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Saturday, September 25, 2010 12:28 AM Greenlight competition affects rates elsewhere By Stephanie Creech | Times Managing Editor City of Wilson leaders have been celebrating reaching the 5,000-customer mark this month for its Greenlight fiber optic network. The number of customers is expected to reach 5,300 by the end of the fiscal year if the current trend continues, according to Dathan Shows, assistant city manager for Broadband and Technical Services. The city's current business plan calls for Greenlight to reach 5,000 customers by the end of the third full year of operation, which will be June 2011. Out of Greenlight's current 5,058 subscribers, 300 are business customers and the remainder are residential. The original business plan called for Greenlight to have at least 5,700 customers after three full years of operation, according to Brian Bowman, Wilson's public affairs director. "We are on schedule," Bowman said in terms of the number of customers. "The demand is where we thought it would be and we're glad to see that." Shows, who said Greenlight is actually six to nine months ahead of schedule on gaining subscribers, said if things continue as they have been Greenlight should have a positive cash flow by the end of this fiscal year. But the application city leaders submitted to Broadband USA in August 2009 seeking federal stimulus funding to build out Greenlight paints a picture of a system that faces challenges because some customers have switched back to Time Warner Cable from Greenlight after becoming a Greenlight customer due to pricing deals offered by Time Warner Cable. The city included notarized letters from Greenlight customer service representatives about customers who left Greenlight after being lured by Time Warner Cable offers. "Time Warner Cable's market tactics include anti-competitive pricing that interferes with Wilson's ability to secure customers through normal marketing," the application states. "TWC offers below-market rates to customers seeking to switch to Greenlight, locking them into multi-year deals in exchange for name-your-price rates that are not advertised and made on an ad hoc basis when customers call to switch to Greenlight." Bowman said the switching of customers isn't as "prevalent as it was."
"That has died down some, actually it's died down a lot," Bowman said. Shows said the biggest issue the city has had to date with Greenlight customers is what he describes as "non-pay disconnects" or customers whose service is disconnected because they haven't paid their Greenlight bill. To date, Greenlight has disconnected just over 1,000 customers due to nonpayment. Shows said these are customers who received Greenlight service but never paid a bill. As a result, the city has had to "tighten standards," Shows said, on deposits. How much a customer pays for a deposit is based on their credit rating and on the services to which they subscribe. The city's finance department handles collections for Greenlight. Melissa Buscher, media relations director for Time Warner Cable Carolinas, said rates in Wilson have stayed fairly steady over the last several years. "We did have an increase in 2010 that went into effect right at the beginning of the year," Buscher said. Buscher said Time Warner does contact customers it loses. "We reach out to any customer who has recently canceled their service to understand why they left and offer them the best promotion we have available at the time to return," Buscher said. "When a customer indicates they are shopping around, we offer them the best promotion we have available at the time." Neither the city nor Time Warner Cable admits to tracking how many customers have switched service. "It's really self-reported," Buscher said. "Sometimes customers may share that information with us and others don't. We've lost some but the number is not significant. More importantly, Time Warner Cable remains focused on customers by providing superior customer service and the best quality Internet, phone and cable services." Bowman said research the city did before launching Greenlight indicated people resent temporary discounts and specials so the city doesn't offer them. "Our prices have remained the same since we started," Bowman said. The city does now offer an Internet only package to customers. It also has a sign-up referral program where Greenlight customers can receive a $25 credit on their monthly bill. Time Warner's rates that went into effect in December 2009 for 2010 indicate an increase for Basic Cable, which includes Broadcast Cable and Cable Programming Tier, of $2.10 per month from $49.85 per month to $51.95. This is the first rate increase for Time Warner customers within the city of Wilson in the past several years, according to letters Time Warner sent to the city of Wilson. What has caught the attention of Wilson leaders, state legislators, leaders from other cities and slowly some customers is the rate differential between Time Warner customers in the city of Wilson and those elsewhere. "If you look at it apples to apples, customers in Raleigh, Durham and even Wilson County are paying more for the same services," Bowman said. "You have to think that's temporary. But people in the Triangle and Wilson County are paying more for the same product than people in Wilson are." One of Wilson's Greenlight consultants at Uptown Services has determined that Greenlight is saving both Greenlight members and local Time Warner Cable customers more than $1 million each year compared to what Time Warner Cable customers in other areas pay, according to Bowman. That determination is based on the following non-promotional Time Warner Cable services for Time Warner Cable Expanded Basic of $51.95 in Wilson and $59.95 in Raleigh and for Time Warner Digital Basic of $70 in Wilson and $76.95 in Raleigh before taxes. The signal for the service Time Warner customers in the Triangle and Wilson County receive comes from the same source in Morrisville. A study completed by Catharine Rice, broadband consultant for the Triangle J Council of Government, said after state legislators passed the Video Service Competition Act, which took effect in 2006, local government leaders kept waiting for competition and kept waiting to see rates go down. The Video Service Competition Act, according to Rice, stripped local government of its ability to monitor cable service providers and to protect consumers. Consortium members, which include the city of Wilson, asked Rice to study what was going on. The study she presented to the N.C. House Select Committee on High Speed Internet Access in Rural and Urban Areas in December 2009 shows cable rates among all the other consortium members, except the city of Wilson, continued going up. "What we saw was pretty fascinating," Rice said. "It tells you competition does work." Rice found that Time Warner was charging customers outside the city of Wilson up to 40 percent higher rates. Rice describes what Time Warner Cable is doing as "cross-subsidizing" and charging higher rates elsewhere so it can offer lower rates in Wilson. Rice said Time Warner Cable is keeping pricing below cost in Wilson to try to drive Greenlight out of business. "Somebody has to start looking at what Time Warner is doing in Wilson," Rice said. "When I step back and look at this whole thing, it's clear as a bell what's going on. Time Warner doesn't want to upgrade its cable plant." When asked about pricing strategies, Buscher said, "We have many competitors in the marketplace and Time Warner Cable is committed to serving customers and competing fairly. Our goal is to attract customers with the best products and services." Jay Ovittore of Greensboro, a partner in Communities United for Broadband, said it's a no brainer that rates are going to drop when you bring competition into a market. Ovittore said rates are being kept low in Wilson because Time Warner really doesn't have competition elsewhere in the state. Ovittore said Time Warner customers outside the city of Wilson saw increases this year of anywhere from 15 to 30 percent depending on what services they receive. Ovittore said he's very happy about Greenlight and about the fiber optic service Salisbury is launching. He said if private industry would give customers what they want and deploy those services then municipalities wouldn't have to get into the business. Communities United for Broadband is a grassroots organization created by Craig Settles, a broadband expert, and Ovittore, a broadband advocate, earlier this year after the announcement of the Google fiber experiment. Communities United for Broadband tries to help communities find solutions to their broadband needs through public-private partnerships, cooperatives and nonprofits. creech@wilsontimes.com | 265-7822 |
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OLD GEEZER said...
Greenlight finally makes money. If greenlight doesn't make money you know who will be paying the bills. Don't you just love it. Everytime I ride by the Parton Theater in Roanoke Rapids I am reminded why local governments should not be in private, commercial business.
Friday, October 08, 2010 at 10:55 AM
you should love it said...Greenlight finally makes money. If greenlight doesn't make money you know who will be paying the bills. Don't you just love it. Everytime I ride by the Parton Theater in Roanoke Rapids I am reminded why local governments should not be in private, commercial business.
Friday, October 08, 2010 at 10:55 AM
you will be paying for it twice. in your subscription charges and taxes when the idiots quit borrowing thru certificates of participation to keep it going . but then if you are live in the city limits and pay property taxes if you are going to pay for this boondoogle twice , you might as well have it instead of paying for it and twc both. when are you people going to wake up and quit letting 7-8 percent of of ignorant , uneducated voters and a few wealthy businessmen and real estate developers keep this bunch of longterm, entrenched ,special interest puppets from continuing to run our city and county into the ground. start change next month aon the county and state level and take out the upper tier of the imbeciles on city council next year. Rose, Coleman, Burton and Johnson III could be finally turned away in one big swoop next year and restore some integrity and accountability and common sense to this city. if people finally wake up and decide to take their city back like we are going to take our county back next month.
Friday, October 01, 2010 at 12:36 PM
Love Greenlight for phone, TV and network. I've had DISH, Direct and TWC. No comparison. When I had satellite I list signals during storms, did not have good local channel selections, no local weather channel and finding a good solid list of the actual channels I got was frustrating on Direct. TWC was fine for years but customer service was my biggest complaint. Greenlight has super customer service, great service and we love it. Never go back to other choices.
Thursday, September 30, 2010 at 12:01 PM
holds people hostage with an atrocity called electricities and with these imbeciles we have for elected officials that 7 percent of the apethetic voters of wilson dont have the good common sense to turn out in off year elections. maybe we will finally change that next year.
Wednesday, September 29, 2010 at 10:21 AM
People there has been something called DISH Network and Direct TV for YEARS! How is TWC held anyone hostage. That is such a IGNORANT comment. I still would love to know how 5,000 customers for Greenlight earned Greenlight 3+ million dollars last year? I am in an area that Greenlight will Never be at but yet I have a feeling I will have to pay for it if I am not already.
Monday, September 27, 2010 at 4:03 PM
