While regulators contemplate forcing 11 million Time Warner Cable customers to endure the hell on earth that is Comcast customer service, another horror story emerged this week from a California man who faced $181.94 more on his cable bill than he expected, all because of a service call to check on an Internet service problem that turned out to be Comcast’s fault.

While Time Warner Cable customers usually get an American customer call center to handle these problems, Comcast relies on English-challenged, underpaid offshore customer care dens staffed by “screen readers” that refuse to go off-script to handle the problems of Comcast customers like Tim Davis.

Before digging into the specifics of Davis’ $182 debacle, The Consumerist noted a critical admission from the Comcast call center agent – a word to the wise about getting your complaints about Comcast’s billing errors and inaccurate charges addressed: If you don’t record all of your calls with Comcast customer service to keep a complete audible record of their promises and commitments, you have absolutely no recourse to get invalid charges and other billing mistakes removed from your bill.

“[…]Since I advised my manager that there is a recording and you were misinformed, then she’s the one who can approve that $82,” said Comcast’s customer service representative.

Seemingly flabbergasted, Davis asks to confirm, “You’re telling me that if I didn’t have a recording of that call, you wouldn’t have been able to do it?”

“Yes, that is correct,” answers the rep, confirming that the only way to get Comcast to erase a bogus charge from your account is to have recorded evidence that you were promised in advance that the call would be free.

Davis decided to turn his Comcast nightmare into a NSFW YouTube video.

[flv]http://www.phillipdampier.com/video/Comcast Doesnt Do Service Credits Without a Recording Saying Otherwise 8-11-14.mp4[/flv]

‘You want a service credit? Who the heck do you think you’re talking to. This is Vasee – Employee 5#$ at Comcast’s English-challenged offshore customer call center. We don’t do service credits. Oh wait, you have a recording?’ (Only Comcast would put $$$-signs in the ID numbers of their employees.) (Warning: Strong Language) (13:56)

Although initially promised there would be no charge for the service call because it was an “outside issue,” when Davis’ monthly Comcast bill arrived, there were several mystery charges totaling $181.94 for service call work that Davis said was never done.

The representative insisted that Comcast charges $50 for every service call for any reason. That will be unpleasant news to Time Warner Cable customers who pay no fees for service calls that address technical issues that are not the fault of customers.

The Consumerist details the rest of the painful experience:

After being put on hold for an hour, Davis hung up and tried again, this time reaching a supposed “supervisor,” who points out that the $49.95 WiFi setup charge is offset by a $49.95 “service discount,” so that’s free… even though it shouldn’t have been charged to begin with.

She also says there is a $49.99 discount on the supposed “Failed Self Install,” meaning Davis is being charged $50 for the nonexistent failed install, plus the remaining $32 for the failed self-install kit charge. A total of $82 that is still being disputed at this point.

She then offers to give him “BLAST+” Internet service for 12 months free of charge instead of simply taking off the remainder of the questionable charges. This semi-upgrade only has a retail value of $60, meaning he’d still be on the hook for $22 for a call that he’d been told would be free.

Davis, understandably, doesn’t want a cheap Internet service upgrade spread out over 12 months. He wants and asks to have the full $82 refunded.

The rep balks, saying she can’t issue him the credit because it is a “valid charge.”

“Every time we send out a technician there’s a $50 charge for that,” she explains.

“Well, I have a call recorded where the agent tells me in no uncertain terms that there will be no charge,” counters Davis. “You can not bill me for something that I did not authorize. You can not tell me that it’s free, then bill me anyway and then tell me that you can not un-bill me or credit me for the bill.”

“I apologize for that, but there’s no way that I can credit the account,” says the rep, desperately trying to jump back on to her script. “We value you as a customer, that’s why I am trying to check what I can give you.”

As soon as Davis produced the recording that indicated there would be no charge, a senior supervisor quickly approved a credit — several calls and hours later.

August 6, 2014

Hon. Kathleen H. Burgess
Secretary, Public Service Commission
Three Empire State Plaza
Albany, NY 12223-1350

Dear Ms. Burgess,

The country is watching New York to learn if our state regulators believe a merger between two unpopular cable operators is in the best interest of New York residents.

For the first time in a long time, the Public Service Commission has been empowered to provide much needed oversight over two companies that have enjoyed both deregulation and a near-monopoly across the region, particularly for High Speed Internet service at speeds above 10Mbps.

New Yorkers, like the rest of the country, consistently rank both Comcast and Time Warner Cable as some of the worst companies around.[1] The PSC has the power to facilitate franchise transfers that would effectively combine the two into one giant monolithic cable company dominating the northeastern U.S., or it can reject the proposed assignment of franchises to Comcast, letting both companies know “in the public interest” means something in New York State.

Section 222 of the New York Public Service law[2] provides the PSC with the authority to reject the application for a transfer of a franchise, any transfer of control of a franchise or certificate of confirmation, or of facilities constituting a significant part of any cable television system unless, and I paraphrase, the transfer is in the public interest.

The Commission is on record partly articulating its standard for determining the public interest. In 2013, the Commission stated several principles it considered in the matter of the acquisition of Central Hudson Gas and Electric by Fortis, Inc., to determine if the transaction would provide customers positive net benefits.[3] The Petitioners in that case were held to a standard requiring them to demonstrate the expected intrinsic benefits of the transaction exceeded its detriments and risks.

However, there are considerable differences between energy utilities and the largely deregulated marketplace for multichannel video distributors and broadband providers. While legacy telephone regulations still provide for significant oversight of this vital service, cable operators have won the right to set their own rates, service policies, and broad service areas.

Although many of us believe broadband has become an essential utility service, federal regulators do not, especially after telephone and cable companies have successfully lobbied on the federal level to weaken or eliminate regulation and oversight of television and broadband service with arguments they do business in a fiercely competitive marketplace.[4]

Regulators cannot compel cable operators to provide service in communities where they have chosen not to seek a franchise agreement, and broadband expansion programs in rural, unserved areas have largely only been successful when communities elect to construct their own broadband networks or federal funds (tax dollars and subsidies funded by ratepayers) defray the expense of last-mile networks.  While it is enticing to seek a voluntary agreement from the applicant to expand its rural service area, the public interest benefit to the relatively small number of New Yorkers getting broadband for the first time must be weighed against the interests of millions of existing subscribers in New York who are likely to see further rate increases, usage-limited broadband service, and worse service from Comcast.

New Yorkers will remain captive in most areas to choosing between one telephone and one cable company for packages of phone, television, and Internet access.[5] Promises of competition have never materialized for vast numbers of state residents, particularly those upstate who have been left behind after Verizon ceased its FiOS fiber to the home expansion project.

Unless Comcast was compelled to wire the entire state, any proposal seeking a voluntary agreement to expand Comcast’s service area in New York is likely to be insufficient to solve the pervasive problem of rural broadband availability. It would also saddle millions of New Yorkers with a company unwelcomed by consumers, with no alternative choice.

As you will see in our filing, Comcast has often promised improvements it planned to offer anyway, but held back to offer as a “concession” to regulators.

The result of past deals is one monopolistic cable operator is replaced by another, and as the American Consumer Satisfaction Index reported, bigger is not better for consumers.[6]

The nation’s two largest cable operators, Comcast and Time Warner Cable, now seek further “value creation” for their already very profitable businesses by merging.[7]

News reports indicate further consolidation is likely in the telecommunications marketplace, largely in response to this merger proposal. Soon after Comcast made its announcement, AT&T announced its desire to acquire DirecTV,[8] and Charter Communications’ efforts to bolster its size are likely to be realized acquiring Time Warner Cable customers cast off as part of the Comcast-Time Warner Cable transaction.[9]

How does this benefit New Yorkers? In our attached statement, we go far beyond the testimony offered by Comcast’s representative at the public information meeting we attended in Buffalo. It is vital for any merger review to include a careful analysis of exactly what Comcast is proposing to offer New York. But it is even more important to consider the costs of these improvements. As you will see, many of the promised upgrades come at a steep price – set top box platforms that require a $99 installation fee, the prospect faster broadband speeds will be tempered by broadband usage limits and usage penalties largely unfamiliar to New Yorkers, and other technology upgrades that are accompanied by subscriber inconvenience and added costs.

Comcast’s promised commitments for customers must also be carefully weighed against what it promised shareholders. While Comcast claims it will spend millions to upgrade acquired Time Warner Cable systems (many already being upgraded by Time Warner Cable itself), the merger announcement includes unprecedented bonus and golden parachute packages for the outgoing executives at Time Warner Cable, including a $78 million bonus for Time Warner Cable CEO Rob Marcus, announced less than 60 days after taking the helm.[10] Comcast’s biggest investment of all will be on behalf of its shareholders, who will benefit from an estimated $17 billion share repurchase plan.[11]

The PSC should be aware that previous efforts to mitigate the bad behavior of cable companies have nearly always failed to protect consumers.

Professor John E. Kwoka, Jr., in his study, “Does Merger Control Work? A Retrospective on U.S. Enforcement Actions and Merger Outcomes,[12]” found past attempts at behavioral remedies spectacularly failed to protect against rapacious rate increases after  mergers are approved.[13]

In short, it is our contention that this merger proposal offers few, if any benefits to New York residents and is not in the public interest even if modestly modified by regulators.

The implications of this transaction are enormous and will directly impact the lives of most New Yorkers, particularly for broadband, now deemed by the industry (and consumers) its most important product.[14]

We have attached a more detailed analysis of our objections to this proposal and we urge the New York Public Service Commission to recognize this transaction does not come close to meeting the public interest test and must therefore be rejected.

 

Yours very truly,

 

Phillip M. Dampier

—

[1]http://arstechnica.com/business/2014/05/comcast-time-warner-cable-still-have-the-angriest-customers-survey-finds/

[2]http://codes.lp.findlaw.com/nycode/PBS/11/222

[3]http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={A55ECCE9-C3B2-4076-A934-4F65AA7E79D1}

[4]http://www.mi-natoa.org/pdfs/The_Ten_Disappointments_of_Cable.pdf

[5]http://www.newyorker.com/news/daily-comment/we-need-real-competition-not-a-cable-internet-monopoly

[6]http://www.theacsi.org/component/content/article/30-commentary-category/179-acsi-quarterly-commentaries-q1-2008

[7]http://corporate.comcast.com/images/Transaction-Fact-Sheet-2-13-14.pdf

[8]http://www.usatoday.com/story/money/business/2014/05/13/att-directv-deal-analysis/9044491/

[9]http://www.reuters.com/article/2014/04/28/us-charter-communi-comcast-idUSBREA3R0N620140428

[10]http://money.cnn.com/2014/03/21/news/companies/time-warner-cable-golden-parachute/

[11]http://www.cleveland.com/business/index.ssf/2014/02/comcast_agrees_to_purchase_of.html

[12]John E. Kwoka, Jr., “Does Merger Control Work? A Retrospective on U.S. Enforcement Actions and

Merger Outcomes,” 78 Antitrust L.J 619 (2013)

[13]7 John E. Kwoka, Jr. and Diana L. Moss, “Behavioral Merger Remedies: Evaluation and Implications for

Antitrust Enforcement,” at 22, available at

http://antitrustinstitute.org/sites/default/files/AAI_wp_behavioral%20remedies_final.pdf

[14]http://online.wsj.com/news/articles/SB10001424052702303657404576359671078105148

(Ed. Note: Our formal written submission to the New York Public Service Commission is presented in this series of articles. Please note that any graphics included on Stopthecap.com were not included in the formal filing, but are presented here to make the material more reader-friendly. — PMD)

STATE OF NEW YORK

PUBLIC SERVICE COMMISSION

---

Joint Petition of Time Warner Cable Inc. and

Comcast Corporation For Approval of a                                       Case 14-M-0183

Holding Company Level Transfer of Control.

---

 

 

Statement of Opposition to Joint Petition
Phillip M. Dampier, Director and Founder: Stop the Cap!
Rochester, New York
August 1, 2014

Stop the Cap! is a not-for-profit group founded in Rochester in 2008 to fight against the introduction of artificial limits on broadband usage (usage caps, consumption billing, speed throttling) and for better broadband speeds and service for consumers. Our group does not solicit or accept funding from lobbyists, companies, or others affiliated with the telecommunications industry. We are entirely supported by individual donors who share our views.

Introduction

Our opposition to the Joint Petition is based on our belief it does not meet the “public interest”  test established in Section 222 of the New York Public Service law, and must therefore be denied.

We are concerned the Commission may attempt a mitigation of Comcast’s failure to demonstrate a public interest benefit for New York residents in its application. The Commission may even attempt to negotiate a monetary public benefit adjustment to afford Comcast the opportunity to pay its way to approval of a merger the overwhelming majority of New Yorkers who have shared their views with the Commission ardently oppose. We submit that the recent change in New York law obligates the applicant alone to demonstrate its proposal is in the public interest. It is not the Commission’s responsibility to propose mitigation formulas that tip the balance in favor of an applicant.

Also lacking in the discussion is a careful analysis and comparison of Time Warner Cable’s existing products and services in contrast with Comcast and, more importantly, the impact of its own upgrade program now underway. It is our contention New York will be better served by retaining Time Warner Cable as the dominant cable provider and rejecting Comcast’s attempt to transfer Time Warner’s franchise agreements to itself. We are not opposed to Comcast independently entering New York and competing head-to-head with Time Warner Cable, although we believe it is unlikely.

Ultimately, we believe Comcast’s executive vice-president David Cohen made one of the strongest arguments why this merger simply does not make sense for New York:

“We are certainly not promising that customer bills will go down or increase less rapidly.”[1]

—

[1]https://arstechnica.com/tech-policy/2014/02/comcast-no-promise-that-prices-will-go-down-or-even-increase-less-rapidly/

Comcast has offered the Commission a vague preview of how it intends to improve cable television service for New York customers, but rarely discloses important details about the costs and limitations their “improvements” will bring.

While Comcast is excited about the proposition of transitioning Time Warner Cable customers away from the current mixed analog-digital platform to an all-digital lineup, Time Warner Cable customers have paid less and avoided costly, unwanted extra equipment as a result of the choices consciously made by Time Warner Cable.

Comcast and Time Warner Cable have different philosophies about how to best deliver the bulging cable television packages most cable systems now offer:

• Time Warner Cable adopted “Switched Digital Video” from BigBand Networks, a technology that lets Time Warner deliver only the digital signals that are being watched in a service group or node, instead of the entire lineup.[1] Since it is unlikely subscribers are watching every niche channel on offer, Time Warner has been able to reclaim unused bandwidth. As a result, customers using older cable-ready televisions can continue to access analog television channels without the use of a costly, often unwanted set top box.
• Comcast has more aggressively chosen a  path to all-digital television service, moving most of their television channels to encrypted digital technology that requires a Comcast set top box, a less costly Digital Transport Adapter (DTA) designed for secondary-use televisions, or a CableCARD. Customers must choose one of these technologies, usually at an added-cost to access their cable television service.[2]

Time Warner Cable also began deploying DTA equipment in certain areas to free up additional bandwidth on its cable systems while still leaving most analog channels intact. The DTA boxes are supplied free of charge during an introductory phase lasting up to a year, after which a $0.99 monthly charge for each box is imposed.[3] (That fee has recently been raised in certain markets, including New York City, to $1.50/mo.[4] [5])

In contrast, Comcast customers were initially entitled to receive up to three no-cost DTAs to install on televisions not equipped with a Comcast set top box.[6]

On January 1, 2013 Comcast began informing subscribers a new $1.99/month “additional outlet service charge,” now applied for each DTA installed. [7]

Public officials in Eagan, Minn., responding to consumer complaints about the new charge, suspected Comcast was attempting an end run around the Federal Communications Commission’s prohibition of “excessive fees for cable equipment.”[8] The additional outlet fee was deemed by Comcast to be a service fee, not an equipment charge.[9]

Attorney Mike Bradley was hired by a group of suburban Minneapolis cable commissions to investigate the legitimacy of Comcast’s new DTA service charge. If the fee were classified as an equipment charge, Comcast would charge 50 cents per DTA based on rate forms filed with the Minnesota cable commissions he represents, Bradley told The Pioneer Press.[10]

For the average Comcast subscriber, the result was another rate increase in return for digital television service. Subscribers with three DTA’s now pay up to $5.97 extra per month in order to continue to receive the exact same programming on the same number of televisions within their household – a $25 annual surcharge per DTA, $75 if the customer uses three DTA’s, complained Eagan, Minn. Mayor Mike Maguire in a letter to Sen. Amy Klobuchar.[11]

Comcast’s fees, in addition to being well in excess of the actual cost of the equipment, will earn the company at least $550 million annually in new revenue – all for equipment that costs the company around $50 per unit.[12] Because Comcast is encrypting its lineup, even televisions equipped with QAM tuners, capable of receiving digital television signals without a set top box, will also eventually need the new equipment to unscramble television signals.

—

[1]http://www.cedmagazine.com/news/2009/09/time-warner-cable-serves-up-sdv-in-n.y.,-dallas,-l.a.

[2]http://customer.comcast.com/help-and-support/cable-tv/how-bill-will-change-with-digital-migration

[3]http://www.cedmagazine.com/news/2012/01/time-warner-cable-wraps-up-all-digital-conversion-pilot-in-maine

[4]https://newsroom.charter.com/

[5]http://www.timewarnercable.com/en/residential-home/support/faqs/faqs-tv/basictvencryption/what-will-the-digital-adapter-cost.html

[6] http://www.twincities.com/ci_22617153/comcast-fee-plan-cause-confusion-controversy

[7]http://customer.comcast.com/help-and-support/cable-tv/how-bill-will-change-with-digital-migration

[8]http://transition.fcc.gov/Bureaus/Cable/News_Releases/nrcb4009.txt

[9]http://stopthecap.com/2013/02/21/comcast-calls-1-99-charge-for-digital-adapters-a-service-fee-to-avoid-fcc-complications/

[10]http://www.twincities.com/ci_22617153/comcast-fee-plan-cause-confusion-controversy?IADID=Search-www.twincities.com-www.twincities.com

[11]https://dl.dropboxusercontent.com/u/9008/pioneerpress/yourtechweblog/Eagan%20-%20Sen%20Klobuchar%20ltr%20re%20Cable%20Rate%20Concerns%203-5-13.pdf

[12]http://cisco-news.tmcnet.com/news/2011/04/25/5464600.htm

At all three public informational meetings, a Comcast representative promoted the benefits of Comcast’s new X1 set-top box/platform which can provide enhanced features and integrate with the Internet to provide more detailed programming information and social media interaction.

The Comcast representative did not mention that customers must pay up to a $99 upgrade fee for the privilege of renting Comcast’s X1 platform.[1] That is well in excess of the cost of an entire month of cable TV service.

Time Warner Cable does not charge an upgrade fee for its set top boxes, including the latest models.

—

[1]http://www.multichannel.com/news/content/comcast-details-x1-upgrade-fee/356207