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from: NY Press

FREE MY TV (AND COMPUTER AND PHONE)
Hooked on cable...sucks for me

By Becca Tucker

The Groove Bros live in an Ewok Village in Bushwick. The music production team’s headquarters got its nickname because it’s divided into two stories of small, oddly-shaped rooms, one of which is partially suspended so that you can walk underneath it. In the center of the “village” is a recording studio, where they lay down tracks to be uploaded and patched to collaborating musicians.

“A lot of the networking elements of working in the music world are on email and Internet,” says Steve Halpern, a 29-year-old audiovisual technician and rapper. Four songs on their MySpace page have been listened to a combined 13,252 times. “Especially now that people have Blackberries and all that stuff, everybody’s all, ‘Email this, email that.’ The communication is not so much voice-to-voice anymore. So without Internet, you’re kind of not really playing the same field as anybody else.”

The Groove Bros know from experience, since they’ve lived through a dark age. Before their building was wired for cable a year and a half ago, they were stuck relying on their overloaded phone line. “Yeah, the DSL line in my neighborhood is really kinda crappy,” says Halpern. “There were times it was a problem, because the service was very intermittent, so it would go in and out. There would be three or four days without Internet. You really would be in a bad situation.”
When his building got hooked up, Halpern ticked through the pros and cons of a $100 a month cable bill.

“I thought of other options in terms of, like, you know, satellite,” says Halpern. “Satellite is way more expensive, and DSL didn’t work great. There were no other options in terms of cable. It was pretty much Time Warner. That’s what’s there.”
Welcome to today’s New York City, where you can pick up a sauerkraut pirogi at 4 in the morning but are offered little choice when it comes to cable, a service that, for most of the city’s population, is as essential as having a roof over your head. After figuring out how to pay our exorbitant rents, most New Yorkers also have to squeeze out hundreds more for utilities—which nearly always include cable television, high-speed Internet and a phone line.

Not so long ago, cable seemed like a luxury, but it’s quickly become as fundamental for modern living as electricity. It all started in 1948 when an appliance store owner in remote Mahanoy City, PA, placed an antenna atop a nearby mountain to capture a distant broadcast television signal, then ran a twin-lead wire from the antenna to his store. In the 1980s and early ’90s, the cable industry spent billions wiring the country in what was the largest privately funded capital investment of its time, making cable our primary means of watching TV.

Soon enough, consumers started complaining about the rising price of cable. The FCC got involved, encouraging encouraging the development of wireless cable—which transmits satellite cable programming over the air instead of through wires—and direct broadcast satellite. Cable stomped them both and continued expanding into a virgin technological frontier, rolling out Video on Demand, Pay-Per-View and a service that would become our collective umbilical cord: broadband cable Internet, which quickly outpaced rival technologies, such as DSL service.

What makes cable modems so necessary to our ADHD generation is that they’re not distance sensitive, like their DSL counterparts, so the speed of the connection doesn’t depend on your location. They don’t require much installation, unlike satellite, and the connection is “always on,” so there’s no—God forbid—waiting.

Now, instead of changing channels, we’re using the same technology to surf from MySpace to Perez Hilton. If you live in Manhattan, Queens, Staten Island or western Brooklyn, your alternatives for cable are most likely Time Warner or…Time Warner. If you live in the Bronx or eastern Brooklyn, you’re part of the nation’s single largest cable cluster of 3.1 million subscribers, and Cablevision’s got you covered.

That’s the way the government set it up. Every municipality around the country grants a franchise to one cable company. In return for the right to dig up the streets, the company is held accountable for things like serving all the neighborhoods and providing access to public and governmental channels, and charged a 5-percent franchise tax.

The system is meant to keep things neat, but it’s got a major drawback. “I would say Time Warner and Cablevision have a monopoly on the city,” says Queens Council Member Tony Avella, chair of the Subcommittee on Zoning and Franchises.
“Yeah, they’re a contiguous monopoly,” agrees Mark Cooper, director of research at the Consumer Federation of America.
As might be expected, Time Warner and Cablevision object to the word “monopoly.”

“Our market is a highly competitive market,” says Jim Maiella, spokesman for Cablevision. “We offer three services: We offer cable television; we offer high-speed Internet; we offer phone, and there are many providers for all of those services that we actively compete with every day across our service area. You know, we’ve been successful in a market that’s highly competitive because our services are better than any competitor’s service in the market, and they’re even better and more valuable when they’re taken together.”

But that’s what you expected them to say, right?

“Oh yes, we do have a lot of competition. We have satellite providers, we have RCN, EchoStar,” says Suzanne Giuliani, spokeswoman for Time Warner, the country’s second-largest cable operator. “They’re all offering the same products that we’re offering in the same area.”

RCN is a relatively small cable upstart serving certain buildings in sections of Manhattan and Queens but, according to Cooper, author of Cable Mergers and Monopolies, “RCN is really passive these days.” EchoStar operates a satellite fleet that includes the DISH network, but the FCC has determined that satellite competition does not keep cable prices down, because satellite appeals to a niche market.

Last year, the FCC decided that cable companies needed some, well, company. Left unchecked, their rates were going up much faster than inflation. Maiella, of Cablevision, points out that the last two years of their cable TV price increases were below the rate of inflation, while voice and Internet rates haven’t changed since 2003.

Nonetheless, uttering the names Time Warner or Cablevision tends to provoke hair-trigger reaction among New Yorkers.
“I’ve heard from a lot of people that Cablevision is the worst cable franchise in the metropolitan area, and a lot of people are really upset with them,” says Avella. According to the Mayor’s Management Report, cable service complaints logged with the city more than tripled between 2002 and 2006, from 189 to 623. Cablevision and Time Warner attribute the change to the increase in services they offer and in the number of customers they serve.

“It’s just their whole attitude,” says Avella. “Customer service, their rates and the way they sort of have conducted themselves with other issues. You know, the whole issue with the West Side Stadium.” The proposed stadium was opposed by Cablevision, which owns Madison Square Garden, the New York Knicks and New York Rangers, and the MSG Network, because a major new Manhattan sports venue might have threatened Cablevision’s ability to secure major events for the Garden.

“They have really been what I consider to be a bad neighbor to the city,” says Avella. “Time Warner, I have an issue generally with the rates, and I also have an issue with customer service, but I think they’re a far and away better operator than Cablevision.”

Meanwhile, the behemoths have been raking in revenue in their cable departments, and they just keep growing. Both companies are making inroads into phone territory by offering voice service in discounted bundles with Internet and TV. Cable companies are roping in close to 1,000 Verizon phone customers a day.

To level the playing field, the FCC ruled last year that phone companies that wanted to start offering cable didn’t have to jump through all the standard hoops.

That was good news for Verizon, one phone company looking to get in the ring with the cable heavyweights. It’s been slowly but diligently winning local cable franchises all over the country in a decade-long, $20 billion operation that will eventually reach 16 million homes across the country. When NYC’s cable franchises come up for renewal in 2008, Verizon hopes to be a part of it.

But it’s slow going. “One thing to keep in mind is that it is a manual build,” says Heather Wilner, a spokeswoman for Verizon. “We have to specifically go out and build the network, lay the fiber in order to carry these services.” In the city, the process is even more time-consuming. “There are a lot of multiple dwelling units, apartment buildings, and with that it’s just an extra step. We have to work with landlords or building managers to get into those buildings and wire the buildings.”
“They’ve had to roll out plans; they’ve had to get through the franchising process, which they complain about bitterly,” explains Cooper. “They get into the business, and then they have to win customers, and that has all proven challenging.”
Locally, Verizon has negotiated 57 franchises in 100 communities in Long Island, Rockland County and Westchester County. They’ve been busy laying fiber optic cable in the Bronx and Brooklyn and have already started launching their high-speed Internet in the city, most recently in Brooklyn. All they need now is to win a cable franchise. That would allow Verizon, like its cable competitors, to offer New Yorkers the holy trinity: Internet, TV and phone.

Selling telecom services to New Yorkers is like selling crack on the Lower East Side in the ’80s. Telltale signs of our addiction include shortened attention span, carpal tunnel syndrome, nearsightedness and possession of a vast body of trivial knowledge. The Internet has become so necessary to our survival that we’d sooner risk our health rather than gamble on picking up a neighbor’s wireless signal. No matter how broke we are, we’ll find a way to pay for cable.
Take Steve Halpern of Groove Bros, who splits a monthly $100 cable bill with his two roommates but can’t afford health insurance. Although he could get coverage through the Freelancer’s Union for $200 to $300 a month or possibly Healthy NY, a benefit package offered by the state to uninsured citizens, Halpern hasn’t been insured since he was a Starbucks barista, and that was about nine years ago.

Fear of an accident stresses him out, and his parents are constantly on his case about getting insurance, but in the end, there really wasn’t much of a decision to be made. Cable was an essential business expense, while health insurance could wait. “Health insurance has always seemed so… I don’t know, it always seemed really, really expensive. It was never a conflict. I always knew I needed Internet. It seemed somewhat more important than insurance.”

“Every day I wake up and I’m like, thank God I’m not injured,” says Julie Sussman, 25, who plays Ultimate Frisbee and lacrosse without health insurance. “I think about it pretty much every day, either casually think about it, or like, really think about it. It’s just, I can’t really afford it.”

A freelance graphic designer, Sussman manages to pay her cable bill because she doesn’t have a choice. “I can’t imagine not having cable Internet. I’m on the fucking computer all the time. This is making me feel bad about myself!” she laughs. “Step…away…from the box.”

Nat Guy, 23, is probably online right now, translating videogames and technical documents from Japanese to English from his Harlem apartment. “I have to have Internet to work. I can’t do without it. Cable TV, sure, I can do without, so I did cancel my cable TV plan that I originally had when I got here.”

Guy is what you’d call a smart shopper. By switching from plan to plan, he’s managed to continue paying Time Warner’s introductory offer of $50 a month for cable Internet. Still, he couldn’t find a way to swing health insurance. “I recently sprained my ankle on a run and had to go to the emergency room to make sure it wasn’t broken. It’s probably going to be about $700 or $800 in expenses that I have to pay out of pocket. It’s pretty rough.”

Within a couple hours of putting out a feeler for this article, I had replies from multiple people who fit the pays-for-cable-but-not-health-insurance bill. My roommate of seven years was one of them.

“We pay for cable Internet,” she told me, “and I don’t have health insurance. Does that count? Oh, we also need to pay the Time Warner bill.”

In all likelihood, Verizon will be granted a coveted TV cable franchise, allowing the phone company
to compete with Cablevision in the Bronx and Brooklyn and Time Warner in Manhattan, Queens, Staten Island and Brooklyn. What then?

Competition will lead to better service at lower prices, of course!

Even Time Warner agrees that theory makes sense. “We’re certainly in favor of competition,” says Giuliani, “because it actually makes all the affected companies better at what they do and ultimately service customers better.”
The FCC’s latest report the industry concluded that where there is land-based competition for cable TV service, rates are typically 27.2 percent lower than in places without competition.

In three Texas communities where Verizon is offering its TV service, the American Consumer Institute found that those who switched providers saved an average of $22 a month on their cable bill, and those who didn’t switch saved even more, thanks to price slashing resulting from good old competition—not to mention that multiple franchises generate more revenue for the city.

That’s what’s supposed to happen. Then again, it might not. In Maryland’s Montgomery County, Comcast Corp., the area’s main cable provider, raised its cable rates $2 a month after Verizon came to town. Comcast officials told the Washington Post that the increased costs reflected a greater video selection and improved customer service.

Worse, there may be danger lurking in the loophole that lets Verizon into the TV business through a back door. Usually a franchise comes with a set of social obligations in exchange for using the streets. Verizon hopes to be exempt from those.
“The problem is, if you let Verizon out of those social obligations, then Time Warner immediately comes back and says ‘Hey, this ain’t fair,’ and you get a race to the bottom, and the needs of citizens are not met,” warns Cooper.

In what may be foreshadowing of things to come, Time Warner is already kvetching. “Verizon should be given the same kind of franchise, with identical terms and conditions and customer standards and reporting that we have to adhere to based on our agreement with the City of New York,” says Giuliani.

Whatever happens right now may not be a reliable indicator of how things will shake out in the long run. In the initial stages of a rivalry, prices almost always drop. Already, ads are popping up in mailboxes, on billboards, subways, even the Staten Island ferry, guaranteeing a slashed cable bill if you sign up now.

“But when there’s only two players, they quickly realize that certain kinds of competition are not in their mutual interest,” says Cooper. “And so once things settle down, fairly quickly, the price competition will go away. They might start to compete on other aspects of service, but this initial period of rivalry will settle down. It just degenerates into a duopoly.”
We’ll stay tuned. Hell, we’re always tuned.

A FEW NYC CABLE USERS RANT ABOUT WHY THEY CAN'T STAND THE CABLE MONOPOLY

A SPECIFIC PET peeve I have is waiting for the service people, either to install something or repair. They give you a four-hour window so you are obligated to take a big chunk of your day, and then, on multiple occasions, they have been late and I’ve been blatantly lied to by the dispatchers who say “you are next,” “someone will be there in 15 minutes” and then the person finally shows up many hours after the window passes. Since there’s no alternative in my neighborhood, I have no choice but to accept this mediocre service and deal with it. If Cablevision were available in my neighborhood, I would definitely get it, since their service in Long Island where I lived last year was much better.
—Jason, 27, Carroll Gardens, Brooklyn

TIME WARNER CABLE is a nasty and unpleasant company to deal with. They have a captive market in Manhattan that they take advantage of by:

1. Poor customer service. You’re put on hold forever on the phone and then get a “devil may care, that’s not my job employee” who either puts you on hold again for a long time, or transfers you to another voicemail that never answers.

2. Strong-armed billing techniques. They bill a month in advance and if you happen to lag behind one month, they’ll send you threatening notice that you’re two months behind. For example, on September 1, you already owe for that month. If for some reason you forget to pay August, then as far as Time Warner is concerned, you’re already two months behind, and they’ll demand payment in full.

3. Raise prices at will. We already are paying $143 for cable, premium channels and the Internet—a lot of money compared to other services—but we are captive in that Time Warner serves our area and we have to use them.
—Ron, 60, Midtown Manhattan

USED TO BE that if you wanted to watch TV, you could just plug in the set and at least get the major networks and public television. Now it’s almost impossible to get a clear signal unless you fork over a hundred bucks for cable service. And don’t even get me started on the whole Internet thing. But really, shouldn’t basic TV reception be a right for all, and not something doled out to those who can afford the exorbitant fees? I ended up canceling the whole thing and going totally Internet. If I really need to see something, I’ll look for it on YouTube instead.
—Tina, 37, Harlem
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