Cable subscribers paying ever-increasing television bills for hundreds of channels they never watch may find some relief if Comcast decides its experiment in “a-la-carte” cable-TV is a success.

The company is testing a new way of selling service that delivers a basic package of channels for a lower price and then offers customers bouquets of add-on channels sold in “theme packs” for $10 apiece.

Comcast is testing what it calls MyTV Choice in parts of Connecticut, Massachusetts, Vermont and Charleston, South Carolina, and plans to expand it to the Seattle area soon.

Here’s how MyTV Choice works:

Customers start with a basic package of channels that Comcast calls “Get Started” ($24.95) or “Get Started Plus,” which sells for $44.95 a month.

What differentiates the two options are the networks they contain.  Inexpensive cable networks turn up in Get Started — A&E, Discovery, C-SPAN, Animal Planet, Daystar, Food Network, home shopping, and The Weather Channel are among the 32 channels that accompanies a basic package of local channels.

Get Started Plus includes all of those networks plus sports — the budget-busting networks that help keep cable bills growing.  ESPN and other regional sports channels are included in the more expensive package.

Missing from the basic package of channels are kids shows, news, movies, and niche networks.  That’s where Comcast’s “Choice” packs come into play.  Customers can add a 19-channel News & Info pack, 31-channel Entertainment & Lifestyle pack, 16-channel Movie pack, and/or an 11-channel Kids pack for $10 each.

That’s where the “choice” ends.  Customers cannot skip the basic channel package to select only one of the theme packages, individual channels are not for sale, and anywhere outside of Charleston, customers also have to buy phone and Internet service from Comcast. HD also costs extra.

So much for a lower bill.

In fact, Comcast sells a digital cable package incorporating a full lineup of basic cable channels for just under $60.  If your family loves sports, has kids, and needs news channels, sticking with the digital cable package is actually cheaper than MyTV Choice.  That’s because the latter will require a $44.95 base package, plus three theme packs for an additional $30 a month.

Comcast denies their experimental a-la-carte package has anything to do with cord-cutting Internet viewers.

“It’s more or less responding to feedback from customers that they want more choice,” Comcast spokesman Bill Ferry told the Post & Courier.

While Ferry and others argue the pay-per-channel is not economically feasible, Christopher C. King, a telecom analyst for Stifel Nicolaus in Baltimore told the newspaper that is the trend.

“Certainly the industry’s moving more toward an a la carte model,” King said.

Theme-packs are not a new concept for some pay television viewers.  In the 1980s and 1990s, consumers owning large 6-to-12 foot satellite dishes routinely encountered the channel bouquet concept.  Customers would purchase a basic package and then select from a dozen or more mini-tiers, usually made up of networks owned by one company.  Want TBS and TNT?  Turner Broadcasting sold an add-on with those two channels.  Wanted a superstation package?  Channels uplinked by cable companies like TCI from Denver could be purchased as a small package.  So could stations like WSBK in Boston, WWOR and WPIX in New York, KTVT in Dallas and KTLA in Los Angeles.

Comcast has “simplified” things with a much smaller set of choices.  But that also dramatically limits any potential savings.

The concept of a-la-carte cable horrifies cable companies and their Wall Street shareholders, because a true “pay-per-channel” offer would dramatically cut the average revenue earned per subscriber if customers took a hatchet to the bloated channel packages most customers receive today.

Cable operators have resisted the concept because every channel would have to be encrypted to sell individually, billing would become more complicated, and the business model of niche-oriented networks supported by more popular fare would end.  That’s why programmers hate the idea as well.  While A&E, TNT, and CNN would have no trouble surviving, networks like Current TV, TV One, Hallmark, Cloo, and LOGO probably would not.

More importantly, many subscribers might find savings elusive from a-la-carte, because the most expensive cable programming networks also happen to be among the most popular.  ESPN and Fox News Channel, for example, have dramatically increased their rates to cable companies, who helpfully pass them along to you.  But if cable operators suddenly stripped those networks out of basic packages, while leaving the much cheaper networks together in broad-based theme packages like “lifestyle and entertainment,” subscribers may howl in protest or accuse the cable operator of playing politics.

It gets even harder when the cable companies selling the big packages of channels customers never watch also happen to own some of the networks found within those packages.  Comcast shareholders may not like the cable side of the business kicking lucrative NBC-owned and operated cable networks like The Weather Channel, USA, E!, Cloo, and other owned networks to a-la-carte Siberia.  Every cable subscriber pays for Cloo and E! today.  How many will choose to pay for those networks under an “a-la-carte” model is an open question.

Only two cable operators have expressed an interest in switching to a true, a-la-carte model to date — Suddenlink and Mediacom — both small, regional players that have no programming interests and lack sufficient buying power to score the kinds of discounts available to companies like Comcast and Time Warner Cable — discounts they can have if they agree to keep as many channels bundled in one digital cable package as possible.

CenturyLink has unveiled its own discounted Internet access program for the income-challenged, loaded with tricks and traps buried in the fine print.

Dubbed CenturyLink Internet Basics, the 1.5Mbps DSL service is available to those who currently qualify for Lifeline Affordable Telephone Service, a federal program that provides discounts on basic monthly telephone service to eligible low-income consumers.  The service sells for $9.95 a month, before taxes and fees.

But buried in the fine print are a number of surprises that deliver higher prices and some nasty surprises (underlining ours):

• Listed High-speed Internet rate of $9.95/mo. applies for first 12 months of service (after which the rate reverts to $14.95/mo. for the next 48 months of service), and requires a 12-month term agreement or 24-month term agreement (if purchasing Netbook);
• Customer must either lease a modem/router from CenturyLink for an additional monthly charge or purchase a modem/router from CenturyLink for a one-time charge, and a one-time High-Speed Internet activation fee applies;
• A one-time professional installation charge (if selected by customer) and a one-time shipping and handling fee applies to customer’s modem/router;
• Taxes, Fees, and Surcharges – Applicable taxes, fees, and surcharges include a carrier Universal Service charge, carrier cost recovery surcharges, state and local fees that vary by area and certain in-state surcharges. Cost recovery fees are not taxes or government-required charges for use (which means they are little more than bill padding junk fees). Taxes, fees, and surcharges apply based on standard monthly, not promotional, rates;
• The first bill will include charges for the first full month of service billed in advance, prorated charges for service from the date of installation to bill date, and one-time charges and fees described above.
• Netbook purchase must be paid in full to CenturyLink prior to shipment. Shipping and handling fees, and applicable taxes will apply. If customer purchases Netbook as part of the CenturyLink Internet Basic service, all warranty and support for the Netbook and accompanying equipment will be covered by the manufacturer or other identified third party, not CenturyLink.
• No software applications or wireless service are included with the Netbook.
• An early termination fee will apply based on the applicable monthly recurring service fee multiplied by the number of months remaining in the minimum service period, up to $200.

Unlike Comcast, CenturyLink claims it will provide equivalent discounts for faster speeds — an important consideration for those with school-age children at home who may need multimedia capability for research and studies.

CenturyLink also offers a netbook computer for an additional $150, plus shipping and taxes, at the time of enrollment in the program.  The service also includes educational training, a 30-day money back guarantee, Norton Security Suite, and parental controls.

“While the Internet has become part of daily life for most Americans, many still aren’t connected because the cost is beyond their reach. CenturyLink is pleased to introduce this new program that offers affordable High-Speed Internet service and computers to those who need help getting online,” said CenturyLink CEO and President Glen F. Post, III.

That and the fact the company was required to offer discounted Internet service as a condition for the approval of their acquisition of Savvis, a web hosting company, according to Broadband Reports.

Like Comcast, participation in the program requires meeting a number of terms and pre-conditions:

Allen Wan from Chicago dropped Stop the Cap! a postcard by good old snail mail about today’s broadband cap ‘n tier regime in place at some of America’s largest Internet Service Providers to make an important point: with Internet Overcharging schemes like usage caps and usage-based billing, America’s best broadband value may actually come from the United States Postal Service.

Allen breaks it down for us:

Allen’s chart points out that for large file transfers like movies, TV shows, and major software updates, consumers actually get more value on a per-GB basis burning those shows and software to a traditional or dual-layer (DL) DVD, and dropping them in the mailbox.

While prices for service may vary, so do Internet Overcharging schemes.  If a customer reaches their monthly limit one time too many, they will be relying on the post office to move files back and forth because companies like Comcast and Cox will terminate their service.  Other providers, like AT&T and Suddenlink, are content to simply send the customer a bill with overlimit charges on it.

With a marketplace duopoly, ineffective government oversight, and ever-increasing prices, the U.S. Post Office may still be in the running after all, thanks to Back to the Future-pricing from your ISP.

1.5Mbps "broadband" is not the cure-all Comcast claims it to be.

When multi-billion dollar Comcast Corporation decided it was the right time to acquire multi-billion dollar NBC-Universal, one of the concessions Comcast made to win federal approval of the deal was to deliver budget-priced Internet service to those too poor to pay the company’s current asking price of $40-60 a month.

Comcast Internet Essentials was the result, and as Comcast rolls its publicity train from city to city, promoting the new package, politicians and cable executives have teamed up to take credit, suggesting the company’s limited-access $9.95 1.5Mbps service will somehow erase the high-tech job deficit, eliminate the digital divide, and will even somehow help America’s broadband speed gap with the rest of the world.

But it will do none of those things for the vast number of income-challenged families who won’t actually qualify for the three year program, either because they already scrape up enough for Comcast service, don’t have children, or manage to miss a payment due date.  In fact, 1.5Mbps budget-priced Internet is a service providers should have been willing to offer all along, to anyone who wants the service.  But it took a colossal-sized merger concession to get Comcast to sort of do the right thing.

I say “sort of” because the terms and conditions that accompany the service resemble the gotcha fine print the banking industry so loves:

The program is only available to households that (i) are located where Comcast offers Internet service; (ii) have at least one child who receives free school lunches through the National School Lunch Program (the “NSLP”) and as confirmed annually while enrolled in the program; (iii) do not have an overdue Comcast bill or unreturned equipment; and (iv) have not subscribed to any Comcast Internet service within the last ninety (90) days (sections 1(i)-(iv) collectively are defined as “Eligibility Criteria”). This program is not available to households that have children who receive reduced price lunches under the NSLP. The program will accept new customers for three (3) full school years, unless extended at the sole election of Comcast. Comcast reserves the right to establish enrollment periods at the beginning of each academic year in which it accepts new customers that may limit the period of time each year in which you have to enroll in the program.

2. In order to confirm your eligibility for the program, Comcast will need to verify that your children receive free school lunches through the NSLP in the initial enrollment year and each subsequent year you are enrolled in the program. In order to confirm eligibility, participants in the program will be required to provide copies of official documents establishing that a child in the household is currently receive free school lunches through the NSLP. Each year you will be required to reconfirm your household’s current eligibility by providing Comcast or its authorized agent with up-to-date documentation. If you fail to provide documentation proving your eligibility in the program, you will be deemed no longer eligible to participate in the program.

3. You will no longer be eligible to participate in the program if (i) you no longer have at least one child living in your household who receives free school lunches under the NSLP; (ii) you fail to maintain your Comcast account in good standing; (iii) Comcast ceases to provide the Covered Service to your location; or (iv) your account opened under the program is closed. A change in address may result in your account being closed, even if you continue to receive Comcast services at a different address. Program participation also may be terminated if the Covered Service is upgraded, altered or changed by you for any reason. If you are no longer eligible for the program, but continue to receive the Covered Service from Comcast, regular rates, and any other applicable terms and conditions will apply to the Covered Service.

No kids in your home?  No discount Internet access for you!  Refuse on principle to accept a government handout to pay for school lunches?  Sorry, you need to buy the full-priced Internet Comcast will happily sell you.  Missed a cable bill payment because you needed to buy medicine this month?  It will cost you your inexpensive access.  Comcast even reserves the right to cancel your discounted service if you choose (or are forced) to move.

Most would-be customers who assume they are eligible because they, like so many others, are income-challenged these days, are thrilled to read and watch news accounts about the discount Internet program for their kids.  But like Santa reneging on Christmas, the excitement turns to disappointment when they discover they are ineligible for one reason or another.

In Baltimore, WBAL-TV got nearly breathless with excitement telling their audience, “Things are looking up for Maryland families — way up. A new effort is under way to help connect 250 families to cyberspace at an affordable price.”

Baltimore is a city of 620,000 people.  Before the Great Recession, 15.4% of families and 19.3% of Baltimore’s residents fell below the poverty line, excellent candidates for inexpensive Internet access.  That’s more than 32,000 people, but Comcast is apparently making room for just 250.

Despite those figures, Comcast’s David Cohen thinks his company’s discount Internet will make all the difference.

“We believe we have a shot to be able to make a real impact on the digital divide with this program,” he told the Baltimore TV station.

He might be right… for 250 families anyway.  Everyone else… pay up or go without.

Terms and conditions apply

WBAL Investigative reporter Jayne Miller got slightly carried away on behalf of Comcast, equating their program with a solution for high-tech jobs and increased Internet speed:

Internet access and speeds have become national issues. The U.S. lags behind other countries in broadband availability, hurting what some believe to be the nation’s ability to compete, said Miller.

In comparison, “China recently graduated over 440,000 engineers, and we in the U.S. graduated 65,000,” said U.S. Rep. “Dutch” Ruppersberger.

I’m sorry to bring people back to reality, but 250 families getting the right to buy up to three years of Internet access at speeds that are half of what the FCC National Broadband Plan defines as actual broadband is not an answer to anything beyond Comcast’s poor public relations in the customer service department.  It’s not going to help America’s broadband speed rating (it will actually hurt it at 1.5Mbps).

WBAL is hardly the only station overdoing their celebrations of Comcast (a prolific advertiser by the way).  I’ve watched reports that suggest Comcast is doing this out of the goodness of their heart, not because they agreed to as a condition of their mega-merger with NBC.  Considering the lawyer-like limitations that are certain to keep many people out of the program and others from downgrading their existing service to something more affordable, charity is hardly a word I would extend to the nation’s largest cable operator who found cause to limit access to even the lowest broadband speeds to protect its bottom line, which it hopes will get much fatter with the acquisition of NBC-Universal.  When the three year program ends, let’s just see how charitable Comcast is about extending it.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/KASA Santa Fe Internet Accessibility with Internet Essentials 8-26-11.mp4[/flv]

KASA-TV in Santa Fe talks with their “very good friend at Comcast” about Internet Essentials and the company’s general Internet expansion plans in New Mexico.  The interview resembles an infomercial for Comcast products and services.  (5 minutes)

Comcast Ventures, the venture capital affiliate of Comcast Corporation today announced it has launched a new company — CTI Towers, Inc., which will own, operate, and develop telecommunications towers throughout the United States. CTI Towers’ is launching with a portfolio of approximately 800 towers that were previously owned and operated by Comcast Cable subsidiaries. Headquartered in Boston, CTI Towers will actively lease tower space to wireless operators and other tenants, creating additional tower capacity for rapidly evolving businesses and technologies across the U.S.

“Consumers are increasingly relying on their mobile devices and consuming high bandwidth applications, such as streaming video, requiring a next generation of wireless communications infrastructure,” said Dave Zilberman, Principal at Comcast Ventures. “Newly formed CTI Towers will work with mobile operators and other service providers to improve the quality of the wireless network experience to their customers by leveraging the extensive footprint of urban and suburban towers in CTI’s portfolio. With Tony Peduto’s significant experience managing and developing towers and his deep understanding of the tower business, CTI is well positioned to aggressively support the build-out of new wireless networks.”

CTI Towers will take its place among more than a dozen other multiple tower owners as 12th largest in the country.  Its management of 800 towers pales in comparison with Crown Castle, which owns more than 22,000 towers across the United States.

But Comcast’s cable infrastructure comes with the deal, and that could be very lucrative for the venture.  Cable companies are increasingly leasing space on their cable networks to provide backhaul connections between the cell tower itself and the mobile operator.  LTE and other 4G networks require bandwidth greater than traditional telephone company circuits.  While many towers increasingly rely on fiber connections, cable companies that have room to spare on their own networks can more than meet the needs of most cell tower operations.

Courtesy: Wireless Estimator