Watson

Unhappy about your cable TV bill? Don’t bother complaining to Comcast, because the cable company is ready to tell you to take your business elsewhere.

New competition usually means those already in the business freshen their game, get creative, cut prices, or out-compete the competition with a better product. But Comcast plans to lose its restless cable television customers if they complain about the company’s prices for cable TV.

Dave Watson, president and CEO of Comcast Cable, told investors at the Deutsche Bank 2019 Media, Internet & Telecom Conference in Palm Beach the company is done handing out retention deals with cut-rate pricing to keep cable TV customers from leaving.

“[Comcast is] simply not going to chase unprofitable video relationships,” Watson said, noting with the growing number of new streaming video competitors, more and more customers are calling looking for better deals and threatening to cut the cord. Watson says Comcast is prepared to let them.

“Because of consumer choice, because of all this competition, we’re just not going to chase video [customers],” Watson repeated.

Comcast’s new “we don’t negotiate” attitude with its customers isn’t groundbreaking in the industry. Satellite providers and some cable companies like Charter/Spectrum have largely stopped negotiating with customers as well.

Some cable operators have intentionally avoided significant video price hikes in recent years, already sensitive to the cord-cutting calls that increase after each rate hike announcement. Others hide rate increases in surcharges, often for local TV stations or regional sports channels. For some companies, giving customers a better deal may even make their video pricing unprofitable.

To compensate for tightening margins on cable television, most providers have been significantly increasing broadband pricing in recent years, knowing broadband is one service customers are least likely to drop as a result of rate increases.

Comcast customers receiving inadequate Wi-Fi coverage while using a company-provided wireless gateway can now buy a mesh-style wireless solution starting at $119.

XFINITY xFi Pods work only with Comcast’s internet service and provide extended Wi-Fi coverage when paired with either the xFi Wireless Gateway or the xFi Advanced Gateway — both available in Comcast store locations.

“Our gateway devices are incredibly powerful, but we know that some homes have a unique layout or are constructed of materials that can disrupt Wi-Fi coverage in some rooms,” said Eric Schaefer, senior vice president and general manager, Broadband, Automation and Communications, Comcast Cable. “Wi-Fi is the oxygen for the digital home and our xFi Pods can blanket a home with great coverage and are simple to install and easy to use.”

Comcast claims its xFi Pods continually evaluate local signal environments to adjust Wi-Fi channels and bands to assure a superior signal. By creating a mesh network, Comcast claims the Pods help eliminate Wi-Fi dead spots in a larger home.

Customers use the xFi mobile app to get new Pods up and running and continually monitor the in-home mesh network. Each individual Pod plugs into a standard home electrical outlet. Customers who do not need to use all of them in a home or apartment setting can share the extras with friends and family, as long as they also have Comcast internet service and the appropriate gateway.

The hexagon-shaped, xFi Pods are sold in three-packs for $119, or in six-packs for $199, plus shipping and handling. They can be purchased online at www.xfinity.com/xfipods, from the xFi app, or from some XFINITY retail stores. Some purchases can be added to the customer’s Comcast bill. Later this year, customers will also be offered a monthly payment plan for the Pods.

SPECS

Comcast claims xFi Pods are superior to traditional Wi-Fi extenders because they communicate with each other and pass traffic between them, allowing for multiple areas of enhanced Wi-Fi coverage around a home.

But there are some caveats:

1. The Pods have a maximum throughput of 200 Mbps, and that was in a lab setting. Comcast said its Pods are intended to expand in-home coverage, not deliver speed to every corner of the home. That means while connected to a xFi Pod, expect maximum download speeds between 100-175 Mbps.
2. The Pods only work with Comcast’s app and gateway. If you own your own modem or router (for Wi-Fi), the Pods will not work. If you switch providers, the xFi Pods will stop working.
3. Your Wi-Fi network must share a single Wi-Fi network name and password. You cannot have Wi-Fi guest networks or different SSIDs for 2.4 and 5 GHz channels.

Usage caps for one and all.

Comcast, which insists on placing a 1 TB (1,000 GB) usage cap on most (but not all) of its broadband customers, is predicting explosive growth in broadband usage as customers connect more devices to their internet connections.

“[If] you look at in terms of just overall consumption, just at a high level, you look at the top 10% of our customers, just how much they use, they are using 20 or more connected devices,” said Comcast Cable president and CEO David N. Watson on a company conference call. “And it’s a tremendous amount of consumption that we have. And I think that’s where the market is going. There is going to be more consumption, more connected devices.”

Comcast’s growth forecasts suggest the company schedules regular network upgrades, although it has only adjusted usage allowances three times in the last decade:

• Comcast introduced a 250 GB usage cap in 2008 that carried no overlimit penalty but persistent violators lost their Comcast broadband service.
• Comcast raised the cap 300 GB in 2013 and implemented an overlimit fee.
• Comcast raised the cap to 1 TB in 2016 and began promoting its Unlimited Data Option as an insurance policy against bill shock from overlimit fees.

“It is important to know that more than 99 percent of our customers do not use a terabyte of data and are not likely to be impacted by this plan, so they can continue to stream, surf, and download without worry,” claims Comcast on its website. As of December, 2017, “Xfinity Internet customers’ median monthly data usage was 131 GB per month during the past six months.”

Such claims should make customers wonder why Comcast needs a usage allowance of any kind if these claims are true. A 2016 study suggests Comcast may have more heavy users than it is willing to admit. The research firm iGR found average broadband usage that year was already at 190 GB and rising. There is no third-party verification of providers’ usage statistics or usage measurement tools, but there are public statements from Comcast officials that suggest the company faces a predictable upgrade cycle to deal with rising usage.

“We increase the capacity every 18 to 24 months,” confirmed Watson.

Upgrading is also a crucial part of Comcast’s ability to charge premium prices for its internet service.

“Not all broadband networks are created equal,” Watson said. “If you are providing a better solution in broadband, your pricing can reflect that.”

For Comcast customers using a terabyte or more in a month, after two courtesy months of penalty fees being waived, Comcast will recommend signing up for its Unlimited Data Option, which costs $50 a month. If you do not enroll and exceed your allowance a third time, the company will bill you overlimit fees: $10 for each additional block of 50 GB of usage. The maximum overlimit penalty in any single month is a whopping $200.

Critics of Comcast’s data caps point out that Charter — the nation’s second largest cable operator, has no usage caps at all. Optimum (Altice) also does not impose data caps. Those that do often copy Comcast’s data allowances and overlimit fees exactly — all to deal with so-called “data hogs” that the companies themselves claim represent fewer than 1% of subscribers.

Comcast is being sued for deceptively advertising cable packages at a low price, but actually charging much more because of compulsory “junk fees” that customers cannot avoid.

Plaintiffs’ lawyers Dan M. Hattis of Bellevue, Wash., and Jason Skaggs of Palo Alto, Calif., jointly brought the class action case against the cable company, asking a judge to force Comcast to stop charging the fees and return all of its “unjust profits” to impacted subscribers.

“Comcast promises to charge customers a fixed monthly price for the service plans, but in fact Comcast charges a much higher rate for those plans via concealed and deceptive ‘fees’ which Comcast intentionally disguises in both its advertising and in its customer bills,” the attorneys complain. “These illegal and deceptive fees, which Comcast calls the Broadcast TV Fee and the Regional Sports Fee, earn Comcast over $1 billion each year, accounting for approximately 15% of Comcast’s annual profits.”

But in fact Comcast’s bill padding goes well beyond its TV and sports programming surcharges. No other cable company has mastered the art of the surcharge and fee better than America’s largest cable operator. Consumer advocates in California complain those fees can now cost an average subscriber in that state more than $40 a month.

“Although Charter Communications and Cox — California’s other major cable operators — also charge many of these fees, Comcast pioneered most of them and charges more than any other cable operator,” claimed Geoff Nawasaki, a San Mateo resident that has filed complaints against Comcast for several years. “A class action lawsuit is long overdue.”

Once Comcast establishes a new fee or surcharge, the company often boosts those fees dramatically over a very short time. Vaughn Aubuchon has been tracking Comcast’s rates in the Monterey Bay area of central California since 2010 and has documented Comcast routinely increasing its junk fees by as much as 1,000%. But most regulators and members of Congress may not realize how much customer bills are increasing, because the rate card Comcast shares with Washington and the general public doesn’t typically include the extra fees.

Aubuchon has documented significant spikes in Comcast’s prices, even though the company is still promoting packages costing $79-89 a month for new customers. But once those customers open their first bill, the advertised price no longer matters.

Hattis and Skaggs’ 2016 lawsuit documents Comcast’s online order system making no mention of its mandatory surcharges and fees. In fact, even Comcast’s fine print fails to mention the exact amount customers will pay in surcharges. According to Comcast, you have to already be a Comcast customer to review your local rates.

Aubuchon’s rate tracking shows just how lucrative Comcast’s billing tactics have become to the cable operator, especially since 2014:

• XFINITY TV cost $80.94 in 2010. As of August, the rate is now $102.98 — more than $20 a month more.
• XFINITY INTERNET cost $47.95 including the $5 modem rental fee in 2010. Today, that price is $68.95 a month, and the modem rental fee has doubled. That’s another $20 more a month.
• Comcast now charges Aubuchon $6 a month for its Broadcast TV Surcharge and $5 a month for sports programming — an extra $11 month that wasn’t there in 2010.
• After adding up all the fees and surcharges, Aubuchon’s bill went from $135.58 in 2010 to $196.65 today — $62.23 more a month.

Aubuchon

Some of the biggest recent hidden rate hikes have come from Comcast’s Broadcast TV Fee and Regional Sports Fee.

“In the Sacramento area in July 2016, Comcast increased the Broadcast TV Fee by 54% from $3.25 to $5.00, and tripled the Regional Sports Fee from $1.00 to $3.00,” the lawsuit notes. “Then, just three months later in October 2016 Comcast increased the fees yet again to $6.50 for the Broadcast TV Fee and $4.50 for the Regional Sports Fee.”

“Comcast has admitted these invented fees are actually just price increases for broadcast channels and sports channels in its cable television packages,” the lawsuit claims. “But Comcast intentionally does not include the cost of these fees in its advertised or quoted rates for those channel packages, in order to mislead customers into thinking that they will pay less than Comcast will actually charge them.”

The plaintiffs also argue Comcast is intentionally deceptive to customers questioning the ballooning fees on their cable bills.

“Comcast staff and agents explicitly lie by stating that the Broadcast TV Fee and the Regional Sports Fee are government-related fees or taxes over which Comcast has no control.”

A Guide to Comcast’s Junk Bill-Padding Fees

• Broadcast TV Fee (up to $7.50): Ostensibly the cost of retransmission consent fees required to carry free, over the air stations on Comcast’s lineup. The amount varies depending on the fees paid in each local market, with a significant likelihood Comcast rounds those amounts up in ‘friendlier’ $0.25 increments. Introduced in 2014.
• Digital Adapter ($3.99): Originally $1.99/mo when introduced in 2014, the fee covers the rental of a basic set-top box to continue receiving Comcast’s encrypted digital cable TV service on older “cable-ready” analog televisions that did not require a cable box in the past.
• Gateway Rental ($10): This is the monthly rental fee for your cable modem, “gateway,” or Wi-Fi enabled router. You can buy your own equipment and avoid this fee. Recently, Comcast has offered customers a waiver of equipment charges if they upgrade to an X1 set-top box. But in practice the rental fees are stopped for your existing equipment only because Comcast has started charging rental fees for the new equipment it bundles with the upgrade.
• HD/DVR Rental Fees (up to $10 a month for equipment you cannot buy outright yourself).
• HD Technology Fee ($9.95): for viewing HD content on a set-top box you already pay up to $10 a month to use.
• Service Protection Plan ($5.99): Was $1.45 (or less) per month for years until Comcast started hiking the price five years ago. Went from $1.99 in early 2012 to $5.99 in August 2017. Many customers sign up out of fear they will be charged between $36.50-$70 for a home visit from a Comcast technician dealing with a service problem. In reality, all the Service Protection Plan covers for certain is inside wiring that does not travel within a wall and protection from in-home service call fees.
• Regional Sports Fee (up to $5): A way to pass on sports programming costs to every subscriber without boosting the published rate for cable television.

Comcast’s Service Protection Plan = “Service Call Extortion Insurance”

Comcast’s $5.99/month Service Protection Plan has been called “extortion insurance” by some customers who buy the plan to avoid Comcast’s notorious service charges for in-home service calls. Unlike many other cable companies, Comcast charges customers to visit their homes for any reason other than a true, company-caused service outage. A 2016 lawsuit in Washington alleged Comcast’s process for determining whether a service call is charged or free is subjective and frequently at the whim of the technician, who enters “fix codes” at the end of a service call. Some “fix codes” are free, others trigger service call visit fees. The lawsuit claims, “Comcast does not formally train the technicians on what each fix code means.”

Comcast customers that have faced the sting of an unwarranted service call charge often readily agree to Comcast’s sales push for its Service Protection Plan, which normally waives those fees. It doesn’t take much to trigger those fees. The Washington lawsuit noted that if a Comcast technician talks to the customer about how to use their DVR, program a remote control, reset their cable modem, or use Wi-Fi, it is considered “customer education,” which results in a service call charge.

“Thus, if a technician fixes a broken Comcast cable box but also provides ‘customer education’ during the service call, the customer will be charged for the service call if the technician applies the customer education code because customer education fix codes are chargeable,” the lawsuit said. “This occurred 2,078 times between 17 June 2014 and June 2016 [in Washington State].”

Customer education fees are waived for those who pay for Comcast’s Service Protection Plan.

Comcast may be undercutting its own fiber broadband aspirations by introducing a cheaper way for customers to get gigabit broadband service over their existing Comcast cable connection.

Customers in seven new areas, including most of Colorado, Oregon, southwest Washington State, and the cities of Houston, Kansas City, San Francisco and Seattle now have access to Comcast’s DOCSIS 3.1-powered gigabit downloads. (Upload speeds are limited to a much less impressive 35Mbps.)

Comcast announced the new communities as part of their gradual rollout of DOCSIS 3.1 — the standard that powers cable broadband — across their national footprint. These communities join Utah, Detroit, Tennessee, Chicago, Atlanta, and Miami where Comcast has already introduced the new speeds.

It is Comcast’s latest foray into gigabit speed broadband, and it is decidedly focused on the cities outside of the northeast (except Boston) where Comcast has not faced significant competition from Google Fiber or AT&T Fiber, both delivering gigabit speed internet access. Verizon FiOS, predominately in the northeast, only recently introduced gigabit speed options for its residential customers. Comcast continues to be among the most aggressive cable operators willing to boost broadband speeds for its customers, in direct contrast to Charter Communications, the second largest cable operator in the country that is predominately focused on selling 60-100Mbps internet packages to its customers.

Comcast sells multiple broadband speed tiers to its customers.

Comcast’s efforts may undercut its own fiber-on-demand project, which wires fiber to the home service for some Comcast customers seeking up to 2Gbps service. That plan comes with a steep installation fee and term commitment, making it a harder sell for customers. Comcast’s DOCSIS-powered gigabit will retail for $159.95 a month, but Comcast is offering pricing promotions ranging from $70-109.99 a month with a one-year term commitment in several cities. The more competition, the lower the price.

In Kansas City, where Google Fiber premiered and AT&T is wiring its own gigabit fiber, Comcast charges $70 a month, price-locked for two years with a one-year contract. Customers who don’t want a contract will pay dearly for that option — $160 a month, which is more than double the promotional price.

In Houston, where AT&T has not exactly blanketed the city with gigabit fiber service and Comcast has been the dominant cable operator for decades, gigabit speed will cost you $109.99 — almost $40 more a month because of the relative lack of competition. Customers who bundle other Comcast services will get a price break however. Upgrading to gigabit service will cost those customers an additional $50 to $70 a month, depending on their current package.

“Additional prices and promotions may be tested in the future,” the company said in a news release.

Comcast does not expect many customers will want to make the jump to gigabit speeds and a higher broadband bill. Rich Jennings, senior vice president of Comcast’s Western/Mountain region, told the Colorado Springs Gazette that gigabit service was a “niche product for people who want that kind of speed.”

Comcast does suspect a number of signups will be from broadband-only customers who don’t subscribe to cable television.

Mike Spaulding, Comcast’s vice president of engineering, thinks the service will appeal most to those who rely entirely on a broadband connection for entertainment and communications.

“There’s not a lot of need for gigabit service for one customer to do one thing,” Spaulding told the Denver Post. “But what it does is enable an even better experience as more devices in the home are streaming, whether it’s video or gaming or whatever they are doing in the home. Most of our customers subscribe to the 100Mbps package today. Less than 10 percent of our customers are in the 200-250Mbps. We’ll see where one gig takes us.”

One place a gig may take customers is perilously close to Comcast’s notorious 1TB usage cap, which is currently enforced in Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, New Mexico, Western Ohio, Oregon, Tennessee, Texas, South Carolina, Utah, Southwest Virginia, Washington, and Wisconsin, even for this premium-priced internet tier. Customers exceeding it will automatically pay a $10 overlimit fee for each 50GB of excess usage, up to a maximum of $200 a month. An unlimited ‘insurance plan’ is also available for $50 a month, which removes the 1TB cap.

Customers will have to use a new modem if they upgrade to gigabit service, either renting one from Comcast for around $10 a month or buying a compatible DOCSIS 3.1 modem. Two of the most recommended: the Arris Surfboard SB8200 ($189) or the Netgear CM1000 ($171.99) (prices subject to change).