Big, Bigger, Biggest… Bigger Still

Comcast has plenty of available bandwidth to indefinitely expand its High Speed Internet services at speeds up to 3Gbps and believes it has won the legal right to grow its cable business as large as it likes.

Comcast executives admitted Wednesday they have more than enough network capacity to meet the demands of customers, both now and well into the future.

“With regard to usage and capacity, we feel the network is flexible and has plenty of opportunity to grow in capacity,” said Neil Smit, president and CEO of Comcast Cable Communications. Smit was responding to a Wall Street analyst asking about future capacity during a quarterly financial results conference call.

Smit noted that some of the biggest bandwidth users served by Comcast are businesses, and the cable operator was well-positioned to service them by extending fiber or deploying its Metro Ethernet product. Residential customers get increased bandwidth through neighborhood node splitting or DOCSIS 3 channel bonding that combines several channels together to increase speed and capacity.

Brian Roberts, CEO of Comcast Corporation, agreed with Smit, adding, “the more the consumer desires speed, the better that is for our company.”

Roberts noted DOCSIS 3.1 — the next generation of cable broadband — was “promising technology.”

“At the cable convention, we demonstrated 3Gbps” over Comcast’s existing cable infrastructure, said Roberts.

Smit

Comcast is easily the country’s largest cable operator, but many believe it is restrained from growing larger through mergers and acquisitions because of antitrust concerns. But thanks to a number of lawsuits initiated by Comcast, the company believes it can now grow as large as it likes.

Roberts admits the question of cable industry consolidation remains a gray area, particularly for Comcast. But he told investors he does not believe there are any remaining legal hurdles preventing Comcast from buying out other cable operators, despite earlier FCC rulemakings limiting the maximum size a cable company can grow through buyouts.

Comcast yesterday announced its last buyout — NBCUniversal — helped fuel a 29% increase in net income in the second quarter, thanks in part to strong results from film and television.

But many of Comcast’s largest gains came from its cable business.

Despite continued losses of video subscribers (159,000 in the second quarter), Comcast’s cable revenue increased 5.8% to $10.47 billion, and operating cash flow grew 5.7% to $4.3 billion. Comcast, which also owns several NBC broadcast affiliates, is playing for both sides of the retransmission consent wars. Its owned and operated television stations have demanded higher fees to be carried on cable systems, many owned by Comcast itself. The increased programming costs fuel subscriber rate increases, which also boost revenue.

Broadband is way up, although the company keeps losing video customers to cord-cutting.

Comcast’s broadband revenue has continued to grow dramatically. Customer additions for High Speed Internet access were up more than 20% in the quarter — the best second-quarter growth in five years — even as subscribers paid more for the service because of rate increases. Customer growth and price hikes delivered 8% growth in broadband revenue. In the last quarter alone, Comcast earned $2.6 billion from its broadband business.

Comcast is not spending a significant percentage of that revenue on enhanced broadband network upgrades. Instead, the company has increased investments to wire office parks and businesses to entice commercial customers, which account for a substantial amount of new customer growth. Comcast is also investing in research and development of new products and services, such as set-top boxes. The company also expects to pay 10% more in programming costs than it did a year earlier.

Year-to-date cable communications capital expenditures have increased 7.1% to $2.3 billion representing 11.3% of cable revenue. Comcast expects that for the full-year of 2013, cable capital expenditures will increase by about 10% over 2012.

Some other highlights from the quarter:

• In the last six months, Comcast completed broadband speed increases for 70 percent of its customers;
• High Speed Internet revenue was again the largest contributor to Comcast’s cable revenue growth;
• At the end of the quarter, 33% of Comcast’s residential high-speed customers take a higher speed tier above its primary service;
• Comcast has pushed Wi-Fi hard, installing more than four million wireless gateways and boosted Wi-Fi coverage to 250,000 hotspots through both cable partnerships and its home hotspot initiative;
• Comcast’s new X1 cloud-based set-top platform has been introduced to more than half of its national service area and will be available everywhere by the end of 2013. By the end of the year, Comcast also expects to push a firmware update to installed boxes to upgrade them to its new X2 platform;
• The average Comcast subscriber now pays the company $160 per month, up 7.4% from last year. Rate hikes, speed upgrades and growing programming packages account for the higher price;
• 77% of Comcast video customers took at least two products and among those, 42% took phone, broadband and television service.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg Comcasts Cable and Media Units Grow 7-31-13.flv[/flv]

Bloomberg reports Comcast is still having trouble holding on to its video-only customers, but broadband customer growth continues to explode. Comcast also does well because it owns a number of cable networks and entertainment properties. Expect Comcast to continue evolving its products to bring them closer to the things people do online.  (3 minutes)