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

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

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

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

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

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

Verizon FiOS is off limits to rural customers. Wireless voice and satellite broadband is in your future.

Verizon Communications has big plans for its “miraculous” wireless home phone replacement which will soon find itself in rural homes across Verizon’s service area as part of a larger plan to dismantle rural America’s wired telephone network.

Just as company executives promised more than a year ago, Verizon wants to transition rural customers to fixed wireless phone service that could mean the end of wired broadband for millions of Verizon customers still using DSL.

Verizon senior vice president Tom Maguire told Communications Daily Voice Link is Verizon’s answer for customers it cannot easily transition to fiber optics. He is thrilled about the prospects of getting rid of deteriorating copper networks in favor of an inexpensive wireless alternative.

“I’m super jazzed about this because I think it will be good for everybody,” he said. “I think it’ll change a lot.”

For rural Verizon customers, the changes could be profound, dramatic, and not exactly a win-win scenario:

• No more wired phone service, which means medical monitoring, many home security systems, and inexpensive dial-up service that all rely on landline technology will be rendered unusable;
• No more unlimited use DSL service, no business broadband service, no credit card processing or other electronic business transactions that depend on a wired connection;
• No enforced quality of service standards, rate oversight, or guarantee of access to quality voice service;
• No prospect of advanced fiber optic FiOS services, including high bandwidth video and broadband.

Verizon is making it clear Fire Island and the New Jersey Barrier Island are just the first steps towards the retirement of copper, either in favor of fiber optics in high profit/low-cost areas or wireless in rural areas not worth upgrading.

Maguire claims Fire Island residents did not want the company to tear up yards or streets to replace its damaged copper wire network with newer technology like fiber. But Fire Island residents and administrators tell Stop the Cap! they were never asked. Instead, residents are being told Voice Link is likely their only option for traditional phone service on the western half of the island, and some customers are unhappy they will never get FiOS broadband upgrades Verizon says are financially untenable to provide.

Verizon has quietly tested Voice Link in Florida, giving customers the option of keeping their wired service or switching to the wireless alternative. But the test may have been stacked in Voice Link’s favor, as the choice was given to voice-only customers having chronic service problems with Verizon’s deteriorating copper wire network.

Going forward, many rural customers may not have a choice. For those who want Internet access, Verizon isn’t promising its wireless network is up to the task. Their suggested alternative?

Verizon’s solution for rural broadband.

Get a satellite dish.

Maguire acknowledged Voice Link customers won’t be able to fax or do certain activities, but he said the telco never pretended they would. Verizon won’t be offering data services with Voice Link, but if Fire Island customers want more options, they can potentially choose satellite, he said.

Maguire believes that customers living with a deteriorating copper landline network will gravitate quickly towards a wireless phone replacement.

Verizon arranged a blind test of Voice Link for 40,000 customers in another company’s territory with unbranded devices. When the copper wire network performed normally, customers preferred the quality of traditional landline service. But after it rained, the poorly maintained network made all the difference.

“The copper sounded like hell, it was noisy and static-y,” Maguire said.

Maguire did not say if Verizon blind tested whether customers preferred traditional landline service, Voice Link, or its fiber optic FiOS network.

Verizon hopes to begin introducing its Voice Link service in other markets as early as June.

Verizon says customers are responsible for maintaining and replacing backup batteries used with its FiOS service.

Beep.  Beep.  Beep.

Verizon FiOS phone customers will one day hear that ominous sound in their home and begin searching for the source. The audible alarm isn’t coming from the smoke detector or your computer’s uninterruptible power supply. It is coming from a square white box mounted in your garage or basement with a Verizon logo on it.

The Verizon Optical Network Terminal (ONT) Battery Backup Unit (BBU) provides up to eight hours of backup power for your FiOS voice services in the event of a commercial power failure.

Verizon considers its battery your problem, even though you lease the equipment from Verizon as part of your monthly service. After one year of standard warranty coverage, customers are responsible for maintaining the battery and for any damages that might occur if one fails to replace or remove it. Verizon’s website warns not promptly removing the spent battery could result in leaking corrosive battery acid which might damage the BBU itself. You would be held responsible for any repair or replacement costs.

Some Verizon FiOS customers cannot understand why they should pay to maintain equipment Verizon still technically owns.

“They require us to lease the equipment (set-top boxes, wireless router, backup battery device, etc.) so they are responsible,” believes one disgruntled customer. “If they would sell it to us or allow us to provide our own I could see us paying for it.”

Verizon representatives say they fully disclose customers are responsible for maintaining the battery. But customers complain it is buried in the fine print. Many more are unhappy to learn Verizon charges at least $45 for a replacement battery that seems to last only about two years.

Joanne Gaugler is on her third battery in seven years, and that one is now on its way out.

“The battery I have now has been beeping for a long time,” Gaugler wrote.

Not only does the battery beep incessantly, but the company also begins sending e-mail messages warning customers they need to replace it to avoid the possibility of damaging their equipment.

“When I called about this problem ten months into my FiOS service, the representative had me remove and reinstall the battery, claiming it was probably a loose connection and that I did not need a new battery,” says Stop the Cap! reader Jim Connor. “When I called back about the same problem 13 months into my FiOS service — one month out of warranty — the representative insisted I buy a new battery.”

Connor said Verizon charges an exorbitant amount for the replacement.

“Another profit center for Verizon, because they charge $35 for the battery and another $9 to ship it, before taxes,” Connor writes. “I ended up paying $10 less at a local battery replacement store, but Verizon got all bothered I did not buy it from them, warning it could ‘damage my service.'”

Verizon strongly discourages customers from buying replacement batteries from anyone other than themselves and disclaims any responsibility for damages caused by “an improper battery.” Verizon also offers customers free battery replacement if you happen to buy a Verizon Protection Pak plan, which starts at $19.99 a month.

There is nothing special about Verizon’s backup battery, a standard issue 12-Volt 7.2Ah SLA (Sealed Lead Acid) model often found in home alarm systems. Frugal Verizon FiOS customers can find equivalent batteries online for less than half the price Verizon charges, often with no upfront sales tax or shipping.

A Stop the Cap! search for “GS Portalac PX12072” or “GT12080-HG” (from labels on current batteries) on websites like Amazon or eBay quickly uncovered several highly rated alternatives that cost as little as $18 with identical specifications.

Batteries of this type have a shelf life of 3-5 years, and an in-service useful life of 1.5-3 years, after which they should be replaced and recycled.

Another alternative is to simply remove the battery altogether. That will result in no backup landline service in the event of a power failure, but your cell phone may already offer a suitable alternative.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KDKA Pittsburgh Verizon FiOS Battery 5-09-13.mp4[/flv]

KDKA in Pittsburgh reports around 10 Verizon FiOS customers a day are flooding into local Batteries Plus stores looking for new batteries for the company’s equipment.  (4 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Verizon Install Replacement Battery 2012.flv[/flv]

Now that you have a replacement battery in hand, here is a Verizon-produced video explaining how to safely install it.  (4 minutes)

After more than a year of aggressive promotions for new customers and those threatening to switch to a competitor, Time Warner Cable has pulled back to boost revenue and make greater profits.

CEO Glenn Britt told Wall Street investors on this morning’s quarterly results conference call that the cable operator is moving in a different direction.

“It’s based on a simple premise: sell people what they want and what they can afford in the first place,” Britt said.

In February, Stop the Cap! noted that Time Warner Cable’s new customer promotions had dramatically changed for the worse. The package prices remained the same — around $80 for a double-play or $89-99 for a triple-play package of cable, broadband, and/or phone service, but customers received a lot less for their money. For example, last year’s promotions bundled Standard/Turbo Service broadband (10-15Mbps) with most offers. Starting this year, only 3Mbps Internet is included. Equipment fees are still extra, but more costly than ever – $8.99 a month for a traditional set-top box, $21.94 a month for a DVR-equipped box and service.

Robert Marcus, Time Warner Cable’s chief operating officer now admits it was all part of the plan, and the company now earns 15-20% more from customers subscribing to the less-aggressive new customer promotions.

“In January we implemented a new pricing and packaging architecture that’s designed to drive greater [new customer revenue] and profit,” Marcus told investors. “We still advertise the same beacon prices, but the product packages are leaner, with lower speeds and fewer channels and features. Once our beacon offers get the phone to ring, our inbound sales reps are trained to help customers select options that are important to them, like faster broadband or a DVR. As a result, customers are up-sold into packages that better meet their needs.”

This year’s promotions largely only bundle 3Mbps broadband instead of the standard 10-15Mbps bundled last year.

Marcus admitted the trade-off is customers shopping around for the best deal who read the fine print are likely to consider an offer from a competitor more closely. Others are disconnecting service when their promotion expires.

Marcus

“By and large, when were talking about triple play disconnects, they are going to our telco competitors,” Marcus said. “When we’re talking about single-play video disconnects, they, by and large, leave us for satellite. We’re increasingly finding that phone customers are dropping landline phone for wireless-only, and there are video customers who are leaving — and broadband customers for that matter, who are leaving the category, and that’s probably more of an affordability issue than anything else.”

Verizon FiOS is Time Warner’s most dangerous competitor because it beats the cable operator on broadband speed and promotional pricing. Time Warner faces some of the highest disconnect numbers in FiOS areas. AT&T U-verse is also having a greater impact because AT&T recently decreased the price of both their triple and double-play promotions and has increased broadband speeds in some areas, Marcus reported.

Marcus said Time Warner is handling the subscriber churn fine, and the cable company now cares more about higher revenue and profits than attracting deal-hunters who shop on price.

“Last year’s aggressive triple play offers drove significant connect volume, which led to the highest quarterly subscriber net adds we’ve had over the last several years,” Marcus said. “But in large part, we were attracting discount seekers who are more likely to [switch after the promotion ended]. In many cases, we caused customers who didn’t need or want phone to take a triple play offer just to get the low triple play rates.”

What new customers Time Warner did attract largely took one or two products from the cable company, usually cable television and broadband. New phone service customers have declined year-over-year as a result of less attractive pricing. Instead, Marcus noted customers are spending on incremental broadband speed upgrades, which cost Time Warner much less than delivering phone service.

Nobody needs 1Gbps, argues Britt.

With the looming threat of Google Fiber in both Kansas City and Austin, Britt seemed generally unconcerned about the impact the gigabit broadband provider would have.

“At the end of the day, what we’re doing is not any different than an overbuilder, and we’ve had overbuilders for the last several decades in this business so that’s what they appear to be doing,” Britt said. “They appear to be very aggressive on price. They’re even giving some tiers away essentially for free, and we’ll see where that goes. Despite the glow and all of that, the products are essentially the same others are offering today in a practical sense.”

Britt said gigabit speeds probably won’t have the impact many customers think they should because most websites are not built to deliver content at those speeds.

Marcus noted that in Kansas City, Google has only passed 4,000 homes so far, about 2,000 of which are Time Warner Cable customers.

“The number of defections we’ve seen is de minimis at this point,” Marcus said.

Both Britt and Marcus responded to a question about consumption billing saying nothing had changed in the company’s thinking about usage caps or charging for what customers consumed.

“We have in place in almost all of our footprint the option for people to pay less money if they wish to really consume less,” Britt said. “People who want to keep getting unlimited and pay for that, can do that. So we really don’t have anything new. It is in place in our whole footprint, I think, except one location.”

“The take rate on that offering has still been fairly modest, but we think it’s a very important principle that there’s a relationship between usage and the price that customers pay,” Marcus added.

Some other highlights:

• Time Warner Cable’s cloud-based set-top box guide is now testing in employee homes with plans to roll the new boxes out to subscribers later this year. Britt said these were the first of a new generation of all-IP boxes, which means if you have a device in your house that knows how to receive IP, you’ll get access directly via WiFi or through a cable technology called MoCA;
• Time Warner Cable will digitally encrypt its entire television lineup in New York City;
• Time Warner Cable’s recent restructuring cost 500 employees their jobs, mostly in finance, marketing and human resources.

Austin, Texas is likely the next Google Fiber city.

Austin, Texas will be the second major U.S. city to receive Google Fiber’s 1,000/1,000Mbps service, perhaps as early as 2014.

A “major announcement” at a news conference scheduled for Tuesday morning is expected to bring more than 100 community leaders together to hear Google’s plans for the city.

Local media reports, an accidental mention of Austin as the next Google Fiber city on Google’s Fiber Blog, and at least one confidential source at Austin’s public utility company (that owns the poles Google Fiber will be strung across) makes it all-but-certain Austin and its nearby suburbs will get the service.

Austin would seem a natural target for Google as home to the high-tech South by Southwest. Austin also hosts Dell, Texas Instruments, AMD, Samsung, IBM, Intel, and a myriad of Internet start-ups. But a key factor for Google also seems to be the presence of Austin Energy, the nation’s 8th largest community-owned electric utility, serving more than 420,000 customers and a population of almost one million. Kansas City, the first choice for Google Fiber, also has a municipal utility company.

Milo Medin, Google’s vice president of access services, made it clear that Google is targeting cities where it does not have to deal with intransigent privately owned utility companies that make life difficult (or expensive) to attach Google Fiber to utility poles. Municipally owned providers have proved easier to work with, and in Kansas City elected officials also helped cut through administrative red tape and facilitated a working relationship between Google and government officials responsible for issuing work permits and clearing up zoning headaches.

Areas served by investor owned electric giants like Southern California Edison, Florida Power & Light, Commonwealth Edison, Consolidated Edison, Georgia Power, Dominion Resources, Detroit Edison, Public Service Enterprise Group, and others may be at an immediate disadvantage in the race to become the next Google Fiber city if those companies attempt to throw expensive roadblocks or disadvantageous bureaucracy in front of Google.

Another factor in Kansas City’s favor was the large amount of pre-existing conduit available to pull fiber infrastructure through without tearing up streets. Cities with this type of infrastructure already in place dramatically reduces construction costs and permit delays.

Google Fiber’s project in Austin will compete directly with Time Warner Cable and AT&T U-verse. Time Warner Cable customers antagonized Austin residents in the spring of 2009 with a planned market test of consumption billing and usage caps for its Internet service. Google Fiber makes a point to say its broadband service is never usage-limited. AT&T U-verse customers in Austin have so far  not faced punitive measures from the phone company when exceeding its 250GB U-verse usage cap.

Many cable industry analysts predicted Google Fiber was simply a show project in Kansas City, designed to embarrass the telecommunications industry’s mediocre and expensive broadband service offerings. But a move into Austin signals Google more likely sees its fiber network as a lucrative business opportunity — one that could gradually be expanded to other cities.

What communities could get the service next? Google seems likely to avoid serving areas covered by Verizon FiOS, because competing fiber networks would likely not produce the bang for the buck Google needs to draw subscribers, and Medin makes it clear the company has found working with publicly owned utility companies easier than privately owned ones, so future Google Fiber cities will likely have these factors in common:

Having a publicly owned utility helps.

• A high-tech business community and well-educated workforce in a medium to large city;
• A publicly owned municipal utility willing to work with Google;
• Pre-existing infrastructure to support fiber service without tearing up streets and neighborhoods;
• A local government willing to cut red tape and ease Google’s expansion;
• No Verizon FiOS fiber service in the immediate metropolitan area;
• A reasonable level of regulations covering environmental impacts of utility infrastructure work, permits, and licensing.

Such requirements would wipe out almost all New York (except Rochester, Binghamton and the Southern Tier around Ithaca — all completely bypassed by Verizon FiOS) and New Jersey as possible candidates. California outside of Mountain View would also seem untenable because of government regulations, sprawling cities, and private utilities. Florida and Georgia have two major private power companies to contend with as well. But there are opportunities in Texas, the Carolinas, Minnesota, Washington, Arizona, Colorado, Tennessee, Massachusetts, and across several midwestern states, especially those served by AT&T’s inferior U-verse system.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KXAN Austin Google Fiber Expected in Austin 4-5-13.mp4[/flv]

KXAN in Austin spent almost seven minutes of its weekend evening newscast talking about forthcoming Google Fiber in Austin.  (7 minutes)