ACP is Going Away: Time to Remove the Mask and Go After the Unjust & Unreasonable Rates.

Please Sir! May I have Another?

READ THE REPORT: The IRREGULATORS Call for Audits and Investigations of the Cable, Broadband, Internet, Phone & Wireless Service Prices, the Underlying Revenues, Expenses, Profits, as Well as the Controlling Factors — the Cross-Subsidies and Regulatory Capture.

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This cable triple play bill, modified, is from our new short report, summarized herein, outlining the excess charges, made up fees and hyper inflated rates we now pay in America — the word ‘affordability’ does not exist. With the ACP program winding down, it is time for some reality about how we ended up with prices that are multiples of what is charged overseas — should be front and center.

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This graphic is from Comcast, stating that the ACP program is critical for our country’s future. If Comcast wants this program extended, you know there is a subplot of how they have made these ‘poor people’ a new profit center.

Over 23 million low income individuals and families are currently receiving a federal subsidy for broadband called “ACP”, “Affordable Connectivity Program”, and Comcast and the other cable and phone companies are some of the largest beneficiaries. And the program is scheduled to end in Spring 2024.

The IRREGULATORS believe that this program must be extended as we do not screw 23 million people who need the $30 a month assistance.

Then what? America has asked the wrong questions. How is it possible:

• 23 million low-income families can’t or struggle to afford basic broadband service? Estimates show almost 50 million people were total that could have applied.
• Overseas, documented prices for communications services, like broadband or even wireless, are a fraction of the costs in America? Why?
• Each state put together a ‘5-year broadband plan’, to get funds to solve the Digital Divide. but NO State Broadband Office (SBO) ever mentions the last 3 decades of promises for a fiber optic future that never showed, that customers have been and continue to pay — be overcharged, for networks they did not get.
• Who does Comcast think is charging exorbitant rates so that low-income families can’t afford service?

The rest of this document is part of the first complaint against the unjust and unreasonable costs of America’s communications services. It will focus on the cable company offering first.

Chart 1: Comcast New “Rural Subsidy Initiative” — $½ Billion a Quarter?

According to Chart 1, Comcast has made a new profit center for the ‘Subsidized Rural Initiative” and is bringing in approximately $ ½ billion dollars a quarter for the last 2 years And there were no expenditures in 2021 Also, there is a nominal amount being spent on wireless.

Questions: What this appears to say:

• We are funding Comcast to expand their monopoly and increase their customer base through gov. subsidies of which we assume some of this is from the ACP program, or other gov subsidies — state, etc.
• After they extend their lines, they also get to keep the physical infrastructure.
• There are no discounts, etc for having the government fund these networks.
• At the same time, the advocates pitching Comcast low income “Essentials” are acting as the company sales force to increase Comcast’s customer base.
• There are also no discounted prices even when the networks were built via gov subsidies, or previous rate increases through faulty deregulation.
• There is no requirement to open the networks up to competition.
• But, at the same time, Comcast can charge out of control rates on their regular cable subscribers.
• Why are we paying them to increase their monopoly?
• And then letting them own government subsidized networks?

Chart 2: 70–98% Profit Margins on the Voice and Data Services

The chart above was created with excerpts taken from the Comcast NY cable TV franchise annual report, from 2010 and 2011. It shows that these 2 lines of business had obscene profit margins for their ‘operating revenues and expenses.

ACTION: We will be filing FOIA requests as all the rest of the years has been redacted for New York. This information matches the Annual Reports of Comcast and WarnerCable (now Spectrum/Charter) as to the profit margins of specific services, but the format that was originally presented was stopped to avoid analysis in detail.

But what these numbers show is that the cable TV networks were built out and these other services are not paying market prices to use the networks but are subsidized and paying a fraction of the expenses.

How much of this is still in place or did Comcast change the accounting or did the businesses change over time?

NOTE The first chart is from the holding company, Comcast, and the second is from Comcast NY’s holdings.

Why have the subsidiaries been allowed to use the cable TV franchise, the rights of way and all of the major anti-competitive advantages by only paying a fraction of the expenses?

• If broadband and voice have over a 90% profit margin, where are the investigations to lower rates as they are using the franchised rights of way and not paying expenses.
• And does this mean that the cable TV customers acted as ‘defacto’ investors for these other lines of business that are also bringing in retail prices for what appears to be incremental expenses — i.e.; the broadband service and the voice service expenses, if they were competitive, would have to pay for the network usage, — as competitors, “CLECs”, There appears to be no such payments.
• At the same time, if it only costs a fraction of the actual charge to provide broadband, what does it actually cost so much?

Chart 3: Time Warner Cable’s Financials Showed 97% Profit Margins

The findings of profit margins for Comcast NY’s Data and Voice lines of business has been something of concern for the last decade, when we uncovered that Time Warner and the other cable companies’ subsidiaries had obscene profit margins, detailed in their annual reports.

Chart 4: Incremental Pricing vs America’s Hyper-Retail Rates.

Simply put — the core price of the overseas (EU) providers triple play service is based on a total price of $35–40 dollars. This example was from specific Free French triple play service, (as described in this link). The fee starts at 29.99 Euros for the first year and includes the VAT tax, usually 20%. Vs -In the US, the Spectrum basic triple play core price is $156.74+ dollars — because they were not held to a pricing formula for the public interest but charging retail for wha should have been incremental prices.

Difference: It comes to 350% more for just the basic rate, about $110 bucks a month, about over $1,300 dollars more — (rounded). We note that since this February 2024, the prices increased in Spectrum NYC. For the triple play, the broadcast fee is now over $30.00.

Chart 5: Spectrum Basic Triple Play Package, About 350% More.

Second Part of the Overseas Vs US Equation: Added Fees, Taxes & Surcharges.

Chart 6: Overseas vs US Prices — Fake, junk fees, pass through taxes, charges for all equipment, even the tech that is required to use the cable or broadband service, are just a few of the problems that we found when comparing the cable triple play of Spectrum NY with the French “Free Telecom” triple play service.

Look at this mess’. On the right are the actual additional charges on one bill, adding $68.67. This chart reveals the second most important difference of overseas services vs US — they never allowed for ‘gimmicks’, made up added fees, surcharges or tax on tax.

The current FCC nutritional label never reveals that there is no ‘Rosetta Stone’ on how to calculate these taxes or more insidious, the tax on tax.

From the chart above, the $27.90 fee is ‘made up’. It has no cost justification presented and the taxing authority considers it direct revenue to the company. Therefore, it is also taxed, fee’ed and surcharged in multiple ways.

There is nothing on the cable company site or even in a filing that details exactly how these fees are justified, and whether they are taxed again.

However, one thing is perfectly clear — The NYC Spectrum Triple Play has at least 12–15 other line items, some of which are legitimate, but with nothing to detail how the numbers were derived.

But it added $69+ a month to the inflated triple play. I.e., $157 for the bloated core triple play, then add $69 for the added fees, including the mandatory equipment to use the services. I note that the overseas price includes the VAT tax of 20%, making these