Cable and satellite companies are notorious for baiting customers with cheap offers for internet, phone, and television service and then shocking them when the first much-higher-than-expected bill arrives, but Altice’s Optimum/Cablevision takes the bait and switch promotion to a whole new level.

Jim C. (who didn’t want to reveal his last name) is a Cablevision customer of over ten years who recently saw a rare promotion targeting existing customers offering 200 Mbps internet and “Core” television service for $99/month. That was nearly $40 less than what he was paying for service, and was his chance to slim down his TV package and get a speed upgrade as well.

“I called the number to ask about the promotion because I know how these companies work,” Jim told Stop the Cap! “You always have to get them to read off the fine print because many fees and surcharges get buried there.”

Jim was right. An impatient Optimum representative was willing to admit “there are some extra fees,” and sighed as Jim asked for details. By the time Jim was finished writing them down, he needed a second sheet of paper.

“This should be illegal — it is clearly ‘bait and switch’ designed to lure you at one price and then stick you with so many fees it turns out to be not much of a deal at all,” Jim shared. “In fact, it turned out to be more expensive than what I am paying right now!”

For the benefit of customers seeing similar promotions, here is a breakdown of just some of the extra fees not included in the $99 price:

Promotion: $99 Optimum Core Double Play Upgrade (Core TV + 200 Mbps internet) for existing customers
Term: 2-year agreement, with penalties for ending contract early

Gotchas:

• Promotion for HBO and Showtime expires after 12 months; customers pay a regular price of $14.95 for HBO and $11.95 for Showtime during months 13-24. If you want access to on-demand titles, add $4.95/mo for each premium network.
• Cloud DVR promotion ends after 12 months; next 12 months you owe them the regular price, which is a whopping $17.95 a month.
• Service, equipment rates and random fees are subject to tax in some areas, up to 5.3%.
• FCC “User Fee” of $0.08/month and fees for public, educational, and government local access channels cost up to $1.35/month.
• Mandatory sports surcharge is $7.97/month.
• Mandatory Broadcast TV surcharge is $4.99/month

Equipment Fees:

• Modem rental is $10 a month.
• Altice One cable boxes needed for TV service carry a $20/month fee. “Mini boxes” are available for $10/month per TV.

That $99 promotion actually costs the average customer with two boxes at least $163.39 a month during the first twelve months, not including taxes, and assuming the customer owns their modem and has one Altice One and one Mini set-top box. During the second year, that “$99 offer” will cost customers in excess of $218 a month, assuming one keeps both premium networks and wants on-demand access as well.

“This is completely dishonest and outrageous,” said Jim. “You absolutely must pay very close attention to the fine print in these offers, because they can get very expensive, very fast.”

Mid-Rivers Communications, a Montana-based telecom co-op, wants everyone to believe their mandatory, usage-based broadband scheme that charges $19.95 a month + $0.20 per gigabyte is popular with their customers.

After the company noticed that fewer than 20% of customers were responsible for more than 90% of Mid-Rivers’ network traffic, it decided to ditch its traditional usage-capped, speed tier plans in favor of a compulsory usage-based billing scheme that included the maximum speed available, sometimes as high as 1Gbps, with no usage allowance.

To listen to Michael Candelaria, Mid-Rivers CEO and general manager, people have lined up at the doors just waiting to sign up, according to an interview published by Telecompetitor:

Initially the company tested usage-based pricing as an option in one CLEC market. But considering that 80% of customers opted for usage-based pricing within one year of its introduction, Mid-Rivers moved completely to usage-based pricing and launched it throughout all four CLEC markets.

Mid-Rivers has been particularly proud of the response it has received from local businesses. Candelaria noted that local hotels have seen occupancy drop after the area experienced an oil-related boom, followed by a bust. Nearly-empty hotels were paying $500 to $1,000 a month for high-bandwidth connections from competitors but only using a fraction of the capacity. The Mid-Rivers usage-based broadband offering was perfect for them.

During certain months, the hotels’ bills are dramatically lower than they were before.

“When the hotel is full, their bill goes up and they know why,” Candelaria said.

Meanwhile, as businesses that were not Mid-Rivers customers heard about the usage-based offering, “they came to us” after “we beat on their door for 20 years,” he noted.

But as news of the interview spread, it seems more than a few customers are not happy with Mid-Rivers’ new broadband pricing, and accused the company of propagandizing its usage based pricing scheme and censoring social media to suppress customer backlash.

Candelaria admitted the company used to take a lot of heat from customers that called up and asked for the cheapest internet plan available, which was $40 a month for 1.5Mbps service. At those speeds and prices, customer slammed the company’s Facebook page.

“This is where Candelaria time traveled a bit on his answer,” reflects Dan Corey, a customer rebutting Candelaria’s case. “Before the usage-based internet [plans], the tiers Mid-Rivers [offered] were 8, 12, and up to 50Mbps. There has not been a 1.5Mbps speed at Mid-Rivers for years.”

These days, Candelaria claims, complaints about speed and pricing are mostly gone.

“Of course they are gone,” responds customers J.P. and Kyle Jones, who jointly shared their feelings with Stop the Cap! “Mid-Rivers now censors their social media after taking a lot of heat so complaints are never publicly seen on their Facebook page.”

“Mid-Rivers must approve any comments made on their Facebook page, so 90% of the complaints are never seen unless Mid-Rivers has a full (even if not accurate) response ready to post along with it,” adds Corey. “No dissatisfied customers would know of others because of the control. Their Facebook page used to show all comments when posted, but that changed once they got a better understanding of how to control the flow of comments.”

Jones points out that the reason “80% of customers opted for usage-based pricing” is that any account change automatically forced the customer onto a usage-based pricing plan whether they wanted it or not. Most customers, including himself, do not want data caps or usage pricing, but he didn’t get a choice in the end.

“Put yourself in the shoes of a customer that used to be enrolled in Mid-Rivers’ Preferred Plan, which cost $59.95 a month and includes 600GB of usage at 12/1Mbps speeds,” writes J.P. “People don’t live in Montana for the social life so we spend a lot of time streaming video at home. Under Mid-Rivers’ new plan, if I used 500GB a month, I’d pay $20 for the account and $100 in usage charges — double what I paid a month earlier just for faster speed I could have paid more to get if I wanted or needed it. How many people do you think are enthusiastically waiting to pay double what they used to for internet?”

Mid-Rivers new usage-based plan.

For Candelaria, “Wide Open Wi-Fi”  is about selling fast internet access for less, and customers should only pay for what they use.

“People have been paying for utilities by usage for some time,” he told Telecompetitor. “Customers don’t tally up how much electricity they use and then order a 30-kilowatt plan and they don’t count how many showers they take to determine what kind of water plan they need. Why should the internet be any different? Everybody should have good internet. It doesn’t matter if you’re rich, poor, you should be able to afford fast internet.”

Customers like J.P. agree with wanting fast and affordable internet, but argue this isn’t that. Where available, “Wide Open Wi-Fi” quickly becomes the only option Mid-Rivers offers, he claims.

“The reason for the [high] ‘take rates’ is that if you attempt to change or upgrade service, you are forced onto the usage-based service,” adds Corey. “There is no choice, so the take rates are very misleading. Customer satisfaction would increase for those that don’t use the service as of now. However, with more and more of the world going to internet, those customers will feel the squeeze soon enough.”

For customers that avoid calling Mid-Rivers and keep their heads down to keep their current plan, that doesn’t stop the company from eventually notifying customers their plan was changing whether they liked it or not.

Mid-Rivers older tiered plans.

“You will be ‘offered’ the Wide Open internet shortly I’m sure. Just like we in the cable modem towns were,” noted BigSkyGuy. “However, once not enough people switch to it, or it’s been some pre-determined amount of time, you’ll be forced onto it like the rest of us. Then you can enjoy the larger bills. Just like your forced router unfortunately.”

Mid-River sells its “Wide Open” service as a great way to get rid of data caps and tiered plans, and includes a free Wi-Fi router:

• Virtually unrestricted speeds
• Connected Home Wi-Fi included!
• No more tiered plans! You automatically get the fastest speed!
• No more data caps
• Pay for only what you use
• Your speed and experience will be greatly enhanced
• Your perfect plan – whether you need the fastest speeds or the most affordable option
• You as the customer will have control over your Internet bill*

That asterisk points to fine print that explains for $19.95 a month, you get no data allowance. You are billed $0.20 per gigabyte in one gigabyte increments. Don’t like the high bill that results?

“Your bill can be controlled by monitoring how much data you are using, use less and your bill will decrease,” the company explains.

But for most internet users, using less isn’t an easy option, especially as cord-cutting shifts more viewing towards the internet. Once Netflix, Hulu and similar services detect the faster speeds available on Mid-Rivers’ metered plan, their players increase video bandwidth to match available speed unless the customer intervenes. If they don’t, streaming can get very expensive.

“I have been hit with that Wide Open internet scam […] and unless you change your settings in [Netflix, Hulu, CBS, etc.] it’ll run you up to 7GB an hour, especially when it reads that speed setting from the Wide Open. In essence, Mid-Rivers is making you pay $1.40 per hour of Netflix,” writes BigSkyGuy. “Now granted, you can go in and change your settings, but how many people really know you can do that?”

The meter is lurking.

Candelaria argues the majority of Mid-Rivers customers use less than 100GB a month and their bill is less than $40, which is nearly $5 less than Mid-Rivers’ cheapest plan at $44.95, which includes a 300GB data allowance. He also claimed ‘the change to usage-based broadband has increased customer satisfaction and take rates – and while margins initially dropped, profitability was back to its previous level within six months.’

To accomplish that, either the company has signed up more new customers under the plan than it expected or usage charges from heavier users are covering the lost revenue. For Candelaria’s statement to remain true, “most customers” would have to use less than 100GB of usage a month for their bill to remain under $40. Lighter use customers may benefit from the faster speeds and continue to pay less as long as their usage stays at or near 100GB a month. But as average internet use continues to increase, so will customers’ bills.

Jones says the news isn’t all good for Montana businesses either.

“In areas where Charter/Spectrum offers business internet service, their bills are a fraction of what Mid-Rivers is charging if that business tends to run up a lot of usage, and there are no surprise bills from Mid-Rivers’ traffic charges,” Jones notes. “The problem is that Mid-Rivers is charging sky-high usage fees of $0.20/GB while other ISPs pay at most pennies per gigabyte. In fact, most ISPs buy bandwidth based on meeting demand during peak usage times, not traffic alone. During off-peak times, using your connection costs Mid-Rivers next to nothing, but Mid-Rivers keeps charging $0.20/GB day and night.”

BigSkyGuy notes other ISPs in the area are offering customers a better value proposition with flat-rate internet that will quickly be the envy of many Montanans facing future Mid-Rivers’ usage charges:

• RTC/Reservation Telephone Cooperative: (100/100Mbps) UNLIMITED DATA $55/month
• Midco/Midcontinent Communications: (75/5Mbps) UNLIMITED DATA $56/month or (25/3Mbps) UNLIMITED DATA $42/month
• Nemont: (10/10Mbps) UNLIMITED DATA $71/month

Warren (center) pictured with representatives of Charter Communications and PowerMyLearning (Photo courtesy of: PowerMyLearning)

The incumbent mayor of Rochester, N.Y., currently up for re-election, has decided to take indirect credit for a low-cost internet program loaded with tricks and traps from a cable company that is worsening the affordable internet problem in the United States.

Mayor Lovely Warren made the head-slapping mistake of teaming up with Charter Communications, already on track to being even more universally despised by its customers than its immediate predecessor Time Warner Cable. Casting political instincts to the wind, Warren decided to team up with an unpopular cable company that is gouging its regular customers while offering a token “low-cost” internet program designed to protect Charter’s internet profits more than offering low-income customers a break.

WHAM-TV:

New low-cost, high-speed broadband Internet service is being launched in Rochester, Mayor Lovely Warren announced Thursday.

PowerMyLearning and Charter Communications announced Spectrum Internet Assist (SIA) would offer the service to eligible low-income household customers in Rochester.

Broadband speeds of 30/4 Mbps are being offered for $14.99 per month by SIA, according to Mayor Warren.

“Lowering the cost barrier to Internet access for families is essential if we are to close the digital divide and help them rise out of poverty,” said Mayor Warren. “Internet access is increasingly essential for students to do homework, for jobs seekers to research and apply for jobs, pay bills and remain connected with society.”

We agree with the mayor that lowering the cost barrier is critical to making essential internet service available to every resident. Unfortunately, Charter Communications is making the problem worse, not better. Charter’s idea of charity doesn’t seem so magnanimous when you read the fine print.

Charter’s solution for affordable internet: Charge most customers more while a select few jump through hoops for a discount.

First, Spectrum Internet Assist is highly discriminatory and only available to families with school age children that qualify for the National School Lunch Program. Don’t have kids? Tough luck. When they leave school, no more affordable internet for you!

Second, if you are a senior citizen on a fixed income, you probably already have 20+ years under your belt dealing with relentless rate increases from the local cable company. Unless you are 65 or over and receive SSI benefits, you’ll keep on paying those rate increases because the only thing Charter has on offer for you is a bigger bill.

Third, and the most egregious insult of all to the most vulnerable members of our society is Charter’s cynical fear its fat internet profits will be cannibalized if they simply lowered the bills of customers that would otherwise qualify for this program. Spectrum Internet Assist is for new customers only (and if you are still on a Time Warner Cable plan, you aren’t a new customer).

Charter refuses to relent on its policy requiring current customers to disconnect internet service for a month before they can qualify for Charter’s “charity.” The company is worried it will lose money from customers downgrading to Spectrum Internet Assist who will pay a lot less for internet access. To prevent that, Charter makes the process of enrolling as difficult and inconvenient as possible. Imagine if RG&E or National Grid demanded poor residents go without heat for 30 days before qualifying for heating assistance or if your elderly grandparents had to disconnect telephone service for a month before qualifying for Lifeline.

While obsessing about whether its poorest customers are taking ‘unfair’ advantage of a money-saving deal, Charter has no problem splurging on fat bonuses and compensation packages for its top executives. In fact, the highest paid CEO in the United States in 2016 was Thomas Rutledge, top dog at Charter Communications, rewarded with a splendid $98.5 million compensation package for finding new ways to charge consumers even more for cable service. Charter can certainly afford to lighten up on its customers. Instead, it seeks to live up to the cable industry’s usual reputation of a modern-day reboot of Oliver Twist, this time starring Rutledge as Fagin. Since Warren wholeheartedly endorses Charter’s paltry efforts for the poor, perhaps residents can call her up and ask why they should be forced off the internet for a month just to qualify for Charter’s “charity.” Or maybe not, considering the fact she had nothing to do with Spectrum Internet Assist beyond having her picture taken at a press event.

As is too often the case, uninformed politicians are quick to take credit for programs they don’t understand and are nowhere to be found when the real problem-solving and hard work needs to be done. How can we say that? Because we were a registered and very involved party in the New York Public Service Commission’s review of the Charter-Time Warner Cable merger deal. Mayor Warren wasn’t. We fought for pro-consumer benefits if such a deal was to be approved. Mayor Warren didn’t. We understood from long experience the cynicism that separates the cable industry’s lofty words from its fine print. She doesn’t.

Spectrum Internet Assist does very little to resolve the problem of internet affordability. The program is a close cousin of Comcast’s much-criticized Internet Essentials program, which has similar eligibility requirements and has proven cumbersome to sign up for and leaves too many eligible families behind because of its onerous signup requirements. In 2016, Comcast itself admitted that since 2011 it has only enrolled 750,000 low-income households in its discounted internet program, although more than 2.6 million families were eligible to sign-up but never did.

Charter makes internet affordability worse.

Our research shows that Charter’s token efforts for the few are more than canceled out by the rate increases and reduced options made available to the rest of its customers.

Time Warner Cable used to offer lower-cost internet plans.

Time Warner Cable used to sell six different internet plans ranging from $14.99 to $64.99 for new customers (and practically anyone who ever complained about their cable bill) or $14.99 to $109.99 if you were in the tiny minority of customers who didn’t either bundle service or ask for a promotion. Charter Communications argues it is “better” for consumers to simplify Time Warner’s “complicated” plans and pricing with a one-size-fits-all alternative — 60Mbps for what sells today for $64.99 a month (they raised the price $5 a month back in February). But at least you won’t pay that modem rental fee (if you didn’t bother to avoid it by buying your own cable modem that would have paid for itself long ago.)

So which company makes internet affordability a bigger problem — Time Warner Cable, which sold less expensive internet service at prices of $14.99, $29.99, and $34.99, or Charter Communications which advertises only one internet plan on its website for much of western New York – 60Mbps for $64.99 ($44.99 if you are new to Charter and not a previous Time Warner Cable customer that still has cable service). Spectrum’s plan is more than four times more expensive than Time Warner Cable’s previously well-advertised $14.99 plan.

Regular TWC broadband-only pricing in 2016.

No organization worked harder than Stop the Cap! to keep Time Warner Cable’s $14.99 Everyday Low Price Internet tier as a condition of the merger. While not fast, it is affordable and available to every customer, not just the small percentage that will eventually manage to qualify for Spectrum Internet Assist. Fortunately, New York’s Public Service Commission agreed with us and insisted that option remain available in New York State for the next several years. But Charter has subsequently made that plan almost invisible, removing all mention of it from its website, telling some customers it was not available, and leaving a distinct impression they don’t want customers to sign up.

Charter’s one-size-fits all plan got more expensive in February.

The reason is simple. Revenue cannibalization. Thomas Rutledge has repeatedly stressed to Wall Street investors he intended to end the “Turkish bazaar” of Time Warner Cable’s former cavalcade of plans and promotions. When a customer called Time Warner to complain about their bill, there was always room for negotiation and a better deal. Customers calling Charter looking for a break are hitting a brick wall with “take it or leave it” pricing, and tens of thousands of customers are “leaving it” and Charter behind. In this area, we don’t have that luxury because the alternative is usually Frontier Communications’ dreadful DSL service, which almost never meets the FCC’s definition of broadband — at least 25Mbps.

To give you an idea of just how rapacious Charter’s broadband pricing is, consider local upstart competitor Greenlight, which offers fiber to the home service to a very small number of neighborhoods predominately on the east side of the Genesee River. It charges a no-nonsense $50 a month for 100Mbps internet — $15 less than what Charter charges for 60Mbps. If you want gigabit speed, Greenlight will sell you 1,000Mbps for $100 a month, which is $5 less than Charter’s unadvertised 100Mbps offer ($104.95/mo with a mandatory $199 setup fee). Ten times the speed for less. No wonder their Facebook page is filled with people begging them to expand.

Rochester, like other cities in the upstate region, continues to fall behind with inadequate and costly internet service, insufficient competition, and no sign of gigabit speeds arriving anytime soon, unless you are lucky enough to live in a Greenlight service area. Those kinds of 21st century internet speeds are years away if we continue to depend on the local cable and phone company.

Phillip Dampier: We can afford to do without Charter’s “charity.”

In the local mayor’s race, one candidate seems to understand this problem and has a credible solution that fixes it. Rachel Barnhart has a long history of advocating for a citywide public fiber broadband network that would wire every home in the city for an estimated $70 million. The costs would be shared by city residents, the Rochester City School District, and at least one private vendor that would likely be responsible for administering day-to-day operations.

“About forty percent of homes in the city – 35,000 households —  don’t have high-speed internet via cable or DSL,” Barnhart said. “Some of those households can only access the internet via smartphones. The Rochester City School District has estimated half of its students don’t have broadband at home.”

City taxpayers have already paid for a underutilized institutional dark fiber network. Barnhart proposes putting that network to work for the community, selling competitively priced gigabit service for residential and business customers that would effectively subsidize free, slower-speed service for the less-fortunate. Is it expensive? Perhaps. But is it out of line when one considers in one local suburb this year, taxpayers will spend $1 million dollars on a single traffic light and minor road widening project to better manage traffic. Considering how many communities need digital highway traffic improvements, this kind of investment is hardly audacious and isn’t just about giving people fast internet. Managing the local digital economy with the right infrastructure is essential in a community that has seen the loss of tens of thousands of manufacturing jobs and has been economically challenged for years. The alternative is what we have now — watching a mayor impotently smile at a manufactured press event declaring victory while the near-cable monopoly local residents have for broadband service throws *-laden scraps at the public and calls it a day.

Rochester, and other communities that are enduring a cable company that is rapidly turning out to be worse than Time Warner Cable, cannot afford Charter’s “generosity.”

Politicians would do well to remember the sage advice we’ve given consumers since 2008. When a cable company claims they have a better deal for you, watch your wallet. For Mayor Warren, she will have to learn the same lesson we taught city councilman Adam McFadden and Assemblyman Joe Morelle. With friends like Charter/Spectrum or Comcast, you don’t need any enemies.

Nine years after Earthlink began promoting its $29.99 six-month offer for alternative broadband service for Time Warner Cable customers, the completion of Charter Communication’s takeover of Time Warner Cable has eliminated a clever way for customers to get broadband rate relief.

For almost a decade, savvy broadband-only Time Warner Cable customers have been able to bounce between new customer promotions at Time Warner Cable and Earthlink. When a year-long promotion with Time Warner Cable ended, a customer could switch seamlessly to Earthlink for six months and pay just $29.99 a month — charged to their Time Warner Cable bill. When the Earthlink promotion ended, customers were entitled to enroll as a new Time Warner Cable broadband customer and pay a lower rate for up to one year. After that, back to Earthlink.

No more.

Charter Communications closed that loophole this month and now prohibits existing Charter/Spectrum customers from getting promotional rates from Earthlink.

Once Charter customers end a broadband-only new customer promotion, currently $44.95 a month for one year, the rate jumps to $64.99… and stays there indefinitely.

The new restrictions appear in fine print on Earthlink’s website:

Charter Communications eliminated lower-cost broadband options for its customers, but claims its single remaining advertised offer (60Mbps in non-Maxx areas, 100Mbps in former TWC Maxx cities) offers a greater value because it is faster than Time Warner Cable’s Standard Internet 15Mbps plan and ends Time Warner’s practice of charging a $10 modem rental fee.

But it also costs more than earlier promotions at Earthlink ($29.99) and Time Warner Cable ($34.95).

Charter has junked Earthlink’s former promotion for Time Warner Cable customers.

“My broadband bill is now double what it used to be because I cannot switch to a broadband promotion with Charter as my Earthlink promotion ends this month,” reports Jim Deneck, a former Time Warner Cable customer in South Carolina. “I was paying $30 a month and now Spectrum wants to charge me $65 a month. The modem fee savings is irrelevant to me because I bought my modem years ago.”

Charter/Spectrum customers hoping for a better promotion from Earthlink are now also out of luck.

“After Spectrum pricing took effect in my area, my bill went up $30 a month,” writes Stop the Cap! reader Gennifer in Maine. “I was hoping to switch back to Earthlink but after placing an order with Earthlink, a representative from Charter/Spectrum called me and denied my request. It’s false competition. Since when is it okay to sign up with one company and then get a call from another telling me I am not allowed to take my business elsewhere. It’s monopoly abuse!”

Earthlink is entirely dependent on Charter Communications allowing them to resell service over Charter’s cable lines. Earthlink has been cautious not to outcompete either Charter or its predecessor Time Warner Cable, and charges roughly the same rates as a customer would get direct from either cable operator. The only benefit of the arrangement for customers was the ability to bounce between new customer promotions to pay the new customer rate indefinitely, but Charter has made sure that practice stops.

Gennifer did manage to ultimately outwit Charter, but at the cost of time and inconvenience.

“I called Spectrum and canceled my service and we signed up as a new customer under my husband’s name,” Gennifer writes. “Unfortunately, Charter won’t process an order at an address with existing service so you have to cancel and turn in equipment first and then place an order under a different name to qualify for a promotion. They really don’t want to give their customers a break or a discount. I wish we had other options.”