Phillip “Victory is Ours” Dampier

It has been 14 months since we heard for the first time Comcast was planning to acquire Time Warner Cable. It was the night of February 12, 2014. I still remember where I was the moment I first learned the news.

Stop the Cap! has maintained a civil relationship with Time Warner Cable for the most part over our seven-year struggle fighting usage caps, lousy broadband, and high prices. We fought one major battle with the company in April of 2009, when Time Warner executives planned a compulsory usage cap experiment on customers in Rochester, N.Y., Austin and San Antonio, Tex., and Greensboro, N.C.

Just as we had done with Frontier Communications a year earlier, we successfully beat down their efforts to impose usage allowances on customers already paying a significant chunk of money for broadband Internet access. After that battle ended, Time Warner Cable changed their position on usage caps and stated emphatically that customers should always have the option of unmetered/unlimited access. They have kept their word. In fact, their optional usage cap experiments have been a spectacular flop, attracting less than 1% of their customer base and delivering the message we’ve tried to get across the industry for years: customer hate usage caps, usage-based billing, and speed throttles.

Comcast is a company that long ago stopped listening to their customers. It applied an arbitrary usage cap on all their customers in retaliation for a FCC decision that disallowed them from running hidden speed throttles on peer-to-peer Internet traffic. Comcast lied about throttling traffic, paid homeless people to stack a hearing on the issue to keep company critics out of the room, and slapped the caps on in the fall of 2008 with the flimsy excuse it represented “fairness” to customers. Only later, we would learn usage caps were never about “fairness” or good traffic management. It’s just a way to deter customers from spending too much time on the Internet, especially if that time is spent watching online videos. Too much time spent watching Netflix might convince you your cable TV package isn’t necessary any longer.

Comcast customer service horror stories reached a level unparalleled by other cable companies when a Comcast predator-installer was convicted of raping and strangling to death 23-year old Comcast customer Urszula Sakowska,  whose lifeless body was found in a bathtub inside her Chicago-area home back in 2006. But Triplett’s violent service calls didn’t stop there. He also faced charges in the death of 39-year old Janice Ordidge, a Comcast customer in Hyde Park. Those two Comcast customers lost their lives. In 2009, another Comcast installer set a Pennsylvania customer’s house on fire. Other installers stole jewelry right out of customers’ homes. Others have exposed themselves in front of female customers or fallen asleep on their couches.

Billing errors are the stuff of legend at Comcast. Offshore call centers with language barriers, inept customer service, and long, long, long lines at cable stores with windows only partially manned by agents sitting behind bullet-proof glass also helped cultivate a customer relationship that can best be described as “perp and victim.”

Comcast isn’t just a bad cable company, it’s a menace. We didn’t have to spend hours proving our case. Fortunately, Comcast’s appalling reputation preceded it. Outside of two executive suites in Philadelphia and New York, nobody was for supersizing Comcast. Just to make sure our regulators knew this, we traveled to Buffalo in June of last year to testify at a Public Service Commission hearing on the subject of the merger. We didn’t mince words.

Sure, there were non-profit groups like the Boys & Girls Club that absolutely sullied their reputation pushing for the merger (Comcast wrote large checks to the organization so you need not give the group a single penny of your money in the future). “Civil Rights” organizations like the Urban League, NAACP, and others that used to defend minority rights now concern themselves with defending the interests of giant cable companies, just as long as they get a nice check in the mail with Comcast’s name on it. Among the worst of all – Shakedown Al Sharpton who will either be your merger deal’s best friend or will go away and leave victims of racism in peace, if you cut his organization a big fat check. (Now that the merger has collapsed, perhaps Comcast-owned MSNBC will end the thinly veiled quid-pro-quo arrangement it has with the man that gives him an hour a night to perform a talent train wreck.)

My own state assemblyman, Joe Morelle, who served as New York’s interim assembly speaker for about five minutes literally plagiarized his letter in support of the Comcast merger (after cashing their check) almost word-for-word from Comcast press releases and congressional testimony. Say it ain’t so, Joe!

N.Y. State Assembly Leader Joe Morelle: “The combination of Comcast and Time Warner Cable will create a world-class communications, media and technology company to help meet the increasing consumer demand for advanced digital services on multiple devices in homes, workplaces and on-the-go.”

David Cohen, executive vice-president, Comcast: “The combination of Comcast and TWC will create a world-class communications, media, and technology company to help meet the insatiable consumer demand for advanced digital services on multiple devices in homes, workplaces, and on-the-go.”

There was not a doubt in my mind that replacing Time Warner Cable with Comcast would be a disaster for Time Warner Cable customers. Despite promises Comcast would upgrade Time Warner’s network, it would also upgrade customer bills, resorting in higher priced service, higher modem fees, and lousy customer service. Comcast vice president David Cohen also made it clear usage caps would be a part of our life within five years. No amount of protesting or rational argument would stop Comcast from being Comcast. Don’t like it? Just try to cancel.

Time Warner Cable can be bad but it is no Comcast.

Malone: Waiting in the wings?

Life will be just fine without Comcast, but danger lurks on the horizon. Still interested in the possibility of taking over Time Warner Cable is the smaller Charter Communications, now effectively controlled by cable magnate John Malone (he owns his own castles). Malone has a long history of enriching himself at the expense of customers with no other choices for cable/broadband service. He used to control Tele-Communications, Inc. (TCI), a cable company that literally threatened city officials who didn’t do what TCI wanted.

We remain unsure exactly what will happen next. Charter could bid aggressively to buy Time Warner Cable, Time Warner Cable could go it alone, or Time Warner Cable could start buying other cable companies (like Charter).

What we hope will happen is Time Warner Cable will refocus its energy on expanding its Maxx upgrade program as quickly as possible to reach all Time Warner Cable markets with faster broadband and a better cable TV experience. We also hope the company will stand by its word that compulsory usage caps are off the table.

I’d like to thank all of our readers who took the time to get involved in the fight and helped make a difference. Wall Street and Washington, as well as Comcast CEO Brian Roberts are all shocked the merger deal collapsed after a torrent of criticism from consumers. It also left state regulators cautious about how to proceed. New York’s Public Service Commission delayed making a decision eight times, recognizing the merger as a hot potato.

Our experience demonstrates that ordinary citizens can wield considerable power when unified and involved. We’ve proved that with multiple victories on the usage cap front as well as the AT&T/T-Mobile merger and Net Neutrality.

Let the fight for better broadband continue!

Phillip “Comcast lost its case for usage caps” Dampier

With today’s announcement Comcast intends to bring unlimited 2Gbps broadband to as many as 18 million homes across its service area, one thing is clear — if Comcast is not worried about the impact of that many potential customers consuming 2Gbps of bandwidth, there is absolutely no justification to impose usage caps and allowances on any Comcast customer.

A frequent justification for usage caps and usage billing is to guarantee fair access for all customers on a shared, congested network. Another is to help defray the cost of broadband expansion. But Comcast’s new super-speed tier will have no usage cap and customers are invited to use it as much as they like for a fixed price. Clearly, a customer maxing out a 2Gbps connection to upload and download enormous amounts of content, say on a peer-to-peer network, will have a far greater impact on Comcast’s infrastructure than a user with a basic 25Mbps Internet connection. Yet today in Atlanta, Comcast is asking its 25Mbps customers to stay within a 300GB usage allowance, if they want to avoid an overlimit penalty of $10 for each 50GB block of additional usage.

Comcast does not like Stop the Cap! calling Comcast’s “data usage trials” what we believe them to be: “usage caps.”

In response to our testimony before the New York Public Service Commission last year regarding its application to acquire Time Warner Cable, Comcast objected to our claim it was placing usage allowances or limits on its broadband customers.

“Comcast does not have ‘data caps’ today,” Comcast told the PSC in its filing. “Comcast announced almost two years ago that it was suspending enforcement of its prior 250GB excessive usage cap and that it would instead be trialing different pricing and packaging options to evaluate options for subscribers—options that reflect evolving Internet usage and that are based on the desire to provide flexible consumption plans, including a plan that enables customers who want to use more data the option to pay more to do so as well as a plan for those who use less data the option to save some money.”

Yet Comcast’s desire to offer “flexible” usage plans becomes very inflexible when customers ask for unlimited service. Comcast has refused to offer such an option in several trial markets where usage caps are once again being tested.

Last May, Comcast vice president David Cohen emphatically stated usage caps and usage-based billing were all about “fairness,” telling investors: “People who use more should pay more, and people who use less should pay less.”

Those signing up for 2Gbps service will be in a position to use far more bandwidth and data than any other Comcast customer subscribing to a lower speed broadband tier, yet will not be asked to pay more for using more or pay less for using less. They will be signing up for a simple to understand unlimited usage plan most Comcast customers want that will carry no billing surprises. At the moment, that is the only unlimited tier residential plan a Comcast customer in Atlanta will be able to buy.

Also turned on its head is the idea that customers who use the most bandwidth or cost Comcast the most should be contributing more to help Comcast pay for network upgrades, but once again this will not be the case for 2Gbps customers in Atlanta. They will cost Comcast a fortune as the company rips out its existing HFC (coaxial cable) infrastructure and replaces it with fiber to the home service. Yet the 25Mbps customer still using decades-old coaxial cable is effectively being asked to limit their Internet usage to avoid additional charges while the 2Gbps modern fiber customer is not.

It clearly makes no sense, but will rake in dollars for Comcast as usage continues to grow.

If Comcast’s network can sustain up to 18 million 2Gbps users with no usage cap, it has more than enough capacity to take the limits off every Comcast broadband customer. Comcast must shelve its usage billing trials immediately and remove all usage allowances from residential broadband customers in various test markets where they have been in place for more than a year. Google, Verizon, Time Warner Cable, Cablevision, Charter, and many other broadband providers have found no defensible reason to slap usage limits on their broadband customers. If they can provide comparable speeds and service without a cap, so can Comcast.

Comcast should clearly state it is in the business of providing the best possible customer experience using 21st century infrastructure more than robust enough to sustain usage demands, and compulsory usage caps and consumption billing are incompatible with the company’s goal to provide top-quality, worry-free Internet access.

If Comcast wants to test voluntary discount programs for light users, we have no objection. But customers should always have access to an affordable unlimited option without having to watch usage meters or worry about bill shock.

Comcast needs to do the right thing today and end all compulsory data usage trials across the country and commit to providing unlimited, allowance-free broadband service.

Emanuel

Chicago Mayor Rahm Emanuel has been prominently cited by Comcast as an example of a U.S. mayor that has the insight to support the company’s $45 billion buyout of Time Warner Cable.

But Comcast also had the insight to avoid mentioning it had paid Emanuel and a political slush fund controlled by him more than $100,000 before Emanuel took pen to paper in support of the merger.

The International Business Times notes the mayor of the Windy City has deposited giant campaign contributions from Comcast and its top executives for years, including two signed by the author of Comcast’s press release thanking Emanuel for his support himself — executive vice president David Cohen. In addition to a $5,000 personal donation to Emanuel, Cohen also signed a check for $10,000 payable to the notorious Chicago Committee, a political slush fund Emanuel controls and uses to keep other local politicians in line with his agenda.

Since Emanuel first ran for mayor in 2010, Comcast and its executives have spent $50,000 on his campaign. When Emanuel was a congressman, Comcast was one of his top donors — spending $46,000 total from 2003 until 2o08. Other executives gave another $25,000 to the Democratic Congressional Campaign Committee that Emanuel chaired at the time.

With that kind of generosity, Emanuel had no trouble signing one of Comcast’s “template” letters in support of the merger, telling the FCC it was great for Chicago and would enhance Comcast’s “generous presence” in the area. While generous to Emanuel and other politicians, Comcast has pounded Chicago residents with relentless rate increases and perennially receives dismal customer approval ratings from locals.

Although Emanuel’s letter told the FCC the merger would not reduce choice, elevate prices, or otherwise harm consumers, piles of Comcast’s cash may have obscured Emanuel’s vision of what ordinary Comcast customers endure. WLS-TV in Chicago reports Comcast’s customer service borders on “abusive.” (1:38)

New York State Assembly Leader Joe Morelle (D-Rochester) plagiarized large sections of a Comcast press release and the Congressional testimony of Comcast’s executive vice president David Cohen in a letter sent to the New York Public Service Commission endorsing the cable company’s bid to merge with Time Warner Cable.

Morelle evidently ignored or was unaware of his constituents’ overwhelming opposition to the merger deal and seemed unfazed about Comcast’s long record of dreadful customer service, constant rate increases, and the company’s plan to reimplement usage limits on consumer broadband accounts. Morelle simply cut and pasted Comcast’s own words in his letter about the merger, as we illustrate below:

N.Y. State Assembly Leader Joe Morelle: “The combination of Comcast and Time Warner Cable will create a world-class communications, media and technology company to help meet the increasing consumer demand for advanced digital services on multiple devices in homes, workplaces and on-the-go.”

David Cohen, executive vice-president, Comcast: “The combination of Comcast and TWC will create a world-class communications, media, and technology company to help meet the insatiable consumer demand for advanced digital services on multiple devices in homes, workplaces, and on-the-go.”

 

Joe Morelle: “Comcast has a proven record of investing in new technologies, facilities and customer support to provide the best in broadband Internet access, video and digital voice services.”

David Cohen: “Comcast has a proven record of investing in new technologies, facilities, and customer support to provide the best in broadband Internet access, video, and digital voice services.”

 

Joe Morelle: “Similarly, TWC has made significant strides in offering a diverse array of video, broadband, and voice services to its customers.”

David Cohen: “Similarly, TWC has made significant strides in offering a diverse array of video, broadband, and voice services to its customers.”

 

Joe Morelle: “Combining the two companies’ complementary strengths will accelerate the deployment of next-generation broadband Internet, video and voice services across the new company’s footprint.”

David Cohen: “Combining the two companies’ complementary strengths will accelerate the deployment of next-generation broadband Internet, video, and voice services across the new company’s footprint.”

 

Joe Morelle: “Residential customers will benefit from technological innovations including a superior video experience, higher broadband speeds and the fastest in-home Wi-Fi, while also generating significant cost savings and other efficiencies.”

Comcast Press Release: “Through this merger, more American consumers will benefit from technological innovations, including a superior video experience, higher broadband speeds, and the fastest in-home Wi-Fi. The transaction also will generate significant cost savings and other efficiencies.”

 

Joe Morelle: “In just two-and-a-half years, over 350,000 families, representing approximately 1.4 million low-income consumers, have been connected to the Internet thanks to this program. This proposed merger would extend this vital program to many more low-income households in New York by providing access to it in certain areas of the state currently only served by Time Warner.

David Cohen: “In just two and a half years, over 300,000 families, representing some 1.2 million low-income consumers, have been connected to the transformative power of the Internet thanks to this program. The transaction will extend this vital program to millions more Americans in the areas currently served by TWC.”

Broadband will be critically impacted by any merger of Comcast and Time Warner Cable in New York. The two companies could not be more different in their philosophies regarding access, pricing, and speeds.

This merger will have an especially profound impact on broadband service in upstate New York, largely left behind out from getting Verizon’s fiber upgrades. New York’s digital economy critically needs modern, fast, and affordable Internet access to succeed. Verizon has not only ceased expansion of its FiOS fiber to the home network in New York, it has virtually capitulated competing for cable customers in non-FiOS areas by agreeing to sell Time Warner Cable service in its wireless stores.[1]  In cities like Rochester, served by Frontier Communications’ DSL, Time Warner Cable is the only provider in town that can consistently deliver broadband speeds in excess of 10Mbps.

Time Warner Cable has never been the fastest Internet provider and had a history of being slower than others to roll out speed increases. But it is also the only cable provider in the country that experimented with usage caps and consumption billing and shelved both after subscribers bitterly complained in market tests in cities including Rochester.[2]

Then CEO Glenn Britt announced the end of the usage cap trial just two weeks after it became public.[3] Britt would later emphasize that he now believed there should always be an unlimited use plan available for Time Warner Cable customers who do not want their Internet use metered.[4] In study after study, the overwhelming majority of customers have shown intense dislike of limitations on their Internet usage, whether from strict usage caps Comcast maintained for several years or usage allowances that, when exceeded, would result in overlimit fees.[5] Just this month, the Government Accounting Office confirmed these findings in a new study that reported near-universal revulsion for usage caps on home wired broadband service:[6]

In only two groups did any participants report experience with wireline UBP [usage-based pricing].

However, in all eight groups, participants expressed strong negative reactions to UBP, including concerns about:

• The importance of the Internet in their lives and the potential effects of data allowances.
• Having to worry about data usage at home, where they are used to having unlimited access.
• Concerns that ISPs would use UBP as a way of increasing the amount they charge for Internet service.

Time Warner Cable has learned an important lesson regarding consumer perception of usage-based billing and usage caps on Internet service. In 2012, the company introduced optional usage caps for customers interested in a discount on their broadband service. Out of 11 million Time Warner Cable broadband customers, only a few thousand have been convinced in enroll such programs.[7]

Despite results like that, Comcast has not learned that lesson and has twice imposed unilateral, compulsory usage limits on their broadband customers, starting with a nationwide hard usage cap of 250GB per month introduced in 2008. Violators risked having their broadband service terminated by Comcast.[8] Today, for some that would be comparable to losing electricity or telephone service. The threat has profound implications in areas where Comcast is the only broadband provider.

Comcast temporarily rescinded its cap in May 2012, but has gradually reintroduced various forms of usage-related billing and caps with market trials in several Comcast service areas[9]:

Nashville, Tennessee: 300 GB per month with $10/50GB overlimit fee;

Tucson, Arizona: Economy Plus through Performance XFINITY Internet tiers: 300 GB. Blast! Internet tier: 350 GB; Extreme 50 customers: 450 GB; Extreme 105: 600 GB. $10 per 50GB overlimit fee;

Huntsville and Mobile, Alabama; Atlanta, Augusta and Savannah, Georgia; Central Kentucky; Maine; Jackson, Mississippi; Knoxville and Memphis, Tennessee and Charleston, South Carolina: 300 GB per month with $10/50GB; XFINITY Internet Economy Plus customers can choose to enroll in the Flexible-Data Option to receive a $5.00 credit on their monthly bill and reduce their data usage plan from 300 GB to 5 GB. If customers choose this option and use more than 5 GB of data in any given month, they will not receive the $5.00 credit and will be charged an additional $1.00 for each gigabyte of data used over the 5 GB included in the Flexible-Data Option;

Fresno, California, Economy Plus customers also have the option of enrolling in the Flexible-Data Option.

Comcast customers in these areas do not have the option of keeping their unlimited-use broadband accounts. Despite the fact Comcast executive vice president David Cohen refers to these as “data thresholds,” they are in fact de facto limits that carry penalty fees when exceeded.[10]

Cohen predicts these usage limits will be imposed on all Comcast customers nationwide within the next five years.[11] Time Warner Cable has committed not to impose compulsory limits on its broadband customers. Verizon has never attempted to place limits on its home broadband customers. Frontier shelved a usage limit plan of 5GB per month attempted in 2008 and currently provides unlimited service.

Comcast CEO Brian Roberts sat for an interview with CNBC in June in which he implied usage growth was impinging on the viability of its broadband business, justifying usage caps. At the end of the interview, Time Warner Cable ran advertising emphasizing it has no usage caps.[12] Both companies have highly profitable broadband services, as do other providers across the country.[13]

As our group has found, usage caps and consumption billing on cable Internet and DSL are little more than a transparent rate increase and anti-competitive maneuver to restrict the growth of the industry’s biggest potential competitor: online video. If a consumer can stream all of their video programming over a broadband account, there is no reason to retain a cable TV package. Comcast’s usage cap provides a built-in deterrent for customers contemplating such a move.

While a Comcast representative offered (without any independent verification) that the average Comcast broadband user consumes fewer than 20GB of data per month, Sandvine released evidence in its Global Internet Phenomena Report 1H2014 study that cord-cutters in the U.S. – at least those whose usage indicates the use of streaming as a primary form of entertainment – now consume about 212GB of data per month (with 153GB of that going toward “real-time entertainment usage”).[14]

That would put many customers perilously close to Comcast’s current market tested usage allowance.

Approving the transfer of franchises from Time Warner Cable to Comcast has the potential of saddling the majority of New York residents with usage caps and/or consumption billing with little or no savings or benefit to the consumer while introducing a major impediment to potential online video competition to help curtail cable television pricing.

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[1]http://www.verizonwireless.com/wcms/page-unavailable.html?e=404&req=/home-services/twc.html

[2]https://www.reuters.com/article/us-timewarnercable/time-warner-cable-shelves-broadband-usage-billing-idUSTRE53F6EQ20090416

[3]http://stopthecap.com/2009/04/16/we-won-time-warner-killing-usage-caps-in-all-markets/

[4]https://newsroom.charter.com/

[5]

[6]

[7]http://stopthecap.com/2014/03/13/time-warner-cable-admits-usage-based-pricing-is-a-big-failure-only-thousands-enrolled/

[8]https://arstechnica.com/uncategorized/2008/08/its-official-comcast-starts-250gb-bandwidth-caps-october-1/

[9] 

[10] 

[11]https://techcrunch.com/2014/05/14/comcast-wants-to-put-data-caps-on-all-customers-within-5-years/

[12]http://stopthecap.com/wp-content/uploads/2014/04/nocaps.png

[13]https://gigaom.com/2014/02/12/comcast-and-time-warner-cable-forget-tv-it-is-all-about-broadband/

[14]http://www.multichannel.com/news/technology/cord-cutters-gobble-down-bits-sandvine-study/374551#sthash.JYFP7o69.dpuf