Tuesday, December 29, 2015
Leave to Comcast management to convert a cost of doing business into a profit center. Cable television operators have to negotiate “retransmission fees” with local broadcasters who do not elect the option of compulsory, “must carriage.” These fees have risen significantly (but not 65% in one year) largely resulting from increased costs to broadcast networks for “must see” content such as NFL football.
Comcast could treat retransmission fees as a cost of doing business and absorb them, or pass them through as a line item on the bill. The company opted to create a line item, but one having no relationship to actual costs incurred. Comcast uses a standard price for its Broadcast TV Fee meaning that the charge to subscribers has no relationship to the actual cost incurred by the company and the number of stations carried in any specific locality.
In a matter of a two years Comcast has converted a minor, symbolic reminder to subscribers of rising carriage costs, to a major cash cow. Comcast started with $1.50, but now raised the rate by 65% from the $3 to $5.
Very clever Comcast. I’m sure senior management thinks most consumers are too stupid, or lazy to know that retransmission carriage rates have not risen 65% in a year.
The only way to respond to such greed and cavalier attitude is to cut the cord. Broadcast signals cost nothing to receive off air other than your tolerance for advertising. Of course Comcast penalizes cord cutters who still need its broadband service. So called naked broadband costs more than when it’s bundled with a cable television tier. Very clever Comcast.
Capitalism at it best!
Monday, December 28, 2015
After writing over one hundred painstakingly researched and edited journal articles I wonder whether I’ve made a woeful error. These days it seems that righteous indignation, bombast and stretching the truth captures attention, headlines, grant funding, status and gravity. I feel foolish for emphasizing empiricism and full documentation.
Yet again the Wall Street Journal reminds me of what I should be doing: identifying villains and saviors in the telecommunications policy world. Today L. Gordon Crovitz vilifies President Obama, FCC Chairman Wheeler and the FCC. See http://www.wsj.com/articles/the-obamanet-overreach-1451259176. He claims that this triumvirate has so burdened and regulated the Internet that it “now [is] known as Obamanet.”
So using Obama as a prefix provides a not subtle signal that another “curtains for the free world debacle” has occurred. Already there’s an Obamaphone, which Mr. Crovitz and his colleague believe is available for free wireless telephone service, despite the fact that a bilateral consensus has supported universal service funding for dozens of years, and service is limited to low income applicants that can prove they qualify for subsidized (not free) service.
Why does Mr. Crovitz resort to such hype when he could identify real flaws with the FCC’s Open Internet Order? He would rather vilify and convert a rumor into a fact than generate arguments on the merits. Apparently Mr. Crovitz knows the President personally directed Chairman Wheeler and the 2 other Democratic Commissioners to change legal strategies for justifying limited Internet regulation. Of course Mr. Crovitz offers no verifiable evidence. Instead, he implies that it is an absolute given that the President intervened. News flash: the Executive Branch regularly participates in the FCC policy making process and an entire agency within the Department of Commerce (the National Telecommunications and Information Administration) serves as the President’s advocate. Apparently, the President can’t issue statements and create videos favoring a desired policy for the FCC to take. I’ll remember this the next time a Republican President tries to use his Bully Pulpit to influence decision making by an independent regulatory agency.
I cannot help but wonder whether opponents of Messrs. Obama and Wheeler might achieve greater impact if they relied on facts and used inside voices.
Recently Comcast CEO Brian Roberts concluded that subscribers hate his company, because they don’t want to pay for content. http://bgr.com/2015/12/14/comcast-ceo-brian-roberts-interview/. Simple, glib conclusion, but quite wrong.
Subscribers do not mind paying for content if they feel they receive fair value. How many times have you heard someone complain about the cost of Netflix service? People do pay for content and gladly so. Just ask the millions of subscribers to Hulu, SiriusXM, etc.
People don’t like getting ripped off. People don’t like paying for something they don’t want, but can’t seem to avoid like the dozens of cable channels they never watch.
People don’t like getting nickeled and dimed, or inconvenienced. Comcast has done both to me in the last few weeks. First a company technician refused to repair a set top box claiming my service tier did not qualify for access to one. The technician seemed not to know that even lowly basic tier subscribers are entitled to a “free” set top box now needed even for viewing certain basic tier channels.
After repeated calls and a second day waiting for a technician, the company issued a $20 credit, but of course there’s a catch. I had to pay the full billed amount after which a credit would accrue in a subsequent bill. So the company issues a credit only after receiving an overpayment. Clever; too clever.
To compound the confusion, Comcast or the U.S. Postal Service managed not to get a bill delivered. Of course Comcast never informed me of an overdue payment, by email. Instead they issued a $9.50 late payment fee and implied dark and negative consequences should they have to refer my debt to a collection agency.
Mr. Roberts just about everyone hates your company, because of its obsession with squeezing every last dime it possibly can, regardless of the value proposition. What else could explain the creation of a new line item called Broadcast TV Fee for local carriage, already paid for in the basic tier charge? What else could explain the 65% increase in that fee summarily announced in the bill I never received?