Cox’s data plan limbo dance. How low can they go?

Cox Communications has cut by half the data usage allowance of one of its fastest broadband plans targeting so-called “heavy users,” exposing unsuspecting customers to expensive overlimit fees, while claiming usage caps are now mandated by law.

Stop the Cap! reader John C. wrote to tell us he discovered his allowance for Cox’s “Ultimate” Plan, delivering 200/20Mbps, has been slashed from 2,000GB to 1,000GB, with little warning except in an obscure support FAQ.

“About 95% of Cox customers are currently on a data plan that more than adequately meets the monthly needs of their household,” Cox claimed. “However, some households, particularly those with multiple Internet users that enjoy streaming TV or movies, may want to select an Internet package with a larger data plan. That is why we offer plans for all types of users so you can choose what is best for your household.”

The plan that most customers want is a flat rate, unlimited-use plan, one that Cox has unilaterally decided to stop offering. Just as bad: targeting the most widely available premium plan for a major usage allowance cut with no explanation whatsoever. It’s bad news for John, who says after paying Cox their asking price for Ultimate service, he cannot afford to also pay overage fees on top of that (currently $10 for each 50GB allotment, charged only in the Cleveland, Oh. area for now).

Customers who contact Cox and complain about their usage caps or allowance changes are being told false fables by Cox’s customer service specialists, who claim data caps are now the law in the United States.

Here is an example of an actual support session with Cox employees, (emphasis ours, edited (…) for brevity):

You: I also learned that you have internet data cap?

Jenna: Data limits were implemented by the FCC in 2011. By law, we have to have them. If you exceed the limit for 3 consecutive months, you will be contacted to discuss your options for upgrading.

You: FCC? can you send me details about that

[…]

Jenna: As I mentioned, there’s no fee for exceeding those limits. If you exceed the limit for 3 consecutive months, you will be contacted to discuss your options for upgrading. You can save a copy of this chat transcript for your records if you wish.

Jenna: I can also get you over to Customer Care for more information.

You: so why would you mention FCC rules then?

Jenna: Because you asked about our data limits.

Jenna: That’s why we have them.

You: Sure so can you tell me what FCC rule from 2011 you are referrind to?

Jenna: Sure, I’ll get you the link to the FCC website.

[…]

Jenna: Sure thing. Allow me a moment to get you over to Customer Care chat for further information about our Data Caps policies, and why we have them.

[…]

Christian O.: I see, well our Internet packages have a data usage limit however if you exceed that limit we won’t downgrade your speed or restrict your access to Internet or charge you more.

Christian O.: I think I found some information on the date usage and the FCC on 2011. One moment, please.

You: but it says right there that you will cahrge $10 for 50GB after I reach data cap

You: And FCC is very strict about data caps

Christian O.: Give me a moment to check something.

You: ok thanks

Christian O.: If you exceed your data plan, Cox may notify you by email to alert you. Your service will not be interrupted if you choose to stay on your existing package except in the rare cases of excessive usage. In those extremely rare situations, Cox may suspend service after attempting to resolve the issue.

Christian O.: Cox is conducting a limited data usage trial in Cleveland, Ohio. In all other markets, Cox does not currently charge additional fees if your data plan is exceeded.

You: what you are doing with data caps / usage is illegal

You: But please send me the FCC rule from 2011 that Jenna and you mention

You: “Jenna: Data limits were implemented by the FCC in 2011. By law, we have to have them.”

Christian O.: I don’t have such rule that talks about that. Do you have the rule where it says that is illegal?

Christian O.: Just asking.

[…]

Christian O.: Honestly I don’t have any idea about the rule that Jenna was speaking about. Let me go ask my supervisor. One moment, please.

[…]

Christian O.: Unfortunately we couldn’t find any information about that rule established by the FCC.

To clarify, the FCC neither has rules for or against data caps. It has remained neutral on the subject, although FCC chairman Thomas Wheeler recently advocated imposing a moratorium on data caps or usage billing for up to seven years as a condition of approving Charter Communications’ acquisitions of Time Warner Cable and Bright House Networks.

Here are Cox’s current data plans, which are effective for all residential customers. However, only customers in Cleveland will face penalties for exceeding them at this time.

Bull Connor was Birmingham, Ala.’s notorious Commissioner of Public Safety in the 1950’s and 1960’s.

In an astonishing guest editorial published by USA TODAY, Rev. Jesse Jackson evoked imagery of the 1960s civil rights movement as a backdrop to claim the Federal Communication Commission’s plan to promote an open, competitive market for set-top boxes was racist.

“National news coverage of the snarling dogs, water hoses and church bombings in the American South were the catalysts to exposing the ugly truths of racism and bigotry in the 1960s. Local news outlets gave new meaning to what the struggle looked like for people on its front lines,” wrote Jackson. “That is why a new proposal at the Federal Communications Commission (FCC) to regulate TV ‘set top boxes’ has raised so much concern.”

That “concern” has come almost entirely from the cable and telco-TV industry and their allies, which have compared the potential breakup of a lucrative cable TV equipment monopoly to anti-Americanism, minority television genocide, an invitation to piracy and a pathway for total world domination by Google.

In April, we reported the rhetoric surrounding the proposal, which would create an open standard allowing any manufacturer to make and sell their own set-top box, had already taken Hyperbole Hill. But Rev. Jackson’s latest guest editorial rockets the ridiculousness of the cable industry’s opposition into the stratosphere.

Jackson claims (wrongly) the proposal will lead third-party manufacturers to segregate minority television content, apparently in a way that resembles life in rural Mississippi in 1962. It evokes dreams of hordes of Google vans roaming across the southern countryside looking for trouble by stripping networks like Revolt and Vme TV of their ad revenue and copyright protection. It just isn’t true. But one line in Jackson’s commentary does prove revealing — noting all these terrible events could all take place “without any compensation.”

Jackson

This is the diamond in the rough of this near-senseless editorial. Like most things in the world of Big Telecom public policy, it’s all about the money. Jackson’s Rainbow PUSH Coalition apparently isn’t what it used to be. Originally created to promote civil rights and diversity, the organization these days is just as likely to promote Big Telecom mergers and its public policy agenda, usually in exchange for contributions to Jackson’s groups, although such quid-pro-quo is always hotly denied. Therefore, we shall call them monetary “coincidences.” His coincidental association with Comcast, AT&T, Verizon and others runs back more than a decade:

• Bell Atlantic (later Verizon) coincidentally donated $1 million to Jackson and his groups. In 1999, Jackson coincidentally endorsed the merger of GTE and Bell Atlantic into a new entity known as Verizon, which coincidentally pledged $300,000 to Jackson annually through the year 2002;
• In 1998 Jackson was strongly opposed to the merger of SBC and Ameritech (which would later emerge as AT&T), suggesting it was anti-democratic. After the two companies donated $500,000 to Jackson’s Citizenship Education Fund (given a dubious rating by Charity Navigator), Jackson coincidentally did a complete 180, praising the merger. It didn’t hurt that Ameritech coincidentally sold part of its cellular business to Georgetown Partners, owned coincidentally by one of Jackson’s closest friends.
• Not to be left out, AT&T coincidentally donated $425,000 to Jackson’s Citizenship Education Fund in 1999, right after Jackson coincidentally withdrew his opposition to the merger of AT&T and TCI Cable (later sold to Comcast).
• Jackson coincidentally has maintained a regular presence in proceedings involving Comcast’s various business dealings, particularly its merger with NBCUniversal, which it coincidentally endorsed as “pro-consumer.”

Jackson mentioned his views have the support of certain other civil rights organization including the National Urban League and the League of United Latin American Citizens (LULAC), two groups Stop the Cap! has written about extensively regarding their ongoing committed support of Big Telecom mergers, deregulation, and other public policy agendas. They don’t work for free — substantial contributions and other compensation from those same companies head into the coffers of both groups. LULAC counts AT&T, Comcast, Cox, the National Cable & Telecommunications Association, Time Warner Cable and Verizon as members of their “corporate alliance.” None of those companies support the FCC’s plan to open up the set-top box marketplace.

Jackson cheapens the legacy of the civil rights movement in his efforts to draw comparisons between the horrible atrocities of the past with the fat equipment profits the cable industry is counting on in the future.

His views are also simply provably wrong. Jackson’s claim that the government was somehow responsible for the destruction of local multicultural newspapers at a time when the entire newspaper industry continues to struggle against online media is ludicrous. His myopic view that the elimination of a minority tax certificate program is the reason minorities don’t own many radio and television stations today ignores the fact many former minority owners cashed out and sold those stations (at a massive profit) after the Clinton Administration deregulated the industry in the late 1990s, which lead to a massive wave of ownership consolidation. Finding individuals, minority or otherwise, that still own local radio and television stations isn’t as easy as it once was.

Jackson and his supporters are wasting their time fighting to preserve the dying concept of the 500-channel linear TV marketplace. Consumers, minorities included, are not clamoring for more minority networks littering the cable dial that spend much of their broadcast day airing program length commercials and reruns of Good Times or The Cosby Show. Many of these networks only add to the growing cost of cable TV. Viewers want on-demand access to quality original programming they can actually find and watch.

We’d also remind Jackson minorities also pay the outrageous price of set-top box rentals, something Jackson and his organization should be sensitive about. Busting the set-top box monopoly means every American will pay lower rates for this equipment. We do understand it won’t help Jackson’s bank account, or those of other civil rights groups that kowtow to their corporate friends, but who exactly do they represent?

Daring to suggest that this debate has anything to do with Bull Connor’s outrageous behavior in Birmingham, Ala. in 1963, where Connor ordered the city fire department to turn fire hoses on peaceful civil rights protesters and attacked them with police dogs, tarnishes the reputation of Jackson and his group and demonstrates just how desperate the cable industry is getting trying to credibly defend a monopoly. Jackson should withdraw those remarks.

Dear Members,

We have had a very busy winter and spring here at Stop the Cap! and we thought it important to update you on our efforts.

You may have noticed a drop in new content online over the last few months, and we’ve had some inquiries about it. The primary reason for this is the additional time and energy being spent to directly connect with legislators and regulators about the issues we are concerned about. Someone recently asked me why we spend a lot of time and energy writing exposés to an audience that almost certainly already agrees with us. If supporters were the only readers here, they would have a point. Stop the Cap! is followed regularly by legislators, regulators, public policy lobbyists, consumer groups, telecom executives, and members of the media. Our content is regularly cited in books, articles, regulatory filings, and in media reports. That is why we spend a lot of time and energy documenting our positions about data caps, usage billing, Net Neutrality, and the state of broadband in the United States and Canada.

A lengthy piece appearing here can easily take more than eight hours (sometimes longer) to put together from research to final publication. We feel it is critical to make sure this information gets into the hands of those that can help make a difference, whether they visit us on the web or not. So we have made an extra effort to inform, educate, and persuade decision-makers and reporters towards our point of view, helping to counter the well-funded propaganda campaigns of Big Telecom companies that regularly distort the issues and defend the indefensible.

Four issues have gotten most of our attention over the last six months:

1. The Charter/Time Warner Cable/Bright House merger;
2. Data cap traps and trials (especially those from Comcast, Blue Ridge, Cox, and Suddenlink);
3. Cablevision/Altice merger;
4. Frontier’s acquisition of Verizon landlines and that phone company’s upgrade plans for existing customers.

We’ve been successful raising important issues about the scarcity of benefits from telecom company mergers. In short, there are none of significance, unless you happen to be a Wall Street banker, a shareholder, or a company executive. The last thing an already-concentrated marketplace needs is more telecom mergers. We’re also continuing to expose just how nonsensical data caps and usage-based billing is for 21st century broadband providers. Despite claims of “fairness,” data caps are nothing more than cable-TV protectionism and the further exploitation of a broadband duopoly that makes it easy for Wall Street analysts to argue “there is room for broadband rate hikes” in North America. Stop the Cap! will continue to coordinate with other consumer groups to fight this issue, and we’ve successfully convinced at least some at the FCC that the excuses offered for data caps don’t hold water.

Dampier

FCC chairman Tom Wheeler’s broadening of Charter’s voluntary three-year moratorium on data caps to a compulsory term as long as seven years sent a clear message to broadband providers that the jig is up — data caps are a direct threat to the emerging online video marketplace that might finally deliver serious competition to the current bloated and overpriced cable television package.

Wheeler’s actions were directly responsible for Comcast’s sudden generosity in more than tripling the usage allowance it has imposed on several markets across the south and midwest. But we won’t be happy until those compulsory data caps are gone for good.

More than 10,000 Comcast customers have already told the FCC in customer complaints that Comcast’s data caps are egregious and unfair. Considering how unresponsive Comcast has been towards its own customers that despise data caps of any kind, Comcast obviously doesn’t care what their customers think. But they care very much about what the FCC thinks about regulatory issues like data caps and set-top box monopolies. How do we know this? Because Comcast’s chief financial officer this week told the audience attending the JPMorgan Technology, Media and Telecom Broker Conference Comcast always pays attention to regulator headwinds.

“I think it’s our job to make sure we pivot and react accordingly and make sure the company thrives whatever the outcome is on some of the regulatory proposals that are out there,” said Comcast’s Mike Cavanagh. We suspect if Chairman Wheeler goes just one step further and calls on ISPs to permanently ditch data caps and usage billing, many would. We will continue to press him to do exactly that.

Stop the Cap! supports municipal and community-owned broadband providers.

Other companies are also still making bad decisions for their customers. Besides Comcast’s ongoing abusive data cap experiment, Cox’s ongoing data cap trial in Cleveland, Ohio is completely unacceptable and has no justification. The usage allowances provided are also unacceptably stingy. Suddenlink, now owned by Altice, should not even attempt to alienate their customers, particularly as the cable conglomerate seeks new acquisition opportunities in the United States in the future. We find it telling that Altice feels justified retaining usage caps on customers in smaller communities served by Suddenlink while denying they would even think of doing the same in Cablevision territory in suburban New York City. Both Suddenlink and Cablevision have upgraded their networks to deliver faster speed service. What is Altice’s excuse about why it treats its urban and rural customers so differently? It frankly doesn’t have one. We’ll be working to convince Altice it is time for Suddenlink’s data caps to be retired for good.

We will also be turning more attention back on the issue of community broadband, which continues to be the only competitive alternative to the phone and cable companies most Americans will likely ever see. The dollar-a-holler lobbyists are still writing editorials and articles claiming “government-owned networks” are risky and/or a failure, without bothering to disclose the authors have a direct financial relationship to the phone and cable companies that don’t want the competition. We will be pressing state lawmakers to ditch municipal broadband bans and not to enact any new ones.

We will also continue to watch AT&T and Verizon — two large phone companies that continue to seek opportunities to neglect or ditch their wired services either by decommissioning rural landlines or selling parts of their service areas to companies like Frontier. AT&T specializes in bait-n-switch bills in state legislatures that promise “upgrades” in return for further deregulation and permission to switch off rural service in favor of wireless alternatives. That’s great for AT&T, but a potential life-threatening disaster for rural America.

We continue to abide by our mandate: fighting data caps and consumption billing and promoting better broadband, regardless of what company or community supplies it.

As always, thank you so much for your financial support (the donate button that sustains us entirely is to your right) and for your engagement in the fight against unfair broadband pricing and policies. Broadband is not just a nice thing to have. It is an essential utility just as important as clean water, electricity, natural gas, and telephone service.

Phillip M. Dampier
Founder & President, Stop the Cap!

America has a new second largest cable conglomerate with 17 million customers and a new name.

Charter Communications formally completed their $55 billion acquisition of Time Warner Cable and Bright House Networks today, creating a new cable giant that more closely rivals number one Comcast in size and scope.

The approval came despite warnings from a team at the FCC assigned to review the impact of the merger.

The Deal is Likely to Trigger an Abusive Money Party at the Expense of Customers… Merger Approved

“We conclude that the transaction will materially alter [Charter’s] incentives and abilities in ways that are potentially harmful to the public interest,” an FCC report about the impact of the merger states.

The FCC concluded the deal could become an enormous money-maker for Charter and its investors through the eventual metering of online usage. There are strong incentives, according to the FCC, for Charter “to impose data caps and usage-based prices in order to make watching online video more expensive, and in particular more expensive than subscribing to a traditional pay-TV bundle” after its voluntary commitment not to impose data caps expires.

Existing Charter customers warn this isn’t the cable company you are looking for.

The FCC is also certain Charter will enjoy considerable pricing power with its near broadband monopoly at speeds of 25Mbps or higher. That means one thing: substantial rate increases unchecked by competition.

Despite the gloomy prospects, FCC commissioners found a “compromise” that will impose consumer-friendly conditions on the merger, but will expire between 5-7 years from today. After that, in the absence of robust competition from a player like Google Fiber, it will be open season on broadband customers.

Consumer advocates were less than pleased.

“There’s nothing about this massive merger that serves the public interest. There’s nothing about it that helps make the market for cable TV and Internet services more affordable and competitive for Americans,” said Free Press president and CEO Craig Aaron. “Customers of the newly merged entity will be socked with higher prices as Charter attempts to pay off the nearly $27 billion debt load it took on to finance this deal. The wasted expense of this merger is staggering. For the money Charter spent to make this happen it could have built new competitive broadband options for tens of millions of people. Now these billions of dollars will do little more than line the pockets of Time Warner Cable’s shareholders and executives. CEO Rob Marcus will walk away with a $100 million golden parachute.”

In fact, the golden parachutes will extend far beyond retiring Time Warner Cable CEO Rob Marcus. According to a regulatory filing, Marcus’ contract was written to allow him to sell the company and effectively be “terminated without cause,” which activates the equivalent of a Powerball Powerplay. Marcus will automatically qualify to receive several years’ worth of his original salary, expected bonuses, and compensation in stock for showing himself to the exit. That alone is expected to exceed $100 million. Marcus’ ancillary benefits also add up, and will be eventually disclosed in future filings with the Securities & Exchange Commission.

Marcus’ colleagues won’t leave empty-handed either. The chief operating officer and chief financial officer of Time Warner Cable could each get $32 million in compensation. The general counsel of Time Warner will retire with around $22 million and some mid-level executives could leave with around $18 million each.

Familar names on Wall Street will also enjoy proceeds worthy of Donald Trump Lotto. Everyone’s favorite financial casino Goldman Sachs is sitting pretty with millions in fees advising Charter on both its acquisitions of Bright House and Time Warner Cable. UBS helped lead the financing of the whopping $55 billion deal on behalf of Charter and is the sole financial adviser to Advance/Newhouse, which owns Bright House. That means big bucks for the Swiss bank.

The Small Swallow the Big

Charter was a much smaller, and not well-regarded cable company before it financed the acquisition of two of its non-competing rivals. In fact, Time Warner Cable was already the country’s second largest cable operator before the acquisition, and Charter will have to contend with managing a cable operator much larger than itself. Charter executives have hinted it will take many months to manage that transition, with the eventual retirement of both the Time Warner Cable and Bright House brands, in favor of Charter and its Spectrum product suite.

Those not already Charter customers will be subjected to a publicity campaign to manage the introduction of Charter in the best possible light, despite the fact current Charter customers rate the cable operator as mediocre in consumer surveys. Its reputation is well-known, especially in the middle of the country where many Charter systems operate.

Charter will continue to be led by CEO Thomas Rutledge, who will also hold the titles of president and chairman of the board. But the man behind-the-scenes expected to have a substantial amount of influence in how Charter is run in the future is ex-Tele-Communications, Inc. (TCI) CEO Dr. John Malone through his entity Liberty Broadband, which will control three seats on Charter’s board of directors, including one for Malone himself. Malone advocated for Rutledge to become CEO of Charter after the cable company emerged from bankruptcy reorganization in 2009.

How to Remake Your Image: Change the Name

Renaming Time Warner Cable isn’t likely to fix the scandalously low regard its customers hold the company. But it couldn’t hurt either.

“It’s not surprising Charter wants to rebrand Time Warner Cable,” said David VanAmburg, managing director of the American Customer Satisfaction Index, which regularly rates Time Warner Cable (and often Comcast trading places) the worst companies in the country. “Charter has scored better than Time Warner Cable in recent years, so it could bode well for Time Warner Cable customers. But the data suggests leaps-and-bounds improvement could be difficult.”

ACSI graded Charter 57 in 2015. Time Warner Cable managed a 58 — both effectively failing grades on a scale of 0-100.

What kinds of services Charter is now compelled to offer is dependent on the state of the cable system serving each area and if regulators extracted concessions on the state level to guarantee better service. The state that worked the hardest to compel upgrades and insist on a more customer-friendly transition is New York, where the Public Service Commission forced concessions to upgrade all of the state and allow customers to keep their current Time Warner Cable plans if they wished.

“On Day One, customers of (Time Warner) won’t really see any changes,” Charter spokesman Justin Venech told the Albany Times Union. “Time Warner Cable and Charter Spectrum will continue offering their current suite of advanced products and services to customers in their markets.”

“As we go all digital market by market, we will launch the Spectrum brand product, pricing and packaging, and Charter will also launch Spectrum in those markets in which (Time Warner has) already gone all digital,” Venech said. “We will be communicating directly with customers, letting them know when they will start seeing the Spectrum brand. In addition, when our Spectrum packages launch, if a customer likes the package they are currently in, they will be able to stay in that package.”

Charter Communications could not have closer friends than the commissioners on the California Public Utilities Commission who unanimously voted in favor of the merger of Charter Communications and Time Warner Cable while some almost apologized for bothering the cable company with pesky deal conditions.

CPUC president Michael Picker quickly dispensed with the glaring omission of a sunset provision on Charter’s three-year voluntary commitment to abide by the FCC’s Open Internet Order by inviting his fellow commissioners to add it back for Charter’s benefit. How nice of him. The cable company lobbyists in attendance at today’s hearing did not even need to ask.

Picker’s review of the merger benefits effectively recited a Charter press release and he seemed genuinely pleased with himself for making it all possible. For example, the CPUC considered the addition of a provision allowing consumers to buy their own cable modems and set-top boxes without a penalty from their provider “unprecedented,” while never mentioning they failed to adopt recommendations that customers be given a discount for providing their own equipment. Score Charter, which can continue to collect modem fees built into the price of its broadband service even when you provide your own.

Dampier

New Charter’s “exciting” commitment to upgrade to 300Mbps by 2019 sounds good, until one realizes Time Warner Cable was committed to finishing their own 300Mbps upgrade at least one year earlier, and at a lower cost to customers. In fact, while California celebrates 300Mbps by 2019, thanks to the efforts of Stop the Cap! and the New York Public Service Commission, Charter is required to be ready to offer gigabit service across the state that same year. See what is possible when you actually try, CPUC?

The commissioners repeatedly thanked Charter Communications and Time Warner Cable while ignoring the consumer groups that contributed opposing comments and tangible suggestions to improve benefits for consumers — almost entirely ignored by the CPUC. That will cost Californians dearly and borders on regulatory malpractice. If the CPUC required California to at least enjoy the same benefits other state utility regulators won for their constituents, Californians would get a substantially better deal. Instead, the CPUC insisted on giving California and even worse deal than the FCC, by granting Charter’s right to gouge customers with usage caps and usage billing in three years, even after the FCC agreed to seven years of cap-free Internet. Mr. Picker and the other commissioners owe California an explanation for letting them down, and the scandal-plagued CPUC needs to demonstrate it is reforming after the shameful performance of its former chairman Michael Peevey.

“Today was a travesty for Californian consumers, and frankly we were shocked to watch ostensibly independent commissioners carry water for Charter Communications,” said Stop the Cap! president Phillip Dampier. “We saw clear evidence of a commission more concerned about Charter Communications and Time Warner Cable than for the average citizens of California that will face higher cable bills, time limits on unlimited Internet access, and a longer wait for upgrades as a direct result of today’s decision. Consumer groups like Stop the Cap! brought clear and convincing evidence to the commission that the benefits of this merger have time limits and plenty of fine print. We offered concrete suggestions on how to improve the deal for consumers — ideas accepted in other states, but the CPUC clearly wasn’t interested in anything that might make Charter uncomfortable.”