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Earth-Shattering News: You Still Hate Your Cable Company

Despite efforts to improve their reputation, cable companies are hated so much the industry now scores lower than any other according to the American Customer Satisfaction Index (ACSI).

The only reason the industry’s average score or 68 out of 100 ticked higher are some new competitors, especially Verizon’s FiOS fiber optic network, which scores higher than any other provider.

acsi tv

The cable companies you grew up with still stink, ACSI reports, with Comcast (63) and Time Warner Cable (60) near the bottom of the barrel.

At fault for the dreadful ratings are constant rate increases and poor customer service. As a whole, consumers reported highest satisfaction with fiber optic providers, closely followed by satellite television services. Cable television scored the worst. Despite the poor ratings, every cable operator measured except Time Warner Cable managed to gain a slight increase in more satisfied customers. Time Warner Cable’s score for television service dropped five percent.

Customers are even less happy with broadband service. Verizon FiOS again scored the highest with a 71% approval rating. Time Warner Cable (63) and Comcast (62) scored the lowest. Customers complained about overpriced service plans, speed and reliability issues. Customers were unhappy with their plan options as well, including the fact many providers now place arbitrary usage limits on their access.

The best word to describe customer feelings about their broadband options: frustration, according to ACSI chair Claes Fornell. “In a market even less competitive than subscription TV, there is little incentive for companies to improve.”

acsi broadband

Time Warner Cable Shareholders Take Company to Task Over ALEC Involvement

Phillip Dampier May 21, 2013 Consumer News, Public Policy & Gov't Comments Off on Time Warner Cable Shareholders Take Company to Task Over ALEC Involvement

twc logoTime Warner Cable executives got an earful last week from investors concerned about the amount of money the company is spending on lobbying activities, the lack of full disclosure on where that money is going, and the cable operator’s continued corporate support for the American Legislative Exchange Council (ALEC).

Among those attending the Time Warner Cable Annual Shareholder Meeting in Saratoga Springs, N.Y., was Tim Smith from Walden Asset Management, which owns 369,000 shares of the company.

Smith, along with 16 co-sponsors, introduced a proposal to force better disclosure of how their shareholder money was being spent on lobbying, noting Time Warner Cable paid close to $28 million on lobbying from 2008 to 2012.

“It’s interesting to note that Time Warner Cable’s spending on lobbying was almost five times the average of its peers,” Smith told the board of directors.

Smith noted that Time Warner Cable’s current quarterly disclosures were opaque and hard for the average person to understand and that the company provided almost no information on state lobbying, which he called a “big, big gap.”

Smith

Smith

“You [also] do not disclose details of the amount of dues to trade associations that engage in lobbying nor the portion used for lobbying,” Smith complained. “So for example, if a company is a member of the Business Roundtable or the U.S. Chamber of Commerce, over 40% of those dues are spent on lobbying. So we think that is important to be a disclosed and in the public record.”

Smith noted that Time Warner Cable abandoned its financial support of The Heartland Institute, a Koch Brothers’ backed group that has argued for deregulation of the telecommunications industry, fought against Net Neutrality, and supports consumption billing and usage caps. A number of corporations stopped supporting the group after its corporate contribution list was leaked to the media in early 2012. Time Warner Cable told Walden Capital Management it dropped support of the group later that same year.

But Smith remained unhappy Time Warner Cable continues to support ALEC.

“Time Warner Cable’s continuing support for the American Legislative Exchange Council, which is called ALEC, is highly controversial and really we think it’s harmful to our brand,” Smith argued. “Right now, the American Legislative Exchange Council is working with The Heartland Institute, where we withdrew, working on a campaign around this country to try to stop renewable energy legislation and regulation. That’s our money at work, and we’re not dissenting. We’re not standing up and saying, ‘This is not Time Warner Cable.'”

CEO Glenn Britt claimed the lobbying expenses were important because Time Warner Cable is “a highly regulated company in a highly regulated industry” and that the company exercises “a value judgment” when it chooses to support third-party groups and lobbyists.

Britt also acknowledged ALEC’s extensive database of model, pre-written legislation suitable for introduction on the state level has proved very useful to Time Warner Cable in the past.

“[ALEC] is very helpful in creating a model legislation for all the states we do business in,” Britt said. “They’re particularly focused on telecom matters, which are highly complicated.”

As for other activities ALEC is involved with, such as opposing renewal energy initiatives for large fossil fuel energy companies, Britt said he does make Time Warner Cable’s views known on those issues.

“Quite honestly, if we thought the objectionable part of that outweighed the benefit, then we would consider leaving,” Britt said. “But it’s a constant balancing of that.”

“Although we fully understand the motivation […] the board recommends a vote against this proposal,” Britt concluded.

Time Warner Cable chose the prestigious Gideon Putnam Resort for its annual shareholder meeting, where rooms run $400-800 a night.

Time Warner Cable chose the prestigious Gideon Putnam Resort in Saratoga Springs for its annual shareholder meeting, where rooms run $400-800 a night.

Jim Voye from the International Brotherhood of Electrical Workers (IBEW), a union that owns about 575,000 shares of Time Warner Cable, also rose to introduce a proposal to limit a potential cash cow for executives in the event of a change in control at the company.

CEO Glenn Britt is widely expected to retire at the end of this year. When he does, he will be awarded more than $50 million in Time Warner Cable stock-based awards. That is on top of his targeted annual salary of $16 million.

Time Warner Cable's CEO spent $400,000 in travel on the company's executive jet.

Time Warner Cable’s CEO spent $400,000 of the company’s money traveling on the corporate executive jet.

In the event of such a change, many Time Warner Cable executives will qualify for accelerating vesting of their own equity awards, which the IBEW argues is an incentive to favor short-term improvements in company performance at the cost of long-term growth.

“The vital connection between pay and long-term performance can be severed when awards are paid out at an accelerated schedule,” Voye argued. “A change in control event should not provide an immediate or automatic economic windfall to planned participants, especially one that could incentivize executives to pursue transactions that are not in the best long-term interest of shareholders.”

Britt recommended a vote against that proposal as well.

During a question and answer section, Smith noted Britt spent $400,000 of the company’s money on corporate jet travel expenses.

Britt also acknowledged the cable industry’s business model has been largely the same across the country, and there is little to differentiate the financial results of one cable company over others.

“We, the cable companies all tend to look the same and I don’t think it’s going to be any different in this case,” Britt said.

Time Warner Cable Moving to All-Digital Cable TV Across New York City

Phillip Dampier May 9, 2013 Broadband Speed, Consumer News, Video 1 Comment
Cisco 170HD DTA

Cisco 170HD DTA

Time Warner Cable customers in greater New York will soon need set-top boxes or CableCARD technology to keep watching cable television.

The cable operator will be dropping analog television service, starting in Mount Vernon, Staten Island, and Bergen County, N.J. with much of the rest of the downstate region switched over the summer.

Cable television customers who already use Time Warner Cable set-top boxes, including DVRs, will not notice any change. Customers that plug a cable directly into the back of a television will need to take steps to keep their video service working after the digital conversion.

Time Warner’s digital switch will also disable viewing on televisions equipped with a QAM tuner. Cable operators now have the power to encrypt their entire television lineup.

twcGreenThe company is mailing letters to affected television subscribers advising them to get a Time Warner Cable DVR, traditional set-top box, CableCARD or Digital Adapter (DTA). For secondary televisions, Time Warner’s new DTA for downstate New York is the Cisco DTA 170HD, which supports both High Definition and Standard Definition channels and digital-only QAM tuning up to 1GHz. This model is also capable of providing HD premium channels, which are currently not available to customers with earlier generation DTAs. It is unknown if Time Warner will support that functionality.

Time Warner is making DTA units available to customers at no charge through the end of next year. Effective Jan. 1, 2015 each DTA box will cost $0.99 a month.

The company says the digital conversion will open extra bandwidth on the cable system to support more video on demand, HD channels, and faster broadband. Each 6MHz analog channel will make room for 10-12 digital channels, three digital HD channels, or an extra 40Mbps of download speed, according to Time Warner’s blog.

Residential customers can get DTA boxes as follows:

  1. through the website at www.TWC.com/digitaladapter
  2. via the telephone at 1-855-286-1736
  3. in-person at a local TWC store
  4. have a tech visit and install it

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/TWC Digital Conversion NYC 4-29-13.mp4[/flv]

 Time Warner Cable produced this video to explain the digital conversion, who needs to get ready, and how.  (2 minutes)

Broadband Lessons from JCPenney: Listen to Wall Street or Customers?

Phillip "I Shop At TJMaxx" Dampier

Phillip “I Shop Online” Dampier

Last week, JCPenney launched their nationwide redemption tour, apologizing to millions of ex-customers that fled the former retail giant, begging them to come back.

It took over a year for JCPenney to get the message that “disciplining” and “re-educating” customers to accept the wisdom of everyday higher prices with few sales and almost no coupons was hardly the door-busting success “miracle worker” CEO Ron Johnson originally had in mind. The ex-Apple executive was rewarded a $52.7 million signing bonus to take over JCPenney’s tired leadership and in return he dragged sales down 28.4% from the year before, with same store sales down 32%. Johnson’s new vision also steamrolled one-third of JCPenney’s online business.

The day those results became known, he confidently showed Wall Street he did not dwell in the reality-based community: “I’m completely convinced that our transformation is on track!” (For Kohl’s benefit anyway.)

Johnson also believed in a “less is more” philosophy in human resources, overseeing layoffs of 13 percent of the company’s workforce last April, with another 350 let go in July.

Despite the fact his all-new, rebooted vision of JCPenney was about as popular as bird flu, he stayed, even as customers and employees didn’t.

It wasn’t that the company didn’t know customers had a problem with all this. Many complained about the radical, unwanted changes at JCPenney, particularly middle-aged professional women representing one of the stores’ most important business segments. Company executives simply didn’t listen.

A year later, some of the same analysts that cheered JCPenney’s crackdown on discounting now wonder if the company will survive 2013. Many fretted about the real possibility the last customer to brave the “new era” of JCP might forget to turn the lights out when they left for good. Others were mostly furious the board let Johnson go.

Despite the tragic consequences, the conventional wisdom on Wall Street remains: Alienating customers with a revamp nobody asked for and “everyday pricing” designed to boost profits every day was not the problem, how Johnson implemented the strategy was. He just didn’t educate customers enough.

We see the same warped thinking in the broadband marketplace, particularly with usage caps, consumption billing, junk fees and the general ever-increasing price of broadband itself.

On providers’ quarterly results conference calls, the regular questions challenging leaders of the industry are not about providers charging too much for too little. The real concern is that your ISP is leaving too much ripe fruit on the tree:

  • Where is the revenue-boosting usage caps and consumption billing, Time Warner Cable?
  • Comcast: can’t you raise prices further on those recent speed increases to maximize additional revenue?
  • Verizon: why are you spending so much on fiber broadband upgrades customers love when that money could have gone back to shareholders?
  • AT&T: Is there anything else you can do to exploit your market share and make even more money from costly data plans?

The best ways a consumer can reward a good broadband provider include remaining a loyal customer, paying your bill on time and upgrading to faster speeds as needed. For Wall Street, the growing demand for broadband is a sign there is plenty of wiggle room for at-will rate increases, new fees and surcharges, contract tricks and traps, customer service cuts, and monetizing usage wherever possible. After all, you probably won’t cancel because the other guy in town is doing the same thing.

This is what sets the broadband marketplace of today apart from most retailers: consumers don’t have 10-20 other choices to take their business to if they are fed up.

Comcast or AT&T? Both charge a lot and have usage limits on their broadband service for no good reason. Your other alternatives? A wireless provider charging even more with an even lower usage cap. Or you can always go without.

While providers may tell you there is a healthy, competitive broadband marketplace, Wall Street knows better. When Time Warner Cable recently announced it would dramatically curtail new customer promotions and concentrate on delivering fewer services for more money, nobody bothered asking whether this would result in a stampede to the competition. What competition?

Although Google is delivering much-needed, game-changing competition in a tiny handful of cities, most Americans will not benefit because the best upgrades and lowest prices are only available where Google threatens the status quo. A larger number of municipalities are done putting their broadband (and economic) future in the hands of the phone and cable company and are building their own digital infrastructure for the good of their communities.

For everyone else, we can dream that one day, someday, the cable and phone company most Americans do business with will be forced to run their own JCPenney-like apology tour for years of abusive pricing and mediocre “good enough for you” broadband with unwarranted usage limits. Time Warner Cable went half way, but until competition or oversight forces some dramatic changes, we should not count on providers to actually listen to what customers want. They don’t believe they need to listen to earn or keep your business.

Time Warner Bungles Insight Cable Conversion in Indiana: Phone/Internet Service Gone

Phillip Dampier May 6, 2013 Consumer News, HissyFitWatch, Video Comments Off on Time Warner Bungles Insight Cable Conversion in Indiana: Phone/Internet Service Gone

welcome to twc

Former Insight Cable customers in Evansville, Ind. are fuming after the company’s new owner temporarily left them without phone or Internet service, with nobody available to explain why.

Time Warner Cable attempted to convert Insight customers to its own platform last week, interrupting service in the process. Affected customers quickly jammed customer service lines, leading some to visit local cable offices to straighten things out.

Time Warner Cable will convert former Insight customers in Kentucky and Ohio to its own platform starting in June.

Time Warner Cable will convert former Insight customers in Kentucky and Ohio to its own platform starting in June.

“Right now, I have no Internet,” said Insight customer Claudia Congleton. “I tried to call them three or four times today. No one answers. You’re waiting for over 30 minutes and so that’s why I’m down here. I’m just going to come down here and talk to them about it.”

“It’s so frustrating,” Congleton told Tristate News.

Time Warner blamed the problems on “minor glitches” during the customer conversion process, which began in Evansville on April 29. A larger transition is planned in Kentucky in mid-June, with former Insight customers in Columbus, Ohio moved later that same month.

When Time Warner Cable launched the conversion in Indiana, broadband customers whose names ended in letters “A” through “K” were redirected to a web page that required them to re-register broadband service and select a new twc.com e-mail address to replace their existing Insight e-mail account. Customers who either failed to complete the registration process or who tried during peak usage times often found their Internet service interrupted. Similar problems occurred with phone customers.

Some customers were unhappy with the cable company’s optimistic predictions of a quick fix.

“They lied to me,” said Insight customer Mary Jackson.  “I am so upset because they lied to me.”

Jackson visited the Evansville cable office to report her phone and Internet service were out and the company promised a same-day fix. A day later it was still out.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WTVW Evansville Time Warner Transition Step By Step 5-1-13.flv[/flv]

Here is how the transition was supposed to take place between Insight Cable and Time Warner. WTVW in Evansville walks customers through the conversion process.  (2 minutes)

 [flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WFIE Evansville Broadband Problems 5-1-13.mp4[/flv]

WFIE in Evansville reports how things actually went. Not so good, reported a number of customers.  (1 minute)

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WTVW Evansville Time Warner Cable Customers Look For Answers 5-1-13.flv[/flv]

The next day, Time Warner Cable customers who could not get through to the company by phone were down at this Time Warner Cable office in Evansville looking for answers, as WTVW reports.  (2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WFIE Evansville Insight Switch 5-3-13.mp4[/flv]

The following day, some customers were still without service. WFIE talks to one Time Warner Cable customer upset she still did not have phone service.  (1 minute)

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