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BellSouth announced that it is immediately eliminating a fee assessed on its DSL Internet services. The broadband fee was designed to recover a number of costs remaining from previous regulatory obligations and other network expenses. Since the FCC eliminated the continuing applicability of many of these regulations, BellSouth announced it could cut the rates.

The vast majority of BellSouth’s DSL Internet service customers will see this change on their bills within a week, although it will take up to six weeks to implement this change for all of BellSouth’s DSL Internet service customers. Any payments attributable to this fee will be credited back to August 16, 2006.

Posted under Customer Service

The Media Bureau of the Federal Communications Commission (FCC) today issued a Further Report on the Packaging and Sale of Video Programming Services to the Public (the “Further Report”) on the issue of an “a la carte” model for delivery of video services. The Further Report finds consumers could be better off under a la carte and explores several a la carte options that could provide substantial benefits to subscribers by increasing their choices in purchasing programming.

The Further Report reexamines the conclusions and underlying assumptions of the earlier Media Bureau report on a la carte submitted to Congress in November 2004 (“2004 Report”). In particular, the Further Report describes a number of errors in the Booz Allen Hamilton (“Booz Allen”) Study that the Media Bureau relied upon to support the conclusion of the earlier report that a la carte is not economical. The Further Report finds that the 2004 report also relied upon unrealistic assumptions and presented biased analysis in concluding that a la carte “would not produce the desired result of lower MVPD rates for most pay-television households.”
The Further Report identifies mistaken calculations in the Booz Allen Study, which was originally submitted by the cable industry for Commission consideration. Booz Allen itself acknowledges the errors, which other economists also have confirmed. The Further Report explains that the Booz Allen Study failed to net out the cost of broadcast stations when calculating the average cost per cable channel under a la carte. As a result, the Booz Allen Study overstated the average price per cable channel by more than 50 percent.

The Booz Allen Study significantly underestimated the number of programming channels that a subscriber could enjoy under a la carte while still achieving savings compared to the subscriber’s current multichannel video programming distributor (“MVPD”) fees. Indeed, correcting for this mathematical error, consumers’ bills decreased by anywhere from 3 to 13 percent in three out of the four scenarios considered in the Booz Allen Study.

In addition, the Further Report notes that, through the use of questionable assumptions, the Booz Allen Study may have further overestimated the costs of a la carte. The Booz Allen Study (accepted in the Media Bureau’s 2004 report) assumed that a shift to a la carte would cause consumers to watch nearly 25 percent less television, or over two fewer hours of television per day. The Further Report finds that there is no reason to believe that viewers would watch less video programming than they do today simply because they could choose the channels they find most interesting.

Finally, the 2004 report fails to mention that the Booz Allen Study shows that, even with the math error noted above, if a la carte were only implemented on digital cable systems with appropriate set top boxes in place, then a la carte could result in a 1.97 percent decrease in consumers’ bills.

The report can be found online at www.fcc.gov/mb.

Posted under Finance

Two weeks ago, Consumer Help Web published an entry about FCC Chairman Kevin Martin’s call for a la carte cable television pricing. It turns out that Martin’s agency may not have the authority to do anything.

According to a story in today’s Washington Post, FCC spokesperson Donna Gregg told a Media Institute gathering that the agency is studing whether it has the authority to compel change.

Gregg’s comments follow a rather weak statement made Monday by Martin, who said, “I am pleased that some cable companies may respond to consumer demand and begin to voluntarily offer family tiers.”

If “family tiers” seems at odds with “a la carte”, you are not alone. It strikes us that way too.

Posted under Products

In May 2005, the FCC adopted rules that respond to the threat that such misunderstandings pose to public safety. The FCC adopted rules requiring providers of interconnected VoIP services to supply 911 emergency calling capabilities to their customers as a mandatory feature of the service by November 28, 2005. “Interconnected” VoIP services are VoIP services that allow a user generally to receive calls from and make calls to the traditional telephone network. Under the FCC rules, interconnected VoIP providers must:

— Deliver all 911 calls to the local emergency call center;

— Deliver the customer’s call back number and location information where the emergency call center is capable of receiving it; and

— Inform their customers of the capabilities and limitations of their VoIP 911 service.

The United States Distict Court of Appeals denied a motion this week that would have delayed these regulations from being put in place. Consumer Help Web reported on this issue in March when Texas Attorney General Greg Abbott filed suit against Internet company Vonage for failing to disclose that the service did not exist.

Posted under Safety

Responding to petitions from consumer advocacy groups, the Federal Communications Commission expanded its rules Thursday to create more consumer-friendly wireless bills. Those consumer agencies, however, quickly found fault with the actions.

The government agency now requires “billing descriptions be brief, clear, non-misleading and in plain language”. The Commission also stated that bills may be considered misleading if discretionary line items are combined with tax or government-mandated fees. Finally, the agency is requesting comment on the distinction between government-mandated and other charges and whether those charges should appear in a different section of the bill.

In a statement issued after the FCC’s action, Chairman Michael K. Powell said, “Wireless consumers deserve accurate, meaningful billing information in a format they can understand.”

At least one consumer group, the National Association of State Utility Consumer Advocates, found fault with the FCC’s actions. “This is a lose-lose for America’s consumers,” said David Bergmann of the Office of the Ohio’s Consumer Council and chairman of the organization.

His statements were echoed by many other advocates, including Janee Briesemeister of Consumers Union, who claimed more than 18,000 consumers had commented on the issue and said, “No matter how the agency spins this decision — it is anti-consumer.”

Consumer groups had lobbied the FCC to ban charges that falsely implied they were made due to government regulations. The groups said that these fees are typically excluded when wireless companies advertise and promote their price plans.

Posted under Customer Service