Time Warner Cable And The $12,000 Installation Fee

Time Warner Cable wants to charge $12,000 to install cable and internet for a customer in the remote town of Lee, MA. The town’s Board of Selectmen, however, are having none of it. They say that Time Warner Cable in in breach of their contract, which requires them to install cable in any house that already has electricity and telephone service.

From the Berkshire Eagle:

“We’ve put Time Warner on notice,” said [Lee’s delegate to the Five Town Cable Television Advisory Committee] “They are in breach of contract.”

“The $12,000 fee is certainly a ridiculous amount,” said [another town Selectman.]

Lee officials are upset Time Warner would charge [the customer] the exorbitant fee — rather than the basic installation cost of $35 — because his home is roughly a half-mile away from the closest Time Warner Cable subscriber. [Lee’s representative] said the cable company — evoking the so-called “long-driveway” clause in [the customer’s] case — is using an incorrect interpretation of the town’s license agreement.

[The town’s representative] said the contract entitles all homes to cable service if electric and telephone service are already available.

“They have to step up and run the cable to the home,” said [a town selectmen] “It’s part of the agreement [Time Warner] signed up for.”

Williams’ home on Fernside Street near the Tyringham town line is roughly 300 feet away from the nearest utility pole. Since the $35 installation fee covers up to 200 feet, [the customer] said he realizes he’ll have to pay extra for the additional 100 feet, but he won’t pay $12,000.

The town says that if TWC doesn’t change its mind, it will begin deducting from the $10,000 the company posted with the town when it signed the contract.

Cable talk turns tough [Berkshire Eagle via Failure Magazine] (Thanks, Trevor!)

Comments

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  1. Its_Miller_Time says:

    Good for the town for sticking it to TWC…

  2. Loias supports harsher punishments against corporations says:

    The answer is simple: drop exclusive contracts with cable companies and allow open competition between providers.

    Okay, not so simple, but we really need to get away from cable monopolies.

    • ShruggingGalt says:

      Some states have done this.

      Texas’ law goes into effect late this year/early next. The city monopolies will no longer exist. Rather capitalist monopolies will. (Example: new neighborhood, AT&T got in first, TWC looked at it and said they weren’t providing service because they couldn’t recoup their costs)

      • joshua70448 says:

        Do you have a link to this law? I’m curious to see this…

      • jason in boston says:

        I second that! There are a couple towns I am looking to move to. I would like to see this enacted while I am saving for my down payment :)

      • pawnblue says:

        Umm, I don’t see how a natural monopoly is any better for the consumer? The local government doesn’t get a cut?

        The best thing is for natural monopolies to be heavily regulated or publicly owned. I know that the free-market fundamentalists will disagree, but that way the public has a say in what goes on. Without real competition, it’s the only hedge the consumer has against large corporations (and believe me, TWC vs AT&T will not reduce prices either way)

    • Tim says:

      That actually wouldn’t work here, most likely. The town signed an exclusive contract with TWC, and in return for the exclusivity, the company must install cable to all addresses that have electric and telephone service for $35.

      Without that contract, I’m willing to bet that no one would want to install cable at this guy’s house for a reasonable cost.

      • The Marionette says:

        Exactly. Competitors would probably lower their prices, but it would be over a loooong period of time especially with Company A having installations for $300, then B $280, then A)$280, etc, etc. At least with a contract they will have a low price no matter what.

    • probablykate says:

      It’s not really cost effective for cable companies to compete in one area because then two companies are running and maintaining all that wire and equipment, but for less customers therefore less $$ (since customers will be split between multiple companies). Sorta a natural monopoly.

    • NeverLetMeDown says:

      There are very few of these exclusive contracts out there. Usually, there’s only one cable company, because building a cable network where there already is one is a great way to lose your shirt.

  3. Draygonia says:

    They must be really in that breach of contract…

    “They say that Time Warner Cable in in breach of their contract”

    Perhaps it is time to get a spellcheck script.

    In other news, many companies are making billing mistakes every day.

    • Shadowfire says:

      “in” is a word, so spellcheck wouldn’t have caught it. Simple mistake. Ugh..

      • hosehead says:

        Most spell-checkers would find a repeated word (i.e., “the the” or “in in”). The built-in versions in Firefox will not.

      • Major Annoyance says:

        Another exciting case from the files of the Typo Police.

  4. Hoss says:

    Lee Mass is rural, but not remote. The Mass Turnpike passes right through

    • kerry says:

      Yeah, I’ve driven all over Mass and I’d hardly call Lee “remote.” Good on the town for standing behind the resident.

  5. tomok97 says:

    It would be cheaper for Time-Warner to just pay for them to have DireTV.

  6. hosehead says:

    A cable company being unreasonable? Imagine that.

    I hope they install the cable for the basic fee and then the guy cancels on them within a month.

    • greggen says:

      This

      • hosehead says:

        …and I am not anti-business or anti-corporate. I am anti-cable.

      • kc2idf says:

        “This” because, of course, you couldn’t come up with a few words of your own to express affirmation of the idea.

        Truly, I imagine that this is part of the reason for the high price, actually. They are trying to recoup their costs for putting in this guy’s service, because they’ll never get it back through the price of service, and they want the guy to be invested in it. That doesn’t make it right, but that’s my read of it.

        • Jack Doe says:

          This! (Sorry, had to do it.) Former cable guy here. From what it sounds like, this customer is likely on a terminating tap. That is, the tap he would normally hook up to is the last on his street’s run of cable. If he had a standard drop, eg, 200ft or less, that would be no problem. Services (analog, digita, and switch digital video, phone, and internet) would run just dandy. However, on a long drop (over 200ft,) there is no guarentee that anything needing two way signal would work on a terminator. Over 300ft, the subscriber would be lucky to get analog basic. What would have to be done to make this work would be a plant extension of about 500 feet. Two new taps (one for the customer, and a new terminating tap (at $3000 per tap,) an in-line amplifier (at $4000 for the amp,) however much trunk (usually about $.80/ft, would need about 1000 ft) and finally the time to actually do the work, the permits, and having to take all other customers off their services for the two days or so to do it. That, plus the actual install cost…

          All in all, the customer here should look into DSL and Dish. He’d be better off in the long run (being near the end of a line like this is a recipie for headache.)

  7. AI says:

    $12k for 100 feet? You can get a hydrovac to trench that for $1500, and I doubt the cable costs more than a couple hundred on top of that. You can run the cable in the trench yourself for free. Add another $1000 to fill the trench back in with dirt (or save it and do it yourself), and while expensive, ~

    • GuyGuidoEyesSteveDaveâ„¢ says:

      Don’t they have that machine that drags a blade through the dirt with the wire/tube behind it without digging a trench?

      • MauriceCallidice says:
      • wackydan says:

        Sure…. But to go that distance you need a number of things.

        If you are going pole to pole:

        -you need an aerial crew: We aren’t talking RG6 coax but at minimum Hard Line COAX…They’ll splice into the closest node and run the line. They get paid by the foot and the money is good. – I’ve done it.

        - You also need a sweep tech. They make sure the new portion of the system isn’t leaking RF and and also adjust output to ensure signal quality is as near perfect as possible.

        - God it would suck real bad if they decided to make a new node and actually have to run more fibre and DAC.

        - One last thing about aerial…. The cable company doesn’t own the poles. They rent access to them… Sometimes the poles belong to the power utility and sometimes they belong to the phone company…. Very rarely does cable bother placing their own poles though that could be part of the cost to the land owner.

        As for burial, same set of costs really… Paying a crew by foot, though you don’t have to worry about pole rent…

        It is just a mess. I’ve done burial work and aerial line construction. I’ve also done residential installs where if the length was long enough we required RG11 to be used ( Really thicker heavier than RG6)…. I remember a house in Florida where I had to span RG11 between three poles to an RG6 burial… If you’ve ever been up on a pole on climbing gaffs trying to pull RG11 taunt enough to tie off then you know what a bitch it is…and is the reason I got paid more per foot for it.

        Anyway… I don’t find the cable company asking for $12k unreasonable.

        • asten77 says:

          If we want to talk about charging actual costs… I don’t know if TWC does what Comcast does, but they tend to charge 5 or 10 bucks for a change of service, even when all that involves is someone clicking something on in a database. That infuriates me more than the monopoly-inspired pricing.

    • therealchriss says:

      Actually, it sounds like $12k to run cable from the nearest node to the customer’s pole, then from the pole to the house.

      If the nearest subscriber is 1/2 mile away, then that means there is probably no cable tap installed anywhere close by, as well as no node built to service that area.

  8. MikeB says:

    So, will that 10k benefit the customer or the town?

    • Elcheecho says:

      well the customer, but only to the tune of less than $2000 and more than $35. That money was already going to TWC.

  9. Losiris says:

    If it weren’t for this contract with the town, the customer wouldn’t even be considered for service. If the nearest subscriber is 2500 feet away, there probably is not a cable tap anywhere near this persons house. It’s not the extra 100 feet from the utility pole, its the half mile of cable, amplifiers, and equipment to get to that pole that is expensive. TWC should have defined the area of service better with their contract, and may end up paying for it, but the town’s statement seems rather misleading, implying that TWC is trying to charge the customer 12 grand for 100 feet.

  10. Skellbasher says:

    Great to see the town step up in favor of the resident and not the cable company.

  11. Tracer Bullet says:
  12. kelth says:

    It may be too expensive for time warner to run the cable all the way out there for one person, I mean lets be realistic….. if it actually costs time warner say 10,000$ to run the line out there, or say they are doing it at cost of 12,000$ to get it out there they would never make that money back. Time warner isn’t in business because this customer wants internet, a person’s need is not a claim on a company.

    • obits3 says:

      True, but TWC is in business to get the town’s business. I think the point is that the town said “We will give you exclusive right to serve our town IF you provide everyone cable who wants it.” TWC agreed in order to get the towns business, so this isn’t about the revenue from one person, it is about the revenue from the town.

    • JonBoy470 says:

      While many on this board are (rightfully) averse to franchised monopolies for basic utilities, such franchises do serve a useful purpose, particularly in more rural areas. TWC’s franchise agreement with the town requires them to serve all customers in the town who already have phone and power. That’s the point of such franchises. The provider gets exclusivity in the franchise area, at the cost of having to service all customers in that area at uniform cost to the customer, regardless of the profitability (or lack thereof) of doing so in any individual case.

    • Andy S. says:

      You may not have heard of it, but there used to be something called The Phone Company, AKA, Ma Bell. Over the course of nearly a century, they ran a phone line to EVERY house in the country. Some houses were 10, 20, 30 miles remote but The Phone Company lived up to its requirement to provide free installation to every house in America, no matter how far it was from the last house.

  13. evnmorlo says:

    I don’t see how it is really a breach a contract since TWC is not refusing to hook him up. They can’t be required to install to nonpaying residents.

    • Englishee Teacher says:

      Because the contract says they have to do the install for $35, not $12000

    • myCatCracksMeUp says:

      You do know that your statement makes no sense, right?

      They are required to hook up cable for everyone, following the same pricing plans, not new, made up pricing plans.

      The pricing plans apparently say that standard hook-up, for up to 200 ft of driveway, is $35. The resident is willing to pay the cost for the last 100 ft of his driveway.

      As many others have pointed out, TWC benefited from having the franchise for the town, in that they have no other cable competitors, therefore they need to suck it up and install the cable for this man for a reasonable cost for the last 100 ft of driveway, plus the standard $35.

      • evnmorlo says:

        But the additional 100ft costs 12k. Costs don’t necessarily increase linearly. I do think that TWC could negotiate a little since they will probably see 1k of profit per year from his house, and the town should also be kicking in some money for universal hookup.

  14. ap0 says:

    I don’t know how cable companies roll out their cable nowadays (ie, how close do they run fiber to a customer), but if he’s a half-mile away, that’s maybe $150 in coax cable, some amplification equipment, and maybe a couple days work from a couple guys. It’s probably more in the $2-3k range to install it, if that (that’s assuming they can just run coax on the utility poles to the guy’s house and amplify it easily, and not having to install fiber or get permits or whatever).

    • bhr says:

      Good chance they have to trench that whole thing, possible going under roads.

      When I had my business I had contacted Comcast about getting internet over the t1 we had at the time. They did a site assessment and to run the cable from the shopping center a few hundred feet away they quoted me $14k. They would waive it if I had 2-3 neighbors interested, but they were happy with slow as heck T1 for triple the price.

    • Poorlytoldjoke says:

      Really? $150 bucks. Because the cable they install in your house, or the cable you use to go to the wall is the same cable on the pole. Good lord. This is why your cable is expensive, because people who live in rural areas can’t accept that there is a trade off for living in the middle of nowhere, and that trade off is that not all services will be available. The next question is, is it a halfmile of cable, or a half-mile by helicopter. There is a difference. Regardless, cable is expensive to run, and for those of you who think it’s the cable you can buy at radio shack for $3 a yard, that’s just dumb.

  15. TasteyCat says:

    Sounds fair to me, unless the contract has indeed been violated. Anybody moving that far away from all other human beings probably should not be surprised by the lack of services they are able to get.

    • myCatCracksMeUp says:

      Except that TWCs contract with the town says they will provide services to all residents for the same fees and costs. TWC benefits from having the franchise contract with the town; now they need to meet the terms of the contract and provide service to the man for the standard fees.

  16. yooper1019 says:

    I work for a cable company and know for a fact that RG-11 cable, vise the more standard RG-6, can be run 300′ and should be installed at no extra charge.

  17. dg says:

    Maybe if they had to put up an additional pole to support the cable. But honestly, I’d just tell them to trench it – perfect time to go underground and not have to worry about it in the next ice storm…

    I’ve heard of this kind of insanity in rural areas, but those places were trailer parks about 7 miles out of town…

    One more example why Network Neutrality is so important – if there were no caps, or other ISP-imposed BS, then this guy could tell TW to bend and flush, and just stream all the video he wants over a DSL line…

  18. Leah says:

    Yet another reason to say “screw the cable companies” and just get satellite. I’ve had DishNetwork for 2 years, and have never had a problem. It’s cheaper than cable, and the quality and service are far better.

  19. foogoo says:

    They only want $57,000 to wire up my business. Which they might be willing to break down in $1500/month for 5 years if I order more than Internet service. DSL is free install.

    • AllanG54 says:

      So they’re only going to charge you $33,000 in interest for the 5 years as $1500 X 60 = $90,000.

  20. SilverBlade2k says:

    HA. I love it when the cable companies are caught like this.

  21. AgitatedDot says:

    This sounds very reasonable. As a cable tech I can tell you these amounts are not for standard installs. Also the cable co I work for does not have to service every house just because they have power. There is a home density per mile requirement and if it’s not met, my cable co does not have to do anything. Also homes that are more than 300 feet away from the cable plant need to pay out of pocket for the installation. In fact we only do RG11 up to 250 feet. Anything above 250 depends solely on my cable co’s decision.

    Also if cable co provides service they have to make sure it works, so they would rather have you pay and get it done right instead of running RG11 and hoping it will work. Once this is installed they won’t charge the customer for maintenance, the new plant is now cable co’s responsibility.