Guy Sues Time Warner Cable For Deceptive Acts & False Advertising Over Bogus Promotional Rates, Hidden Fees

from the transparently-non-transparent dept

For many, many years, plenty of people have complained about hidden fees and bogus promotional rates offered by various broadband companies. It appears that Jeremy Zielinski has had enough. He's actually sued Time Warner Cable in NY for "deceptive acts and practices" and "false advertising." Specifically, he signed up for Time Warner Cable at a promotional $34.99/month package, only to discover his first bill was for $94.45. The $34.99 had magically morphed into $39.99 plus a $5.99 "internet modem lease" fee and a $47.99 installation fee -- all of which he insists were never mentioned anywhere in the original offer. The modem lease and install fees are fairly common these days -- and it's ridiculous but they're the kinds of things that people should absolutely clarify before signing up for new internet service. The wrong promotional fee, though, seems really questionable. Zielinski then had a rather typical customer service experience with a big broadband player:

On or about the next day, Plaintiff called the defendant's customer service number to complain about the overbilling. Plaintiff specifically informed TWC that the prices and services billed for were neither advertised, explained, nor agreed to. After waiting on hold for some time, a representative claimed that the $34.99 was a "promotional price" that should not have been on the website anymore and that the "modem lease" fee and installation fee were "standard" and could not be taken off. Inexplicably, the representative nevertheless agreed to remove the $47.99 "Internet, Install fee" from the bill.

A few calls later, TWC promised to lower the price to the advertised $34.99, but did not (of course). After many more complaints, TWC did temporarily lower his bill to $19.99 (plus the "modem lease fee").

Zielinski also notes some other practices that he suggests are unfair or deceptive, such as leasing certain modems that the company insists will not work on its system if you buy them (thus pressuring people into the lease fee):

Another page on TWC's site, taken down at an unknown point in the last few months, contained a list of which modems TWC will "approve" if owned by a consumer and which modems TWC will "lease" to consumers. The list of modems which are compatible with its services is substantially larger than the "approved" list. Many modems which TWC falsely claims "will not work" because they are not on the "approved" list are the very same ones that TWC "leases" to consumers and charges them non-advertised fees for. Exhibit H.

For some modems, the only distinction between whether consumers can use it to receive TWC services is whether TWC or the consumer owns the modem. If the consumer owns it, TWC will not allow the consumer to use it, but if TWC owns it—and can charge the consumer a monthly "modem lease" fee for it—the modem is perfectly acceptable to TWC. There is no legitimate technological reason for this distinction.

Many of the modems which TWC falsely claims "will not work" with its services are substantially cheaper than the ones on the "approved" list. TWC's false statements about which modems are compatible with its services, and its refusal to "approve" consumer-owned modems which are actually compatible with its network, have no legitimate technological justification, and are intended to deter consumers from purchasing compatible modems and to coerce them into paying exorbitant and unnecessary "modem lease" fees.

He also claims that Time Warner Cable sold him a speed upgrade, which was never actually delivered, though the company continued to bill him for it.

Despite TWC's email, Plaintiff observed that his upload and download speeds did not seem to have improved in any noticeable way. He began conducting a series of speed tests and discovered that his upstream and downstream speeds were the same as they were before the upgrade, even though he was now being charged $10 per month more for TWC services.

Plaintiff then contacted TWC customer service using its online chat portal and spoke with several representatives attempting to resolve the problem.

The first representative revealed after checking Plaintiff's account that the modem TWC had previously provided was not compatible with the higher speeds. According to that representative, in order to receive the services advertised, Plaintiff would have to travel at his own expense to the local TWC office and swap out the modem for a newer one.

The second representative proposed the preposterous solution of giving Plaintiff a one-day credit for the services TWC was apparently incapable of providing, then canceling the upgrade and going back to the lower speeds.

When Plaintiff requested to speak to a third representative, that person initially said the first representative was wrong and that the modem was compatible with a "Turbo" Internet access line, then after a speed test showed the same sub-advertised performance it had a few minutes before, changed his mind and said the modem was not compatible.

One interesting note in all of this: early on, Zielinski made the decision to pro-actively opt-out of TWC's mandatory arbitration clause, which most customers just accept, and which would significantly limit the ability of most users to go to court. Here's one of the exhibits in his lawsuit filing: Companies like Time Warner Cable have been able to get away with these sorts of questionable and non-transparent practices for ages. If I had to guess, I'd imagine that this lawsuit won't get very far in court, but it's still interesting to see someone fighting back...

Filed Under: broadband, cable, deceptive practices, false advertising, jeremy zielinski, lawsuit, new york, promotional rates
Companies: time warner cable

AT&T Pouts, Freezes Mostly Bogus 'Fiber To The Press Release' Deployments In Net Neutrality Bluff

from the land-of-broadband-make-believe dept

Oh, AT&T. For a good thirty years the telco has used a halt in "network investment" as a bogeyman to scare government away from any and all consumer protection policies. Do something we don't like, AT&T will usually argue, and we won't invest in the technologies of tomorrow, leaving you all stuck in the stone age and regretting the day you tried to challenge us. Usually said network expansion is a phantom; the company will simply manipulate numbers to actually create artificial broadband gaps, then promise to fill those gaps each and every time they want a regulatory favor.

AT&T has been doing it again lately with the DirecTV deal -- promising to shore up broadband gaps that should have filled years ago (thanks to billions in government subsidies) if it's allowed to gobble up a pay TV competitor. Basically, I've watched for ten years as AT&T just shaves off a few million users from their existing or already-planned network build projections, then pretends these users will be new upgrades -- but only if AT&T gets deregulated, faces fewer price controls, gets some new subsidies, or is allowed to buy BellSouth, DirecTV, or T-Mobile.

This week, "the good time, down home AT&T network investment bogeyman stage show" came to town in the form of a pouting response to the President's clear support for Title II reclassification. AT&T CEO Randall Stephenson has breathlessly proclaimed that the telco is going to freeze fiber expansion because they're concerned about Title II network neutrality protections:

"We can't go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed," CEO Randall Stephenson said..."We think it is prudent to just pause and make sure we have line of sight and understanding as to what those rules would look like," he added."

In other words, do what we want or we'll make sure the United States remains a broadband backwater. The problem? It's a childish, transparent bluff, as AT&T gave up on meaningful fixed-line fiber investment years ago.

Despite a decade of massive, sweeping telecom industry deregulation, AT&T's fixed-line network investment has consistently dropped like a stone as the telco focuses on wireless services, where socking users with overage fees and imposing bizarre new anti-competitive pricing models is far more profitable. In fact, AT&T announced yet another $3 billion fixed-line CAPEX investment cut just last Friday, long before the President announced he wanted to go to war over Title II. As for those "100 cities," AT&T says were getting fiber under the "Gigapower" brand? All AT&T's really doing is cherry picking a few high-end wealthy housing developments where fiber is already in the ground, then dressing up those deployments to make them look much, much larger than they actually are.

It's something I affectionately refer to as fiber to the press release.

When Google Fiber entered the market, pampered, competition-phobic, incumbent ISPs like AT&T, CenturyLink and Frontier began putting on a stage show, proclaiming that they too were joining the 1 Gbps race. Usually these announcements come in the form of a press release with absolutely no meaningful statistics in terms of timeline, coverage areas, or the actual number of users covered. That's again because it's largely bullshit: with a few exceptions, the companies are simply bumping speeds in housing communities where in many cases, fiber was in the ground as part of the building process. You'd be amazed (or perhaps not) just how well this works on the press, helping to craft the image AT&T's keeping pace as a next-generation broadband powerhouse.

But not only is AT&T not significantly upgrading the majority of its users to fiber, they're actively pulling out of vast swaths of the United States under the guise of something they're calling the "IP transition." As I've noted previously, AT&T's going state by state, promising state politicians amazing new levels of network investment -- but only if AT&T is completely deregulated and all consumer protections (like having to continue to offer dial tone to old people so they can call 911) is stripped off the books. In reality, AT&T's looking to sever the connections of tens of millions of DSL users they don't want to upgrade, which will only strengthen the cable monopoly in many markets.

This week, AT&T's once again pretending that if the government doesn't do what the pampered duopolist wants, they'll freeze fiber investments that were already stagnating by choice. It's a bluff that AT&T never stops using because the press, politicians and public seemingly never learn to stop believing it. Of the dozens of technology news outlets covering AT&T's announcement, only a handful could be bothered to mention that AT&T's 100 city promise was incredibly ambiguous and disingenuous to begin with, or the fact that AT&T had cut fixed-line investment projections already just days earlier.

Filed Under: fiber, fiber to the press release, net neutrality, randall stephenson, threats, title ii
Companies: at&t

Tom Wheeler Still Wants To 'Split The Baby'; Forgetting That The Point Of That Story Was Not To Actually Split The Baby

from the slamming-on-the-breaks dept

The Washington Post put up an article last night claiming that FCC boss Tom Wheeler is telling tech companies that he isn't going to follow President Obama's net neutrality plan, following the President's surprise announcement on Monday of his support for real net neutrality rules under Title II. We've heard from a few people who were at that meeting who claim that the Washington Post article isn't entirely accurate. It is true that Wheeler is still very interested in a potential hybrid plan that almost no one likes, but that much of Wheeler's statements at the meeting were actually more focused on delaying an official decision by the FCC, which many had expected to come in a December FCC meeting. Wheeler, it appears, wants more time to study the different options. Another FCC commissioner, Jessica Rosenworcel (who seems more likely to support a plan including Title II reclassification), has apparently been pushing for the FCC to stick to the existing schedule and to make a decision "without delay."

Still, it does appear that Wheeler wants more time to potentially explore the possibility of the hybrid option, or whether or not to really support the President's Title II plan. According to the Washington Post, he made this rather unfortunate analogy:

“What you want is what everyone wants: an open Internet that doesn’t affect your business,” a visibly frustrated Wheeler said at the meeting, according to four people who attended. “What I’ve got to figure out is how to split the baby.”

Except, first of all, no, he doesn't need to "split the baby." The whole point of the split the baby story is not about compromising and going down the middle, but about how such a plan for a compromise is actually a decoy to get parties to reveal their true positions, leading to the final result, which does not involve such a compromise. Perhaps Wheeler thinks he's playing the long game here, and his apparent attraction to the hybrid plan is something of a similar decoy, but it's not at all clear right now.

Meanwhile, the White House is making lots of noise about how the President is really serious in supporting Title II and "itching for a fight" if Congress tries to challenge such net neutrality rules:

Ultimately, the White House decided that telecom companies probably would challenge any strong FCC rules in court anyway, so why not fully support calls by the tech lobby for far-reaching rules protecting an open Internet?

The aides saw a political upside to a strong statement. A key contingent of the president’s base — young, tech-savvy progressives — would be energized by the action, and a strong statement on net neutrality could also help his relationship with congressional Democrats, according to government and industry officials.

Obama also saw a more immediate opportunity to retake the political high ground from Republicans, according to a Democratic congressional aide. Should GOP lawmakers vote to overturn any protections enacted by the FCC, a presidential veto would put Obama on the side of millions of consumers who have called on the FCC to adopt strong regulations.

“I see him almost salivating over a congressional fight, or a fight with the carriers, over this issue,” said the aide, who spoke on the condition of anonymity because he is not authorized to talk on the record. “This is a populist issue he thinks he can win on.”

If true, that's a good sign, but unfortunately, we've grown accustomed to promises to take on issues like this, not followed up by any actual actions. But hopefully the message is being made clearly to Wheeler at this point that there is political backing if he decides to take the most reasonable step and support reclassification.

Filed Under: broadband, fcc, hybrid, net neutrality, open internet, split the baby, title ii, tom wheeler

The Cable Industry Thinks Mindlessly Raising Rates Is A Good Idea In The Face Of Fleeing Subscribers

from the that'll-work dept

While cord cutting has been a small but important phenomenon for some time now, there are indications that the trend may be poised to accelerate in 2015 when a bevy of new live Internet video streaming options from HBO, Showtime, Sony, Dish and Verizon emerge. Cord cutting continued at a slow drip last quarter, with traditional pay TV operators losing a net 179,000 customers. Satellite companies Dish and DirecTV, which used to be immune to these defections, are no longer so; DirecTV lost 28,000 customers last quarter -- the first time they lost customers during Q3 in the history of the company.

Even industry analysts, who historically have ridiculed cord cutting as a hallucinated phenomenon reserved only for poor nobodies, have changed their tune. With the cord cutting trend clearly established and cable customers getting annoyed by often bi-annual rate hikes, how are many cable companies responding? Why, the one-two punch of denial and raising rates, of course!

New York's Cablevision is a prime example. At one time a cutting edge company that offered some of the fastest speeds at the best prices in the industry, over the last few years the company has resorted to winking and nodding at regional competitor Verizon every time it's time to raise rates on TV and broadband services. Company chief James Dolan recently declared that offering promotional rates and trying to compete on price was a "dead end" for the company, and as a result, a recent SNL Kagan study showed how Cablevision customers paid some of the highest prices for cable anywhere.

The result? Cablevision lost 56,000 video, 23,000 broadband and 33,000 Internet voice subscribers last quarter, but saw a 3.7% jump in net revenue. So stock jocks are temporarily happy, but that's not really a sustainable way to function long term -- unless of course your long-term goal is to sell your company to Comcast. James Dolan told analysts last last week he sees the cord cutting trend but isn't really worried about it:

"I don't know that it's necessarily disruptive to us yet as a multichannel provider, but we're keeping our eye on it. Ultimately, cord-cutting and going to over-the-top is something that we do believe is going to happen, and we're preparing ourselves for it. But I think that's all I can say about it at the moment."

Why aren't cable execs like Dolan worried about Internet video disruption? Because they know that because they see even less competition on the broadband side than they do on the TV side, they can continue raising rates there (inevitably in the form of technically unnecessary usage caps) relentlessly for the foreseeable future. In other words, cable companies are going to ride the pay TV cash cow right into the ground (while providing some of the worst customer support in any industry), then when Internet video takes off, shift their focus to new and creative ways to jack up prices thanks to the lack of competition in the field.

Filed Under: arpu, cable, cord cutting, increasing rates, rates
Companies: cablevision