Wednesday, December 28, 2005

What's Your Privacy Worth

Recently, I wrote about Comcast's privacy policies and mentioned that, as a cable franchise, they have a requirement (weak though it may be) for their privacy policy to meet certain standards. While reading the legal notices in the newspaper (you know, those articles printed in 7 point type stuffed in as filler in random places around the paper), I came across this one:
If you were a Time Warner Cable subscriber any time between January, 1994 and December, 1998, you may be eligible for free cable services from a class action settlement ....
Ohhhh, Free Cable!

The class action is over Time Warner selling personal information of their subscribers without their permission or knowledge. I guess that was before the cable companies figured out they could tell customers in such a way that they'd still be oblivious to it - with legalese so impenetrable that no one could possibly be sure what it meant - assuming they were still awake after the first three sentences.

I'll cut to the chase. The terms of the proposed settlement are as follows: one free month of cable service. Yep. That's it. In return for giving away your private data, you get a month of cable service! How fair is that?

And it's worth even less than it sounds at first. Because if you're a TW subscriber, it's not your entire bill but rather an extra channel or service that you don't already get, such as HDTV. In other words, you get to choose something that you probably don't want because if you did, you'd already have bought it! Alternatively, you can choose two Movies On Demand. Ok, let's be generous and estimate this is worth $15 total. (And costs the company zip.)

And if you're a former subscriber, the terms are equally meager: Yes, you get a free month of cable service but, of course, the only package you can get without paying extra is basic cable which is typically only a dozen or so channels. No, you're not going to even get the entire analog line-up of 100 or so channels because technically, that's two packages: basic plus expanded basic. (Remember, you can't get expanded basic without paying for basic.) But it's a moot point because any "former" subscribers are probably former because they either 1) live out of the TW area (in which case they can't get the service) or 2) are getting what they want from alternate TV providers (i.e., satellite) and aren't about to switch back for a month.

One more possibility: Former customers can also donate their settlement to someone else. Right. As if you're going to call some old neighbors and take 20 minutes of their time to try to explain to them what this pathetic little turd is that you're bequeathing them with IF they jump through the appropriate hoops not to mention even want it in the first place.

And that's what your privacy is worth.

By the way, there is one party sure to be happy with the settlement. The settlement includes a $5,000,000 payment to the law firms responsible for the settlement proposal. I guess your privacy is worth something after all.

Thursday, December 22, 2005

Comcast's New Residential Phone Service

Starting last week, Comcast began rolling out phone service (called "Digital Voice") in parts of Maryland and Virginia. The Comcast press release specifically says Montgomery County residents can get service (although when I visited the website to try to sign up, it told me I was ineligible).

Why would you want to switch your phone service from Verizon to Comcast? Or from a Voice-over-IP (VoIP) provider to Comcast?

I suppose it would help if you hate The Phone Company. There is a long tradition of hating The Phone Company (ok, I'll stop calling it that), the model of a large faceless uncaring corporation that you have to pay every month like it or not. If you're old enough, you probably remember how it gradually became worse and worse to deal with Verizon or perhaps Bell Atlantic or even AT&T or whatever it was called as it merged and morphed over time. Unions, deregulation, reregulation, mergers, and competition from cell phones, VoIP, etc., have provided plenty of excuses for the difficulties that Verizon has gone through.

More recently, the failure to deliver any kind of a competititve broadband solution to most of Montgomery County has allowed Comcast to eat Verizon's internet lunch. And now VoIP is eroding Verizon's traditional telephony business.

Verizon is attempting to reinvent itself with fiber-to-the-home but they have to earn their customers all over again. I still remember the ever-rising costs, absurd extra charge for touch tone dialing, for caller ID, and the inability to reach Verizon outside of "normal business hours."

The question is whether Comcast provides a meaningful alternative. And Comcast not only has to compete with Verizon but with the many VoIP providers.

Surprisingly, Comcast's price for telephone service ($39.95 when bundled with TV service) is exactly the same as traditional phone service from Verizon's "Freedom Essentials" plan which includes unlimited nationwide calling and features such as caller id. (The Comcast package has additional features but none that I would pay extra for.)

But Verizon also offers a VoIP package (VoiceWing Unlimited) that is significantly cheaper at $29.95. And of course, there are many other VoIP providers such as Vonage, Skype, and SunRocket that are even cheaper. I'm on SunRocket's pay-by-the-year plan which works out to less than $17/month for unlimited nationwide calling. The much more popular Vonage is $24.99. Skype is representative of a number of services that offer free computer-to-computer calls with per-minute charges only for connections to the traditional phone network.

One differentiating factor of Comcast's VoIP service is that it uses different routing and prioritization for voice packets. This should enable better reliability and quality (enable but not guarantee, ahem). As a VoIP user myself, I am well aware that the quality of the voice is not always as good as a traditional telephone circuit. One of the problems of my VoIP provider is that it's dependent on Comcast's internet service - which isn't reliable! (Isn't that ironic? The way Comcast chose to improve on VoIP is to avoid relying on their own internet service!) Will the quality of Comcast phone service achieve traditional phone quality? Whether this is true in practice depends on how Comcast manages their internal network capacity and how Comcast manages other aspects of their services.

Comcast's advertisements tout additional features such as web access to voicemail as well as more traditional extras (3-party calling, for example). So there is a possible customer for Comcast - the person who wants all the high-tech features and isn't on a budget - then Comcast VoIP may be attractive.

However, one thing may stop people dead in their tracks. For years, outages have been a regular event. Comcast may be pouring tons of money into improving infrastructure, but for many people the Comcast name will long be associated with unreliability, exactly the opposite one wants from a phone connection. Imagine your phone stops working - but you can't call Comcast about it because ... your phone doesn't work! Oh but we have cell phones to cover this eventuality right?

All of Comcast's previous products have been "best effort, no guarantees", so you have to wonder why this should be any different. I'm not aware of Comcast having any experience with high-reliability services. I've no experience with their business packages but this new phone service is aimed at residences - and it's hard to imagine that Comcast will start offering first-class service all of a sudden. What I expect:
"I'm sorry to hear your phone doesn't work, sir, but we show a strong signal on your line. Could you please disconnect all your computers in the house, pull the cable out of the modem and powercycle your modem and telephone adaptor? That didn't work? Ok, I'm rebuilding your account, please try again in about 45 minutes and call back if it still doesn't work. Then we'll schedule a service call to your home - will you be available sometime next week?"
And Comcast's record of customer service is poor. In the past, I have put up with it only because cable was my only choice for high-speed internet access. Will other people put up with it given the choice? And even worse is Comcast billing. In our franchise area, the county cable office frequently reported that half the complaints they received each month were billing problems. I don't know why billing was always such a disaster for Comcast but it makes me cringe to read Comcast's latest advertisements touting "only one bill" as a benefit. And I already have difficulty understanding the bills now! (You'd think it should be easy when the bill is the same each month, but noooo....) Anyway, turning my phone bill over to Comcast's billing department sounds like it would only increase my headaches, not decrease them. (If I were to order Comcast's phone service, I would insist it be on a separate bill.)

For these reasons, it is hard to imagine more than a fraction of Comcast's customers being attracted to their VoIP service. For people that want traditional voice quality and reliability, they can still get that from Verizon and at the same price. For people willing to risk quality in the interest of saving money, just about anyone else's VoIP product will be cheaper.

Bottom Line

Will people really move their phones - for no financial savings - phones that have been working for years without problems on Verizon - to Comcast, a company that has long been associated with poor customer service, unreliable connections, billing headaches, and ever soaring rates? Let me know if you sign up and why.

Saturday, December 17, 2005

Verizon FIOS TV Franchise Status Report

Since late September of 2005, Verizon has been rolling out FIOS TV to communities across the US. Verizon's own website has press releases on them.

This includes such DC-area jurisdictions as Fairfax County (est. 351,000 households) and Herndon, VA (est. 22,000 households).

So where's Montgomery County on the list? MC has many potential customers (324,000 households, median income $84K/family) and roughly half the county is wired with Verizon fiber already. Sounds like a golden opportunity, yes?

You'd Think So

When I first reported on the Verizon franchise process, I hypothesized that the signing of a franchise would take roughly 6 months. This was based on my experience watching the county sign two deals with Comcast and two with Starpower/RCN - and the reality that Verizon had a large investment of fiber in the ground already and was raring to go. I actually said "Look for passage by the end of the year. Actual implementation is anyone's guess." What I meant by that was the papers would be signed by December 31, 2005 and that we'd get actual service some time after that. The actual deployment would depend in large part to where you lived in the county. Some neighborhoods have fiber already. Some won't have it for a year, possibly more.

However, at successive MFP meetings, the Cable Office reported progress on the franchise was proceeding slower than expected. And I could tell that was true. We should've had council hearings (we have not) and public hearings (we have not) even before the council hearings. During a CCAC meeting just two days ago, Cable Office staff described some of the difficulties they were encountering. Rather than repeat the trivia, I will read between the lines - Verizon is NOT interested in a quick rollout of FIOS TV in MC.

I can only speculate what the problem is but it's likely a combination of several things:
  • loss of local top Verizon executives in Montgomery County. Now the county has to deal with Verizon executives in Chicago who don't readily drop round for discussions. (Curiously, this week's Potomac Almanac reported on the Montgomery County Executive's Ball. Nominally, a benefit for the arts and humanities, the Ball is more suitably described as a thinly disguised excuse to do some politicking in support of MC Executive Duncan's run for the Maryland governorship. In attendance - Don Heath, who until last month was in charge of Verizon's MD/DC FIOS project. Hmm.)

  • wariness from Verizon being raked over the coals by MC on the fiber install problems (discussed here earlier).

  • Verizon lawyers are, after all, pretty busy and there are plenty of opportunities to sign franchises elsewhere.

  • Verizon is waiting for Congress to make a decision on the future of cable regulation.
The last point bears deserves further explanation. There are at least three bills pending in Congress that would change the way cable companies (and Verizon currently qualifies as such) are franchised. The bills range from franchising at the state-level to no franchising at all. Needless to say, Verizon is presumably thinking that it's not worth the effort to create a local MC franchise if it's all going to be for naught in a few months.

So why is Verizon signing franchises in other localities? These other localities are much smaller or simpler than Montgomery County. MC is big, complex, has some unusual requirements and most importantly, has some very savvy people that would be creating the franchise. So while Verizon may be quick to jump all over small communities such as Keller TX, their efforts with MC won't be as easily rewarded.

So what does this mean? The telecommunications field is in a huge state of flux - and may well be for years! But one thing is clear, all transmission mechanisms are converging. Phone, video, internet, ... and so on, are all in a sense the same thing (packets). Currently regulations treat them all separately with wildly differing laws and, while historically understandable, make little sense to continue and get ever more baroque. As a simple example, why should a company accept onerous cable TV regulations if they can turn around deliver video over the unregulated internet? Or burdensome phone regulations in the presence of unregulated VoIP?

The franchise rationale is just as conflicted. While franchises create an unfair playing field in the TV domain (after all, satellite TV providers don't need franchises), franchises do provide a regulatory mechanism which can have valid benefits (trust me, you don't want an ungrounded connection to the cable system). And there are similar arguments and trade-offs for franchising at a local level vs national level.

The bottom line is that Congress has a very tough problem on their hands. (And knowing how Congress works, there's no reason to believe they will come up with simpler and more sensible regulations. But that's for another discussion.) And I am not holding my breath for a rapid resolution, particularly with so many alternatives being pushed at the same time.

For this reason, I believe Verizon is making a major mistake by delaying a franchise in MC. Six months can turn to a year or two rather quickly. Verizon is missing the opportunity to catch ex-Comcast customers before they move to satellite. Or phone customers before they move to any of the hundreds of VoIP providers.

It is ironic that Verizon even today is spending handsomely on advertising describing how their efforts will pay off for the citizens of MC. Between all the full page ads that the Gazette is carrying for both Comcast and Verizon each week, the Gazette owners must be very happy. Of course, I've given up tracking Comcast's ads and promotions. For Verizon FIOS, I have personally received 18 full-color flyers in 5 different designs, one UPS mailing, and one personal visit from a team of salespeople (who were so ill-prepared that they managed to find a time to visit my home when I wasn't present and then left no message that they had been there). Oh, and I've had a man sitting in a "FIOS car" parked on my street for a day. The car was bedecked in FIOS colors (which I actually think make a pretty good logo - see, I'm not totally negative!) but the occupant was unable to answer any questions about the service. ("I'm just paid to sit here all day. I've got my Starbucks and my crossword puzzle - I'm happy.") although he did confess that at his own home, he was unable to get FIOS. His provider? Comcast.

Thursday, December 15, 2005

Complaining For The Wrong Reasons

There was a curious article in the Gazette recently. Alas, I cannot provide you with a link - the Gazette appears to be a little too picky with what they decide to make available online. (I sent email to the Editor asking why I couldn't find the article in their search engine - despite knowing the exact title and date of publication! It's been two weeks and still no reply from the Gazette.)

The article ("Officials criticize Comcast rate Hike", Nov 9 2005) describes how Comcast is raising their rates. In newspaper advertisements, Comcast explains that fees are going up because of "increasing operating expenses and other investments and increased PEG/I-Net fees paid to Montgomery County." At least half of this statement is a lie.

PEG/I-Net fees are not going up. According to the article, the fee remains at $1.50 per customer for 2006 just as for 2005. (An official of the Cable Office informs me that actual 2005 rate was actually a few pennies less ... close enough though.) But for some time, Comcast's bills have been informing customers that the fee is only $1.25. Now the bills have been changed to reflect the true amount. BUT ... the bottom line on your bill is going up by the difference - which Comcast is pocketing, which makes their advertisements rather confusing and, in some people's minds, outright misleading.

This is a 20% rise in a fee and the County has undoubtedly been receiving calls from citizens irate at the substantial jump. So county officials are doing their best to explain that it's not their fault rates are rising - which is technically true. But also true is that the rates - rates directly traceable to the county government - are high to begin with!

So if you want to complain to the county about high fees - go ahead - just make sure you complain for the right reasons!

We Now Return You To Your Regularly Scheduled Price Hikes

Comcast raises rates each year on January 1 and holds rates throughout the year (though specials that come and go make it seem like their rates are changing regularly). The Jan 1 tradition is in part due to regulatory reasons - the FCC only permits regulated rates to change once per year. However this year, the regulated rate for basic service is not rising. But the most popular package rate (the entire analog lineup, called "preferred service") is going up (from $49.82 to 52.15 plus fees). And prices for other packages and hardware (converter boxes, etc) are going up as well.

This 4.6% increase is a significantly smaller rise than previous years. The reason is undoubtedly due to competition from Verizon. Oh, I suppose Comcast may have also cut back on expenses - their loss of numerous senior executives probably helps.

Ok, that's a small joke. The reality is that the senior staff is very important. In that sense, Comcast has yet to deliver. And from the looks of it, they appear to be heading in the wrong direction. Some of their senior staff are still "Acting" and, even more surprising, Comcast has announced that their new General Manager for Montgomery County will also be responsible for Prince Georges County as well. This roughly doubles the number of subscribers that that the GM will be responsible for. That does not bode well for our future.

Starpower Hikes Prices, Too

According to officials from the Cable Office, RCN (nee Starpower) is also raising its rates - by a screaming 18%. Despite that jump, RCN's cable prices will STILL be cheaper than Comcast's!

Unfortunately, the RCN website doesn't have the new prices so I'm going by information given to my by the MC Cable Office. I even called RCN support - nope, they have no knowledge of new prices, sigh. But I believe the Cable Office officials since new price announcements must first be approved by the county. (More specifically, the County gets 5 days to comment on any notification of price changes before being released to the public.)

Sunday, December 04, 2005

Cable Communications Advisory Committee Appointments

The County Executive has made the following appointments to the Montgomery County CCAC (Cable Communications Advisory Committee).
  • Yen-Ju Chen (re-appointment)
  • Elizabeth Irons (re-appointment)
  • Trish Evans
  • David Friedman
  • Joy Ragsdale
  • Jim Schleckser
  • Suzanne Weiss
These appointments are subject to approval by the council, tentatively scheduled for December 13, 2005.

Town Hall Meeting Announcement

The Montgomery County Council is holding a Town Hall Meeting this coming Monday evening (Dec 5 '05). If you want to ask questions (for example "What's the holdup with the Verizon TV Franchise?") or make statements ("We need competition, please find out what's holding up the Verizon TV Franchise."), this would be a splendid opportunity since the entire council will be present. The meeting will also be broadcast on County Cable Montgomery channel 6.