Knology's Shakedown in Lawrence

Pesky facts have a way of getting in the middle of silly marketing campaigns.  Knology of Kansas (actually Georgia) has run into this problem in a big way with its glitzy, carefully-crafted welcome website KnologyKnows.

Some of the company’s facts are uncoordinated.

Lawrence blogger Joe Davis sure noticed:

Knology put up a new website to help build their brand in Lawrence, Kansas. In big capital letters, they write:

Allow us to introduce ourselves. We’re Knology, the new (115-year-old) kid on the block.

Sounds eerily familiar to the beginning of “Sympathy for the Devil” by the Rolling Stones.  Trust me… I have no sympathy for the Devil (in this case, a non-local company), also known as Knology. Their website is called KnologyKnows.com. But considering how many “facts” they’ve put out this past week that have been wrong, they really don’t know.

[flv width=”640″ height=”253″]http://www.phillipdampier.com/video/Sunflower Broadband is Now Knology.flv[/flv]

Knology’s opening welcome video to residents of Lawrence, Kansas has some fact-checking problems. (1 minute)

Davis caught a fact-checking lapse in the company’s introductory video, which claims the world record for handshakes was 13,372.  Oops.  In 2002, while campaigning for office, soon-to-be Gov. Bill Richardson set a world record for the most number of handshakes in an eight-hour period: 13,392.

The only thing Knology has been good at so far in Lawrence is shaking down their customers with Internet Overcharging schemes.  The company has plenty of money to invest in promoting itself, but has so far retained Sunflower Broadband’s costly usage limits and overlimit fees.

Knology hasn’t been around for 115 years either — a company it bought out was.  The Interstate and Valley Telephone Company was one of many independent phone companies created to serve areas AT&T dismissed as rural backwaters not worthy of their service.  Knology itself has only been around since 1994, owned by ITC Holding Company — the people who also brought you Mindspring, a defunct Internet Service Provider sold to Earthlink one month before the dot.com crash.

Did you know Lawrence omits several states?

Davis is also unimpressed with the company’s sell-out of its customer support staff, many of whom will lose their jobs as part of the company’s “rightsizing” initiative.

For Davis, first impressions mean a lot, and Knology is doing themselves no favors.  Some of their other trivia isn’t always accurate, either:

This “fact” is told to anyone who first comes to Lawrence. However, it is wrong. Truth is, 14 states are missing from the Lawrence street grid. The first thing I did when I was told this in 2006 was to find where Connecticut street was located. The funny thing is… Of the 36 state streets in Lawrence, Georgia is not included. Knology is based out of Georgia. Whoops.

Davis says Knology has turned Sunflower’s well-regarded Twitter customer support account into an automated marketing spambot, spewing out continuous tweets telling customers to enter its giveaway and visit its newly branded website.

Stop the Cap! reader Brian, also from Lawrence, agrees with Davis.

“Knology has no concept of the truth in their marketing campaign. This is a scary test of things to come. Fortunately, we just switched to AT&T’s U-verse.”

Perhaps Knology should learn from the ghost of Mindspring, which used to have legendary customer service and a list of:

By filling out Knology's survey, you can give the company a piece of your mind over its Internet Overcharging schemes and possibly win this 32" Samsung flat panel TV.

The 14 Deadly Sins of Mindspring (a/k/a “the ways that we can be just like everybody else”)

1. Give lousy service- busy signals, disconnects, downtime, and ring no answers.
2. Rely on outside vendors who let us down.
3. Make internal procedures easy on us, even if it means negatively affecting or inconveniencing the customer.
4. Joke about how dumb the customers are.
5. Finger point at how other departments are not doing their job.
6. Customers can’t get immediate “live” help from sales or support.
7. Poor coordination across departments.
8. Show up at a demo, sales call, trade show, or meeting unprepared.
9. Ignore the competition, they are far inferior to us.
10. Miss deadlines that we commit to internally and externally.
11. Make recruiting, hiring, and training a lower priority because we are too busy doing other tasks.
12. Look for the next job assignment, instead of focusing on the current one.
13. Office gossip, rumors, and politics.
14. Rely on dissatisfied customers to be your service monitors.

Readers can share their views about Knology’s unjustified Internet Overcharging schemes and enter to win a 32″ Samsung flat panel TV in the process.  You need not be a customer to participate.  Just complete their survey, and be sure to let them know in the box labeled “other” that you will never do business with an Internet provider that doesn’t provide truly unlimited, full speed, flat rate broadband service.

Satellite company Dish Network suffers a competitive disadvantage its grounded competition doesn’t — the ability to offer a broadband and phone service package along with a lineup of video channels.

Not anymore.

On Monday, Dish announced its intention to acquire Denver-based Liberty-Bell Telecom, a small telephone company serving 6,000 residential and 4,000 business customers in Colorado, New Mexico and Utah.

The purchase, if approved by the Federal Communications Commission, would give Dish the chance to sell a “triple-play” bundle of telephone, broadband, and satellite-delivered TV channels to Liberty-Bell customers.

Martino

Liberty-Bell was started by a consumer reporter, Tom Martino, currently working for KDVR-TV in Denver and host of the national radio program, The Troubleshooter Show.  The acquisition would deliver a 90 percent stake to Dish.  The phone company has an established reputation for consumer-friendly service, even giving out the personal cell phone number of company owner Nigel Alexander in case customers run into trouble.

The phone company already had an extensive bundling arrangement with Dish, heavily promoting the satellite service as part of its phone and broadband service package.

The move to acquire Liberty-Bell may be Dish’s first foray into developing its own triple-play package to compete with cable and phone companies.  Liberty-Bell delivers service to customers under a wholesale agreement with incumbent provider Qwest and is licensed to provide service to residential and business customers in 10 states.  Theoretically, Liberty-Bell could develop a much larger reach with wholesale agreements with incumbent phone companies around the country, especially with the financial backing by Dish.

That could create opportunities for the satellite company to meet the needs of an increasing number of Americans seeking telecommunications services from a single company.

Dish currently has reseller agreements with other independent phone companies, including Frontier Communications.

A British financial analyst has issued a new report telling phone companies they should forget about fiber optic upgrades — copper-based DSL service is adequate for consumers and doesn’t bring shareholders fits over capital expenditures.

Analysys Mason’s Rupert Wood believes companies are at risk of overspending on fiber networks that deliver speeds he claims few consumers want.

“The vague promise of future services may appeal to some early FTTH adopters, but will become increasingly ineffective as a selling point unless the rate of innovation in devices and services that are uniquely suitable for FTTH gets some new impetus from vendors and service providers,” writes Wood. “The future cannot be simply plotted against increasing fixed-line bandwidth.”

Wood believes wireless 3G and 4G broadband is where innovation and demand is greatest.  It also just happens to be where the biggest money can be made.  Providers can charge premium prices for wireless services while limiting access.

Wood

For at-home Internet, Wood believes copper-based DSL is fine for most consumers.  Wood points to American providers offering super-high-speed broadband tiers that attracts few buyers as proof there is little interest in ultra-fast connections.  DSL is cheap to provide, he argues.  Fiber is just ‘too risky’ and Wood suggests it’s not as “future-proof” as wireless.

So what should providers do with their fiber networks?  Short of abandoning them altogether, Wood recommends operators pull back on fiber roll-outs and deploy them only for experimental purposes.

“Conditions vary between markets, but in general the business case to move much beyond trials just isn’t there and we are already beginning to see some scale-back,” explains Wood.

“Bandwidth demand for fixed broadband is converging with the bandwidth required to stream TV, and its rate of growth will slow down,” he adds. “DSL [technology] might not be able to meet these demands at some point in the future, but we believe that this point is still a long way off.”

If you want to read more, it will cost you €5500 to purchase a copy of “FTTx roll-out and capex in developed economies: forecasts 2010–2015.”

Our analysis comes for free.

Wood ignores the most important reason why Americans are not signing up for ultra-fast premium speed tiers in droves — the current “early adopter” price tag.  Few consumers are going to justify spending $99 a month or more for the highest speed connections.  When price cuts deliver faster service at incrementally higher pricing, perhaps $10-20 for each step up, there will be greater demand.  If America was not interested in higher speed networks, Google’s proposal to build a 1Gbps fiber to the home system would have passed by without notice.  Instead, more than 1,100 communities applied to be chosen for the project, including just about every American city.

Wood’s report primarily speaks to a European market, where the majority of broadband connections come through telephone company DSL or wireless.  In the United States, the cable industry heavily competes with phone companies for broadband customers.  That is much rarer in Europe.  Wood’s claim that consumers care little about speed is belied by marketing campaigns that put cable broadband’s speed advantage front and center, and they have the market share to justify it.

In North America, although Wood’s report may be music to phone companies’ ears, refusing to upgrade copper phone networks comes at their peril.  Americans and Canadians are disconnecting their landlines at an increasing rate, abandoning those that abandoned innovation long ago. Cable operators report many of their new broadband customers come from those disconnecting slower speed DSL service from copper-loving phone companies.

The future is clear — sticking with standard DSL over copper phone lines in competitive markets is a losing proposition unless phone companies begin slashing prices to become a value leader for those who want more savings than speed.

Verizon determined the best way to “future proof” its network was to deploy fiber straight to the home in many areas.  Verizon’s vision carries a price tag analysts like Wood and those on Wall Street don’t like because it challenges short term profits.  But with Americans increasingly saying goodbye to their landline providers, not upgrading networks to give customers a reason to stay is penny wise and pound foolish.

Belinda Horton, Clarksville, Tenn. speaks with AT&T customer service

Back in April, Stop the Cap! covered the story of Clarksville, Tenn., resident Belinda Horton, who found herself besieged by endless billing errors from AT&T.

She was not alone.  More than 15,000 customers in Tennessee alone have been suffering with an AT&T “unlimited” long distance calling plan that has billed every long distance call at non-plan rates.  At one point, Horton found herself staring at a bill for $1,350.

As of late April, more than three thousand dollars in erroneous charges had appeared on her phone bill over several months, when she was only supposed to have paid a flat rate amount of $25 a month for unlimited long distance.

Horton did secure credits from AT&T, but only after repeatedly calling their customer service department after every inaccurate bill arrived.

For her and other Tennessee customers in the same boat, appeals to the Tennessee Regulatory Authority were supposed to fix the problem.  AT&T’s legal counsel, Guy Hicks, apologized on behalf of the company and promised to make things right.

That lip service was apparently good enough for the TRA, which as we wrote at the time was just a bit premature:

It was disappointing to see the TRA praising AT&T at the end of Monday’s meeting.  This is an ongoing nightmare for some customers, and TRA officials seemed all too ready to applaud the company for its promises to fix the problem while Tennessee residents continue to be overbilled.  The time for praise comes after the company resolves the issue and every customer has been credited for every error.  AT&T has promised it would resolve these billing problems for nearly a month, with complaints still arriving even as the Authority met.

Long time readers can guess what happened next.

Belinda dropped a note to Stop the Cap! informing us she had enough with AT&T and decided to switch to Charter Communications.  But in one last indignity, her final bill from AT&T was loaded with inaccurate charges running over $100.

Now that Horton is a former AT&T customer, the company has been even less responsive than ever.  The TRA is reportedly involving itself in the matter once again, although it’s clear AT&T doesn’t exactly feel threatened by the Authority.

Had AT&T done the right thing, they would have not only credited back the inaccurately billed long distance calls, they also would credit back the $25 a month Belinda paid for a long distance plan she had to fight every step of the way to actually receive.  It’s the least the company could do for a customer who was forced to flee AT&T because they couldn’t resolve their own billing problems.

Belinda writes she has better things to do than spend endless hours fighting with the phone company.  She has been devoting as much free time as possible caring for an ailing friend.  Many people would have simply paid AT&T’s final bill just to be rid of them, but it was Belinda’s friend who encouraged her to stay in the fight and not pay AT&T one penny more than they deserve.

Stop the Cap! is attempting to get Horton in touch with the executive office customer service department at AT&T to get this resolved once and for all.

Time Warner Cable CEO Glenn Britt told Wall Street the company is backing AT&T’s decision to cease unlimited access to its wireless data services.

“In most businesses when usage goes up, that’s a good thing because people pay more,” Glenn Britt, Time Warner Cable’s chief executive officer, said at a Sanford C. Bernstein Wall Street investor conference Friday in New York. “It’s going to get the industry better aligned with consumer behavior.”

But Britt also said AT&T’s decision was “more sensible than when we did it,” referring to the company’s April 2009 aborted experiment to charge customers up to three times as much for broadband service with a consumption billing scheme that got a hostile response from consumers.

Britt was speaking about the network capacity constraints that wireless data networks have that do not compare with the much wider pipeline available to wired provides like Time Warner Cable.  Britt cited AT&T’s still-exclusive iPhone as being the single most significant factor in AT&T’s decision.

Britt told Business Week that “at the time” consumption “pricing was needed to maintain the expense and expansion of the network.”

But consumer advocates suggested the company targeted its overcharging experiment in cities where customers didn’t have strong competitive alternatives.  That was particularly the case in Rochester, N.Y. and Greensboro, N.C., where alternative broadband meant significantly slower telephone company DSL service.  In the case of Rochester, that service included a monthly 5GB usage allowance in Frontier Communications’ Acceptable Use Policy.

Without equivalent competing alternatives, broadband consumers would be trapped in a broadband backwater with significantly worse service than neighboring cities.

Despite Britt’s acknowledgment that his company backed off because of strong consumer opposition, he’s still willing to talk about bringing the overcharging scheme back, telling Business Week, “Exactly how it works and what the PR around it will be is something we can talk about.”

[Note: We will have some audio up soon. — Editor]