By Swapdisk (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons

Comcast. AT&T. Verizon. They're some of the lowest rated customer service experiences in the business world. And yet almost all of us are dependent on their services. Once again, we return to some of our favorite topics... net neutrality, cord-cutting, ARPU, and the way that communications and media technologies have evolved in the US. What will it take for the country to develop truly world-class Internet service? Recorded 8/16/2015.

 

You can download the episode here, or an even higher quality copy here...

 

Mike & Matt's Recommended Reading:

Comcast VP: 300GB data cap is “business policy,” not technical necessity, by Jon Brodkin (Ars Technica, 08/14/2015)

More coming soon...

 

Transcript:

Alpha: Welcome to another episode of Robot Overlordz, episode #200. On the show we take a look at how society is changing, everything from pop culture reviews to political commentary, technology trends to social norms, all in about thirty minutes or less, every Tuesday and Thursday.

Mike Johnston: Greetings cyborgs, robots, and natural humans. I’m Mike Johnston.

Matt Bolton: And I’m Matt Bolton.

MJ: And since it’s been a while since we’ve sort of visited our favorite punching bag, Comcast, we thought it would be good to revisit the subject of Comcast. There was a really good article just the last week from when we’re recording this about Comcast’s VP talking about data caps. In 2015, the FCC did actually enact one of our somewhat dream initiatives, the net neutrality; they actually classified things as Title II. You know, I think the data cap is probably a subject that they’re going to be looking at next.

MB: Yeah, my thing is—with Comcast, they’re starting to pick on that a little bit—but what irritates me is they’ve never done anything about the cell companies doing the exact same thing.

MJ: Yeah. Well, that was one of the other big changes the FCC made this year, is that they’re starting to apply net neutrality to mobile broadband as well. So, I think that you’re right: in the past, they’ve sort of exempted it. Back when the FCC had their net neutrality rules that Verizon sued them for and that ended up getting thrown out, which is the whole reason the FCC declared things Title II, those didn’t include mobile broadband. And when the FCC did declare Title II this year, they made a point of mentioned mobile.

MB: Yeah, I think we’re kind of getting screwed on mobile but they seem to be taking care of—or at least it looks like we’re going to get regular cable lines. I still think the best solution to this problem, especially on the cable lines, is to open them, just say, “Look, all the cable lines are going to be opened up to other companies” so that you and I have 10-15 choices, even though it’s on the same line, multiple choices for who can be my service provider as opposed to the way it is now where I get one. Any time you open up to competition, prices go down, service goes up. I think that’s the best way to handle this. But back when we were having all these arguments about net neutrality, there were certain senators and things who came out and they were like, “Well, people just have to pick a different cable company.” Well in a world of faeries and things, that’s a good idea, but 90% of the—I’ve never met anybody who basically has more than one or two options for internet and cable and TV and all that, so.

MJ: Well and it depends what you mean by “options,” because I think part of the problem is there is somewhat a natural monopoly in connection to the house for data purposes. Whether it’s video, whether it’s TV, whether it’s internet, there is a certain monopoly to—it doesn’t make sense to run multiple lines. So in terms of the physical connection, your house should only have one. But at the same time, like you said, for everything else, like all the service providers, your connection out to the larger internet, and even the things that you choose to run for your services, like say do you want a landline phone, do you want TV service, do you want streaming—all that stuff I think that there needs to be way more choice. I don’t know, personally I’m kind of more for the municipal broadband just to open up so you at least have two solid choices, because municipal broadband is a little more accountable to the people in a given region than these big companies are. I mean, AT&T and Comcast and Verizon, they could care less about, for example, Aurora, or Naperville, or podunk Iowa. They’re concerned about their overall numbers, and any individual town they could very easily just say, “Well, screw you.” Whereas if the individual towns are providing that, they’ve got to go back to their residence at least. So, I think that would be one way to get some accountability into the local regions. But like you said, the data caps in general…well, I think that mobile and the regular internet—wired internet—they should be treated the same. The infrastructure for either one of them, it’s sort of it’s on, it’s off. Those are, for the most part, fixed costs in running it and they tend to upgrade it on schedules.

MB: Yeah, especially with mobile too, they kind of nickel and dime you for everything that you do. What is it you use where you—god, I can’t even believe I have to ask you this question…

MJ: Tethering?

MB: Tethering, yeah. [laughs] Sorry. When you use tethering, the fact that you have to pay extra to tether a device, or if you want to add an iPad or something, you’re still using the same amount of data. I don’t understand why…I mean, I understand, because any time they can make an extra dollar or two off of you. But it’s that kind of stuff I think in the long run that kind of hurts them because that’s the kind of stuff that makes people absolutely hate their mobile carriers; it’s the reason they hate Comcast. I mean, you look at your Comcast bill sometime and all of the stupid extra stuff, and they keep raising the price on the equipment you’re basically required to use to get their product. And then, “Hey, if you sign up now, it’s $99,” and then six months from now your bill goes from $99 to $250, and then you’ve got to get back on the phone with the people who are…less than fun to talk to at Comcast and getting your bill resolved back down. There are reasons that people absolutely hate all of these companies, and for good reason.

MJ: Well, they deliberately structure their company to be that way. You know, the executives who make those decisions, they’re insulated from the customers. You mentioned it’s no phone to call those centers. It’s also not fun to work in those call centers. Both parties in those calls are screwed and they’re screwed by the executives who are making these kinds of decisions, who are treating things like—well, AT&T’s old CEO famously said, “I’m going to charge Google to use my pipes.” It’s very “MY pipes, MY network.” Every time you and I talk about this, I always bring this up, the fact that they even have a network. They have completely forgotten the fact that the government gave them a monopoly to run lines across people’s property. So, basically all of us collectively gave them that network. I mean, yeah, they had to invest in order to actually build things within that right that was given to them, but they wouldn’t have even been able to do that. They would’ve had to go around and pay each and every one of us in order to build their network otherwise. Just the fact that they can be so blasé about that, I think that contributes to all of the things that their attitude kind of comes from. They have this attitude that it’s theirs and they’re going to charge you what they want, and if someone manages to put a public interest fee—like the universal service fee that gets service for people in economic distress so that the network connects everybody, if they get charged with that, they’re going to pass that cost onto you. They always make sure. Because they’re public companies, you can look at their profits. They’re OBSCENE.

MB: Yeah. Going back to what you were saying about the CEOs who never have to deal with the customers or anything, there’s that stupid show, I don’t watch it but I have seen it before, it’s called, “Undercover Boss.” I would absolutely love to see the president of Comcast, the president of AT&T have to work in one of their call centers for a day or two and just see how…And I’m talking on a realistic basis, not just for a TV show. But I think if they had to deal with what they make their employees go through, I can’t say that they would change but at least they would have some kind of perspective of this is just how awful it is for literally everyone involved, not just the people at Comcast answering the phones, but for the customers, for literally everybody; just how bad their policies are and how poorly the customers are treated.

MJ: I also would love to see that, but I guarantee it won’t ever happen. They’re too insulated. If they ever had to call their own service at home, for example, they get special treatment. It’s exactly like when I worked at AT&T, there was an executive helpdesk, and those guys had to jump through hoops in order to fix things for the executives. They didn’t have to go through the regular helpdesk. I mean, that’s just vintage how they operate. I’ve watched AT&T executives talk in videos, and man, it’s all about congratulating themselves on how great they are. And I don’t think Comcast is any different. I mean, the Ars Technica article that I kind of mentioned in the beginning about data caps, this Comcast VP who was talking…anyway, I guess it was on Twitter, he just sort of ducked the question of, “Oh, data caps are business policy, they’re not a technical necessity.” The fact that he was that honest probably was an accident. But there’s literally no technological reason why there are data caps on cable.

MB: Yeah, no, obviously it’s just one of those things where it’s kind of like the tethering thing we talked about earlier. I think part of the thing that they do as CEO is literally sit around with a bunch of other people who are like-minded and just think of ways to increase the amount of money. There’s a figure that all of these companies like AT&T and Comcast are all worried about every month, and that’s the average amount of money per user.

MJ: Yes! ARPU, my favorite!

MB: [laughs] That’s what they care about. So if they can screw you out of another 60 cents or a dollar or whatever, they’re going to do that, because that’s all they care about. They don’t care how much data you use, they don’t care if you’re tethering. I guarantee you they just sat around in a room one day and they went, “How can we get people to—how can we up their bill? Let’s charge them to use the same amount of data that they’re already paying for but all they’re going to do now is connect it to a laptop.” Obviously with Verizon and AT&T, all these cell companies, they have data caps. As long as you’re under your data cap, I don’t know why they even care what you do with your data. I mean, let’s say I want to use all of my data on day one just to download movies and everything else and then not use any data for the rest of the month. Well, I should be able to do that. But with the tethering and other devices, they keep adding all of these silly charges that have nothing to do with anything, other than ARPU.

MJ: Yeah. Well, and I think you hit the nail right on the head there, because I’ve heard them talk about ARPU and how that is the number that drives their business. And what gets me about that is I think it’s a recipe for being a lousy company. This is the thing—exactly like you said, they sit around thinking of these things. But the kinds of decisions that it leads them to make…when you’re concerned about the Average Revenue Per User, you don’t care about your good users, you don’t care about the ones who are maybe, “Oh, this service is awesome!” You only care about the average. So, if you have to degrade the users that actually love what you do for them, then you’re going to do that, and over time you end up with people who don’t love you. And the same with people who are sort of stuck getting you. I mean, we’ve mentioned earlier how most people only have one or two choices. ARPU is a lousy number for that, and that’s what drives that entire industry. And yet—like I’ve said, I’ve sat through innumerable presentations and talks of AT&T executives—they will sit around and circle jerk each other about how innovative they are and how technologically amazing. There’s nothing technologically amazing about what they do. I mean, Randall Stephenson has all the charisma of a bag of potatoes.

MB: [laughs]

MJ: Seriously, it’s just pure profit grab. And again, look at what’s happened to the US ranking in terms of internet access. We’ve continually fallen over the last decade all because these companies manage to—it takes away from ARPU if they upgrade the quality of their network. One of the things the last AT&T CEO got credit for by stockholders, but it’s why AT&T’s network sucks now, is he only did what’s called “fiber to the node,” which is they run fiber line into your neighborhood, where the line to your house terminates, and that’s it—they didn’t run it to your house. And they saved, you know, X million dollars on that. Verizon with their FiOS service, they actually took it to the house, at least with their last CEO, and then they’ve replaced him with a guy who has the same attitude that the AT&T guy has. So, they stopped doing FiOS. When you do that, that’s why AT&T’s network now can’t offer some of the things that Comcast’s network can, because the cable technology, since it was sort of newer—in terms of the 20th century, phone service is super old, cable came in more in the second half of the 20th century—so they’re able to get more out of that network by just changing out some of the things on the ends; they don’t have to run new cable. So, the cable network…a lot of the reason people are going to cable for internet—I mean, this is not a choice that I’m looking forward to having to make—to get the really fast speed you’re kind of stuck with cable because the DSL technologies that AT&T and Verizon’s stuff is based on, they just don’t have the speed.

MB: Going back to ARPU, one of the other things, and you’re kind of seeing this now, is the fact that because the amount of money that people are spending per month just keeps  going up and up and up, people are just saying, “You know what? I don’t really need your service anymore.” And so, it hasn’t happened yet, but I think eventually and probably in the near future something is going to break, especially with the cable companies, like Comcast, Time Warner Cable, and some of these other ones, where people are just like, “You know what? Screw you. I’ve got Netflix, I’ve got Hulu. I don’t need your cable service,” especially for TV. Obviously the phone thing, to me, is a complete waste. I mean, I know Comcast is constantly trying to get you to sign up for their phone service or whatever, but I don’t want a phone in my house; I haven’t had one in years, there’s no point. I think when your cable bill starts to get into that $150-$200, people just kind of start looking at that and going, “Alright, look, my cable bill is SO much money every month. Do I really need that?” And with the economy being the way it is and everything, people start looking at their expenses. Every month I open my Comcast bill and it’s always 50 cents or a dollar more than it was the month before. People eventually just say, “Take your service, shove it up your ass, I’m done,” and I think Comcast—and all these other companies—are going to have to start looking at the fact that you just can’t keep overcharging people for the exact same service. It’s not a sustainable business model.

MJ: Yeah. Well, and we’ve talked about this before, the whole phenomenon of cord cutting. And I’ve read some stuff recently that up until recently, the TV industry, the cable industry has been like, “No, that’s not a real thing, it doesn’t happen,” and now they’re starting to say, “Oh, well, actually, yeah it kind of does.” I guess ESPN’s numbers particularly, that they just announced I think within this last quarter, was really obvious. All of a sudden now—you know, they’ve been telling investors, “Oh, nobody cord cuts, it’s just a few weirdos that live in their mom’s basement.” It’s now obvious that it’s a real thing. So, I think that you could call 2015 the year of the cord cutter, the year where finally people wake up to this, “Why the hell am I paying for cable?” And I think we talked about this a little bit at one point, the fact that you can get HBO now without a cable subscription, I think very quickly you’re going to see some of the others. I think those companies, though—like, I have no trust of HBO; I’ve actually kind of come to the conclusion, I mean, I did buy them for “Game of Thrones” from HBO Now this year. I think I’m done with HBO, I think I’ll just wait for the discs, because I’ve just had it with them as a company for a lot of the same reasons that we’re talking about with the communications providers, like Comcast, and Verizon, and AT&T. I think these companies are very arrogant about how they treat their customers, and they’re really not very good at customer service.

MB: No. Going back to what you said about ESPN, I don’t know, a lot of people may not realize this, but when you look at your cable bill, it’s $150 or whatever it is, $6 of what you’re paying is for ESPN. So, that’s how much they get per user, because there are enough sports fans out there or whatever. I’ll be honest, if I could call Comcast today and say, “Look, you know what? I don’t want ESPN, take it off,” and I could save $6 on my bill, I would do it. Do I watch ESPN? Sure, I watch it sometimes. But it’s not a necessity at all. If it was gone tomorrow, I’d rather save the $6. It’s just they need to start having a la carte packaging for their channels. And I know they keep saying, “Oh, that’s not a possibility,” but you’re starting to see there are some companies that are coming out with ways that you can get a la carte packaging through the internet as opposed to—what is it, Slingbox I believe, they have a thing now where it’s like $27 a month and you get basically the basic channels, the most popular channels, like History channel or whatever it is. And I think you’re going to start seeing that a lot more, and a lot more people are going to start ditching, and then eventually they’re going to have to stand up and take notice. I don’t think they’ve gotten to that point yet. Their response has been, “Oh my god, we’re losing subscribers. Let’s just raise the rates on the other people to make up for it.”

MJ: Yeah. Well, I think they’re well and truly in panic mode after the last quarter’s ESPN numbers. Well, and you’re a sports fan. You’d say that about ESPN? I mean, I’ve never watched ESPN, not ever, for anything, and I’ve always had it in my cable subscription back when I had cable. And one of the reasons I went without it is I’m actually more on the show level than the channel level. So for all these channels, that’s what—I think people in the farther out future are actually going to be more like me than like people back in the ‘80s, where they would just take what you give them. I mean right now there’s some talk about the channels. I think it’s going to get down, at some point, to the show level, where, you know what, you subscribe to the shows you want and that’s the ratings, actually. Because to me, that would be a much better system, and shows that couldn’t afford to be made because not enough people are interested in them would die. And you know what? That might take out some of my shows. But I’d be fine with that if that meant the shows that I was willing to pay for, and maybe I’d pay a little extra, that those shows get made and that they stay on consistently, because right now it’s so indirect. I don’t know. The whole space, though, I think is radically changing. Whether it’s data caps, whether it’s a la carte cable, whether it’s just cord cutting, I think these trends are just going to become even more prevalent. And for the companies that are in the connection business, I think managing things by ARPU—that might’ve worked in the past when things didn’t change a lot, and for as much as how they claim to be innovative, I think they need to be a lot more in touch with what innovation actually is. And seriously, quit circle jerking each other.

MB: Yeah, no, I’m definitely with you. I think in the long-term future it’ll be per show, and I think Netflix has already started to…make people more comfortable with that concept, especially with Netflix shows. And the other thing is Netflix releasing all of their shows on one day. I don’t know if I should say this: “Game of Thrones”—at the beginning of this year they leaked out four episodes of “Game of Thrones” before the season even started. Well, I got to see those four episodes and I got to watch them one right after the other, and the story made so much more sense and it was so much better being able to watch it one right after the other as opposed to having to wait a week. Especially with a show like “Game of Thrones,” where there’s all these plot points and everything’s kind of all over the place, it makes it much easier to keep track of what everybody’s doing when you can see them all at once.

MJ: Oh yeah.

MB: Whereas having to wait a week…And I would wait the week, the problem is “Game of Thrones,” is so popular that I can’t get anybody to shut the hell up about it so I don’t get all these spoilers, so I have to just, you know what, I’m going to end up having to watch it. But I would much rather watch it all at once. I mean, not all 50-60 episodes, but at least one season at a time.

MJ: Yeah. I’ve had that experience I think I mentioned the last time we talked about “Game of Thrones,” where particularly in the fourth season and this last season, both of them I kind of thought, “Eh, it’s really not as good as it was first season.” And the first season actually I bought the season pass from iTunes, so I got those episodes all at once. Because HBO, they make you wait a year and then they release all the episodes. I object to waiting the year, but the all episodes at once—actually, that was one of the reasons I loved season one. And after season four had come on and I sat down and watched all of season four again back-to-back—at that point the spoilers don’t matter—I liked season four significantly better all at once than I did when I watched it piecemeal.

MB: Yeah, I think that’s going to be—maybe not for comedies or whatever—but I think for serialized shows like that, I think that’s kind of the future of where things are going to go just because it does make it more enjoyable.

MJ: Yeah, definitely. Well, lot of change ahead, and I’m sure we will be talking about it again.

MB: Yeah, absolutely.

A: That’s all for this episode of Robot Overlordz. Are you interested in the future and how society is changing? We’d love to have you join our community. Visit our website to learn more and to connect with others that share that interest. You can find us at RobotOverlordz.FM. The site includes all of the show’s old episodes along with complete transcripts, links to more information about the topics and guests in each episode, and our mailing list and forums. We’d also love to hear what you think about the show. You can review us on iTunes or email us.

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A: We hope to see you again in the future…

MJ: Thanks everyone for listening.

MB: Thanks.

 

Image Credit: By Swapdisk (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons