Pay $160 a month... or $89.99

Time Warner Cable attached their new rate schedule to my November cable bill which arrived in the mail last week.  It’s the second major rate increase in western New York this year, and it means customers who just want to watch standard basic cable television will now pay $80.50 a month to do so.  We’re a long, LONG way from the $20 cable TV package the industry used to advertise as “less expensive than a cup of coffee a day.”  This is Starbucks’ coffee pricing, with no end in sight.

Time Warner Cable’s Triple-Play package of phone, Internet, and television service will now run $160.49 a month here in Rochester.  It wasn’t too long ago that a bill that size was reserved for the gas and electric company, or perhaps for a used car payment.  That’s before taxes, franchise fees, and other pad-ons, too.  Need that extra set top box?  Add another $7 a month each with remote control.  Want to speed up your broadband?  $10 a month for that.  HBO?  Time Warner Cable’s premium channel-pricing completely ignores today’s economic and marketplace (Netflix/Redbox) realities.

The cable company does have competition in the television business. In the same day’s mail was the latest offer from DirecTV, which has nearly as many sneaky extra fees as local phone company Frontier Communications.  That $24.99 a month “amazing deal” starts to snowball as you build a package, and it also means a satellite dish on your roof, which some people just don’t want.

Assuming you stick with the cable company’s triple play package, the sobering truth is that doing business with Time Warner at their everyday-high-pricing will cost you at least $1,920 a year.  But you don’t always have to pay them the asking price.

So with rate increase notice in hand, what can you do?

1. Call them up and tell them the relationship is over unless changes are made.  Good things come to those who wait for the other side of the relationship to start sacrificing for a change.  You’ve coped with rate hikes for years and cable companies keep shoveling more channels you never watch and then raise rates because of “increased programming costs.” This time, let the cable company give a little.  Call and tell them you want to disconnect your service two weeks from today.  A retention specialist will attempt to negotiate with you (starting with efforts to pare down your package, leaving you still paying regular price for fewer services).  Be non-committal,  because better deals will start to arrive by phone as early as a few hours after telling them you’re leaving.  (But you have to answer those unfamiliar Caller-ID calls to hear about them.)  The worst that will happen is you don’t win a significantly better deal. You still have two weeks to rescind the cancel request with no interruption in service and at least get something for your efforts.  Consolation prizes to sweeten a mediocre retention deal: free sample of premium channels, a free Turbo-class upgrade for Road Runner, and/or a break on DVR service.

2. Compare prices.  If you live in an area with telephone company-delivered TV, offer to stay with the cable company if they will match the new customer offers you are probably already getting pelted with in your mailbox.  Most will.  There are customers who literally bounce back and forth between AT&T/Verizon and Comcast/Time Warner Cable year after year just to keep the $89-99 triple-play promotional price that effectively never expires.  Getting your existing provider to match it saves you and your provider the time and hassle of switching.

3. Demand a new customer price.  Do a Google search for “Time Warner Cable deals” (or for your respective cable company) and at least a dozen offers will appear, mostly from third-party, authorized resellers.  Double-play offers for broadband and cable-TV often range between $75-85.  A triple play offer which adds phone service is usually just a few dollars more.  Some resellers pitch combo offers that deliver a discounted rate and a substantial rebate ($150), like the one below:

Ask Time Warner to match the price of these offers (you likely won’t get the rebate, however).  They certainly can come close on retention deals — in fact they will go as low as $85 a month for an annual triple play deal in some areas.

Some customers deal with intransigent retention agents by canceling service and quickly signing up as a new customer soon after.  That is more of a hassle, and some areas require a waiting period before they’ll offer a new customer promotion again, but the usual trick around this is to sign up under a spouse’s name.

It pays to shop around and read the fine print carefully.

For example, in the deal above, I highlighted three important features — the $150 rebate, which is important for reasons I’ll explain in a moment, the free DVR service, and “standard installation.”  In some cases, promotional offers for new customers do not include free installation or equipment, so it is always important to ask exactly what is included.  The $150 rebate will help defray those expenses, but some competing deals omit the rebate and knock $10 off the $99 monthly price for the same bouquet of services and installation is free.

1. Drop services you don’t need.  Still paying for premium channels?  Why?  Also check your bill for extra mini-pay tiers for certain HD channels Time Warner Cable dropped a few years ago.  You may still be paying $5 a month or more for channels like HDNet Time Warner replaced with the hardly-comparable RFD-TV.  Some customers who signed up for a discounted promotional offer for Time Warner phone service are now paying upwards of $30 a month for the company’s regular-priced unlimited long distance plan.  Consider switching to the $20 “local calling only” plan.  You can make those long distance calls on your cell phone or Google Voice and save $120 a year.

Time Warner, like every other cable company, understands the word “cancel” very well.  The best way to put an end to endless rate increases is to refuse to pay them and being willing to cut the cord until they get the message.

Time Warner Cable’s latest series of rate increases and perceived snubs has rubbed some New York residents the wrong way, and one upstate city has retaliated by extending the cable operator’s franchise by just one year.

Cable customers from Lowville to Massena, adjacent to the Canadian border, have been venting about the cable company’s decision to increase cable rates for the second time this year across the region.  The anger is nearly universal, whether one is a conservative tea party member in Norwood or a liberal Democrat in Watertown.

But the strongest message heard by Time Warner officials was delivered by Massena Deputy Supervisor Albert N. Nicola, who helped shoot down the cable company’s request for a 15-year franchise renewal, and approved a one year renewal in its place.  The vote was 5-0.

“They’re asking for a 15-year extension, which is absolutely totally outrageous,” Mr. Nicola told the Watertown Daily Times. “We’ve got to be crazy for even thinking about that.”

That is no Christmas present for Time Warner, whose cable franchise agreement in Massena expires this year on Dec. 25.

Town board members noted the cable company didn’t bother show up for franchise renegotiation discussions and were reportedly not in attendance for this week’s vote.

“It’s tough to ask questions of a group that isn’t here,” Nicola said.

Massena wants some changes in the local cable lineup, more responsiveness to local residents, and more involvement in the community by the cable company.

Residents want lower rates.

Wayne D. Mihalyi of Lowville called Time Warner the poster child of corporate greed.  Tim Donahue of Lowville wondered how much more he and his neighbors would take from the cable operator:

How long are we going to continue having Time Warner Cable increase their rates without hesitation? Isn’t anybody out there looking out for us?

We just had all our rates increase 7.5 percent in January 2011. They cried poverty and increases in dealing with the networks. Yet another small increase occurred (because of taxes) somewhere between June’s bill and October’s.

And now we just received yet another 8 percent increase within the same year? They must have seen how Netflix did it and said, “What the heck, if they can do it so can we.”

This time we’re supposed to believe it is because of their significantly increased cost of programming. Don’t forget, we also got socked a whopping 16.5 percent increase in January of 2010. When is this nonsense going to end? I am beginning to understand the reason for some of the protesting going on. This is outright greed. There is no other explanation or words for it. They have to know that seniors haven’t even had a 1 percent raise in three years.

Providers establishing Internet Overcharging schemes like usage caps, so-called “consumption billing,” and speed throttles that force subscribers into expensive upgrades are planning for a growth industry in data consumption.

According to new research from a firm that specializes in market strategies, data usage is going up and fast.  Providers that seek to monetize that usage could win enormous new profits just sitting back and waiting for customers to exceed the arbitrary usage caps some companies are now enforcing with their customers and take the proceeds to the bank.

iGR says the demand for connectivity inside the home is at an all-time high, with the biggest growth coming from wireless Wi-Fi connections.  The more devices consumers associate with their home broadband connection, the greater the usage.

That is one of the reasons why providers are increasingly supplying customers with free or inexpensive Wi-Fi routers, to make the connections quick, simple, and potentially profitable down the road.

Comcast's Wireless Gateway: A Future Money Machine?

Comcast announced this week it would supply a free 802.11N “home gateway” free of charge to every new customer signing up for Blast!, Extreme 50 or Extreme 105 broadband service.  In addition to wireless connectivity for every device in the home, the Xfinity Wireless Gateway also includes a built-in cable modem and phone service adapter.  Time Warner Cable strongly encourages new DOCSIS 3 customers use their equipment for Wi-Fi service as well.  AT&T has included its own wireless gateway with U-verse for a few years now.

The offer is hard to refuse.  Nearly 80 percent of homes use wireless access, connecting cell phones, tablets, laptops, personal computers, game consoles, and even set top boxes that let customers stream video entertainment to their television sets.

iGR found average usage in heavily-connected homes at the all time high of 390GB per month.  By 2015, that will rise to more than 440GB per month.  Both numbers are well in excess of average consumption limits by providers like Comcast and AT&T, which top out at just 250GB per month.  Of course, not all Wi-Fi usage is based on traffic from the Internet.  Some users stream content between computers or devices within the home.  But the research is clear — usage is growing, dramatically.

Video is by far the biggest factor, according to iGR.  Their report, U.S. Home Broadband & WiFi Usage Forecast, 2011-2015, says the appetite for downloaded and streamed video is only growing.

Matt Vartabedian, vice president of the wireless and mobile research service at iGR, says home Wi-Fi has become inextricably woven into the personal, social and business fabric of today’s life.

Broadband is increasingly seen by consumers as an essential utility, as important as the home wired telephone, safe drinking water, and reliable electric and natural gas service.

Providers are positioning themselves to take advantage of the growth market in data by establishing what, at first glance, may seem to be generous (often inflexible) usage limits that remain unchanged years after introduction.  While only a handful of consumers may cross those provider-imposed thresholds at first, within a few years, it will be more uncommon to remain within plan limits, especially if you watch online video.

AT&T pays a lot of money — millions annually — to make sure its business agenda does not run into political or legislative roadblocks in Washington, D.C.  With dozens of members of Congress effectively on AT&T’s campaign contribution payroll and the company’s unparalleled skill at convincing non-profit organizations to advocate for its interests, worrying about the government’s antitrust views on its proposed buyout of Deutsche Telekom’s T-Mobile was the least of its troubles.

“It’s a done deal,” several analysts predicted shortly after the deal was announced, especially after AT&T demonstrated its confidence level in the merger was as high as the enormous $6 billion dollar breakup concession payable to Telekom if it ever fell apart.

Then the government dared to put its two cents in, in the form of a “are you kidding me?”-lawsuit courtesy of the U.S. Department of Justice.  It seems, in the words of some Beltway cynics, the Obama Administration can manage to see a clear cut case of anti-competitive behavior when given enough time.

Since the lawsuit was announced on Aug. 31, it has been “all-hands-on-deck” for the company’s government relations division, packed full of the company’s top lobbyists.  While company lawyers desperately attempt to block what it sees as “pile on” objections and lawsuits from worried competitors, Sprint-Nextel in particular, AT&T lobbyists are trying to compromise away the Justice Department case with proposals of concessions and giveaways to make approval more palatable.

Further north, as fall turns into winter in New York’s financial district, Wall Street analysts are cold on the troubled deal themselves.

The Financial Times reports most analysts think there is now less than a 50-50 chance the merger will be completed unless the two companies agree to disgorge themselves of market share, territories, and increasing “shareholder value” that will come from eventual rate increases a wireless duopoly would inevitably bring.

Some are even less sanguine, predicting AT&T has only a 20 percent shot, and only if it sells off considerable chunks of valuable spectrum to competitors other than Verizon Wireless.

AT&T is retuning its “message” for the times, downplaying the original, ludicrous notion that urban-focused T-Mobile would be the keystone of a new era in 4G wireless service for rural America.  There is a reason T-Mobile isn’t the first choice for small town America’s cell phone buyers.

Instead, AT&T is now positioning the merger deal as a lifeboat for its troubled competitor.  AT&T suggests the number four carrier is in immediate peril — hemorrhaging customers, caught without a coherent 4G strategy, and an exodus of interest by its increasingly neglectful parent — Deutsche Telekom.

Could Time Warner Cable be an eventual part-owner of T-Mobile USA?

“Over the past two years, T-Mobile USA has been losing customers despite explosive demand for mobile broadband,” AT&T said in a statement this week. “T-Mobile USA has no clear path to 4G LTE, the industry’s next generation network, and its German parent, Deutsche Telekom, has said it would not continue to make significant investments in the United States.”

With AT&T predicting the demise of its smaller would-be cousin, consumers may not be in the mood to sign a two-year contract with a company that could soon be rechristened AT&T, especially those leaving AT&T for T-Mobile.

But don’t tell T-Mobile’s marketing department it’s a phone company on life support.  T-Mobile has beefed up its advertising and continues to irritate its larger competitors, particularly AT&T, with very aggressive pricing on its prepaid plans.

T-Mobile recently unveiled two disruptive $30 4G prepaid plans that offer either 1500 shared minutes/text messages and 30MB of data usage -or- 100 voice minutes combined with unlimited texting and up to 5GB of mobile data before the speed throttle kicks in.  Those prices are too low for AT&T and Verizon to ignore, especially when offered on a 4G network.

So far, the Justice Department shows no signs of backing down from their resolute opposition to the deal, minor concessions or not.  Shareholders may not appreciate giving the government too much of what it wants in order to win approval.  Washington lawmakers are split — virtually every Republican favors the merger, Democrats are less absolute, with most opposed.  Among those in favor, by how much is often a measure of what kind of campaign money AT&T has thrown their way.

AT&T absolutely denies they have a “Plan B” in case the merger eventually fails.  But the Times doubts that, reporting as time drags on, an alternative deal might emerge.  Some of the possibilities:

• T-Mobile USA could merge its spectrum with Dish Network, the satellite TV company, to launch a new 4G mobile operator in the USA;
• Combine forces (and spectrum) in a deal with leading U.S. cable companies like Cox, Comcast, and Time Warner Cable to launch a new cable-branded mobile operator;
• Sell or merge operations with MetroPCS, Leap Wireless’ Cricket, or one of several regional cell companies.

Perennial cable booster Craig Moffett from Sanford Bernstein predictably favors the cable solution, which would let companies offer a quad or quint-play of cable TV, wireless mobile broadband, wired broadband, phone, and cell phone service all on one bill.  It would also get the FCC off the backs of cable operators Time Warner and Comcast, who both control a total of 20MHz of favored wireless spectrum they have left unused since acquiring it at auction.  The Commission is increasingly irritated at companies who own unused spectrum at a time when the agency is trying to find additional frequencies for wireless providers.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg ATTs 96000 Job Claim in T-Mobile Deal Questioned 11-8-11.flv[/flv]

Bloomberg News questions AT&T’s claim its merger deal with T-Mobile will create 96,000 new jobs. [Nov. 8] (3 minutes)

Winston-Salem Time Warner Cable customers can expect to pay around 4% more for cable service in 2012.

Time Warner Cable’s annual rate increases have now reached the Carolinas.

The company is mailing letters to customers that announce rate hikes for off-contract clients in the $2-4 a month range, including price increases for Road Runner broadband that will now cost between $49.45-$57.95 a month.

“Our new prices reflect dramatically higher programming costs, additional programming and features, and continued investment in our network and customer service,” said Time Warner spokesman Scott Pryzwansky. “Time Warner Cable invested more than $350 million in capital in the Carolinas over the past year to make our network even more robust and to enable our customers to get the services and features they want.”

The company also invested heavily in lobbying lawmakers to keep community-owned broadband competition at bay, helping pass a measure through the Republican-controlled legislature that makes municipal broadband competition much more unlikely.

The result is another year of unfettered rate increases for customers in cities like Winston-Salem:

• Cable TV increases from $10.23 to $11.49 for broadcast basic, $64.99-$69.49 for standard analog service, $80.99-$85.49 for digital cable;
• Broadband increases from $47.95 to $49.45 for customers who also have digital cable, $52.95 to $55.95 for customers with any other tier of cable TV, $57.95 for standalone broadband service;
• Telephone rates are unchanged.

Customers can avoid some of the price increases through creative bundling, threatening to take your business elsewhere, or by signing up for alternative providers:

1. Customers on discounted promotional packages, retention deals, and term contracts will not face the rate increases until their promotional rates or contract expires;
2. If you are unhappy with the rate increase, consider calling Time Warner and telling them to cancel your service 1-2 weeks from today’s date.  Then wait for them to start calling you with promotional “win-back” offers that deliver at least a year of substantial savings off regular rates;
3. If you are a broadband standalone customer, consider signing up for Earthlink under their six-month promotion for just under $30 a month.  You will continue to be billed by Time Warner Cable and receive the same speeds and service with two exceptions: no PowerBoost (a temporary speed increase during the first few seconds of downloading), and you lose your Road Runner e-mail address (which you are not actually still using, are you?)  Get a Gmail account, don’t worry about speed gimmicks, and save $28 a month.  At the end of six months, sign up for Time Warner’s Road Runner service under their promotional rate, which is around $30 a month for a year.  Total savings over the 18 month combined promotional rate term: $504!

More than two years after Time Warner introduced DOCSIS 3 speed upgrades in New York, Time Warner is finally completing broadband upgrades for their customers in the Carolinas.  The latest cities scheduled to get the company’s Wideband (50/5Mbps) and Road Runner Extreme (30/5Mbps) services are Wilmington, Jacksonville and Morehead City. The new services will be available by early 2012.

Most customers in eastern North Carolina and parts of South Carolina still get Standard service speeds of 10Mbps download, 512kbps upload.  After the upgrade, a boost in upstream speeds to 1Mbps for Standard service customers is expected.