Phillip "Keeping an Eye on Time Warner's Eye" Dampier

Today’s announcement by Time Warner Cable that it is reintroducing usage based billing, at least optionally for customers in southern Texas, is a concerning development that requires further examination and vigilance.  But before we delve into that, I’d like to thank the company for avoiding the kind of mandatory usage billing/cap system we’ve seen appearing at certain other providers.  We also welcome the company’s admission that they have earned enormous profits from unlimited consumption plans and consider that pricing part of the success story they’ve had selling Internet access.

Stop the Cap! has never opposed optional usage-based billing tiers for customers who feel their light usage justifies a service discount.  However, industry trends so far have made no provisions for truly unlimited usage plans that sit side by side tiered plans without quietly diluting the value of flat rate Internet with tricks and traps in the fine print.  We have serious concerns this “foot in the door” to Internet Overcharging could eventually become mandatory for all customers.  Perhaps Time Warner Cable will be different than all the rest.  We can only hope so.

Let’s break it down:

First, Time Warner Cable’s admission it blew it the first time it experimented with these pricing schemes is most welcome.  Being on the front lines of the battle against the company’s Internet Overcharging experiment in 2009 remains very-well-documented on this website.  We confronted arrogant local management that argued usage billing was “fair” and would barely affect any customer.  In fact, the original plan a later revision would have tripled flat rate Internet access to a ridiculous $150 a month.

The company’s 2009 “listening tour” was also a farce, with a number of e-mailed comments deleted unread (we know, because Time Warner’s comment system sent e-mail to customers telling them exactly that.)  Local media outlets, newspaper editorials, and customers made it quite clear: customers want their unlimited Internet access left alone.  They do not want to learn the mysteries of a gigabyte, they don’t want to watch a gauge to determine how much usage they have left, and they sure don’t want to pay any more for broadband service.

If Jeff Simmermon, Time Warner Cable’s director of digital communications, now represents the prevailing attitude about unlimited Internet access among Time Warner Cable’s executive management, that is a very welcome change indeed.  But we’re not completely convinced.  For nearly two years, Time Warner executives have talked favorably about usage-based billing as the “fairest way” to bill for Internet usage.  Besides Simmermon’s comments, we have seen nothing from CEO Glenn Britt or CFO Irene Esteves that indicates they have changed their original views on that.

Unfortunately, we’ve learned over the last three years today’s promises may not mean a lot a year from now.  We’ve watched too many companies introduce these pricing schemes and then gradually tighten the noose around their customers.  Once broadband usage is monetized, Wall Street looks to the practice of charging for usage as a revenue source, and they pressure companies to keep that money flowing.  What begins as an optional tiered plan can eventually become the only plan when flat rate broadband is “phased out.”

Canadians understand this is not unprecedented.  They’ve been down this broadband road before, and it is loaded with expensive potholes and broken promises to repair them.  Usage allowances have actually dropped at some Canadian providers.  The fixed maximum on overlimit fees has gradually been relaxed or removed altogether, exposing Canadian consumers to broadband bill shock.

Time Warner Cable customers are now paying upwards of $50 a month for broadband after consecutive annual rate increases.  That’s plenty, and usage should remain unlimited for that kind of money.

Still, Stop the Cap! has never been opposed to truly optional usage-based billing plans.  We’re just unconvinced companies will keep the wildly popular flat rate pricing if boatloads of additional revenue can be made dragging customers to tiered usage plans, particularly in the absence of aggressive competition.  Just ask AT&T.

Second, as we’ve seen on the wireless side, “unlimited Internet access” means one thing to consumers and all-too-often something very different to providers.  For example, companies have discovered they can claim to provide unlimited access but then de-prioritize flat rate traffic, or even worse, throttle speeds and give preferential treatment to usage-based billing traffic.  Time Warner Cable needs to commit that unlimited access means exactly that — no traffic prioritization, no speed throttles, and no sneaky fine print.

Third, we don’t expect Time Warner will get too many takers for their Broadband Essentials Internet program.  The discount, just $5 a month, is quite low for broadband service limited to 5GB per month.  Exceeding that limit is quite easy, and after just 5GB of “excess usage,” the discount is eaten away and the penalty rate of $1/GB kicks in.  That could ultimately risk up to $25 a month in extra charges.  I’m uncertain how many customers would want to risk exposing themselves to that for a modest discount.

While we are not issuing a Call to Action over these developments, we will be watching them very closely.  Time Warner Cable should make no mistake: if their usage billing plans begin to eat away at fairly priced unlimited access plans, we will once again picket the company and do whatever is necessary to bring political and consumer pressure to force them to rescind these kinds of pricing schemes yet again.

Time Warner Cable's usage meter.

Time Warner Cable today relaunched usage-based billing, offering customers a $5 monthly discount off Internet access when they confine their usage to a maximum of 5GB per month.

Stop the Cap! was at the forefront of protesting Time Warner’s last Internet Overcharging experiment in 2009, which would have allowed unlimited access for $150 a month — a major rate increase to be sure.  Other customers had usage allowances that originally would have ranged from 40-60GB per month, with overlimit fees of $1/GB or more.

Time Warner Cable’s Jeff Simmermon, director of digital communications, admitted the 2009 experiment attempted in Beaumont, San Antonio, and Austin, Texas, Greensboro/Triad, N.C., and Rochester, N.Y. was unsuccessful.

“Yes, we did try this before, a few years ago,” Simmermon said. “And yes, pretty much everyone agrees that it didn’t go so well. So we listened to customer complaints. A lot.”

The cable company is trying again in southern Texas, including the cities of San Antonio, Laredo, Corpus Christi, the Rio Grande Valley and the Border Corridor.

This time Simmermon says the usage-based pricing program for Time Warner Cable customers will be optional. He also promised Time Warner Cable customers will always have access to unlimited broadband at a flat monthly rate.

This is a major change for the cable company, because earlier statements from both CEO Glenn Britt and the chief financial officer Irene Esteves called usage based billing inevitable.

Simmermon admitted Time Warner Cable is making plenty of money selling unlimited access to customers today.

Simmermon

“We profit from unlimited consumption, and a free, open Internet is the sort of Internet that has gotten us this far,” Simmermon wrote on the company’s blog.

“All participation in the Essentials plan is opt-in, with the opportunity to save a few dollars each month,” Simmermon said. “It’s not going to be for everybody, and that’s fine — all Time Warner Cable customers will still have the option of selection an unlimited broadband plan.”

The details:

1) Up to 5GB/month of data transmission for a $5/month discount from one’s current monthly bill. All Standard, Basic and Lite broadband customers will be eligible. Turbo, Extreme and Wideband customers will continue as always, with access to unlimited broadband and no optional tiered plan or discounts.

2) The ability to opt-in and opt-out of a tiered package at any time.

3) A “meter” that tracks usage on a daily, monthly, weekly or even hourly basis, enabling customers to accurately gauge usage.

3) A 60 day/2 billing-cycle grace period to allow customers to adjust usage patterns. During this time the company will notify customers of overages but won’t charge for them.

4) Overages will cost $1 per GB, not to exceed a maximum of $25/month.

This presents the opportunity to save $5/month from a monthly broadband bill.

Time Warner already has the TV Essentials plan for $39.99/month that offers low-income households to have access to cable, in a stripped down package. Simmermon says this is meant to be the broadband equivalent.

[Stop the Cap! will publish our own views on this development in a separate editorial.]

Nearly one year ago, Google selected Kansas City, Kansas as the first city to “Think Big With a Gig,” a gigabit fiber to the home broadband network that would shatter misconceptions that Americans don’t need lightning-fast broadband speeds.

In the original announcement, early 2012 was slated to be the target date for the service to become available in at least some areas of the city.  After months of wrangling with utility companies and the city government, Google began burying the first fiber lines earlier this month.  This week, it filed for permission with both Kansas and Missouri officials to compliment its forthcoming broadband service with a complete cable-TV package as well.

Google’s fiber project now has incumbent operators on both sides of the Missouri and Kansas Rivers concerned about forthcoming competition from the search engine giant, especially after Google announced it would wire both the Kansas and Missouri sides of the city.

Greater Kansas City is primarily served by Time Warner Cable and AT&T, but smaller cable operators also offer service in some areas.  Google is considering a competitive cable package with video on demand.  It is expected to wrap up licensing negotiations with programmers within a month or two, and some of its contracts allow Google to sell cable service outside of the Kansas City area, a potentially interesting development should Google want to provide an Internet-based cable system to subscribers in other cities.

We have collected several media reports on the Google project in Kansas City to bring readers up to date:

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WDAF Kansas City Gigabit Challenge Offers Google-Friendly Ideas 12-6-11.flv[/flv]

WDAF in Kansas City reports on some of the submissions to Google’s Gigabit Challenge — a competition to consider how to leverage 1,000Mbps broadband. (12/6/11 — 2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WDAF Kansas City Why is Google Fiber Set Up Taking so Long 1-18-12.flv[/flv]

WDAF reports on what is holding up the Google Fiber project.  It turns out local utilities have been harder to deal with than originally thought.  (1/18/12 — 3 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KMBC Kansas City Google Begins Fiber Installation In KCK 2-6-12.flv[/flv]

KMBC reports Google is ready to break ground on its new fiber network.  (2/6/12 — 2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KCTV Kansas City Google Starts Laying Fiber 2-18-12.mp4[/flv]

KCTV says Google started laying fiber this week.  The new service is on the way.  (2 minutes)

Billing problems, promotions-not-honored, and passing the buck are all common complaints from cable and phone customers, especially when employees of large providers don’t communicate with each other and saddle customers with the role of “go-between.”

Two recent examples of Customer Service From Hell reached our desk this week, one involving Verizon which has the “not my job” mentality firmly entrenched in their call centers, and the other from Time Warner Cable, where “Diego” told a new customer he couldn’t install their service until they disguised themselves as an old customer to cancel someone else’s service first.

The Case of the Persnickety Promotion – You Don’t Qualify Because We Never Added It to Your Account

You can't touch this Verizon offer when the company forgets to apply it to your account for eight months.

Anthony Caruso received an offer he couldn’t refuse from Verizon FiOS: $69.99 a month for a triple play package of phone, Internet, and television service good for 12 months, with a reduced discount of $89.99 per month for the second year — still a great deal over what Comcast was selling.

He signed up for service in June and was happy with the installation and the service… until the bill came.

Over the last eight months, Caruso has never received a single bill that reflected the offer he signed up for, resulting in monthly calls to customer service lasting between 30 and 75 minutes each.  Every month, Verizon told Caruso the promotion he received never existed, but they would issue certain credits as a gesture of goodwill.

The Star Ledger exhaustively details the entire debacle, but suffice to say, Caruso was a victim because nobody at Verizon applied the promotion to his account.  The company also never bothered to investigate why a customer had to keep calling (eight times in the last eight months) to receive those credits.  The newspaper illustrates how complicated it all got:

In early July, Caruso received the first bill, for $176.44.

It was more than a little confusing: $470.32 in “Current Activity” charges minus $289.96 in “Specials & Promotions” minus $21.24 for a partial month. The bill also included a “Showtime Starz Entertainment Pack” for $16.99 and “Multi-Room DVR Package” for $24.99, neither of which Caruso ordered.

The bill also included a “first bill estimate” showing monthly charges would be $139.31.

“Very confusing collection of charges and credits,” he said. “I paid the full amount to avoid billing issues for my first payment.”

He called Verizon on July 29 to discuss the bill. Caruso was transferred three times, and a rep named Sandy helped. Caruso said she dropped the “Showtime Starz” package and applied a one-time $30 credit. Caruso decided to keep the “Multi-Room DVR Package,” so his future billing should be $104.43. Because of the overpayment on the first bill, the amount due on the August bill would be $43.21.

“I was also told I was getting $9.99 “Epix” movie channel free for three months,” he said. “The FIOS lineup shows Epix is included in my package, but I decided not to fight this.”

Caurso said he paid the August bill, but there were still problems. It showed the normal monthly price to be $133.63.

He called again, and this time spoke to a rep named Jason, who said he had never heard of a $69.99 bundle offer. Caruso faxed a copy of the offer letter to the rep, who then recomputed the bill to reflect the correct package amount.

But the September bill was for $127.26.

Caruso called Sept. 7 and spoke to two different reps. The second rep also denied the existence of a $69.99 bundle offer, but asked Caruso to again fax a copy of the offer.

The rep applied another one-time credit and said the correct amount would now be $92.16.

This continued for the next several months. The bill would be wrong, Caruso would call and the reps would apply credits.

Got it?

After months of endless frustration, Caruso had to appeal to the newspaper’s Bamboozled column for Star Ledger readers seeking a solution to their endless customer service nightmares.

Tom Maguire, a senior vice president for Verizon, figured out what at least 10 Verizon customer service representatives couldn’t — the company never applied the original promotion to Caruso’s account because the service order was not written in a way that would allow the promotion to be applied.  Instead of the two year promotion, Caruso was signed up for month-to-month service, at a price of $129.99 a month, not $69.99.

“They basically dropped the ball from my perspective,” Maguire admitted.

What irritated Maguire (and Caruso even more) is that repeatedly-faxed copies of the promotional offer made no difference.

Caruso’s consolation prizes for his eight month ordeal:

• A direct number to a senior customer service representative already aware of Caruso’s service history;
• A restart of Verizon’s promotion, effectively extending it for nine additional months;
• A multi-room DVR package at a discounted price for the life of his service.

Tips for Living With Verizon:

Keep a copy of the promotional offer you select until it expires. If Verizon does not apply it correctly, or it mysteriously drops off your account at some point, you will have evidence the offer existed.  If you experience a repeated billing problem, ask the representative that answers to transfer you to a senior customer service supervisor.

Time Warner Cable’s Mind Games Threaten Our Relationship

Courtesy: Jacobson

Julie Jacobson chose Time Warner Cable over AT&T for her new Carlsbad, Calif. condo located to the north of San Diego.  The deciding factor: no cable box required for extra sets hooked up to expanded basic cable. (Unfortunately for Jacobson, that won’t be true much longer as Time Warner embarks on a nationwide conversion to a virtually all-digital lineup, which will require extra equipment on most television sets.)

Unfortunately, ever since Jacobson signed up for service, Time Warner has been playing “hard to get.”

Jacobson painfully details her encounters with Time Warner customer service, who had no idea what a CableCARD was (much less an “M-Card” which allows multiple signal streams).  She was also not impressed to discover the “free” HD-DVR promotion on offer evidently only applied to the cardboard box it came in.

“Your ‘free’ HD-DVR comes with an additional $11/month box-rental fee and $11/month service fee,” Jacobson discovered. “The HD-DVR is free + $22/month, which puts TWC pricing into U-verse territory.”

But even that wasn’t enough for Jacobson to declare Time Warner Cable “sucky.”  It was this:

Julie,

Thank you for placing your Time Warner Cable order online. We were unable to complete your order with the information you provided.

Please call us at 855-889-4113 so we can proceed with your service order. Be sure to have your order confirmation number (########) and the four-digit PIN you created during your online order ready when you call. We look forward to hearing from you so we can complete your order as soon as possible.

Thank you for choosing Time Warner Cable.

So I called the number on a Sunday at 3:15 p.m., using the phone number in the email. The office was closed by then. Believe it or not, I started pining for Comcast back in Minnesota. At least their customer service is 24/7.

After being bounced from offices in Wisconsin and North Carolina, she was finally transferred to California, where Diego (with his barely decipherable English) was waiting to not provide customer service:

I’m sorry, but I had a really tough time understanding him. As it turns out, it didn’t really matter because he was flat-out wrong. He told me the old tenants returned their TWC equipment, but they didn’t call to cancel their service; my order wouldn’t go through because there was already an account associated with the address.

“You need to call them to cancel their service,” he said.

“What?! I don’t even know who they are!”

In that case, he said, I could go to the local TWC office and bring them a copy of my lease.

That’s real convenient, given we’re only in town for one day.

So I ask Diego for the store phone number, and he provides it.

“Where is it located?” I ask.

“I don’t know … somewhere in the LA/San Diego area.”

Thanks, that narrows it down.

A more encouraging experience with another representative later on seemed to have everything worked out, until a new message from the company reached her e-mail box earlier today:

3rd Attempt: Please call us to avoid cancellation of your Time Warner Cable order.

Tips for Living With Time Warner Cable:

Time Warner’s system for dealing with new customers always hangs up when it finds existing service already established at an address. We encountered this ourselves and had to arrange for the old owners of our home to arrange for a service disconnection before Time Warner could complete our order for new service. Usually it makes better sense to call and establish service directly with a Time Warner representative over the phone when a complication like this arises. The representative would have identified the problem immediately instead of dispatching cryptic e-mail messages about a generic “problem with your order.”  Calling the local office nearest you is also a great way to cut through red tape and stop your call from being transferred to different call centers.

If your order went horribly wrong and you were inconvenienced, ask a representative to throw in free installation or some other extra promotion for your time and trouble. 

We also suspect that “third attempt” notification was probably associated with the earlier e-mail and not the more encouraging, later experience with another representative by phone.

Time Warner Cable and Cox Cable finally have an answer for keeping “stay at home” dogs entertained while their owners are away at work or play: DOGTV.

With more than 400 hours of research to win a rating of “puppy approved,” DOGTV will feature dog-sighted views of open car windows, dogs chasing balls around the yard, piano music, and popular movies for Fido like Beverly Hills Chihuahua.

For now, the show is running on both Time Warner and Cox Cable systems in San Diego, and is currently available for free.  Eventually, both cable companies are expected to charge $4.99 a month for the dog-centric programming.

The concept behind the idea for DOGTV is that a lonely pet left at home alone is an unhappy pet.  By leaving a television set tuned to programming that some dog experts believe will be soothing and engaging, your dog’s anxiety level can be kept as low as possible. If you have cats at home, you can buy toys to keep them company at Cat adorn.

Raising the cable bill another $5 a month might provoke anxiety in the rest of the household, however.  But as people continue to spend a fortune on keeping their favorite animal companion happy, it might prove to be the one pay-per-view event some pet lovers cannot live without.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/DogTV Sample.flv[/flv]

A sample of DOGTV’s “relaxation” programming.  (1 minute)