Tiny Ringgold Telephone, which serves 122 square miles of northwestern Georgia, has pulled the plug on the company’s own video IPTV package and is encouraging customers to watch all of their television shows online or through a satellite TV package offered by DISH Network.

Ringgold was in the IPTV business long before AT&T began offering U-verse, having launched video over phone lines back in 2003.  The phone company invested heavily in producing local programming for their customers, including local sports, issues in the news, health and fitness, and educational shows for and about the region.  The hope was that the phone company would give cable subscribers enough reasons to cut the cable cord for good.  They’ve invested heavily to remain on the cutting edge, something uncommon for traditional wireline phone companies.

In 2000, Ringgold announced they would deliver a High Speed Internet connection to every single customer who wanted it throughout their entire service area.  The company has continuously upgraded their facilities, offering traditional copper wire customers bonded DSL service up to 25Mbps and their growing number of fiber customers speeds up to 50/50Mbps.  That’s an enormous difference over other nearby providers, including AT&T, Frontier Communications, and CenturyLink which deliver customers 1-3Mbps DSL with no fiber in sight.  The other alternative is service from Charter Cable, among the worst-rated cable companies in the country.

But that level of innovation isn’t unusual for Ringgold, which has outpaced traditional Bell System phone companies since it was first founded in 1912 with just eight telephone lines.

In 1950, Ringgold was among the first independent companies in Georgia to switch from manual to dial telephones.  By the 1990s, Ringgold realized the future was in fiber optics, and planned to replace a significant amount of copper wiring that had been on phone poles for decades.  The phone company thought it had mastered the ultimate triple-play fiber-optics package of voice, broadband, and television, until their small size got in the way.

Ringgold discovered that “bigger is better” in the pay television business.  The largest cable operators enjoy the best bargaining power for just about everything.  Companies like Comcast and Time Warner Cable can use their enormous customer base to negotiate cut rate pricing on programming and equipment and stand-up to greedy programmers that demand excessive payments for programming.  Ringgold discovered they can’t.

Light Reading highlighted the challenges Phil Erli, executive vice president of Ringgold, spoke about recently:

• Ringgold could not cut a deal with equipment vendors that would deliver DVR and HD functionality at a level above that of the local cable company.  Large set top box manufacturers deal in volume, and smaller players like Ringgold are often left with inferior technology at prices higher than large cable companies pay for the most advanced equipment available.  Erli tried to innovate a new approach using Microsoft’s Mediaroom, but discovered that required a large number of servers too costly for a small phone company to consider;
• Programming costs were completely out of line.  Volume discounting delivers enormous savings, if you are a large-sized national provider.  Large cable companies pay a fraction of the prices independent providers pay for programming, and local broadcast stations held the company hostage on retransmission consent agreements.  Erli noted the local NBC station, presumably in nearby Chattanooga, demanded an incredible $5.25 a month per subscriber.  That rate was so high, it would turn the company’s video venture unprofitable.  Even worse, Erli relates, “these weren’t negotiations, they told me what we would pay.”  Erli realized that just one programmer could make or break Ringgold’s video service profits;
• The company’s video lineup, due to wholesale costs, was inferior to that offered by the local cable company.

Ringgold's broadband network is superior to anything the competition offers in northwestern Georgia.

With these challenges, the phone company decided enough was enough and dropped its video package, redirecting customers to DISH Network for satellite-TV, and more recently to online Internet video as an alternative to pay television.

Something you won't likely see from your cable company.

While most broadband providers treat online video as a parasite, Ringgold sees it as the ultimate business opportunity to reinvent themselves through their broadband service — selling super high speed access to content that someone else provides and has to worry about.

They’re considering a new customer promotion that includes a Roku, Apple TV, or Clearleap-powered set-top box to integrate broadband connections with television sets.  The company is even educating customers about the growing number of programs available for free (or with a low cost subscription) online with an interactive web tool.

Ringgold’s new solution for online video also includes some small revenge on high programming costs, giving subscribers an integrated over-the-air antenna system that can pick up nearly a dozen HD channels, including that NBC station, for free.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Internet TV.flv[/flv]

Here is something you don’t see every day: Ringgold Telephone encourages its customers to get online and watch TV shows for free.  (1 minute)

Most cable operators are doing a better job of providing telephone service than traditional telephone companies, according to a new J.D. Power and Associates survey.

Among the worst providers across all regions were Frontier Communications, which scored dead last in the East and North Central regions, and cable operator Charter Communications, which won the lowest score overall for service in the western United States.  Cox delivered the most consistently reliable service across three of the four regions it serves, although it was beaten by Bright House Networks in the south.

The results:

The study measured customer satisfaction with both local and long distance telephone service in four regions throughout the United States. Five factors were examined to determine overall satisfaction: performance and reliability; cost of service; billing; offerings and promotions; and customer service.

Satisfaction with performance and reliability-the most influential factor contributing to overall satisfaction-has declined by 6 percent to an average of 7.4 (on a 10-point scale) in 2011 from 7.9 in 2011. Within this factor, satisfaction with the service provider’s ability to keep outages to a minimum has experienced the greatest decline.

“The brutal winter weather that plagued much of the country clearly took a toll on service levels,” said Frank Perazzini, director of telecommunications at J.D. Power and Associates. “In fact, the proportion of customers who contacted customer service to report an outage jumped to 21 percent in 2011 from 12 percent in 2010.”

According to Perazzini, a key driver for mitigating losses in satisfaction due to outages is effectively managing customer expectations regarding service restoration. On average, customers who experience an outage are advised that service will be restored within 30 hours, while actual service restoration time averages 25 hours. Overall satisfaction among customers whose service was restored approximately three hours earlier than the time quoted by the service provider averages 705 on a 1,000-point scale. In comparison, among customers whose service was restored three hours after the estimate given by the provider, satisfaction averages 591.

The study also finds that among customers who use an alternative phone service (for example, cellular or Internet service, rather than wireline), the proportion who replace wireline telephone calls with cell phone calls, texts and email remains relatively unchanged in 2011, compared with 2010. However, use of Internet calling services such as Skype or Vonage has increased to 21 percent in 2011 from 16 percent in 2010. Customers who use Internet calling services are significantly less satisfied with their telephone provider (622 on average, which is 14 index points below the industry average of 636) and are more likely to switch telephone providers (23% vs. the industry average of 16%).

Phillip "Frontier DSL is Too Slow and Expensive" Dampier

Frontier Communications occasionally sends me mailers promoting their latest offer for DSL and/or satellite service.  The price on the front of the letter looks good — usually around $20 a month — despite the fact the best Frontier can deliver my area less than one mile from the Rochester, N.Y. city line is 3.1Mbps.  But Frontier’s fine print is infamous for bill padding extra fees, charges, and service commitments that makes the out-the-door price literally higher than Time Warner Cable’s Road Runner service, which actually delivers substantially faster speed at a lower price.

I’m not alone.

Customers in several Frontier service areas are openly wondering why they should do business with the phone company when they are charging more for less service.

In Ohio, Frontier Communications competes in some areas with Buckeye Cablevision.  Frontier sells DSL Internet in northwest Ohio for $29.99 a month.  For that, customers like Inquiry receive 6.2Mbps even though they bought 7.1Mbps service.

“Their [Internet prices] are significantly higher when comparing the other providers in northwest Ohio,” Inquiry writes. “Buckeye Cablevison has 10Mbps service for $24.95/month. And they actually give the customer 10.8Mbps.”

In areas where Frontier often finds itself the only game in town, that price is downright cheap.

Frontier's "High Speed" Fantasies

Nialis in Aliso Viejo, Calif. doesn’t know what Inquiry is complaining about.  He pays $30 a month for 1.5Mbps DSL service from Frontier.

Eric McDaniel from McDavid, Fla. found small relief when he complained about the 2.2Mbps DSL service he was paying $39.99 a month to receive.

“I now pay $29.99, and that is only because I threatened to cancel my service,” McDaniel says. “Now they give me a $10 recurring credit.”

“What are you going to do when they’re the only show in town?”

Even Charter Communications, one of America’s lowest rated cable companies, has prices and service that beats Frontier hands-down.

In some Charter areas like Wausau, Wisc., Frontier DSL comes with a two year service commitment, a $14.99 monthly Wireless Router Fee, and comparatively slow service:

Frontier Communications Pricing - Wisconsin

Customers can pay $29.99 a month (before fees) for “up to 3Mbps” DSL service from Frontier or spend $29.99 and get 12Mbps from Charter:

Charter Communications Pricing - Wisconsin

So how does Frontier Communications keep offering service at uncompetitive prices?  They have much greater success in the rural markets they favor, where cable competition rarely exists.  Plus, many consumers may not understand the impact of the speed differences they receive from different providers, tending to blame “the Internet” for slowdowns more than the provider delivering the service.  Some customers may also be attracted to valuable customer promotions that include free netbooks or television sets, and forget about the fine print service commitments that come with the deal.

As dwink9909 from Clintonville, Wisc. shared on the Frontier Broadband Reports forum: “Frontier Communications Inc. is free to charge the maximum the market will bear primarily because they are the only provider in most of the areas they serve. That’s certainly true here in Wisconsin. Six miles south of me you can get dial-up service from two dozen ISPs and broadband via wireless, cable or DSL, but here there is only a single provider for telephone and broadband. We are among the “under-served” millions who are just glad to have high speed Internet at any cost.”

Frontier is only too happy to oblige.

Charter Cable told a Howell, Mich. family that lost everything in a major house fire they owed the cable company $1,600 for cable equipment, remote controls — even the batteries — that were consumed in the blaze.

Kerry Cacchione, her three children and her husband Jeff lost every single possession they owned in the fire seven weeks ago.  The Cacchione family, like many home renters, neglected to purchase all-important renter’s insurance, and without it, all of their furniture, clothing, and other valuables were gone for good.

When the family returned home to see the property, undergoing repairs paid for by their landlord, they were confronted with an enormous bill from Charter Communications, their cable company.

“$1,600, and they [charged us] for every remote, every battery, every modem, every cable box, and every DVR box,” said Cacchione.

The Cacchione family took the bill to Charter Cable and begged for forgiveness, telling employees there was no way they could afford to pay that cable bill.

Kerry reports Charter was unsympathetic and refused to waive the charges, leading her to ask WXYZ’s “Call for Action” to intervene.

With the threat of more bad publicity on the 6 o’clock news, Charter Communications decided to wipe out their bill.

Charter is among the most intransigent cable companies when it comes to demanding compensation for cable equipment destroyed or damaged in fires.  The company always relents when confronted with the prospect of bad publicity, such as when a customer service representative told one tornado victim in Alabama she would wait on the phone while she searched through debris in the neighborhood for lost cable equipment.

Every renter should always have renter’s insurance, which typically will cover damaged cable equipment. It’s very affordable and protects renters from losses. Many consumers believe landlords carry insurance which will protect them in the event of a natural disaster or fire, but those insurance policies protect the landlord’s property, not renters’ possessions. The peace of mind afforded by renter’s insurance can make all the difference in a major loss like the one experienced by the Cacchione family.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WXYZ Detroit Losing It All 8-31-11.mp4[/flv]

WXYZ in Detroit comes to the rescue of yet another family falling victim to an enormous cable bill from equipment lost or damaged in a house fire.  (3 minutes)

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/KDFW Dallas Charter’s Excuse-o-matic 8-29-11.mp4[/flv]

Charter Cable left one North Texas family with lousy cable and poor Internet service for months, even scattering a new drop line across their backyard and leaving their cable connection exposed to the elements.  Despite repeated calls for assistance, all this family got were excuses, even going as far as telling them the local town wouldn’t allow Charter to bury their new cable line.  When a reporter from KDFW-TV ambushed a Charter Cable repairmen sent to assist with the family’s Internet service, all that changed.  In hours, the cable the company claimed couldn’t be buried was, and Charter even offered service credits.  (2 minutes)