…fiction into “fact.”

Although America’s perennially worst-rated cable company is advertising “always faster Internet,” it is also moving “full speed ahead” to enforce usage limits to make sure customers don’t take too much advantage of those speeds.

Broadband Reports notes Mediacom is preparing notices stating effective Sept. 7 usage limits and overlimit fees that used to only apply to new customers or those changing plans will now be enforced for all customers.

A member of their social media team blamed bandwidth hogs for the caps.

“We have a small subset of customers that are using a very large portion of the available bandwidth, which can have a negative impact on the other Internet users in the surrounding area,” said Mediacom’s Social Media Relations Team. “By curbing this behavior, other customers can benefit with faster speeds.”

Actually, Mediacom will benefit from lower usage and higher revenue it will collect from the $10 overlimit fee for each additional 50GB of usage. Neighborhood congestion issues are largely a thing of the past because of upgrades to DOCSIS 3 technology.

Although the usage caps for higher priced tiers are generous by current standards, the company can adjust the caps up or down at any time. Mediacom traditionally serves rural areas or small cities that lack significant telephone company competition, so customers may have few alternatives. Both CenturyLink and AT&T have their own usage caps, barely enforced. Frontier Communications, another common provider in Mediacom territory, has tested the water with usage caps in the past but does not regularly impose them.

Broadband Reports assembled the pricing and caps for each Mediacom broadband tier:

A Wall Street analyst has urged Time Warner Cable’s competitors to deny promotional pricing to new customers switching providers because of the CBS blackout.

“While Time Warner Cable’s competitors appear to be resisting predatory marketing campaigns to take advantage of the CBS blackout, at least so far, we believe they need to go even further to cause real industry change,” wrote BTIG Research’s Richard Greenfield. “While TWC’s competitors cannot stop consumers from switching their video service provider due to the loss of CBS, they could make it less appealing to switch due to a programming dispute blackout.”

Greenfield wants providers to support solidarity against programmers like CBS by not taking advantage of the situation to poach subscribers away from Time Warner with attractive promotional packages and pricing. He believes it will ultimately lead to lower prices for consumers.

“The only way to begin to shift leverage in these content negotiations is for [providers] to start supporting each other in programming disputes, rather than try to steal each others’ subscribers,” said Greenfield. “We believe it would make strategic sense for all major [providers] to add a script to their website and call-center new customer acquisition process that asks whether a customer is switching due to the Time Warner CBS dispute (or whatever disputes are currently on-going in the country).  If the answer is ‘Yes’ we believe that consumer should not be offered promotional pricing and should be informed that these types of disputes are becoming a problem for all video providers — essentially teaching consumers that ‘switching won’t help’ during these short-term programming battles.”

DirecTV is among the first to express solidarity with its cable competitor, issuing a statement last weekend:

DirecTV has certainly had its share of these battles, so we applaud Time Warner Cable for fighting back against exorbitant programming cost increases. We are also appalled to learn that CBS is now punishing DirecTV customers, who may happen to have Time Warner as their Internet provider, by denying them access to CBS content online.

Greenfield’s suggestion essentially asks that cable operators and telephone companies agree not to compete. His idea also penalizes consumers caught in the middle of programming disputes that customers ultimately pay for in the form of higher bills. We think it comes dangerously close to illegal, anti-competitive behavior. Even Greenfield seems to understand his suggestion comes close to the line.

“It is obviously illegal for MVPD’s to collude,” Greenfield concludes. “However, it is not illegal for each to do what is right for the future of their business, even if it means passing on short term opportunity.  Tacit cooperation is the best strategy we see available, barring government intervention.”

What is right for business is not right for consumers. Stop the Cap! strongly recommends those signing up with a competitor over programming blackouts avoid explaining their reasons for switching. As well as being none of their business, being candid could cost consumers valuable money-saving discounts and promotions that other new customers receive.

We believe the most effective “game-changer” in the fight between providers and broadcasters demanding 600% rate increases for programming available for free on any television is technology like Aereo, which picks up over-the-air stations with dime-sized antennas and provides customers with online streams of those channels. This technology, if found legal, could eventually be adopted by cable operators to avoid retransmission consent payments altogether or use as effective leverage in negotiations. Aereo is a win-win for providers and consumers. Telling providers to deny consumers new customer pricing just because someone wants to get missing programming back is not.

We’d remind Greenfield of this universal truth: cable bills never go down unless a customers downgrades or threatens to leave.

Frontier is enticing Rochester-area customers to “say goodbye to Time Warner Cable.”

Time Warner Cable’s relentless rate increases, particularly on its broadband service, are leading to calls for more competition in the upstate New York cities of Buffalo and Rochester, now dominated by Time Warner, Verizon Communications (Buffalo), and Frontier Communications (Rochester).

“Bloodsuckers,” came the terse reply of Cathy Slocum.

Frontier Communications is making the most out of the cable company rate increases with a new “Goodbye Time Warner” ad campaign (that incidentally includes a link to Stop the Cap!’s coverage of TWC’s modem fee). It is pitching $19.99 broadband price-locked for two years — an improvement over its earlier offers thanks to a major reduction in sneaky fine print.

Customers can get up to 6Mbps service (up to 12Mbps available in limited areas) at the special offer price as long as they keep a Frontier landline active with a qualifying calling package. There are no contracts with this promotion, but Frontier’s pesky $9.99 “Broadband Processing Fee” applies if customers ever choose to disconnect Internet service. A free Wi-Fi Internet router is included and the company claims it offers “free Internet activation.” But an installation fee still applies, discounted if customers choose the self-install option. Taxes, governmental and other Frontier-imposed surcharges also apply and new Frontier customers are subject to credit approval, which will show up as an inquiry on your credit report.

In the past, we have taken Frontier to task for its expensive early termination and modem rental fees, as well as its bundling requirements, but the company has since ditched most of these as part of its new self-proclaimed reputation as “BS free.”

Unfortunately, Frontier’s DSL speeds can wildly vary, so if you take advantage of their offer, be sure to verify the speed actually get at your home or office. If the service proves too slow to your liking after installation, you can negotiate canceling within the first two weeks without any termination fees.

Where FiOS is available in Buffalo, Verizon is offering promotional pricing on its bundled services, including an $84.99 offer including 50/25Mbps Internet with a Verizon landline offering unlimited calling. This is cheaper than Time Warner’s offer with considerably faster upload speeds and no modem fees. In parts of Buffalo, Verizon is authorized to offer broadband and phone service only, although several suburbs have franchise agreements that allow the phone company to also sell television service. A large part of the city and other suburbs are still stuck with Verizon’s copper network, however, which means DSL is the best they can offer.

Time Warner Cable’s new customer promotions, useful when negotiating a customer retention deal, have resumed bundling Standard tier (15/1Mbps service) Internet speeds into most offers. Previously, the company bundled 3Mbps service in many of its promotions. Broadband-only customers can pay as little as $34.99 a month for a year of Internet service at 15/1Mbps speeds, assuming one buys their own cable modem. A double play offer of broadband basic television (around 20 channels, mostly local over-the-air) with 30/5Mbps Internet service is now priced at $94.97 a month after a $5.99 mandatory modem rental fee is included (not optional with this package).

Time Warner Cable executives have repeatedly told investors its higher priced promotions are intentional to increase revenue and profits even if the company loses customers by charging higher prices.

Verizon FiOS offers in the Buffalo area.

“I moved here from the New York City area a year ago where we had two cable companies — Cablevision and Verizon FiOS,” noted Stephen O’Brien. “Competition changes everything. Not only were the rates much lower than here, the companies would offer you all kinds of incentives to switch from one to the other. One time we switched and got a free iPod Touch. The argument that the rate increase is needed to cover investment is the biggest red herring of all — Cablevision and FiOS spent many times more on infrastructure, yet their rates were much lower.”

Stop the Cap! recommends Time Warner Cable customers check out our guide to getting the best deal possible from TWC.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WGRZ Buffalo Time Warner Rate Hikes 8-6-13.flv[/flv]

WGRZ in Buffalo reports upstate New York residents are upset about two recently announced broadband rate hikes. Time Warner Cable says it needs the money to keep up its broadband service’s reliability. What alternatives do customers have?  (2 minutes)

Time Warner Cable admitted this morning extracting more revenue from existing customers was more important than attracting new ones, and long time subscribers responded by canceling service in above average numbers.

In a conference call largely hosted by incoming CEO Robert Marcus, a number of Wall Street analysts listened to Marcus’ vision for Time Warner under his forthcoming leadership. Marcus offered competing, potentially incompatible visions in his defense of a lackluster quarter: charge existing customers higher prices for service to boost average revenue per subscriber (ARPU) while also improving the customer-company relationship.

For most of 2013, Time Warner has been aggressively moving away from heavily discounted promotional offers to attract customers. Both outgoing CEO Glenn Britt and Marcus have repeatedly stressed heavy discounting of service during the past two years is now over, and the company is looking forward to resetting prices higher when the promotions end later this year.

It is part of the company’s plan to “drive better performance in the residential business.” An unfortunate side effect is that the company continues to lose video and phone customers and its broadband service growth has been so slow, one analyst called it “anemic.” The company’s quarterly results show Time Warner added only 8,000 new broadband customers in the last three months. The company still earned $1.42 billion from broadband sales alone over the last three months, mostly because of rising broadband bills.

Courtesy: Jacobson

Offsetting that growth, TWC lost 191,000 residential video subscribers, leaving it with about 11.9 million video customers. At least 56,000 customers also pulled the plug on Time Warner Cable telephone service.

“As we discussed before, this [new pricing] approach represents a conscious decision to pursue subscribers with higher ARPU, higher profit and lower churn even if that means fewer connects,” said Marcus as he defended the results. “So it’s not a surprise that as in the first quarter of 2013, subscriber net adds were down in the second quarter on a year-over-year basis.”

As customers deal with increasing prices for cable television and broadband service and the irritation of modem rental fees, many are cutting back on their packages to keep their bill stable.

Marcus admitted customer sign ups of triple play — phone, broadband, and cable TV service — were way down in the second quarter and a lot fewer single and double-play customers were convinced to upgrade. The company’s promotional offers have come with a higher price and slower broadband service, often only 3Mbps.

In a number of markets, especially in the midwest, customers are shopping around for other providers. They are finding AT&T U-verse to be a formidable competitor.

“Throughout the quarter, U-verse was pretty aggressive with a beacon price of $79 for their triple play and $49 for their double play,” said Marcus. “I would characterize those as aggressive promotional prices, and they had an impact. I would say that the impact was more pronounced as the quarter wore on. We’ve now responded to that in the market, and I expect that our relative performance should improve there.”

But for much of the rest of the country where competition is less robust, Time Warner intends to continue to hold the line on pricing and resist discounting even if it means subscribers threaten to cancel.

Time Warner Cable has gotten itself ready for an onslaught of unhappy customers, assigning nearly 1,000 employees to staff four national customer retention centers dedicated to trying to persuade customers not to leave. But these specially trained representatives have a dual mission — keep customers with Time Warner Cable, but don’t give away the store doing so.

Stock buybacks and shareholder dividends were a major priority for Time Warner Cable’s cash on hand.

“Not only are our reps saving more customers, they are also preserving more ARPU among the customers they save,” said Marcus. “As promotional roll-offs peak in the second half of 2013, we expect that our new retention capabilities will drive better revenue growth.”

In the broadband market, Time Warner changed little in the second quarter except to raise prices on service and equipment. Marcus could only point to the addition of 3,500 new Wi-Fi hotspots, mostly in New York City, as its signature achievement over the past three months.

On the residential side, broadband revenues were up 12.5%, but most of that growth came from a combination of the modem lease fee, an increase in the number of 30/5 and 50/5Mbps customers and a successful Turbo promotion.

Results for video and voice were considerably worse. Revenues were down about 4%.

But the company managed to report its highest ARPU ever, with customers now paying an average of more than $105 a month for Time Warner service. Most of that increase came from rising broadband prices.

Time Warner Cable has also been preoccupied with spending excess cash on hand to buy back its own stock, which creates shareholder value. Time Warner expects to spend at least $2.5 billion on stock buybacks this year. Shareholders also received $829 million in dividends (113% of Time Warner’s free cash flow).

“We repurchased 6.6 million shares for $638 million, and through July, we have repurchased approximately 83 million shares at an average cost of around $78.50 per share since we began the program in November of 2010,” reported chief financial officer Arthur T. Minson.

Time Warner Cable’s Board of Directors recently approved increasing spending up to $4 billion on stock buybacks.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WRGB Albany TWC Modem Fee 7-31-13.flv[/flv]

WRGB in Albany reports Time Warner Cable customers are angry about another price hike on the company’s modem lease fee effective Aug. 18. WRGB recommends customers buy their own modems to avoid the fee. Time Warner Cable’s Glenn Britt admitted earlier the fee is really just a hidden rate increase. (3 minutes)

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Comcast is introducing a new 5GB optional usage cap for customers subscribing to their Economy Plus ($29.95 – 3Mbps/768kbps) tier willing to limit their Internet usage in return for a $5 discount.

“The Flexible-Data Option is specifically designed for casual or light Internet users who typically use 5GB of data or less a month,” says a new Comcast FAQ on the subject. “It provides a $5 credit if your total monthly data usage is less than or equal to 5GB per month.”

Comcast admits only a tiny percentage of customers subscribe to the Economy Plus tier, and those are the only customers receiving letters offering a discount for keeping Internet usage low.

The company says it will inject a message into subscribers’ web browsers notifying them when they reach 90% of their usage allowance. If customers do happen to exceed 5GB of usage per month, there are repercussions. First, they automatically lose the $5 credit. Instead, they will be charged $1 per gigabyte in overlimit fees.

“We believe this monthly option is fair because it allows our eligible customers who use less data to now pay less,” writes the company.

But unlike Time Warner Cable’s trials of 5 and 30GB usage-capped plans that limit the overlimit fee to $25 a month, Comcast has no disclosed maximum, which means a customer consuming 200GB a month could face a $195 overage usage penalty.

Comcast notes the option is being offered later this month on a trial basis and only in the Fresno area. Customers can drop the usage capped option at any time.

Comcast discontinued its formal 250GB usage cap in May 2012, but it has not abandoned interest in usage limits or consumption-based pricing.

In Tucson, Comcast is testing variable usage caps with an overlimit fee of $10, which includes an extra 50GB of usage. In Nashville, all customers face a hard 300GB usage cap.

Time Warner Cable has repeatedly admitted very few customers have shown any interest in usage capped broadband plans.