Tag Archives: comcast

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.

As TV subs cancel, monopoly control of broadband pipes is Comcast’s best hope to grow business

by Steve Blum • , ,

As TV subs cancel, monopoly control of broadband pipes is Comcast's best hope to grow business

Comcast offered the perfect example last week of why big, monopoly broadband companies hate the idea of network neutrality, and are stuffing politician's pockets with cash arguing so eloquently against it.

Comcast's traditional cable television business is bleeding subscribers and revenue at an increasing pace, but its broadband business is booming. The company reported its second quarter 2018 financial results last week. It gained 260,000 broadband subs, but lost 140,000 video customers, which led to a 1.9% decrease in video revenue. Losing video subs is nothing new, but declining revenue is. It's the first time that's happened, according to a story by Ben Munson in FierceVideo.

The reason is Netflix and its over the top kin, according to Comcast CEO Brian Roberts, who spoke on a conference call with analysts

Continuing competition from virtual contributed to our 140,000 video customer net losses in the second quarter. We remain focused on segments that we can serve profitably as part of a broader relationship with the customer centered on a whole home experience.

One way of creating that “broader relationship” with a “whole home experience” is to manipulate customers' Internet traffic so the video content Comcast sells comes first and the bandwidth used to carry it is cheaper.

That's what paid prioritisation is all about. There are different ways to game it and Comcast lobbyists have tied themselves up in semantic knots trying to redefine paid prioritisation so that Comcast can claim to be against it while building fast lanes for itself. But it comes down to the same thing: use monopoly control of Internet service to make, say, Netflix's video streams slower and more expensive for consumers than Comcast's.

The potential, and the reality, of that kind of abuse of market power is the reason that the concept of non-discriminatory access and open pricing for critical infrastructure came in being – the common carrier principle. It's as applicable to broadband today as it was to ferries four hundred years ago.

Cable, telcos hit rock bottom in consumer satisfaction rankings

by Steve Blum • , , ,

The broadband industry is pissing off its customers. According to the latest American Customer Satisfaction Index (ACSI) telecommunications company rankings, the consumer businesses at the very bottom of the list are subscription television service (a rating of 62 out of 100), Internet service (also 62), video-on-demand service (68) and fixed line telephone service (70).

In other words, the misery caused by your local telco is only exceeded by the pain inflicted by your cable company. Both do a worse job of keeping you happy than the U.S. post office, airlines and health insurance companies (but not by much – they’re tied with social media platforms for fifth worst with a score of 73).

Mobile phone service isn’t much better. It rates a 74. Just above it at 75 are video streaming services and both investor-owned and municipal utilities.

Over-the-top (OTT) video providers like Netflix offer consumers better and friendlier service than cable and telcos, with devastating effect according to ACSI…

OTT operators have raised the bar by providing greater personalization, lower prices, more mobility—and much better customer service. As a result, cable and satellite television customers think they are paying higher prices for lesser value and receiving poor service to boot.

The effect is widespread. The entire sector faces repercussions as many of the same large companies offer service for internet, television, and voice via bundling. Subscription television and internet service providers rank last among all industries tracked by the ACSI. The implication is clear: moving in on the video streaming market won’t be enough to keep TV subscribers unless customer satisfaction improves as well.

Consumer electronics companies do the best, topping the list at 85 out of 100. Of course, there’s nothing like a cold drink to go along with a binge watching session, so breweries and soft drink makers are in second place with an 84. Online retailers and credit unions round out the top five with a score of 82.

Cable’s broadband monopoly profile sharpens with 2017 results

by Steve Blum • , , , ,

Share of U.S. broadband households, as of 31 December 2017. Source: Leichtman Research Group.

Comcast and Charter own half of U.S. residential broadband subscribers, and their share of the market – if you want to call it that – is growing. That’s one of the conclusions gleaned from a tabulation of year-end 2017 financial reports by Leichtman Research Group. As with a similar count by FierceTelecom, the numbers show telcos continue to bleed subscribers profusely, while cable – and the overall broadband universe – keep on growing.

Leichtman’s report was published before Wow cable released its final 2017 financial results, so I added those into the totals. Over the course of 2017, the top cable companies added 2.7 million broadband subscribers, while the top telcos lost 626,000 subs. Big cable’s share of the, um, market was up a point to 61%, while the largest telcos lost a point, dropping to 34%.

Overall, the race for broadband customers is down to a two and a half horses. Comcast has 26% and Charter is behind by a nose at 24%. Their combined 50% share (after rounding) is up from 48% at the end of 2016.

AT&T was the only other broadband provider to hit double digits, with 16% of U.S. broadband households. It was also the only big telco to show growth in broadband customers – fiber-to-the-home gains offset DSL loses, producing a net increase of 114,000 subs. Cincinnati Bell, a much smaller fry, was also in the black, adding 5,500 subs. All the other big telcos – Verizon, Frontier, Windstream and FairPoint – ended 2017 with fewer broadband customers than they started it with.

The top providers – seven cable companies and seven telcos – account for 95% of U.S. broadband households, according to Leichtman. Since it’s a choice between one cable and one telephone company, at most, for any given home, it’s technically a duopoly. But one with a junior partner who is on the ropes. Factor in cable’s overwhelming superiority in the 25 Mbps down/3 Mbps up and better category – the minimum federal standard for modern broadband service – and it looks more and more like a one player game.

If it prices like a monopoly, slams and crams like a monopoly and shows a monopoly’s lack of respect to its customers, then it’s a monopoly.

Reporters ripped for muni broadband stories. Is Comcast behind it?

by Steve Blum • , , ,

A “visiting scholar” at the American Enterprise Institute (and a member of Donald Trump’s “landing team” at the Federal Communications Commission) has taken to trash talking writers and publications that reported on a recent municipal broadband study (I haven’t yet – it’s on my to do list). The resemblance to a Comcast-sponsored astroturfing campaign is noteworthy.

Roslyn Layton joined Jeffrey Eisenach and Mark Jamison as volunteers assigned to help cobble together telecoms policy and overhaul the Obama-era FCC. All three are affiliated with the American Enterprise Institute (AEI), a consulting group – think tank in Beltway speak – that serves right-of-center and industry interests.

Writing in Forbes, Layton tees off on a study done by Harvard’s Berkman Klein Center for Internet and Society that concluded that muni broadband systems “generally charge less for entry-level broadband service than do competing private providers, and don’t use initial low ‘teaser’ rates that sharply rise months later”. She spends little effort critiquing its merits. Layton’s ire is directed at publications that dared to report on the findings and, in her view, failed to properly excoriate it.

For the editor of one of those publications, Daniel Frankel at FierceCable, the attack brought to mind a 2014 campaign by AEI to discredit network neutrality policy, an effort that was linked to Comcast

At the time, Comcast spokesperson Sena Fitzmaurice conceded to the [Washington Post] that the cable operator “has worked with most of the major think tanks in town who are interested in communications issues," including the Aspen Institute, the Brookings Institution and the American Enterprise Institute. She didn’t go into further detail.

I reached out to Fitzmaurice to see if she could provide any update on Comcast’s relationship with AEI. Is it now working with them on municipal broadband, an issue Comcast has stridently contested in markets including Seattle and Denver? I’m still waiting to hear back.

Layton told Frankel that “Comcast didn’t influence her column” and claimed to have “little to no knowledge” of where AEI gets the money it pays her. But that doesn’t mean that Comcast isn’t still in AEI’s decision making loop.

By their nature, astroturfing campaigns – where a company uses unidentified front organisations to push its agenda – are difficult to unmask. Absent a smoking gun, companies who engage in it don’t offer straightforward answers.

But Frankel is asking the right questions.

I make my living helping communities improve broadband infrastructure and service, including, at times, developing municipal broadband projects. I’m not a disinterested commentator. Take it for what it’s worth.

Will the FCC be as shocked by Comcast’s consumer deception as Washington’s AG?

by Steve Blum • , ,

Comcast is even more dishonest that previously suspected, Washington’s attorney general told a Seattle court earlier this month. Bob Ferguson is suing Comcast over its habit of cramming service contracts, that don’t necessarily offer much service, onto monthly cable bills.

You can read the latest filing here. Ferguson’s office summed it up in a press release

A sample of recorded calls between [service protection plan (SPP)] subscribers and Comcast representatives obtained by the Attorney General’s Office reveal that Comcast may have signed up more than half of all SPP subscribers without their consent. Comcast deceived consumers even when mentioning the SPP, telling them the SPP plan was “free” when they signed up, when in fact, Comcast would automatically charge them every month after the first month.

“This new evidence makes clear that Comcast’s conduct is even more egregious than we first realized,” Ferguson said. “The extent of their deception is shocking, and I will hold them accountable for their treatment of Washington consumers"…

Even when Comcast actually mentioned the SPP on the sales call before signing consumers up for the SPP, Comcast continued to engage in deception. Comcast deceptively failed to disclose the SPP was a monthly recurring charge to 20 percent of the Washingtonians in the sample. Rather, Comcast often told subscribers the SPP was added for “free” to their account.

The core issue is whether a cable company, or any other telecoms service provider, can aggressively up sell customers into vaguely described packages, and then hide behind the fine print on later bills or posted on a website. It’s a particularly important question because full disclosure is the sole, broadband-specific consumer protection allowed by the Federal Communications Commission after its vote to repeal network neutrality and other common carrier rules.

The FCC’s current industry-friendly posture is not reassuring in that regard. It’s hung on to the role of consumer disclosure cop, but its recent track record doesn’t offer much reason to think it will be as tough on broadband providers as some state attorneys general. How those duties will be split between the FCC and state enforcers has yet to be determined.

Comcast, AT&T have the traffic cones ready for Internet slow lanes

by Steve Blum • , , , ,

AT&T and Comcast are offering two good reasons for keeping broadband under the common carrier regulatory umbrella, and not scraping network neutrality rules. Not that they meant to do that. It’s just their nature.

Comcast is backing away from an unconditional promise to abide by net neutrality principles, regardless of whether or not federal rules require it to do so. That pledge was made in 2014, while Comcast was in the middle of an unsuccessful attempt to add cable systems owned by Time Warner and Charter Communications to its portfolio. According to an article in Ars Technica by John Brodkin, Comcast has opened the door to paid prioritisation – selling content companies fast lanes to broadband subscribers, while keeping everyone else in the slow lane…

While the company still says it won’t block or throttle Internet content, it has dropped its promise about not instituting paid prioritization.

Instead, Comcast now vaguely says that it won’t “discriminate against lawful content” or impose “anti-competitive paid prioritization.” The change in wording suggests that Comcast may offer paid fast lanes to websites or other online services, such as video streaming providers, after [the Federal Communications Commission] eliminates the net neutrality rules.

AT&T, on the other hand, announced good news: its online video service, DirecTv Now, just passed the 1 million subscriber mark. It’s good for AT&T, which is fighting to hold on to video customers, and it’s generally good for the industry and consumers. It’s more confirmation that there is a competitive market for over-the-top television, which should result in greater consumer choice.

Should.

If you’re getting broadband service from AT&T, you can freely choose between OTT platforms. But only so long as AT&T follows net neutrality rules. Once those are gone, it will have strong incentives – a million and counting – to shape its network traffic to favor DirecTv Now, while sending everyone else into the slow lane.

The FCC is still on track to vote on Thursday to scrap common carrier status for broadband service and with it, net neutrality rules.

Comcast asks FCC for privilege without responsibility

by Steve Blum • , , , ,

Comcast has joined Verizon in pushing the Federal Communications Commission to override state and local laws that might affect their business. In a required notice filed after a private meeting with FCC chair Ajit Pai’s top staffers, a lawyer for Comcast said they urged the FCC to overturn its 2015 decision to regulate broadband as a common carrier service, and to make sure that state and local governments didn’t try to pick up the slack…

At the meeting, we reiterated Comcast’s support for restoring its prior classification of broadband Internet access service (“BIAS”) as an interstate information service and reversing the 2015 decision to classify BIAS as a [common carrier] telecommunications service…

We also emphasized that the Commission’s order in this proceeding should include a clear, affirmative ruling that expressly confirms the primacy of federal law with respect to BIAS as an interstate information service, and that preempts state and local efforts to regulate BIAS either directly or indirectly.

Comcast and Verizon are worried about state initiatives like California’s assembly bill 375, which would have restored consumer privacy rules scrapped at the national level. It was eventually brought down by an all out attack by telecoms lobbyists who control millions of dollars of payments made to legislators in Sacramento. But the effort will, in all likelihood, be made again next year, and Comcast wants to head it off.

But it’s about more than just a few bills. If – when – the current FCC follows through on its promise to scrap broadband’s common carrier status, Internet service providers, like Comcast, will lose their existing exemption from consumer protection laws at both the state and federal level. Although it’s under challenge in a federal appeals court, that exemption basically puts the FCC in charge of regulating most aspects of common carrier telecoms services. Even the Federal Trade Commission can’t set business rules for common carriers.

Comcast likes the advantages, such as immunity from state and federal consumer laws, that come with a common carrier label. But it doesn’t want the common carrier obligations, such as net neutrality rules or FCC oversight, that follow. It would be reckless if the FCC accommodates them.