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from: FoxCity HD

HD Rants: Statewide cable franchising flops in Texas. Worried yet?

According to a survey by the Texas Association of Telecommunications Officers and Advisors, as told in the Milwaukee Journal-Sentinel, multichannel TV service rates have actually increased rather than decreased as promised by supporters of statewide deregulation. Texas was the first state to adopt statewide TV service franchising similar to that proposed by legislators and heavily backed by AT&T in Wisconsin. The Texas Public Utility Commission fields consumer complaints but has no staff to follow through on them, leaving customers to deal with the service providers directly.

Cable prices rose anywhere from a few percent all the way up to 49% more for basic service from Charter in Denton, Texas.

While opponents of Wisconsin’s pending legislation are holding Texas’ results up as a possible outcome in our own state, the legislators and AT&T-paid lobbyists including TV4US are blasting the survey as incorrect and flawed. Rep. Phil Montgomery (R-Green Bay) says the study doesn’t account for “bundled” services, where TV service is combined with other services like home phone, internet, and cellular phone. Thad Nation, a PR consultant working with TV4US says the study is flawed because it measured products “few customers opt for, has the least competition among providers and has thin (profit) margins and little potential for decreased prices.”

Wait. What?

The study seems to have focused on basic and standard cable TV service. I don’t know about you, but isn’t that what most current cable TV subscribers who complain about the cost of cable prices want? Ask any cable customer who’s resisted using a cable box in the past couple years — and there are more than you think — and they’ll tell you they do care about just plain ol’ basic/standard service. Those are the products I want to know about, and ask anyone I know… I’m one of the most technically-demanding cable customers you’ll ever meet. And I sure as heck don’t want bundles. For one thing, I don’t want or need home phone service. I have a cell phone. Heck, I barely even need a cell phone, but try and find a cheap cell phone plan for those who use less than an hour a month.

Sen. Jeff Plale (D-South Milwaukee) says the survey should have included “introductory rates” for new customers. How does a 12-month introductory rate help consumers? Plale says even if the savings are temporary, consumers are saving. How nice. I’d like to order the service I want, at a decent price, without having to jump ship every twelve months to get those decent prices. Have you ever tried canceling AOL? I have. Several times. If cable or satellite service customer reps are trained in the same tactically-annoying customer retention techniques, switching service every time your introductory rates expire isn’t an inconvenience I’m willing to go through for cost savings.

You know what? I also wouldn’t mind high-speed Internet that’s truly high-speed without having to pay a premium for it… bundle or no. Did you know we pay more for much slower connections in this country compared to others? The average broadband download speed in this country is only 1.9 megabits per second (roughly DSL speeds), but they get an average of 61 in Japan, 45 in South Korea, 18 in Sweden, 17 in France, and 7 in Canada. Don’t let that “best speed in town for the price” jazz fool you. To get top speeds of broadband in our area, you have to pay $40-45 for 6 Mbps Road Runner or Premium DSL, and even more for Road Runner’s “Turbo” gamer-focused service, with 8 Mbps. I know what you’re thinking… “What’s wrong with DSL speeds?” Well, admittedly I’m a much more demanding high-speed customer than the majority of the population, so it’s not an area I’m confortable cutting corners (or prices).

Shouldn’t I be happy that competition is imminent? Well, for starters, there’s nothing stopping competition under current franchising procedures. Secondly, when AT&T launches their U-Verse service in our area next year, it won’t be for people like me who are hard-core adopters of HDTV. At best, AT&T will only be able to send two HD channels into your house at a time if all goes to plan. That means if your DVR is recording an HD show and you’re watching a live HD show, someone in another room can’t watch HD programming until one of the streams frees up. Even so, early reports on HD picture-quality from Milwaukee are mixed at best. And AT&T has said they don’t intend to compete on price, but rather “value,” which means they’ll want to sell you more service to get you to pay more, I guess. What about satellite? I guess you could say I’m one of supposed whiny minority that cares about public-access television, a service satellite won’t offer. I also enjoy video-on-demand, and while satellite is planning on rolling out VOD, you need high-speed internet (and thus, cable or telco service) to use it. There’s also a hefty upfront hardware fee to get the HD DVR I would want, and I don’t think I’d even own the box after paying it.

But what really worries me about the whole ordeal is the potential consumer confusion the supposed “price war” will create. Those who fall for vague advertising and don’t pay attention to the fine print will likely find their bill skyrocket after a year and finally wonder what happened to their low-priced service. I’m no opponent to competition. I’m really not. It could lower prices. It might not. After seeing the results from Texas, I’m less optimistic about it, but will keep an eye on it either way in the coming year. What I would hope for in all this is a certain level of truth-in-advertising. I’m much less optimistic about that.

What do you think?