Tag Archives: comcast

Led by AT&T meltdown, big U.S. pay TV companies take a dive in second quarter

by Steve Blum • , , , ,

AT&T’s video businesses bled out in the second quarter of 2019, losing nearly a million net subscribers. Its two old school linear platforms, the DirecTv satellite service and the DSL-based Uverse service, hemorrhaged 778,000 subscribers while its DirecTv Now streaming platform took a 168,000 subscriber hit.

Actually, it’s the DirecTv Then platform – its new name, announced yesterday, is AT&T TV Now.

It’s a similar, if less gruesome, story for the other three major U.S. pay TV companies. DISH, which is positioning itself for a run at the mobile telecoms sector, lost 79,000 satellite subscribers but picked up 48,000 Sling streaming customers, for a net loss of 31,000 monthly accounts. That’s better than expected – analysts had predicted a net loss of 252,000 subs – and better than the two big cable companies.

Comcast lost 224,000 video subs, and Charter Communications had a net loss of 141,000, with residential cancellation offset a bit by a gain in business accounts.

All up, the major legacy pay TV companies lost 1.3 million subscribers between April and June of 2019. The second quarter of the year is traditionally a tough time for the subscription video business, as people take advantage of summer to move from one home to another, or to just take off and shut down utilities for a few weeks.

Even so, this year’s second quarter losses are “freaking ugly”, as one Wall Street analyst put it.

It was especially ugly for AT&T, though. It lost more than twice as many subscribers as the other three combined. It comes during a period when AT&T is trying to enter the video and motion picture business in a big way, with its acquisition of HBO, the Warner Bros. studios and the Turner networks. So far, it’s misplaying its hand. Grafting businesses driven by artistic and marketing creativity onto a monopoly model telco is a losing proposition.

It’s going to take more than an uninspired rebranding to make AT&T pretty again.

Comcast guilty of slamming, has “technological and monopolistic” power over customers, judge rules

by Steve Blum • ,

A $3.6 billion case against Comcast was whittled down to a $9.1 million fine plus refunds to affected customers (with 12% interest) by a Seattle judge in a lawsuit brought by the Washington attorney general. Initially, the consumer action accused Comcast of deceiving customers when it sold them service plans that covered “inside wiring”, but excluded wiring that’s inside of walls. Additional allegations relating to way Comcast sells service plans were added later.

King County Superior Court Judge Timothy Bradshaw ruled that the “inside of walls” exception wasn’t deceptive or unfair, but Comcast’s sales tactics were both. More than a third of the time, when a technician or call center rep signed a customer up for a free month’s worth of a service plan, the fact that it would automatically continue at a monthly cost of $5 wasn’t mentioned. He called that “slamming”…

Enrolling customers in the [service protection plan (SPP)] without disclosing recurring monthly fees has the capacity to deceive a substantial portion of the population and is an unfair or deceptive act or practice under [Washington’s Consumer Protection Act].

One month “free” offers were automatically rolled to retail rate in month 2. Such would not be a reasonable consumers net impression.

In addition, each time Comcast charged an unsuspecting consumer for the SPP after failing to disclose the fees at the time of subscription it committed an additional unfair/deceptive act. Customers subscribed without fee disclosures would have no reason to scrutinize their bills for SPP charges and the law does not so burden the consumer.

In June 2013 Comcast decided not to send welcome letters or emails to [Washington] subscribers after it was stated in an internal email that “if we welcome SPP Subs via email, we are essentially reminding them they have this plan and then they may want to cancel it”.

Auto-charging after the first month in this circumstance was “just not right”…

Enrolling customers in the SPP — a paid product for which Comcast charged a recurring, monthly fee — without obtaining affirmative consent has the capacity to deceive a substantial portion of the population and is a deceptive act or practice.

Bradshaw said fining Comcast is appropriate because “the power imbalance, technological and monopolistic when dealing with cable/internet needs, potentially rendered the cable/internet customer here more vulnerable”, but scaled back the attorney general’s proposed penalty because of “a nucleus of company good faith”.

AT&T, Comcast blamed for stonewalling burnt out Paradise residents, as CPUC approves broadband grant pilot

by Steve Blum • , , , ,

California wildfire ruins

The California Public Utilities Commission decided to be more generous with broadband construction subsidies for low income home owners and tenants yesterday, but also took aim at AT&T, Comcast and other big telecoms companies that refuse to take advantage of state broadband subsidies or cooperate with communities that need service. Commissioners voted to raise the proposed limit of $5,300 on line extension program grants to $9,300 per household, as they unanimously approved implementation plans for the $5 million pilot project, paid for by the California Advanced Services Fund (CASF).

Commissioner Martha Guzman Aceves, who is in charge of the overall CASF program re-write, criticised the major players for not using it to upgrade infrastructure in communities that lack adequate broadband service. One example, she said, is the town of Paradise, which was largely destroyed by a deadly wildfire last year and which she recently visited…

One of the main areas they wanted to raise with us was the telecommunications needs in the town, and they expressed a lot of the difficulty with the lack of communication during the response and warning time. But also now, in trying to get real, concrete commitments from both AT&T and Comcast in what the rebuild looks like. There was concern that, given that even prior to the fires not all the community was served, that after the fires there’s nothing really requiring them, for all the community to be served, still. And certainly nothing requiring the type of infrastructure and technology upgrades that all Californians need today. So I did want to highlight and invite AT&T and Comcast to utilise the underutilised CASF grant program for these types of infrastructure needs, including the line extension program that we just approved today, and encourage them to take this state subsidy to really build out, not just in the community of Paradise, but in many of the communities that find themselves in a similar situation.

That’s the big question yet to be answered: will those big, incumbent ISPs will participate and build out facilities to unserved, low income homes? The line extension program was originally proposed by Comcast, as a way of laundering state grant money through residents so it wouldn’t have to answer directly to the CPUC, which is anathema to cable companies. The ball is now in their court.

The other substantive change to the first draft, which was published last month, include boosting the percentage of costs covered by the grants from 95% to 100% of construction budgets – the remaining 5% would have been paid by Internet service providers who ultimately received the money. AT&T didn’t like the idea of paying anything, and none of the Internet service providers who commented – which also included Frontier Communications and Comcast’s and Charter Communications’ lobbying front organisation – liked the $5,300 limit. The final, approved version raised it to match the amount allowed for staff-level approval of other broadband infrastructure grants from CASF.

More information and key documents about CASF broadband infrastructure, public housing and other grant programs are here.

Comcast tells CPUC it must say yes to rural cherrypicking because it can’t say no

by Steve Blum • , , , ,

Paicines pole route

Comcast took its best shot at explaining why it should be allowed to jump the queue and start competing against Ponderosa Telephone before the California Public Utilities Commission decides what the future will be for small, rural telephone companies. The answer: because the developer wants us and the Federal Communications Commission says we can.

The dispute centers on Tesoro Viejo, an upscale master planned community under construction in the foothills of Madera County. Comcast claims the developers offered Tesoro Viejo as a cherry ripe for picking, and it wants to oblige them. There’s nothing preventing Comcast from providing video and broadband service, but if it wants to bundle in telephone service and offer the full triple play, it needs the CPUC’s permission.

That’s because Ponderosa Telephone serves the foothills of Madera and Fresno counties, as well as more remote communities further up in the Sierra Nevada. It’s one of ten small, highly subsidised telephone companies that serve deeply rural areas of California, the edges of which are now right in the path of exurban development. The CPUC protects those rural telcos from competition in an effort to minimise the amount of taxpayer dollars it takes to keep them afloat.

That policy is under review, but Comcast doesn’t want to wait. Ponderosa, on the other hand, doesn’t want to be nibbled to death. It argues that top level policy has to be decided first “because competition raises public policy questions with a collective impact on stakeholders throughout the state”.

It’s a tough question. Comcast is an unlikely champion. It moves quickly to kill potential competition whenever its territory is threatened. But regardless of how disingenuous it’s being, Comcast is correct in saying that more choice brings greater benefits to consumers. Once its process is complete, the CPUC might trim, or even eliminate, the privileges that rural telcos enjoy.

Might.

That’s a decision that needs to be taken deliberately and with the full consequences for all – rural residents, exurban immigrants, California taxpayers – in mind. Doing it reactively in response to rich targets of opportunity is a disservice to everyone.

Collected documents regarding Comcast’s expansion into Ponderosa’s territory are here.

Comcast has to explain why it’s okay to start cherry picking rich, rural customers right now

by Steve Blum • , , , ,

Tesoro viejo youtube

The California Public Utilities Commission won’t jump the gun and give Comcast permission to compete directly with the Ponderosa Telephone Company. At least not yet. Comcast has to first explain why past CPUC decisions don’t apply to its request for permission to offer telephone service in Tesoro Viejo, an upscale master planned community of 5,200 homes in Madera County. Among other things, those rules protect highly subsidised rural telephone companies from competitors that want to cherry pick affluent customers in densely populated exurban developments, and ignore people in poorer and more sparsely populated communities.

The CPUC has been thinking about changing those rules for the past twelve years, with no decision yet on the horizon. It’s the normal course of business for the commission, which considers these kinds of issues in excruciating detail via an adversarial process that includes anyone with an interest in the outcome. It doesn’t happen quickly.

In a ruling last week, commissioner Liane Randolph rejected Comcast’s request for an immediate exception to current policy, saying that questions about why those rules do or don’t apply have to be answered first. That means considering a study of rural broadband and telephone competition completed last year, and a 2014 CPUC decision that concluded that companies like Comcast…

…may tend to serve only small portions of any of the [rural telco] service areas with high quality, high reliable voice service and…may be likely to “cherry pick” business customers rather than serve significant portions of rural service territories, particularly customers whose cost to serve is high.

That’s exactly what Comcast proposes to do in Madera County. It’s been clear that its ambitions are limited to the newly built homes, and that it does not plan to offer service to homes and businesses in the surrounding area. Ponderosa’s service territory includes traditional foothill ranch lands and remote Sierra Nevada towns, as well as new and wealthier exurbs.

Comcast and Ponderosa have two weeks to answer Randolph’s questions.

Collected documents regarding Comcast’s expansion into Ponderosa’s territory are here.

Comcast protests we’re not cherrypicking, it’s our cherry that’s been picked

by Steve Blum • , , , ,

Comcast tried to paint itself as a champion consumer choice, as its lawyers clashed with those representing Ponderosa Telephone at the California Public Utilities Commission last week. The question is whether Comcast should be allowed to compete as a telephone company against Ponderosa, which is a small, heavily subsidised rural telco. But the core issue is whether allowing wireline telephone competitors to target high revenue potential customers in rural telco service areas will lead to even greater taxpayer subsidies for less affluent and less densely populated communities that companies like Ponderosa are required to serve.

In this case, the wrangling is mostly about Tesoro Viejo, a new, upscale master planned community of 5,200 homes in Madera County, although Comcast also hinted that other areas that are lucrative enough to meet its return on investment model will likewise be targeted. Ponderosa wants Comcast’s application for permission to enter its market to be iced until the CPUC makes a cosmic decision as to whether the dozen or so rural telcos remaining in California will face such competition. The commission’s concern is that competitors will cherrypick customers on the high side of the digital divide and leave the rest even worse off than before.

In a completely disingenuous argument – and that’s the kindest way to characterise it – Zeb Zankel, a lawyer representing Comcast, tried to make the administrative law judge hearing the case to believe that corporate strategy has nothing to do with it

We didn’t reach out. We didn’t pick. Comcast did not pick. We were picked. And we were picked presumably because Comcast has service offerings that presumably Tesoro Viejo just sought its service offerings in addition to Ponderosa, as it should. Consumers should have choice. So I think this repeated allegation of cherry picking is simply untrue.

What Zankel, um, neglected to mention was that redlined communities routinely reach out to Comcast and other cable companies for service, and are just as routinely turned down. Unless the potential customers can afford a sufficiently hefty monthly bill and they are densely packed enough to keep the cost of delivering service low.

If what Zankel said is true, then Comcast would be jumping on the chance to extend service throughout southern Madera County. But it’s not. It wants to serve Tesoro Viejo, with the income levels and household density of a suburb, and ignore the surrounding rural residents.

That’s cherrypicking.

Collected documents regarding Comcast’s expansion into Ponderosa’s territory are here.

Comcast reveals plan to pick a juicy cherry in Madera County

by Steve Blum • , , , ,

Tesoro viejo

Comcast wants permission to offer phone service to a new Madera County development in Ponderosa Telephone’s territory. In a required public disclosure of a private meeting between a California Public Utilities Commission staffer and a lobbyist and a lawyer for Comcast, the company revealed that it is targeting Tesoro Viejo, a master planned community of 5,200 upscale homes on two and a half square miles of rural land in southern Madera County.

According to the filing, Comcast says that if it offers phone service in the development, it would create “additional consumer choice” but “would have limited effect on Ponderosa and its draw on [a rural telco subsidy] fund”. As a matter of general policy, the CPUC doesn’t authorise competitive phone service in areas where small, heavily subsidised rural telcos, like Ponderosa, operate. That policy is under review, but Comcast doesn’t want to wait, presumably because it’s already put out a press release saying it will provide…

A wide range of innovative and advanced technology solutions, including high speed broadband, WiFi, video entertainment and “smart home/smart business” security/automation offerings, to homes, businesses and public spaces throughout the new Tesoro Viejo master-planned community.

Telephone service isn’t specifically mentioned – it would make for an awkward conversation at the CPUC – but the press release’s boilerplate includes phone service in the list of Comcast’s otherwise unregulated offerings.

Ponderosa wants to block Comcast, arguing that the CPUC already has concerns about competing telephone service leading to higher subsidy costs in rural areas, and if Comcast is allowed to pursue its plan, “the cherry-picking problem will be exacerbated”.

Comcast’s claim of a “limited effect” on CPUC subsidy requirements is disingenuous. The effect will be limited to the relatively affluent and densely packed customers in the development, who would otherwise be paying Ponderosa for phone and, perhaps, broadband, service. The CPUC will still have to help keep Ponderosa afloat so that its less well off and more scattered rural customers can continue to be served. Less revenue from the most profitable customers means more subsidies than would otherwise be required.

On the other hand, Comcast is correct when it says that allowing it to compete with Ponderosa will lead to greater consumer choice. At least for consumers who 1. have sufficient income to meet its revenue targets, and 2. are close enough together to minimise its cost and maximise its profit.

The CPUC has a hard decision to make: limit consumer choice and the need for taxpayer subsidies for all, or pick up the increased tab for rural residents while their new, more affluent neighbors reap the benefits of an open market. It’s a question that should be deliberatively answered at a top policy level, and not ad hoc in response to a company’s target of opportunity.

Collected documents regarding Comcast’s expansion into Ponderosa’s territory are here.

Comcast seeks CPUC blessing to compete with rural telco, but only for not so rural customers

by Steve Blum • , , , ,

Sierra 625

Comcast says it’s striking a blow for telecoms competition, Ponderosa Telephone says no, it’s cherrypicking business customers at the expense of rural residents. At issue is Comcast’s request to expand the area in which it’s authorised to offer telephone service to include the service territory of Ponderosa Telephone Company, a small, incumbent local exchange carrier (ILEC) that serves parts of Fresno, Madera and San Bernardino counties. Presumably, Comcast is eyeing Fresno and/or Madera counties, where both it and Ponderosa operate.

Historically the California Public Utilities Commission, which regulates telco operating authority, has protected small, rural phone companies from competition. That’s not because of sentimental attachment. Those small telcos serve communities that aren’t sufficiently lucrative markets to attract big incumbents like AT&T and, consequently, are heavily subsidised. As Ponderosa points out in its protest, the CPUC previously concluded that allowing competitors to pick and chose their customers in rural communities would “result in the small ILECs losing revenue and needing to seek a larger draw from the [telephone subsidy] program”.

With no apparent sense of irony, Comcast claims to be fighting for a competitive telecoms market, reminding the commission that it has “found that the presence of competition in local telecommunications markets leads to efficient pricing, improved service quality, expanded product and service capabilities, greater reliability, and increased consumer choice”. But Comcast’s application also says that it won’t expand its footprint and will only increase service in areas where it presently offers video service – areas that are densely populated enough to support its urban/suburban business model. This isn’t about upgrading service or infrastructure in truly rural communities.

Comcast is correct about the benefits of competition, despite going to great expense to avoid facing it elsewhere. But Ponderosa’s point is also true. The more it relies on revenue from remote and economically deprived communities, the more taxpayer subsidies it will need to continue to serve them.

The dispute is formally about voice telephone service, but it involves broadband policy too. Both Comcast and Ponderosa are retail Internet service providers, who rely on privileges granted by state law – either as telephone or video companies – to build wireline infrastructure in the public right of way and access wholesale services. Changing those privileges and protections will also change the economics, and consequently the availability, of broadband service in Ponderosa’s territory.

Do you limit the choices available to homes and businesses in places where revenue runs thicker in order to reduce the subsidies needed to maintain baseline service in more sparsely populated communities? Or do you maintain the status quo – in service as well as public support – for all?

That’s the choice the CPUC has to make, and it comes as no surprise. The commission is in the process of reexamining its telecoms competition policy in rural areas, as both Comcast and Ponderosa point out. Ponderosa argues, correctly, that this is a major policy decision and shouldn’t be made by default in a narrow, administrative proceeding. Near term, the CPUC should reject Comcast’s application, but long term, it has a difficult problem to solve.

Collected documents regarding Comcast’s expansion into Ponderosa’s territory are here.

Comcast continues aggressive bill at will tactics against customers, Minnesota attorney general says

by Steve Blum • ,

Comcast deceived thousands of customers in Minnesota, according to a complaint filed last month by the state’s attorney general’s office. It’s a familiar story: customers are lured in by impossibly low prices that aren’t honored, and by additional fees for services that customers didn’t order and that no one thought to mention.

According to a story in the Minneapolis Star Tribune by Torey Van Oot, a major problem is that Comcast’s phone representatives – who don’t have a sterling reputation to begin with – can’t be trusted…

The complaint outlines practices and communications that state prosecutors say put Comcast afoul of Minnesota’s consumer protection laws against deception and fraud. Those actions include quoting a fixed price and then charging another, much higher rate and signing consumers up for new services or products without their permission.

Those hikes often come in the form of added fees that [then-attorney general Lori Swanson] said can boost a customer’s quoted package price by upward of 30 percent…

Barbara Laporte saw her bill jump from $107 to $143 a month between 2016 and 2018, even though she thought she was signing up for a fixed two-year rate. During one 2016 customer service call released by Swanson’s office, a representative repeatedly assures Laporte that she will receive the lower price of $107.38, even “after taxes and equipment.”

Comcast’s response was typical. Instead of addressing the corporate practices and policy at the root of the problem, the company issued a general denial and oiled squeaky wheels by addressing a few of the individual complaints.

Since the lawsuit was filed, Swanson was replaced as attorney general by former congressman Keith Ellison. All mention of the case, including the original press release, has disappeared from the attorney general office’s website. Presumably, the case will be pursued, despite the changing of the guard, but that’s yet to be confirmed.

Consumers say they’re paying too much for poor Internet service

by Steve Blum • , , ,

Big Internet service providers hit all time low in customer satisfaction ratings, according to the latest American Customer Satisfaction Index (ACSI) telecommunications company rankings. The survey ranks telecoms companies and service offerings on a 100-point scale. ISPs dropped from an overall industry average of 64 out of 100 in 2017 to 62 this year, and overall the broadband industry is making people very unhappy.

According to ACSI, it’s a case of the bad just getting worse…

Internet service providers (ISPs) are down 3.1% to 62—an all-time low for the industry that along with subscription TV already had the poorest customer satisfaction among all industries tracked by the ACSI.

Customers are unhappy with the high price of poor service, but many households have limited alternatives as more than half of all Americans have only one choice for high speed broadband. Every major ISP deteriorates this year except for Comcast’s Xfinity, which is unchanged.

Verizon’s FiOS fiber to the home service is still top rated with a score of 70, and AT&T wasn’t far behind with 68. Charter Communications and Comcast are below the industry already dismal customer satisfaction average – both scored 60. Suddenlink wasn’t much better at 61, both it and Charter saw a year over year decrease of 5 points.

Frontier Communications and Cox Communications bring up the rear among major California ISPs, with customer satisfaction ratings of 54 and 59, respectively.

As a group, small ISPs did better than average, but still not great, getting a combined score of 63.

On specific aspects of service, call centers are the biggest pain point for consumers, getting a 59 out of 100 rating, while bricks and mortar store staff are well regarding, topping the benchmarks at 76. But all customer experience ratings are down from last year’s…

Internet service is less reliable (69), more prone to outages (68), and performance during peak hours is worse (68). Video streaming quality is unchanged (68), but overall data transfer speed is lagging compared with a year ago (–3% to 67), as is the quality of email, storage, and security (–3% to 69).

The rankings are based on an email survey conducted this past March and April. More than 45,000 customers responded.