AT&T’s fiber to the neighborhood service is not exactly winning consumers over in Chattanooga, Tenn.  As of this past spring, AT&T only managed to convince 821 local customers to sign up for U-verse service, in part because the competition delivers faster service, and one doesn’t slap broadband customers with an Internet Overcharging scheme.

While Comcast remains the dominant cable company in the city with more than 100,000 customers, community-owned EPB Fiber has made major advances, primarily against Comcast, picking up at least 33,000 customers in the city since the summer of 2010.

EPB is turning into a major success story for community-owned broadband, typically maligned as a financial failure by cable and phone company competitors.  EPB offers residential customers usage cap free gigabit broadband, television, and telephone service and is competing effectively against the nation’s largest cable operator.

EPB has been raking in more than $3.8 million a month in telecommunications revenue from residential customers alone.  In less than two years, EPB, which also delivers electricity in Chattanooga, has built a $45 million a year telecommunications business.  As a community-owned utility, most of that revenue stays in Chattanooga, benefiting the local economy and allowing EPB to reinvest in its network and improve service.

Comcast, in contrast, has seen its revenue drop by 8.4 percent during the first six months of 2011, primarily because of departing customers. That has forced the dominant cable company to become more aggressive in its efforts to retain those calling to cancel, primarily by slashing prices if wavering customers agree to stay.

Remarkably, AT&T’s U-verse has merited also-ran third place status — the victim of limited availability, the ongoing trend of customers dropping landline service, and the far-superior broadband speeds available from the competition.  AT&T’s Internet Overcharging scheme is also the stingiest, limiting broadband customers to just 150GB for its DSL service, 250GB for U-verse broadband, charging overlimit fees when the caps are exceeded.  Comcast has a usage cap of 250GB with no overlimit fee.  EPB has no limits.

The Chattanooga Times Free Press compares all three providers’ strengths and weaknesses:

EPB Broadband speeds are the fastest in the nation.

AT&T — Very aggressively priced introductory offers, more HD channels than its competitors, plus a “quad-play” bundle that includes AT&T wireless service.  But AT&T’s landline network is still the least equipped to compete on broadband speed, an increasing number of residents continue to turn their back on AT&T when they cut landline service, and U-verse’s usage caps come with overlimit fees.

Comcast — Has a substantial number of on-demand programs to access, can be cheaper than EPB during the initial year of service, and is testing home security and automation services.  Also offers two-hour service call windows and aggressively priced retention deals.  But Comcast’s regular prices are high, its broadband service usage-limited, and its reputation questionable after more than a decade of rate hikes and service complaints.

EPB — The fastest broadband speeds anywhere, EPB runs an advanced fiber to the home network, and maintains a very aggressive attitude about expanding and improving service.  EPB is a formidable competitor.  Community-0wned, its service benefits local residents with a locally-staffed call center, revenues that stay in Chattanooga, and management that answers to customers, not Wall Street.  No caps either.  But EPB can be a harder initial sell for price-sensitive customers because it doesn’t offer heavily discounted service to attract new customers.  But EPB prices don’t rise dramatically after the first year, either.  EPB’s television lineup is less robust than others, in part because it lacks a nationwide presence that brings the kind of volume discounts AT&T and Comcast receive.

Cablevision's top executives head on out. Tom Rutledge (left) and John Bickham (right) left within weeks of each other.

The unexpected and sudden departure of two senior executives at Bethpage, N.Y.-based Cablevision has pushed the rumor mill into overdrive the cable company is about to be sold or taken private.

John Bickham, president of cable communications and chief operating officer Tom Rutledge will both be spending more quality time with their respective families after departing Cablevision.  Last Thursday’s announcement that Rutledge would resign caused Cablevision’s stock price to drop by nearly 14% during trading Friday.

The inevitable conclusion on Wall Street: Cablevision is about to be sold or taken private.

Major shareholders and investment firms have criticized Cablevision over the years for being “too successful” signing customers to fixed price double or triple-play packages that provide a full suite of products and services, but deliver few growth opportunities shareholders demand. With heavy competition from Verizon FiOS in most of their service areas, Cablevision’s ability to simply raise rates is limited, especially when customers bounce between promotional offers from the phone and cable companies.

Rutledge’s departure, in particular, has been seen as a major negative on Wall Street because he was responsible for many of Cablevision’s most innovative products, including streamed video, his advocacy for boosting broadband speeds, and the company’s aggressive move into home security.

Craig Moffett, a Wall Street analyst from Sanford Bernstein, thinks Comcast and Time Warner Cable are set to divide the spoils in a shared buyout — Comcast grabbing northern New Jersey and Connecticut and Time Warner Cable assuming control of Cablevision’s systems in New York.  But other analysts don’t think that scenario is so likely, especially when considering the Dolan family’s long history in the cable business.

ISI Group Inc. analyst Vijay Jayant told Light Reading Cable he believes the more likely scenario would have the Dolan family buying out shareholders and taking the cable company private.

Time Warner Cable has repeatedly informed shareholders the company will not engage in bidding wars or overpay to win new acquisitions, and the Dolan family’s selling price for Cablevision is likely far higher than Time Warner would be willing to pay.  Comcast might have a political problem assuming control of more cable systems after its recent merger with NBC-Universal.  Shareholders may also rebel, as they did in a 2007 effort to take Cablevision private.  Investors felt they were offered too low a price to compensate them for their shares.

Moffett believes Cablevision’s days of high earnings and rapid growth are behind them, because just about everyone who wants cable service already has it, either from Verizon FiOS or Cablevision.

“No, we don’t think [Cablevision] can grow. And, no, we don’t think the rest of cable is doomed to the same fate,” Bernstein’s Moffett wrote in a report in late November. “The cause of [Cablevision’s] growth decline is straightforward: it has been so successful in achieving high product penetrations that growing further is quite challenging.”

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg Joyce Says Cablevision May Be a Takeover Target 12-16-11.mp4[/flv]

David Joyce, media analyst at Miller Tabak & Co., talks about Cablevision Systems Corp. Chief Operating Officer Tom Rutledge’s resignation and the outlook for the company.  Bloomberg News.  (5 minutes)

Providers establishing Internet Overcharging schemes like usage caps, so-called “consumption billing,” and speed throttles that force subscribers into expensive upgrades are planning for a growth industry in data consumption.

According to new research from a firm that specializes in market strategies, data usage is going up and fast.  Providers that seek to monetize that usage could win enormous new profits just sitting back and waiting for customers to exceed the arbitrary usage caps some companies are now enforcing with their customers and take the proceeds to the bank.

iGR says the demand for connectivity inside the home is at an all-time high, with the biggest growth coming from wireless Wi-Fi connections.  The more devices consumers associate with their home broadband connection, the greater the usage.

That is one of the reasons why providers are increasingly supplying customers with free or inexpensive Wi-Fi routers, to make the connections quick, simple, and potentially profitable down the road.

Comcast's Wireless Gateway: A Future Money Machine?

Comcast announced this week it would supply a free 802.11N “home gateway” free of charge to every new customer signing up for Blast!, Extreme 50 or Extreme 105 broadband service.  In addition to wireless connectivity for every device in the home, the Xfinity Wireless Gateway also includes a built-in cable modem and phone service adapter.  Time Warner Cable strongly encourages new DOCSIS 3 customers use their equipment for Wi-Fi service as well.  AT&T has included its own wireless gateway with U-verse for a few years now.

The offer is hard to refuse.  Nearly 80 percent of homes use wireless access, connecting cell phones, tablets, laptops, personal computers, game consoles, and even set top boxes that let customers stream video entertainment to their television sets.

iGR found average usage in heavily-connected homes at the all time high of 390GB per month.  By 2015, that will rise to more than 440GB per month.  Both numbers are well in excess of average consumption limits by providers like Comcast and AT&T, which top out at just 250GB per month.  Of course, not all Wi-Fi usage is based on traffic from the Internet.  Some users stream content between computers or devices within the home.  But the research is clear — usage is growing, dramatically.

Video is by far the biggest factor, according to iGR.  Their report, U.S. Home Broadband & WiFi Usage Forecast, 2011-2015, says the appetite for downloaded and streamed video is only growing.

Matt Vartabedian, vice president of the wireless and mobile research service at iGR, says home Wi-Fi has become inextricably woven into the personal, social and business fabric of today’s life.

Broadband is increasingly seen by consumers as an essential utility, as important as the home wired telephone, safe drinking water, and reliable electric and natural gas service.

Providers are positioning themselves to take advantage of the growth market in data by establishing what, at first glance, may seem to be generous (often inflexible) usage limits that remain unchanged years after introduction.  While only a handful of consumers may cross those provider-imposed thresholds at first, within a few years, it will be more uncommon to remain within plan limits, especially if you watch online video.

The nationwide outage lasted just a few minutes for some, about 20 minutes for others.

Time Warner Cable customers across the country noticed a nationwide outage of the cable company’s broadband service this morning.

Customers from New York to California to Texas first noticed the outage at around 9am EST, which appeared to first affect the company’s DNS servers, but attempts to switch to other DNS providers only worked briefly before they began to fail as well.  Inbound and outbound traffic was impacted.

The outage lasted approximately 20 minutes for customers relying on Time Warner’s DNS servers and just a few minutes for those who don’t.  Thanks to Stop the Cap! reader Tom for dropping us a note and letting us know.  We already knew — Stop the Cap! HQ is powered by Time Warner Cable broadband and it was out of service here in Rochester, N.Y. as well.

The company acknowledged the “large but brief Internet outage affecting most of our service areas” and requested customers still impacted reboot their cable modems.  That’s advice unlikely to help those who can’t access the Internet to read those instructions, however.

Because the outage lasted less than one hour, and only a few minutes for many, customers are not entitled to service credits this time.

It could be worse.  Some AT&T and Cablevision customers in parts of Connecticut are expecting to be without Internet or cable service for as long as two weeks after the snow storm that struck the area Oct. 29-30, bringing down utility poles and cable lines.

At least 50,000 people in the Nutmeg State have begun their second week without electricity as Connecticut Light and Power missed their self-imposed deadline to get the lights back on by midnight last night.  Power isn’t expected to be fully restored until Wednesday.  Cable and telephone crews cannot begin repair efforts until electrical service is up and running.

(Courtesy: Glasbergen)

Shaw Cable customers in Langley and Aldergrove, B.C., waited as long as four hours on hold to speak to a customer service representative trying to learn when their cable and broadband service would be restored after vandals cut a fiber line.

Days later, hundreds of customers were still without service… and answers.

“When I called [Shaw], I was told there was a four-hour wait to talk to customer service,” area resident Candace Hopkins told CBC News.

That four hour hold time was hardly an isolated case.  Several CBC viewers reported similar experiences, and many simply gave up calling even though their cable service was out for days.

Shaw Cable suspects the vandals were would-be copper thieves, unhappy to discover their efforts would only net them fiber optic cables which have almost no resale value.  But customers suspect the cable cuts have not been a priority for Shaw, leaving customers in the dark about when service would be restored.

CBC News called Shaw customer service and only managed to get a recording, which said nothing about how large the problem was or when it would be fixed, saying only that some service was restored and crews were working on the rest.

Other calls to Shaw’s media relations department from CBC News have not been returned.

Shaw customers are not amused, invading the company’s Twitter account with repeated complaints. Other outages have left customers with similar experiences.  One customer on the Outer Gulf Islands told he’d be waiting up to four hours for help managed to leave his number for a call back.

“The kicker is that after about four hours we received a call from something approximating Shaw,” the customer explains. “I believe that it was a call center in India. To add insult to injury, the voice on the other end of the phone line told me that everything was fine with my line. And, it was. Service had been restored 10 minutes before the call back. When I tried to explain this and asked what the earlier service disruption was about, the voice on the line simply kept repeating that everything was fine on my line.”

Shaw’s hold times are infamous in western Canada.  It is not uncommon to wait at least an hour to speak to a customer service representative as we reported back in September.  Some customers find it quicker to drive to the nearest cable office to arrange for service calls or manage their accounts.  So far, Canadian regulators have done little to pressure Shaw into making improvements.

When service was restored, some customers were brave enough to call Shaw to request outage credits.  “A big mistake,” shares one of our readers.

“The automated voice said there was a two hour hold time and when I finally got through, I was told I couldn’t get a credit because I didn’t report the outage during the outage,” says Stop the Cap! reader Jules who shared this story over his restored Internet service in Aldergrove.

“They didn’t seem to have a good answer when I suggested how difficult that would have been since it took out my Shaw telephone line as well. I got my credit.”