A typical flat/mud flap style antenna.

Proliferating in online ads, newspapers, and sometimes on television, “revolutionary” new antennas are being advertised claiming to replace cable television while getting most (if not all) of the same channels over the air for free.

These misleading scams have been around for several years. We covered one well-funded ad campaign for “Clear Cast” back in 2011. That particular over-the-air antenna was sold through newspaper ads designed to mimic a newspaper story, with bold headlines like “New Invention … Gets Rid of Cable and Satellite TV Bills.” Those who spent upwards of $50 received a slightly dressed-up bow-tie antenna barely suitable to receive UHF TV stations and worked about as well as a similar antenna selling for $1.49.

With the first wave of misleading ads well behind us, marketers have had to work overtime to reinvent the wheel and convince people to spend $40-50 for what usually cost the company under $5 to manufacture.

Now, instead of the “Clear Cast” antenna, there is the “ClearView HDTV Antenna,” marketed by a company named True Signal. It’s hardly alone. The Octa Air, The Fox, and many others are nearly-identical “mud flap”-style antennas, with a tiny “antenna” embedded inside. The concept marginally works when the owner attaches it to a window, which gives it more signal to work with than an antenna placed in the corner of a room.

The ad copy on the manufacturer’s website is usually over the top but is nothing compared to some of the advertiser-sponsored editorials — “advertorials” published by bloggers, third party advertisers, and fly-by-night websites that exist primarily to cash in on sales commissions. More than a few of those stretch marketing claims into the stratosphere.

Goodsavingstips.com is designed to look like an online combination of a high-tech website and Consumer Reports. In fact, it is a website that reviews products, but has a financial incentive to write glowing reviews to encourage you to buy whatever they write about.

Goodsavingstips stretches the truth about the ClearView antenna more than a salt water taffy machine on the Atlantic City Boardwalk:

If you could stop paying for cable or satellite TV and still get all of your favorite TV channels in HD for FREE, would you do it? Millions of Americans are doing just that, thanks to a brand new rule in 2018 that allows certain regions access to free TV.

Thankfully, if you live in an area where this new rule went into effect, you no longer need to give your hard earned money away to the big cable companies. As a result, Americans are now cutting the cord on their cable companies in record numbers, saving them thousands of dollars.

Up until 2018, cable companies were allowed to “scramble” their channels so that the general public could not access them without paying for their service. However, that all changed starting in 2018, with the government ruling that TV signals are public property and “belong to the people”. Ever since this rule went into effect, the big cable companies are panicing [sic] because many Americans will no longer need to pay for cable or satellite tv to get their favorite channels in HD. As long as you live in a publicly broadcasted [sic] area, it is now possible to watch all of your favorite channels for free with a TV antenna.

Boastful claims about the TrueSignal antenna.

Several antenna companies market their antennas using similar language. There is, in fact, no 2018 “new rule” suddenly mandating your access to free TV. You have been able to watch free TV for decades. Notice the ad copy does not directly state you can receive cable and satellite channels over the air. It only states you can watch “all your favorite channels,” which in this case better be local TV stations and not networks like USA, TNT, CNN, etc. Consumers did not need a new rule to cut the cable TV cord. They just needed competition.

A map invites consumers to see if “free TV” is available in their state. Unsurprisingly, it is in all 50 states.

The rules regarding scrambling have only toughened against consumers over the last few years, not improved. Cable operators are now permitted to encrypt their entire TV lineup, even those channels customers used to watch using a built-in QAM tuner. The encryption allows cable companies to disconnect service from the office instead of dispatching a truck to physically disconnect the line going to your home or apartment.

However, not all TV antenna’s will work. In an attempt to block the public from picking up their TV signals, the cable companies are broadcasting their signals at very low frequencies since most antenna’s will not be able to pick them up. The trick is to get an antenna that can reliably pick up these low frequency signals, and up until now, there hasn’t been an antenna advanced enough to pick these signals up reliably. (There are other antenna’s out on the market, but they fail miserably in comparison to this one).

This is plainly false. Cable companies do not “broadcast” signals over the air. They send them through cables, hence the name “cable” television. Most cable systems also encrypt their digital lineups and no television antenna alone will decrypt them. If we were charitable, we could hazard a guess the reviewer is trying to suggest there are low-power television stations out there which need a better antenna to receive clearly, but these stations are independent of cable operators, don’t transmit on “very low frequencies,” and have been around for years.

Developed by a NASA engineer using military technology, the ClearView HDTV Antenna was just released this year so that it could specifically pick up these signals reliably and has been hailed as the only “super” HDTV antenna. It uses a discrete mud flap modern design which makes it the most reliable and technologically advanced antenna to hit the market today. It can pick up signals out to 60 miles with no problem (as well as the low frequency signals) to enable you to receive free crystal-clear HD channels.

Phillip Dampier: Debunking mode.

Misleading. In fact, the original design for the so-called “mud flap” antenna came from a Raleigh, N.C. based company Mohu. The company began as a small military contractor and the original intent of the antenna was not to receive free cable television. Mohu’s founder, David Buff, was working under a military contract to research new ways to counteract improvised explosive devices (IEDs) that were used against our armed forces in Iraq and parts of Afghanistan. He devised a low/no-profile antenna that closely resembled a mud flap attached to armored military vehicles that would jam the remote wireless signals used by insurgents to detonate roadside bombs. The military chose a different approach. So if the people selling these antennas were honest, they would have to say, “Developed by a military contractor but rejected by the military itself….”

Buff would later expand Mohu as a consumer antenna company, but suggests his proprietary design isn’t the result of the ‘space age’ antenna, but rather the signal amplifier attached to it. But that is hardly groundbreaking if an antenna cannot receive enough signal to amplify.

The “reviewer” promoting the ClearView antenna (who will earn a percentage from every sale that results from a click on his website) was amazed with the results:

What happened next was astonishing…

We turned the TV on and found ourselves staring back at an incredibly clear channel in HD. We kept flipping through channels and to our amazement, every channel was crystal clear. Best of all, we received almost all of the most popular channels you would get with cable.

All in all, we were able to access 68 channels in 1080 HD. It was as if we were getting free cable or satellite TV.

Now, before you cancel your cable or satellite subscription, it is important to note that there were a few channels that we could not get with the antenna. But in the end, we were able to receive about 85% of the same channels and more importantly, they were the most popular channels that people actually watch.

The verdict:If you want to save thousands of dollars and stop paying for cable or satellite tv, and don’t mind losing out on a few random channels you probably won’t even watch….

Up and coming technology: A wireless over the air antenna that receives signals from the best place in the house and then sends channels over an in-home Wi-Fi network.

We were not surprised it was deemed astonishing, considering the companies selling these antennas routinely buy sponsored space to promote their products on independent websites or compensate reviewers with a substantial commission if their reviews result in product sales. (Stop the Cap! does not accept sponsored posts or commissions to peddle products.)

The ClearView antenna did not do well for Amazon customers.

What the reviewer experienced was… over the air television, received through an antenna. Because most television stations now broadcast a digital signal, it is not surprising every channel would appear “crystal clear” because the alternative is typically no signal at all. The article continues to mislead readers, however, when it suggests buyers would “receive almost all of the most popular channels you would get with cable.” In fact, antenna users will only receive free, over the air local stations. Getting 68 over the air digital TV channels (and subchannels) is common only in the largest cities with multitudes of over the air stations. Many of those channels target ethnic minorities with foreign language programming, religious programming or home shopping. In most medium and smaller cities, expect 20-25 channels.

Right until the end, the reviewer was prepared to mislead his readers. The disclaimer itself fails to be completely forthcoming as well, telling prospective buyers there were only “a few” channels not receivable with the antenna. That could refer to over the air stations too weak to receive, but the surrounding context invites readers to believe those few channels are cable television networks. Telling people they will receive about 85% of the “same channels” (whatever that means) and “most channels that people actually watch” is true only if you exclude all cable television networks from that list.

The worst part of this is after spending $40 on the ClearView HDTV antenna, a whopping 52% of reviewers on Amazon.com gave it just one star. One reviewer compared it with a bent coat hanger serving as an improvised antenna and the coat hanger won. Most claimed it completely failed their expectations.

These antennas are made and marketed to a gullible public that has either forgotten about the basic principles of television antenna design or were too young to have ever used one. Many of the “high-tech” antennas we see sold these days are designed to work with UHF channels only, an important issue if one or more local stations still occupies VHF channels 2-13.

A more traditional RCA set-top antenna style common from the early 1970s – today. They work reasonably well and are inexpensive. The two vertical telescoping antennas are for VHF reception and the loop is tuned to receive UHF channels. You need an antenna capable of receiving both bands if you have stations on channels 2-13.

Indoor antennas are only suitable in you live relatively close to the transmitter. In most cases, residents of a city or inner ring suburb can usually get by with two telescoping rod antennas (“rabbit ears”) and a UHF antenna shaped into a small loop or bow tie design. Traditional set-top antennas often incorporate both. The telescoping antennas can be raised or lowered and rotate in various directions until you find the best reception. A UHF antenna usually can be turned to the right or left until best reception is achieved. These antennas are perfectly suitable and cost $20 or less. There are more modern antenna designs, some flat plastic or rubber sheets, others look like miniature replicas of an outdoor antenna mounted on the roof. In most cases, the design itself is what is “revolutionary.” None of these antennas perform miracles, but many are adequate. The key is finding the right direction to point them in or keeping them as close to a window as possible. You may need to find a different window, or change the height or positioning of the antenna to get the best reception.

If your reception remains poor, you need a roof or attic-mounted antenna, (remotely rotatable preferred over fixed-mounted). These antennas are mounted higher in a home, giving a less obstructed view to the transmitter tower, and capable of collecting weak signals that would be non-existent indoors. The biggest cost involved with these is often not the antenna but the installation. A high quality roof-mounted antenna will outperform any indoor antenna and will likely receive some stations from adjacent cities.

A relatively recent development is the “wireless antenna” which receives signals from an antenna placed in an area of the home which gets the best reception and transmits received TV channels over an in-home Wi-Fi network, making long antenna cable runs unnecessary. Unfortunately, reviews of many of these products are mixed and hint the technology has to undergo further development to make it less frustrating.

For now, cord-cutters with reception challenges may find the best solution is to subscribe to one of the streaming providers like DirecTV Now, YouTube TV, Hulu, etc. Be sure to verify which stations are available to you from each service before subscribing as they vary widely in each market.

If investing in a TV antenna, start small and inexpensive and consider trying out antennas available in local stores like Walmart, which can be more easily returned if they are unsuitable. If buying online, stick with a retailer like Amazon.com where independent reviews can help give you some insight into each antenna. Just be careful about overly glowing reviews. Fake/compensated reviews are a significant problem on online retailer websites, especially for unknown or unusual products or brands trying to break through in the market.

Gone from Spectrum lineups across northern New England.

Many Spectrum cable television customers across the country have seen their broadcast TV lineups shrink as the company removes “duplicate” and “semi-local” stations, even as it hikes the cost of its Broadcast TV surcharge.

Southern Maine customers are the latest to be affected with the sudden removal of Boston’s ABC affiliate, WCVB-TV on June 5 — the last Boston area station on the television lineup.

“York (Maine) is part of the Portland TV market and we carry the designated in-market ABC affiliate — WMTW,” responded Andrew Russell, Spectrum’s director of communications for the northeast division. “We no longer carry the out-of-market ABC affiliate.”

Viewers trying to watch WCVB in southern Maine saw a screen stating “programming on this network is no longer available,” instead of local news and traffic information important for a number of southern Maine residents that commute down I-95 into the Boston area for work.

“I am fit to be tied,” York Beach resident Ken Morrison told the Bangor Daily News. “And I’m not alone. A lot of people are very upset about it.”

Subscribers in distant suburbs, exurban or rural areas between two major cities often had access (often for decades) to several stations in adjacent television markets. Each subscriber could choose the station serving the city that was most relevant in their lives. Prior to Spectrum and Time Warner Cable, cable systems in these areas were often locally owned and operated by smaller companies. These operators were responsive to the needs of their customers and distant over-the-air stations were often a part of the cable lineup from the 1970s forward. But as consolidation in cable industry continues, local lineups are now usually determined in a corporate office hundreds of miles away.

This Binghamton, N.Y. PBS station was thrown off the Spectrum lineup across several counties in the Southern Tier.

That could explain why Spectrum subscribers living in Tompkins and Cortland counties in New York suddenly lost WSKG-TV, the PBS affiliate from nearby Binghamton in favor of Syracuse-based WCNY-TV. Local residents do not consider themselves a part of Syracuse. Most consider themselves residents of the Southern Tier, which stretches along the New York-Pennsylvania border and includes Binghamton, Corning, Elmira, Hornell, Olean, Salamanca, Dunkirk, Jamestown, and Vestal. Residents will tell you they have more in common with their neighbors in northern Pennsylvania than Syracuse, but Spectrum apparently knew better and announced viewers in the two counties would now have to be satisfied watching a PBS station broadcasting to an audience at least 50 miles away.

Spectrum’s decision in this case does not appear to be a financial one.

“A public media organization like us gets no money from Charter to air our programming,” said WSKG’s management. “Our programming is provided to them for free, by law.”

WSKG believes what is actually behind Spectrum’s decision to change the lineup is the regionalization of their cable system head-ends, from which television programming is managed. Programming seen on Spectrum subscribers’ TV screens across much of the Southern Tier and part of the Finger Lakes region is now managed from Charter offices in Syracuse.

“In this case, because our tower is more than 70 miles from Syracuse’s head-end, where the signal originates, there’s a line of demarcation where they don’t have to carry our signal anymore,” said WSKG station president and chief executive, Greg Catlin. “In this case, that cut-off is Cortland and Tompkins County. They have every right to be doing what they’re doing. That doesn’t mean they have to do it.”

Subscribers were exceptionally unhappy to lose their Binghamton PBS station, and the station received a significant number of listener and viewer contributions from an area that is now cut off. The Southern Tier, like Pennsylvania to the south, is notorious for poor signals due to mountainous terrain, which limits television and FM radio reception. Verizon offers no competing television service in this part of New York, leaving residents with satellite television as the only possible alternative.

WPTZ in Plattsburgh is off Spectrum lineups in several parts of northern New York.

The first week of June was a significant date on the calendar for many residents in Spectrum’s northeastern service areas. In northern New York, Spectrum customers were notified they were losing WPTZ, the NBC affiliate in Plattsburgh, in favor of Syracuse’s NBC station WSTM-TV. That Syracuse station now produces news and current affairs programming for three Syracuse stations – WSTM itself, WTVH (CBS) and WSTQ (CW) under the “CNY Central” brand. But subscribers who lost WPTZ do not consider themselves a part of central New York and would more likely choose to visit Vermont than Syracuse.

In other parts of New England, Spectrum customers also lost WMUR-TV — the New Hampshire station with one of the best regarded news operations in northern New England, in favor of WVNY in Burlington, Vt. Newscasts on WVNY are produced by its sister station WFFF-TV. WMUR has a larger American audience than WVNY. In fact, this Vermont ABC affiliate has far more viewers in southern Québec and Montréal than it does in its own home market.

Back in Maine, the local congressional delegation is turning up the heat on Spectrum, so far to no avail. State Reps. Lydia Blume and Patricia Hymanson of York have written a letter to Spectrum demanding the company reinstate WCVB or reduce the cable television bills of affected customers to compensate. So far, Spectrum has done neither.

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Morrison told the Bangor newspaper Channel 5 “is the channel of the household. We watch it every day, multiple times a day,” he said. “Many people in the York area commute to Boston. The traffic reports on Channel 5 are essential.” WCVB was also the last Boston channel that could be accessed through Spectrum. Boston channels 4 and 7 have already been discontinued.

WMUR in Manchester, N.H. is gone for many New England Spectrum subscribers.

After contacting town officials, who hold the franchise agreement with Spectrum until it expires in 2022, Morrison learned a powerful lesson about deregulation. When a cable company lacks competition or regulation, it can do pretty much what it wants.

York town manager Steve Burns says his hands are tied, noting that Spectrum’s franchise agreement is written to automatically renew (for their convenience) unless the town wants to attempt to renegotiate.

“But negotiate how?” Burns asked. “Comcast is not going to come in and compete with Spectrum. They divvy up the territory. And there’s no one else.”

Spectrum has also made sure that Burns’ phone is among those that rings first when a customer has a complaint, noting Spectrum prints his name and number on each subscriber’s bill, listing him as the “franchise administrator” for the town.

“But it doesn’t mean anything,” Burns told the newspaper. “We have no authority. They decide the programming and the fees. I don’t think we’re important to them.”

So far, all Spectrum has been willing to do is mail out a channel request form to residents who complain, but there is scant evidence the cable company will restore the Boston station, because it has refused other similar requests from subscribers across the country.

For customers in the Berkshires in western Massachusetts, they know only too well how responsive Spectrum is to channel requests. When Spectrum took over Time Warner Cable, local subscribers lost access to several stations (most recently WCVB as well), forcing some to watch local news from stations either in Albany, N.Y., or Springfield, Mass. At the same time, customers were notified Spectrum was increasing its Broadcast TV surcharge, for fewer channels.

Spectrum did not offer any significant response to U.S. Sens. Ed Markey and Elizabeth Warren, or Congressman Richard Neal when they contacted Charter Communications to complain. In Maine, it is the same story for Sens. Angus King and Susan Collins, as well as Rep. Chellie Pingree.

The editorial and opinion page of The Washington Post has always been an uneven experience, especially when it comes to their views on the telecommunications business.

For years, the Post’s editorial page has been suspiciously cable-friendly. It favored Comcast’s failed 2014 acquisition of Time Warner Cable — a thought so horrible, readers were likely to spit out their morning coffee after seeing it. At first, one might have attributed the editorial board’s friendliness to the fact its corporate parent at the time also owned Cable One, a cable operator serving small and medium cities in places Comcast, Charter, and Cox forgot. But Cable One is now long gone — spun off as an independent entity. So perhaps laziness explains why reporters and columnists are frequently suckered by well-worn talking points from a cable industry on the defensive — celebrating every article proclaiming the impact of cord-cutting is muted, at best.

This morning’s shallow column by “right-leaning blogger” Megan McArdle, “You think you hate your cable bundle. You’re wrong,” is an excellent case in point. It’s a combination of cable industry folderol and misunderstanding of the economics of today’s cable business.

McArdle argues that recent subscriber growth by Netflix, Hulu, and other streaming services should mean we can get rid of the hated cable television bundle. Only we don’t she says, because we “actually love bundles.”

Her argument runs into trouble almost immediately when attempting to conflate a-la-carte economics of the television business with the likely impact of that type of pricing on hotels, airlines, and restaurants:

When you book a hotel, you expect “complimentary” mattresses, sheets and towels, rather than renting each individually. When you go to a restaurant, you don’t pay extra to enjoy the use of a plate. And you get very testy indeed upon discovering that your bargain airline charges you to choose a seat or bring luggage.

Bundling, it turns out, is valuable. You aren’t willing to give up complimentary shampoo and towel service when you’re traveling, because that turns every shower into a financial decision. The hotel, meanwhile, would need more staff to field requests for trivia, raising the price of the room. Much better for everyone to sell you a bundle that we call a “hotel room” but that really includes a bunch of ancillary products you might like to use during your stay.

In 2014, the Washington Post editorial page endorsed the Comcast-Time Warner Cable merger that eventually fell apart.

Value is in the eye of the beholder, and hundreds of thousands of cable customers are doing what was once unthinkable for the cable industry (and Ms. McArdle) — they are cutting the cord to their cable television package for good. That is a fact many cable executives are now willing to acknowledge. It is why CEO’s complain about the inflation rate of cable programming costs and the fact subscribers are no longer amenable to annual budget-busting rate hikes for cable television. Some cable companies now attempt to hide those growing costs in fine print surcharges for broadcast TV stations and sports programming. Others are offering new slimmed-down cable package options for customers no longer willing to pay for dozens of channels they will never watch. It’s a story we’ve covered for nine years, but one Ms. McArdle obviously missed.

Her analogies about an a-la-carte world for hotels and airlines isn’t a good one because nobody staying in a motel or flying complains about getting too much from either. As with all things, there is a general consensus about what one can expect staying in a Holiday Inn or flying Delta. You can find outliers like the seedy motel with hourly rates that charges for clean sheets or the airline that is now contemplating new seating arrangements that cram people even tighter into an almost-standing position. But when you signed up for cable television, you did not expect or ask for hundreds of channels — many added not because subscribers valued them but because of corporate contract decisions or launch bonuses. But you didn’t have much of a choice with “take it or leave it” lineups. McArdle’s argument falls into the industry’s favorite talking point of all — the value proposition. ‘Yes, your cable bill is now headed for $200 a month, but look at all the value we give you by bundling dozens of networks you’ve never heard of with a phone line you don’t want and an internet connection that we now target for our annual rate hikes.’

Bundled pricing is designed to trap you into their business model, and any attempt to claim we “love” those pricing plans is extremely misguided.

Take Spectrum’s misleading promotion for a year of their triple play bundle, marketed as: TV+Internet+Voice with a price of $29.99/mo each. Not a bad deal. One can take internet service and television, for example, and expect to pay just under $60 a month for both. That’s a fine price. But then you missed the fine print. It actually says “from $29,99/mo each for 12 months when bundled.” To actually get those services for $29.99 a month each you have to take all three. If you just want the aforementioned bundle of television and internet service, the promotional price for that is $59.99 a month for television, plus $29.99 a month for internet — which adds up to one cent more than Spectrum’s triple play promotion, which also includes a phone line.

Do subscribers “love the bundle” or traditionally take it because it is the only package on offer from the cable company that makes economic sense, given the options?

McArdle continues:

Bundling is especially valuable in businesses where fixed costs account for a disproportionate share of the total price. Once you’ve gone to the monstrous expense of building and staffing a hotel, providing extra amenities generates little additional cost while adding a great deal of value for the customer. And the same is true of cable. Much of the expense comes from laying and maintaining a wire to your house; adding another channel is relatively cheap.

Right now, cable companies sell you phone, Internet service and entertainment products, all of which share one wire, one maintenance operation and one customer service staff. Without those other services, the Internet division would have to cover all that overhead. So if you pay less for the entertainment, you’re probably going to have to pay more for connectivity.

The sunk costs of cable company infrastructure have been largely paid off for years. Today’s cable systems were largely designed and last significantly overhauled in the 1990s and early 2000s to make room for more television channels. Every service contemplated for sale by the cable industry, including broadband, was designed to work over a hybrid fiber-coax network design that has been in place for 20 years. Move analog television channels to digital, and one opens up room for more broadband. Need more bandwidth for broadband? Order a node split to further divide pools of users.

The cable industry itself rejects McArdle’s argument for the one-size-fits-all cable bundle. It is why companies have started to introduce slimmed down cable packages and sell new packages of over the top streaming cable TV channels to their broadband-only customers. The costs to deliver and support the broadband services cable companies now love to offer have been declining for years, even as rates increase. Ms. McArdle is obviously also unaware of the industry’s push to launch more self-service options for customers to cut down support calls and dramatically reduce the number of truck rolls to customer homes. She may also not realize the impetus to raise prices comes not out of necessity, but from Wall Street and investors’ revenue expectations.

As cable television programming prices increase, the profit margin on cable television goes further into decline. But the cable industry makes up the difference by raising broadband prices. That is one segment of its business that remains very strong. Losing video subscribers is not the disaster Ms. McArdle suggests it could be. In fact Moody’s recently noted that with broadband profit margins about three times more than for video, the economic loss from a departing video customer can be neutralized by growing broadband subscribers at a fraction of the video unit’s loss. The ratings agency estimates that a ratio of about two broadband subscribers added for every video customer loss should offset revenue losses, while a ratio of 0.67 times that takes care of profit declines as well. That is based on current prices. Therefore, as cable companies add broadband customers, they easily offset the financial impact of video customers departing with no actual need to raise rates.

McArdle finally falls into the trap of using today’s linear TV paradigm as the basis of her argument that if all cable television channels were sold a-la-carte, they would cost astronomically more than they do as part of a bundle. But if that were true, the slimmed down competitive offerings of DirecTV Now, Sling TV, and others would be substantially more expensive than they actually are. For many customers, the out-the-door price is what matters, even if they are paying more for each of the channels they are interested in watching. A $35 DirecTV Now bill is still a lot less than an $80 cable TV bill, which often does not include surcharges and equipment fees.

Wall Street analyst Richard Greenfield of BTIG Research is so skeptical of the future of today’s bloated bundles, he has a Twitter tag: #goodluckbundle that expresses his view that bundled, linear, live television itself is decreasing in importance as viewers turn to on-demand streaming services. Subscriber satisfaction with Netflix and Hulu is much higher than almost any cable company.

Snapshot of #cordcutting — more consumers are abandoning the “big” bundle #goodluckbundle https://t.co/Bp8Zz9LX2T pic.twitter.com/bTwUjKu0F5

— Rich Greenfield (@RichBTIG) August 11, 2016

One of Stop the Cap!’s readers understands subscribing to a lot of streaming services can also cost a lot, but customer satisfaction matters even more:

“It still adds up when you subscribe to a lot of services, but my satisfaction has never been higher because I am getting services with a lot of things I want to watch instead of hundreds of channels I don’t,” said Jack Codon. “When you flip through the channels and run into Sanford & Son, Law and Order, home shopping, and terrible reality show trash, you just get angry because I was paying for all of it. Now I pay Netflix and they spend the money on making more shows I will probably want to watch, as opposed to reruns I don’t.”

McArdle is correct about one thing — we should expect streaming and internet prices to increase, but not because of what she wrote. The real reason for broadband rate hikes is the lack of competition, which allows companies to implement “because we can” rate increases. Netflix itself hinted it may also increase prices incrementally down the road, but not with the intention of rewarding executives and shareholders with fat bonuses and dividend payouts. Netflix wants to pour all it can into additional content development to give customers even more reason to watch Netflix and little, if anything else.

Charter Communications is taking the city of El Centro, Calif., to federal court for interfering in a dispute between Spectrum and a local TV station owner that has resulted in two stations being blacked out on the local cable system for nearly three months.

Northwest Broadcasting, Inc., has been in a contract extension dispute with Charter Communications over multiple stations, including its two El Centro-area affiliates KYMA (NBC) and KWST (CBS). Charter accuses Northwest of gouging, claiming “Northwest demanded an 80 percent increase in carriage fees, more than double the rate Charter pays any other broadcaster anywhere else in the entire country.”

On March 7, 2018, the City of El Centro got involved and cited the cable operator, alleging Charter violated five provisions of Article X of the City Code, and began fining the cable company $100 a day for each violation, assessed each day the dispute continues.

El Centro accuses Charter of:

• Discriminating against subscribers based on specific protected classes;
• Failure to notify the city and subscribers 30 days in advance of any changes to cable service or rates;
• Failure to establish a time frame to respond to service interruptions;
• Failure to refund customers for service interruptions exceeding a stated period;
• Failure to notify the city and subscribers 30 days in advance of any changes to the cable television channel lineup.

El Centro Mayor Sheryl Viegas Walker: “I’m taking it to the streets. I’m so fed up with [Spectrum’s] disregard for this community,” KYMA in El Centro reports. (3:02)

Northwest Broadcasting CEO Brian W. Brady strongly disputes Charter’s claims, dismissing them as “lies,” particularly surrounding the removal of two El Centro stations from Charter’s lineup after the cable company claimed Northwest refused permission to continue carrying the stations while renewal talks continued.

“Charter accepted the first two extensions which were offered to them, however, they refused the third extension and took our stations off with 10 minutes notice,” Brady said.

Charter’s lawsuit argues El Centro officials have no right to intervene in the dispute, force Spectrum to put the stations back on the lineup, or require Charter to issue refunds to customers for channels that are no longer available to them.

“Northwest’s pulling its authorization for Charter to carry its broadcast signals is not a ‘service interruption’ within the meaning of the City Code provisions in question,” Charter argued in its lawsuit. “Even if it were, while El Centro demands that Charter ‘cure’ its alleged violations, the only means for Charter to do so is to finalize a retransmission agreement with Northwest. The City’s citations are thus intended to pressure Charter to accept Northwest’s unreasonable terms by imposing fines and intentionally damaging Charter’s reputation and harming its goodwill and relationships with its existing and prospective customers.”

Charter argued giving refunds to customers over the lost channels was “contrary to Charter’s terms of service, and in so doing improperly interfere [sic] with Charter’s contractual relationship with its customers.”

Charter is relying heavily on California’s statewide video franchise law — the 2006 Digital Infrastructure and Video Competition Act (DIVCA), heavily pushed by telecom lobbyists a decade ago, which stripped most local authority over cable systems and transferred it to the state government. Charter is using DIVCA’s light touch regulations to support its assertion El Centro officials cannot interfere in programming disputes and that their actions during the dispute have only made things worse.

“The effect of the City’s actions has been to harden Northwest’s negotiating position and make a deal on reasonable terms even more difficult,” the complaint says.

“I have never seen a corporate entity act with such disregard for our community,” said El Centro Mayor Sheryl Viegas Walker. “We have a contract with them that spells out certain steps that they’re required to take if those kinds of changes are going to be made. They didn’t do that. We wake up one morning and we’re suddenly without two major channels.”

“Rather than negotiating in good faith like all other parties would do and what the law requires, Charter has taken a ‘take it or leave it’ approach,” added Brady. “In an effort this week to get this back on track, Northwest submitted a new proposal to Spectrum. Spectrum’s representative communicated that they really wanted to get this resolved, but would not counter Northwest’s proposal and would not respond at all in writing. Odd behavior for a company that claims to be negotiating in good faith. It appears that Charter would rather bully a small municipality than to engage in a good faith negotiation.”

It appears other small cities are joining Brady’s cause, complaining to the Federal Communications Commission that Charter was unfairly profiting from station blackouts. In Crescent City, Calif., city officials accused Charter of charging a Broadcast TV surcharge of $7.50-8.85/month, but didn’t change or adjust rates after the Northwest Broadcasting blackout began.

“Despite the fact the fee is itemized and justified as a pass-through, Charter did not eliminate or reduce that fee, even though it was no longer incurring costs associated with carriage of … at least two network affiliates,” Crescent City officials told the FCC.

The two California cities have also been joined by officials in Yuma, Ariz. and Jackson, Wyo., where Charter has removed Northwest Broadcasting stations as well.

“We have learned that it is no different for numerous municipalities which have been forced to sue Charter to collect the fees that are contractually owed to them,” Brady said. “Most disputes are settled because Charter uses their army of lawyers to outspend the municipalities forcing the municipality to settle on Charter’s terms, regardless of their contractual obligations. It’s no different for their customers who have told us that Charter recently raised the broadcast surcharge fee in spite of the fact that the programs they want to watch are unavailable because Charter removed the programming. Many have asked for refunds only to be told no. What is the customer to do, sue Charter?”

Northwest Broadcasting Owned and/or Operated Television Stations

KPVI-TV in Pocatello, Ida. was widely seen in parts of Wyoming over Charter Communications until the station was blacked out in a contract dispute. Now viewers want to see Charter fined. (1:11)

Charter officials claim there was insufficient time to notify subscribers about the loss of Northwest Broadcasting stations from the TV lineup, but Jackson, Wyo., officials noted Charter bought a new domain name reflecting the contract dispute at least two weeks before stations like KPVI were blacked out. (1:02)

Jackson city officials question a Charter representative about refunds for customers paying surcharges for broadcast TV stations no longer on Charter’s lineup. (0:57)

How to File a Petition on this Issue with the Federal Communications Commission:

This petition allows for public comment until April 16, but the FCC requires some special steps for individuals wishing to file comment. Below is a list of the requirements to file a public comment with the FCC regarding Charter Communications:

• Members of the public who wish to comment should do so on or before April 16, 2018.
• Filing should be submitted to the FCC via the electronic comment filing system (ECFS).
  • That system is accessible at https://www.fcc.gov/ecfs/filings.
  • A member of the public should type his or her comments and save them.
  • At the top of the ECFS page, select standard filing and in the “proceedings” box, type 18-91 (the proceeding is MB Docket No. 18-91).
  • Fill out the remainder of the boxes with information that is required (some information is optional).
  • At the end of the form, there is a box where saved comments can be uploaded.
• Comments that contain statements of fact (for example, “Here is what happened to me”) should be supported by an affidavit.
• “Comments or oppositions shall be served on the petitioner and on all persons listed in petitioner’s certificate of service…” The petitioners here are the Cities, and the certificate of service is at the end of the communities’ filing, which can be downloaded from https://www.fcc.gov/ecfs/filing/1032236683943.

PBS TV stations in smaller communities and secondary PBS affiliates and public stations in large ones are ending their free, over-the-air television broadcasts after decades of service because of politics, budget cuts and repacking the TV dial to give up more spectrum for wireless providers.

The most significant trigger for the impending closedown of several stations, especially those run from universities, is the FCC’s spectrum auction and reallocation plan, repacking UHF stations into a much smaller number of available channels, requiring stations to buy new transmitting equipment many cannot afford.

The original plan to repack television stations reassured affected broadcasters that the auction proceeds from the wireless industry auctions would cover the costs of the necessary new equipment.

KNCT’s coverage partly overlaps other nearby public stations.

Then Central Texas College, which owns and operates PBS affiliate KNCT in Belton, Tex., learned Republicans in Congress might appropriate only enough funding to cover 60% of the transition costs. The trustees that oversee KNCT, which serves central Texas, realized they would have to find roughly half of the $4.5 million needed to change their channel from 46 to 17 as part of the “station repack” and hope Congress would change its mind and reimburse the station.

That was money the trustees ultimately decided could not be found, especially as annual deficits at the station now average $500,000 — costs covered by the college.

KNCT general manager Max Rudolph, who has been in charge of KNCT for most of its 38 year history, said the station will now have to leave the airwaves.

“The board had to make a tough decision, but repacking was only the tip of the iceberg,” Rudolph said. “It’s economics — dollars and cents.”

KNCT operates with a staff of 15 — including five part-time employees, that take care of both the PBS TV station and KNCT-FM, which will continue on the air. The annual budget for the TV station was about $1 million, half spent on PBS membership and programming. Donors also provided around $160,000 a year.

KNCT-TV serves the Belton/Killeen/Temple/Waco, Tex. market, although KNCT’s signal struggles to reach into the northeastern part of its service area near Waco, where public TV station KAMU-TV in more distant College Station strangely provides a better signal.

The station hopes to continue operations through online streaming and on-demand shows kept on its website, but both require a subscription to internet service. For parts of central Texas, it represents the end of free PBS over-the-air programming.

Last year, Central Michigan University decided to accept a $14 million offer for satellite PBS station WCMZ-TV in Flint to vacate its current UHF channel and close down for good April 23, 2018. WCMZ-TV’s signal reaches as far away as Port Huron, Detroit and Lansing. But its intended market was Flint, which lacked local PBS service when the station signed on more than 30 years ago. Today, Central Michigan University still operates its primary station WCMU in Mount Pleasant, along with WCMV, which serves Cadillac and Traverse City, WCML, serving Alpena, Petoskey, Cheboygan and the Straits of Mackinac, and WCMW, which broadcasts to the Lake Michigan communities of Manistee, Ludington and Pentwater.

CMU officials are pulling the plug on WCMZ because, they claim, 99 percent of viewers live in areas that are now served by other public broadcasting stations. While cord cutters may miss WCMZ, cable and other pay television customers likely won’t because the service is expected to continue uninterrupted on cable and possibly satellite.

KMTP, San Francisco’s youngest multicultural public television station, is looking for a new home after selling its spectrum for $87.8 million in last year’s FCC auction. KMTP is licensed to Minority Television Project, Inc., a not-for-profit corporation, and serves the San Francisco Bay Area with non-commercial public television. KMTP broadcasts international programming in multiple languages including English and is not affiliated with PBS.

Its best chance to survive is dependent on an acquisition or arrangement with Poquito Mas Communications LLC, the licensee of low-power KCNZ in San Francisco, which is best known for carrying Creation TV, a Chinese language religious network. KMTP can either occupy several of KCNZ’s subchannels, or potentially buy the station outright. As a low power outlet, KMTP can hope to keep carriage on cable television, giving it perfect reception in areas where KCNZ’s low-power UHF transmitter cannot reach. But that means cord-cutters may have no access to the channel unless they live near the transmitter.

WUSF-TV, on the air in Tampa for 51 years, signed off late last year after the University of South Florida decided to liquidate the station for $18.8 million in auction proceeds from the FCC’s spectrum auction. The area’s larger PBS station, WEDU, has absorbed most of the programming that used to appear on WUSF, which now appears as a virtual subchannel on WEDU — unofficially called WEDQ.

Today, WEDU carries six different signals on its over the air digital channel: WEDU/PBS HD, PBS World, PBS Kids, WEDU+, Florida Channel, and Create TV. Many of these services are also available on cable television. But the original competing voice from WUSF is now gone.

WYCC in Chicago was the city’s second PBS affiliate, behind the larger and better known WTTW. Licensed by City Colleges of Chicago, the trustees decided to liquidate WYCC last year for cash as part of the FCC’s spectrum auction.

WYCC began its operations in 1983 with a message from President Ronald Reagan, congratulating the station for producing adult learning programming lacking on commercial television. WYCC first ended its PBS affiliation in 2017 and had one sole program provider, MHz Networks’ WorldView, when it ceased broadcasting on Nov. 27, 2017.

WTTW has sought to claim WYCC’s remaining assets and intends to place WorldView on one of its subchannels in the future. It already grabbed two Australian shows WYCC used to air:  “Miss Fisher’s Murder Mysteries” and “The Doctor Blake Mysteries.” All that will remain of WYCC are its “call letters,” which could possibly reappear when WTTW launches WorldView.