AT&T’s solution for rural Americans without access to broadband service arrived this week with the introduction of an $80/month plan bundling a mandatory wireless home landline with a 10GB usage-capped Internet plan.

AT&T Wireless Home Phone and Internet has undergone market testing in selected northeastern areas (largely outside of AT&T’s landline service territory). This week the service became available nationwide and is marketed to customers disconnected (or soon will be if regulators approve) from AT&T’s traditional landline service. AT&T is petitioning to dismantle its rural and outer suburban wired landline network and transfer customers to wireless service. But AT&T’s wireless replacement is both expensive and usage capped with an allowance that is just a fraction of what AT&T DSL offers:

• Customers start with a $20/month wireless landline phone replacement, powered by AT&T’s wireless network. Customers will keep their current phone number and home phones and will be sent a “Home Base” device that will interface between AT&T’s wireless network and up to two telephones. AT&T does not permit its device to be connected to your existing home phone wiring, so it strongly urges customers to buy cordless phones. The device is portable so it can be taken with you when traveling. The standalone service offers unlimited nationwide calling, Voicemail, caller ID and call waiting;
• Those interested in also purchasing broadband can add one of three different data plans: $60 for 10GB, $90 for 20GB and $120 for 30GB. AT&T charges a $10 overlimit fee for each extra gigabyte. You cannot buy broadband service unless you also subscribe to AT&T’s wireless landline product. That means the lowest possible price for rural broadband is $80 a month for up to 10GB of usage. Access may be over AT&T’s 4G LTE network (5-12Mbps maximum speeds) or their much-slower, but more common 3G network. In contrast, AT&T sells DSL for as little as $15 a month with a 150GB usage allowance included.

[flv]http://www.phillipdampier.com/video/ATT Wireless Home Phone Internet Intro 5-2014.flv[/flv]

AT&T introduces its new solution for rural America — wireless home phone and Internet service, at a price much higher than what urban customers pay. (1:42)

AT&T’s Home Base

AT&T’s Wireless Home Phone and Internet includes plenty of fine print and disclaimers:

• A two-year service commitment is required to avoid a $199 charge for the Home Base device;
• 911 service is not guaranteed and you will be required to give your physical location to the 911 operator so they can send help to the proper address;
• A backup battery powers the Home Base allowing up to 1.5 hours of talk time and 18 hours of standby time. However, a standard corded phone that does not need electric power to operate is required to place or receive calls (including 911) during a power outage;
• Not compatible with wireless messaging services/text messaging, home security systems, fax machines, medical alert & monitoring systems, credit card machines, IP/PBX Phone systems, or dial-up Internet service. May not be compatible with DVR/Satellite systems;
• Call quality, wireless coverage, and service reliability are not guaranteed;
• Well-qualified credit approval required;
• An activation fee (undisclosed) also applies.

There are many surcharges that also may apply, including a $35 restocking fee, federal, state, and local taxes and the universal service fee. Customers must also pay AT&T-originated fees kept by AT&T, including a $1.25 “cost recovery charge,” a gross receipts surcharge, administrative fees and any government-originated assessments that AT&T passes on to customers in various states.

[flv]http://www.phillipdampier.com/video/ATT Wireless Home Phone Internet Setup 5-2014.flv[/flv]

AT&T explains how to set up and configure its Home Base to receive phone and broadband service wirelessly. (3:16)

Comcast says you must have the option to pay more for the same broadband service you already get, only now with an allowance

Comcast has announced it is considering testing an innovative new plan in several test markets offering “unlimited Internet access” to customers for a yet-to-be-determined price. Whoever heard of such a thing?

Comcast’s executive vice president David Cohen raised eyebrows last week when he predicted all Comcast customers nationwide would see usage-based billing for their Internet access within five years.

Such statements tend to muck up things like a $45 billion dollar merger with Time Warner Cable that both companies must prove is in the public interest. The buyer wants to limit your Internet usage and the seller got its fingers burned back in 2009 when it tried its own usage cap experiment and now advertises it has no data caps.

Telling Time Warner Cable customers it is in their best interest to lose unmetered Internet plans may be too tough to sell, so Cohen has spent much of this week backtracking and claiming he was “misunderstood:”

To be clear, we have no plans to announce a new data usage policy.  In 2012, we suspended our 250 GB data cap in order to conduct a few pilot programs that were more customer friendly than a static cap.  Since then, we’ve had no data caps for any of our customers anywhere in the country.  We have been trialing a few flexible data consumption plans, including a plan that enables customers who wanted to use more data be given the option to pay more to do so, and a plan for those who use less data the option to save some money.  We decided to implement these trials to learn what our customers’ reaction is to what we think are reasonable data consumption plans.  We certainly have no interest in adopting any plans that our customers find unreasonable or disruptive to their Internet experience.

It’s important to note that we remain in trial mode only.   We’re now also looking at adding some unlimited data plans to our trials. We have always said that as the Internet, and our customers’ use of it, continues to evolve, so will Comcast and our policies.

Cohen makes a careful distinction between a strict usage limit and the kind of usage-based billing that will fill the company’s coffers with overlimit fees. But any usage allowance is a limit of how much you can use the Internet before something bad happens — either your access is shut off or your bill explodes.

Stop the Cap! has talked with more than a dozen customers in Comcast’s test markets about their experiences with Comcast’s “data usage policy.” Although the company claims it is seeking customer reactions, it never asks whether those customers want usage limits or not, only what kind.

Giving customers “the option to pay more” is exactly the type of thinking that won Comcast the dubious distinction of being the worst company in America. No usage plan tested by Comcast actually offers savings to customers. It simply places an artificial, arbitrary usage allowance on the overpriced broadband service the company offers now.

At this point, Comcast is not offering any unlimited use trials, but we have learned the value they are likely to place on “unlimited” based on what certain customers have paid all along for that privilege. Ars Technica reports some avoided the 250GB cap by signing up for business class service. The cost? $133.79 a month for 50/10Mbps. If Google Fiber was in town, you’d pay $70 for unlimited 1,000/1,000Mbps service, and the search engine giant would still be making money.

Cohen claims nothing is set in stone, but considering Comcast’s “don’t care” attitude towards its customers, it is a safe bet they will do what is best for shareholders and ignore complaints from customers that often have nowhere else to go for 21st century broadband speeds.

Telus is notifying customers in Prince George, B.C. and surrounding areas it will begin imposing usage-based billing for Internet service effective April 21.

Despite claims that implementing usage-based charges will save customers money, nearly every Telus broadband user is already paying a higher bill because of a rate increase announced in late January.

Telus’ usage allowances range from 15GB a month for High Speed Lite users to 400GB for Telus Internet 50 users. Telus is also imposing a scaled overlimit fee system based on the total amount of excess usage. Customers face a $5 overlimit fee for up to 50GB of overuse to a maximum of $75 for 350GB and above. A typical customer with a 150GB usage allowance using 250GB would pay the usual $55/month broadband charge plus a $25 overlimit penalty, raising the price of service to $80.

Starting in June, Telus will introduce an Unlimited Internet Usage option (price not disclosed) for any of their Internet plans.

Telus wants to fence in “data hogs” with “fairness.”

“It’s fair that people pay for how much they use, as you would with any other service,” Telus explained. “Our goal is to offer customers a broad spectrum of plans that meet everyone’s needs, and to get customers on the right plan for them.

“Someone who uses their basic Internet service for a bit of email, Skyping with the grandkids, and sharing photos shouldn’t pay as much as someone who games and downloads hundreds of gigabytes of videos every month,” Telus added.

Of course, every customer is already paying more after Telus raised its broadband rates on Feb. 26.

“The cost of managing, expanding and improving our network continues to rise,” Telus explained. “We’re doing our best to keep rate increases as moderate as possible, while still offering great services, flexibility and good value.”

So effectively no customer is actually saving any money with Telus’ usage-based billing. They are actually paying more today and could potentially pay much more when overlimit fees take effect later this month.

Should a deal to merge Time Warner Cable with Comcast be approved by regulators, Time Warner Cable customers can expect a number of changes to their cable, Internet, and phone service because of Comcast’s much more involved rate plans¹.

Customers should expect to pay significantly higher prices for a package comparable to what Time Warner Cable offers today, especially for cable television.

Broadband speeds will be faster with Comcast, but also likely usage-capped at 300GB a month, with overlimit fees applied to “heavy users.”

A sample Comcast bill

Customers may also be surprised to discover Comcast levies a number of ancillary fees that Time Warner does not, especially for various tasks completed by a Comcast customer service representative.

Comcast and Time Warner Cable have very different operating philosophies. Comcast is quickly moving customers to all-digital cable television service, so those Time Warner customers without set-top boxes or CableCARDs should be ready for a rapid transition to all-digital TV. Time Warner Cable, in comparison, has moved slowly towards digital service and uses a stop-gap technology that delivers some digital channels to neighborhoods only when being watched as a bandwidth conservation measure. Comcast will likely scrap that technology in favor of an all-out drive to switch to digital service.

Comcast’s television packages are very different from what TWC customers are used to buying. Time Warner customers can expect significant channel losses with Comcast’s nearest equivalent basic cable service. If you enjoy a lot of sports or old movies, Comcast will make you spend nearly $20 more on a higher-cost tier to get back the networks that Time Warner used to bundle as part of their basic cable service. But Comcast makes adding “whole home” DVR service look a lot more affordable than the $30+ unbundled fee Time Warner Cable has traditionally charged for the equipment and service.

In general Time Warner Cable customers should expect a higher bill for cable television, unless they want to downgrade service (for which Comcast also charges a service fee).

Broadband service from Comcast is also very different from what Time Warner Cable has offered. Most TWC customers now get 15/1Mbps service. Most Comcast customers get 25/5 or 50/15Mbps service. However, TWC doesn’t force usage caps on customers and Comcast is systematically reimposing them on theirs city by city, usually 300GB a month. The tradeoff with Comcast is faster advertised speed that comes usage-limited vs. slower speeds you can use as much as you want. Comcast also charges the highest modem rental fees in the country — now $8 a month in most places. Customers can and should buy their own modems. Those Time Warner Cable customers who already have better double-check to make certain Comcast will still support that equipment.

Phone service isn’t much different between the two companies, so we’re not covering it here.

Television Packages

Comcast offers a bigger variety of television packages than Time Warner Cable. Comcast likes to bundle premium channels into some of their higher end packages. Time Warner Cable’s prefers an a-la-carte approach with HBO and other similar networks.

Comcast customers start with Limited Basic service, comparable to Time Warner Cable’s Broadcast Basic package. It primarily features over the air local television stations and often runs under $10 a month. Effective this year, there is also a $1.50/month Broadcast TV surcharge applicable to all cable TV customers.

A new concept for Time Warner Cable customers is Comcast’s Digital Economy package that includes Limited Basic, Digital Economy channels, and a standard definition cable box and remote. Consider this barely promoted tier the economy bare bones basic cable package. In addition to local channels, Digital Economy offers a lineup of home shopping channels, CNN, HSN, Cartoon Network, Lifetime, History, A&E, E!, Comedy Central, Spike TV, USA Network, Fox News Channel, The Weather Channel, Food Network, Animal Planet, TLN, BET, TV Guide Network, Discovery Channel, Comcast Network, CSPAN, EWTN, Jewelry Television, and Music Choice. This package is $40 a month, although promotions may cut the cost. For some, this may be more than enough.

But most Comcast cable TV customers choose the Digital Starter package that also includes Limited Basic, Expanded Basic, MoviePlex, and Music Choice. The lineup includes just over 80 channels. This $69.95 package is still smaller than what Time Warner Cable offers its digital cable customers, leaving out networks including Cloo, CNBC World, Al Jazeera America, Discovery Fit & Health, Disney XD, DIY, a range of ESPN’s extra networks, EWTN, Fine Living, Fox Business News, Great American Country, IFC, Investigation Discovery, Lifetime Real Women, Military Channel, MLB, most of MTV’s extra networks, NBA, National Geographic Channel, NFL Network, NHL Network, most of Nickelodeon’s extra networks, OWN, Oxygen, Sundance, Turner Classic Movies, The Science Channel, and VH1’s extra networks. There are other channels left out of the lineup as well. But Digital Starter customers do get the full lineup of Encore movie channels, for which TWC charges extra. However, sports and old movie fans will be dismayed to find so many sports networks and Turner Classic Movies excluded. Comcast customers have to pay more to get them back in the lineup.

Those who can’t live without sports networks and TCM, among other networks noted above, will have to pay for Comcast’s 150+ channel Digital Preferred package. This tier brings back the cable channels you used to get with Time Warner Cable (plus Encore), but it costs an extra $17.95 a month. Check your current Time Warner Cable TV bill. Compare it against Comcast’s total combined charge of $87.89 a month for a comparable lineup. How much is your cable TV bill going to increase after Comcast takes over?

For those who want even more, Comcast offers Digital Premier, with more than 190 channels. This package includes Digital Preferred, HBO, Showtime, Starz, Cinemax and Comcast’s Sports Entertainment Package. It adds an extra $57.45 a month on top of the $69.95 Digital Starter package. That is $127.40 a month just for television service.

Time Warner customers looking for a DVR will probably be mystified by the way Comcast charges for DVR service. Comcast markets “whole house” DVR service much more aggressively than TWC. This service, dubbed AnyRoom, lets customers watch recorded shows on any set-top box-equipped television in the home, along with managing recordings. DVR service with Comcast costs an extra $8-10 a month, but Comcast also charges an “HD Technology Fee” of $9.95 a month to enable “whole house” service. Many higher end bundled packages incorporate the DVR service into the package, along with the Technology Fee.

At regular prices, a Comcast triple play customer should expect to pay $141.99 for the most bare bones TV, phone, and broadband package, $154.99 for the most popular package without premium channels, and $164.99 a month for a bundle that brings along a similar lineup to what TWC offers, along with Starz. Comcast’s nearest equivalent to Time Warner Cable’s $200 Signature Home service costs $239.99 a month and offers no better Internet speeds than what “regular” customers get.

Internet Plans

Comcast does offer faster Internet service than what Time Warner Cable has sold for the last 3-4 years, but it will likely come with a usage cap of 300GB per month, with overlimit fees applied to those who exceed their allowance. Internet-only customers are going to find higher prices for broadband service than what Time Warner Cable charges. Comcast prefers bundled service customers, and deters cord-cutters with extremely high Internet-only pricing.

Comcast’s Internet Tiers (The first price is for Internet-only service followed by the price, when different, for customers subscribing to more than broadband)

• Economy: 1.5Mbps/384kb (N/A)
• Economy Plus: 3Mbps/768kbps ($39.95 $29.95)
• Performance Starter: 6/1Mbps ($49.95)
• Performance: 25/5Mbps ($64.95 $51.95)
• Blast: 50/15Mbps ($74.95 $61.95)
• Extreme 105: 105/20Mbps ($114.95 $99.95)

Modem fees are extra unless you buy your own equipment.

Other Comcast Fees You Better Know About

Comcast charges a number of extra fees and surcharges that raise customer bills without affecting Comcast’s advertised prices. The ones we have not already covered are included below. Among our favorites: Comcast charging $20 to hound you at your front door for a past due payment, charging shipping/handling and other fees for “self-install” kits that save Comcast money not having to dispatch a technician to your home, installation -and- activation fees for extra outlets, and that $249 “go away” service charge for their 105Mbps broadband tier. It is important to note not everyone will pay these fees and promotions often waive some of them. Customer service representatives will also drop some of them when asked, and may remove them from your bill if you complain loudly enough.

Ancillary Service Fees You May Encounter

• Reactivation fees: Shut off for non-payment or vacation? Comcast charges $5 to reactivate Internet service, $5 to reactivate a phone line, and $1.99 to turn back on your cable television;
• Field Collection Charge: If Comcast sends someone to your residence to collect a past due balance or pick up unreturned equipment, there is a $20 charge per visit;
• Returned Payment Fee: $20 per returned payment;
• Late Fee: 5% of your account balance;
• Name Change Fee: $1.99;
• Pay by Phone Convenience Fee: Making a payment by phone with a customer care representative will cost $5.99 per payment;
• Copy of Bill: For bill statement copy requested by phone or in person, there is a $5 charge per bill;
• Unreturned/Damaged Equipment: Charged at the suggested manufacturer’s replacement cost.

Common Equipment Fees

• Signal Amplifier: $35/each
• Self-Install Kit Convenience Fee: $40
• Self-Install Kit Shipping & Handling: $9.95 (Standard Delivery)
• Self-Install Kit Shipping & Handling: $29.95 (Priority Mail)
• Remote Control Replacement by Mail (Separate Shipping): $5.95/each
• Voice/Data Modem (Used for customers with phone and Internet service): $8/mo²
• Wireless Gateway (Provides Wi-Fi service): $8/mo²
• Cienna 3931 Modem & Netgear Wireless Router: $19.95/mo
• Wireless Adapter (each, one-time charge): $30.00
• Limited Basic Only Service Converter: $1/mo
• Digital Converter: $2.50/mo
• Remote Control: $0.18/mo
• HD Digital Converter (Limited Basic Only): $2.20/mo
• Digital Adapter (Limited Basic Only): $0.50/mo each
• CableCARD: 1st card is free, each additional is $1/mo
• Customer-Owned Video Equipment Credit: $2.50/mo

Installation and Service Calls (May vary with promotions)

• Installation fee for one product: $32
• Installation fee for two products: $80
• Installation fee for three products: $90
• In-Home Service Call: $32.10
• Service Charge for Custom Installation Work: $33.20/hr
• Installation fee for additional outlets: $13.35/ea at time of new customer visit, $32.15/ea for existing customers
• Activation fee for additional outlets: $5.60/ea for new customers, $22.05/ea for existing customers
• Relocation fee for additional outlets: $13.60/ea for new customers, $28.55/ea for existing customers
• VCR/DVD Connection Charge: $7.90 for new customers, $16.35 for existing customers
• Upgrade/Downgrade Service Fee (no in-home visit required): $1.99 per instance
• Upgrade/Downgrade Service Fee (in-home visit required): $26.30 per instance of an upgrade, $12.05 per instance of a downgrade
• Upgrade Standard Definition DVR or HD DVR Service: $26.30

Broadband-Specific Installation/Service Charges

• Additional IP Address (first): $4.95/mo
• Additional IP Addresses (second and/or third) $9.00/mo each
• Professional Internet Installation: $99.95
• Wireless Networking On-Site Professional Set-up (up to 4 devices per trip): $49.95
• Wireless Networking On-Site Professional Set-Up (extra trips): $99.95/ea
• Wireless Networking On-Site Professional Set-Up (each additional device over 4): $29.95/ea
• Broadband-related In-Home Service Visit: $40/per trip
• Extreme 105Mbps Broadband Professional Installation/Activation Surcharge: $249.00

¹The rates and services quoted in this piece were taken from Comcast’s current rate card for Cambridge, Mass. Rates and services may vary slightly in other markets. The rate card was effective June 2013.
²Comcast charges $7 a month for their modem rental in certain other markets.

When Jeff McDonaghe celebrated the beginning of 2013, his cable and Internet bill from Shaw Communications was roughly $117 a month. In April, Shaw announced a wide-ranging rate increase that cost the Calgary resident an extra $7 a month. Now Shaw is back for more with another rate increase that will cost the McDonaghe family an additional $11 a month. His October bill: nearly $135 — $18 more a month.

“Shaw seems to have gotten quite comfortable raising rates at least twice a year, because my bill has gone up like clockwork every six months or so,” McDonaghe tells Stop the Cap!

Shaw representatives blamed the “price adjustment” on the cost of programming, its upgraded “digital gateway” set-top box, and higher licensing and regulatory fees.

September 2013 Rate Adjustment

At Shaw, we’re committed to providing quality products and services at the best value for all customers.

To continue delivering the best entertainment options, you may notice a few changes to your monthly bill, effective September 1, 2013.

For customers in Manitoba and Ontario (excluding Hamilton), these changes will take effect on October 1, 2013.

Changes are as follows:

Some of the most significant rate hikes will affect grandfathered service plans, leaving some customers scratching their heads.

Shaw’s old 20Mbps plan (no longer listed on the company’s website) now costs $60 a month, the same price charged for Shaw’s newer 25Mbps tier.

The company’s old “discount” Internet plan delivered DSL-like speed of 7.5Mbps for $45 a month. On Sept. 1, Shaw raised its price to $50. Today, Shaw’s entry-level 10Mbps broadband package sells for $55 a month — only $5 more — with a 125GB monthly usage cap.

Despite the company’s claims of increased costs, Shaw reported $250 million in profits during the third quarter of this year, delivering better than anticipated results with a promise to return some of the excess cash to shareholders in the form of dividends.

“Given the improvement in free cash flow and assuming continued favorable market conditions, our board plans to target dividend increases of five to ten percent over the next two years,” said Brad Shaw, CEO of Shaw Communications.

Shaw’s financial gains come at the cost of its declining customer base. During the summer, Shaw lost at least 26,578 basic cable subscribers due to increased competition from Telus’ TV service. The company did better adding broadband customers (4,157), but its greatest growth has come from its phone business, where the company picked up 17,719 new landline customers.

Drew McReynolds from RBC Capital Markets said Shaw was growing revenue mostly by “better monetizing the existing subscriber base.”

“Shaw’s revenue and EBITDA beat was mostly due to price increases,” added Greg MacDonald, managing director at Macquarie Capital Markets Canada.

Former CEO Jim Shaw is costing Shaw some of its earnings as well with a pension payout of almost $500,000 a month. In fact, the Shaw family that founded the cable company has three generations of pension and salary obligations it expects to be honored:

• J.R. Shaw, the company chairman has an annual pension of $5.4 million;
• Jim Shaw, J.R.’s son, now gets $5.95 million annually;
• Bradley Shaw, Jim’s brother and current CEO is eligible for a $3.97 million pension at age 65. His accrued pension obligation is $37.6 million.

Jim Shaw’s pension alone has cost Shaw more than $71 million in financing expenses because the company’s executive pension plan is not pre-financed; the costs are instead paid from annual cash flow as a compensation expense.

“Those price hikes are going to executive compensation and to shareholder dividend payments, because my service has not improved a bit despite paying almost $20 more a month this year,” complains McDonaghe. “The best mere mortals like ourselves can get when threatening to cancel are some temporary credits of around $5 a month for each of their services. Even with those credits, my bill is still higher.”