Michael's Insight

Getting Ready for the Big Easy

I'm getting ready to attend the Cable Show starting Sunday in New Orleans.  Lot's of technology, programming and software to check out.  I plan to attend some public policy discussions, technical seminars and I get to moderate a session on Sports.  I'm really looking forward to that one! 

I also want to check out the True-2-Way products and see what type of 3rd Party opportunities are beginning to be developed for digital cable's new interactive open platform.  I know the cable industry is preparing to welcome developers to add great new products to the next generation of video service and I want to make sure we're being hospitable.

I hope to have a chance to post some thoughts while I'm there.  Don't blame me though if the crawfish etouffee and dirty rice keep me out late!

Confessions of a Network Manager (Part 1)

Okay, I confess.  It's true.  I'm a network manager.  I manage networks.  Not directly, but I approve policies that authorize our technical people to do just that.  I can't help myself.  There, I said it.

What is network management?

Simply put, network management is a series of rules that network managers put in place to ensure the smooth operation of their networks, thus maximizing customers' experiences.  I'm not sure why, but network management has become a debate. 

Why do we do this?

Network management is not your enemy -- it is your friend, even if you're a P2P enthusiast.  Without network management, everyone's online experience would melt down to a completely useless exercise.  It would reduce the Internet to a chaotic free-for-all as if you built a 10-lane superhighway and didn't have any traffic laws in place to keep the traffic moving.

The fact is, network management is absolutely necessary throughout the Internet, from the ISP's all the way through to backbone providers.  It happens everywhere on the Internet.  And it's a good thing that it does.

Bandwidth, throughout the Internet, is a shared asset.  Accordingly, we all have to learn to live with one other as good neighbors.  You don't go to Joe's Barbecue, an all-you-can-eat buffet restaurant, and proceed to eat all the food.  The goodies are affordable because they are offered under law of averages and a shared economic model.  If my brother-in-law, Norman, and a few of his buddies showed up every night, Joe would either have to raise the price for everyone or start charging by the pound.

Why are we having this debate?

I guess, to some extent, we created this debate ourselves.  Many of us, myself included, didn't really want to talk about how we managed our networks to keep the traffic flowing smoothly.  We simply did it.  Frankly, I believed that if we were totally transparent about it, certain people would figure out ways to defeat the rules of the road, making our management practices harder and more intrusive than we were wanting them to be.

Before you start flaming me, take a deep breath.

Today, let's look at upstream bandwidth.  Here's the deal.  Last time we checked, when we didn't employ network management techniques, far fewer than 5% of our customers monopolized over 80% of our upstream bandwidth.  Suffice it to say (and without going into the technical reasons) clogged upstream also ruins the downstream experiences for everyone else as well.  What does a clogged network mean? ...

Email?  Looks more like snail mail.

Looking up information?  Use the encyclopedia (if you have one). 

Gaming?  Go to an arcade.

Shopping?  Drive to the mall.

Sharing pictures of the kids?  Mail them.

In order for all those things to work, we say to the 5%'ers that, instead of taking 80% of the available bandwidth, you can only have 40% of the upstream at any given time.  You still get 8-times more than the average user, you just can't have it all.

And, what's this about us picking on P2P protocols?

We really don't.  We really are content agnostic.  We look for any and every cause of meaningful bandwidth-usage disparities.  When we find them, we look for ways to smooth out the spikes without blocking the content.  But the fact is, that today's Internet usage patterns result in P2P traffic being one of the most disproportionate bandwidth users.  But it's not about what it is, it's just about how much it's using. 

Why don't we just build as much as everyone can use?

ISP's are spending billions of dollars constantly provisioning for increasing bandwidth demand.  It's a never-ending battle which, frankly, I hope never ends.  It means we're in a successful business.  But we have to pace our spending so it doesn't get way in front of the vast majority of users' needs.  If we don't, the Internet would become totally unaffordable for almost everyone. 

So, what's so bad?

In this post's example -- upstream bandwidth management -- I've explained that we actually allow disproportionate users to have nearly 10 times more bandwidth than the average customers' demand.  We just don't let them have it all.  That way, we keep the entire Internet experience working reliably and affordable for all.

Research confirms that consumers rate our service higher than any of our competitors' and that we're one of the best ISP's in the country.  Responsible network management is one of the reasons we are able to provide one of the fastest and best Internet experiences in the nation.

So, go ahead Norman, have another burger.  Have 8.  But please, don't eat 20.

WOW! Where's our Workforce?

A while back we were given the opportunity to hire a number of experienced customer service representatives who were looking for new positions.  Why?  Because their jobs were eliminated when their employer and our competitor -- WOW -- closed one of their local call centers.

Did you know that when you call Insight, you usually are talking to one of your neighbors?  Insight maintains customer call centers during the business day and into the evening in virtually all of our districts.  Even after hours and Tier 2 calls don't travel very far.  They land nearby in Louisville, KY.  With the occasional exception when we have special call volume needs, we keep your business close to home.   

We know that customers have a choice when they decide where to get their video, broadband and phone service.  At Insight, it is a core company value that we continuously reinvest in the communities where we conduct business.  Unlike virtually all of our competitors, whether they are a cable or satellite company, a phone company or an ISP, we don't ship your calls off to a foreign country or halfway across the nation.  We take care of you right at home, where you live.

The dedicated men and women who work in our districts know how our customers, who are also their neighbors, are feeling about our service.  They are as personally invested in us as they are in their community.  When we need to improve something or change something -- and they're not shy about telling us -- we hear about it. 

They also are not shy about telling us that the quality of our service is very important to them.  When they show up at the supermarket or a little league game, they want to be proud of wearing a shirt with their company's logo on it.  And we want them to be proud.

We simply don't buy the theory that companies save that much money by centralizing their operations.  I've seen those consultants' reports that "prove" me wrong but my instincts tell me that their spreadsheets don't take into account the importance of being local.   

So, next time you call our office, say "Hi" to one of your neighbors who answered the phone and is helping you out.

Cable a Monopoly? Don't Make Me Laugh!

This is a story about a few dozen people who wake up in the morning and get ready to go to work, just like everyone else.  Specifically,these folks are responsible for the products and services that their company provides to its customers.  They work for Insight Communications.

Before they get to their desks, they've already checked out what's going on in their world.  How much of an installation discount is Dish offering?  Is DSL increasing their maximum speeds?  What kind of response is AT&T having to our unlimited long distance, feature-rich phone service?

The fact is that cable companies are operating in the most intensely competitive environment that they ever have.  Our customers have a choice with every service we offer.  We live and breathe competition every single day.  We offer great value with our attractive bundles, more reliable service than ever, faster speeds than anyone else in our markets.  Why?  Not because we're simply good guys (although we are), but because we respect the forces of competition.

Yet, people across the land don't seem to understand how competitive our world really is.  Indeed, not too long ago, I viewed a focus group where we were interviewing 10 of our customers.  The focus group was being held right after we announced a modest annual increase in our basic video rate.  After hearing some pretty good reactions about the service they were receiving from us, the interviewer asked them how they felt about how much they were paying us. 

One customer quickly expressed his unhappiness with our decision to raise the benchmark basic rate.  He accused us of raising our rate every year (that was pretty much true).  He ranted on that we did this because we didn't have any competition.  Others joined in, nodding in total agreement.  Then he went on to say that if we kept raising our rates every year because we had no competition, he would consider defecting and going to satellite.

I stood there in disbelief. 

What was I missing? 

We raised rates because we "didn't have any competition" and if we kept doing it, he would "go buy a satellite dish." 

Alas, another painfully clear example of how regular people don't connect those the dots that cable is a highly competitive business.

We fight these competitive battles every single day on multiple fronts.  I grew up in the cable industry and watched it transform itself from what was essentially a monopoly into this highly competitive business.  And I see close up that customers are the beneficiaries as we focus intensely on improved service, faster speeds, more channels, and greater value.  In a market-driven business, companies that don't understand competition don't do as well as those who have institutionalized a competitive spirit deeply into their culture. 

We certainly understand that at Insight.  Indeed, last year we gained over 45,000 basic video customers despite the intense competition. 

Good for us and good for you.

Cable A-La-Carte - A Great Idea, or Is It?

I know it sounds like a great idea to offer all the cable networks individually and to allow consumers to pick and choose the ones they want. 

But is it really? 

I have no doubt that consumers will suffer if cable operators, by law, had to offer their channels a-la-carte.  It sounds good at first but, when consumers face the reality of their new choices, they will discover that they are facing the prospect of having to choose far fewer channels than they have today or pay much, much more for them.

Why? 

Because an important percentage of revenue for programming networks like CNN, ESPN A&E and Discovery comes from advertisers.  Advertisers rely on ratings and ratings are enhanced increased by "accidental" viewing or the by-chance landing on a network by channel surfers.  Take those viewers out of the mix, and, poof, viewership decreases and advertising revenue that supports program creation and development evaporates.

Bundling networks into packages has been great for consumers

When it comes to video product, cable and satellite distributors are indisputably successful.  Together they serve over 90% of the nation's television households. 

Think about it.  Where else do you have seemingly endless entertainment and information options for $2 per day?  Without the contribution of revenue from advertisers, the cost for those networks would have to be fully borne by consumers. 

Life in an a-la-carte world

In an a-la-carte world, two bad things would happen.

• New networks would not get funded or launched
• Numerous existing networks would cease to exist

I oppose government-mandated a-la-carte, but not because it would be bad for my business.  To be perfectly honest with you, unlike the networks, I don't believe cable operators would be negatively impacted in an a-la-carte world.  In fact, some distributors think it would make their lives easier when it comes to dealing with the networks.

I oppose it because it would dumb-down television.  It would force the networks to program for the masses.  Is that all you want on television?  In addition to mass-appeal programming, our current system encourages the existence of diverse, niche and narrowly focused networks. 

Now I understand that there are times when we all feel like we have "500 channels and nothing to watch."  But I have no doubt that a lot of really great services such as TV One, Hallmark, Biography, Discovery Green (one example of a future service), and dozens, if not hundreds, of other current and future networks would simply cease to exist or won't be created at all. 

The cost of television today

I also understand that there are increasing costs that are putting serious price pressures on television.  Sports programming, in particular, is spiraling out of control.  But we must resist the temptation of blowing up a mostly successful system to deal with narrow problems within it.  We have found other ways to offset increasing costs by creating new optional tiers of programming.  And let's not forget that cable customers massively are finding opportunities to save money by purchasing our bundled voice, video and data offerings at attractively discounted prices.

Sure, a-la-carte absolutely sounds like a great idea, but sometimes something that sounds too good to be true is just that -- too good to be true. 

Customer Service 101

Yikes.  That was a spirited reaction to Karl's report about my blog over on Broadband Reports yesterday.  Some cynics over there questioned my motivation for reading blogs and responding to customers.  I actually intended to write about customer service anyway, so I guess this is as good a time as any. Here's one quote from the reactors. 

...Mr. Willner takes some time to scan through this and other sites, but don't for a second think it's all about customer service. It's about keeping PR fires under control.

I understand the comment but actually disagree with it.  I scan the blogs to deal with individual issues but we apply what we learn from those issues to fundamental changes in the way we do business and in the services we offer.  I have a very different motivation than "putting out PR fires." 

First of all, it is really important to me that we keep our customers from going elsewhere by keeping them happy.  But I have no shame in telling you that it's also about profitability.  Fact is, I believe fundamentally to the core that good customer service does not cost more money, it costs less money.

Why? 

Let's start from the premise that, no matter how nice we are, customers like us most when they don't have to talk to us.  They just want to turn on their TV or computer or pick up their phone and have it work.

In our business, really great customer service should be based on finding ways to reduce the need for customers to call us.  When a call center isn't keeping up with demand, hiring a bunch of people to answer more calls is the equivalent of putting a band-aid on a seriously infected wound.  Instead, shouldn't we treat the infection with antibiotics that cure it by asking ourselves, "Why are so many customers calling us?" 

We've found that there are a handful of typical reasons why calls increase.   Some of the culprits include...

• Are we maintaining the plant properly? 
• Is our billing system accurate and easy to understand? 
• Have we made a customer-impacting change in our service and, whoops, forgot to tell our customers what we were doing? 
• And last, but certainly not least, what is our repeat call ratio? 

When we ask those questions, we find things we can do better -- things that help us to reduce the call volume by not causing problems in the first place or by fixing problems the first time we hear about them. 

To illustrate the money savings opportunities, let's delve into the last point -- repeat call ratios.  You might be shocked to know how many service organizations simply accept call-back rates in excess of 35% and even higher.  That means that over one-third of the customers who call in, have to call again to resolve an issue!  And they're usually really peeved that they are forced to do so.

We began to work on this issue a couple of years ago. Now, before you start sending me nastygrams, let me say that we know we're still not perfect in this respect and we continue to work really hard to reduce repeat calls further.  We started by asking our call center and field leadership teams to accept responsibility for reducing our call-back rates.  We measure their stats closely, analyze the reasons behind the call backs, look for ways to eliminate those reasons and discuss their progress regularly.  And we have made real progress.

Just think of the numbers.  Hypothetically, if a call center handles a million calls with a 35% call back ratio and you reduce that number by just 10 percentage points -- to 25% -- by solving a customer's issue on the first call, you've reduced your call volume by 100,000 calls!  It doesn't take a rocket scientist to figure out that that's big bucks.

Reducing the call volume by fixing operational problems and resolving issues on the first try is one of the greatest cost cutting activities we can achieve.  And instead of cost cutting decisions that reduce customer service quality, our customers will think we're even better for doing so.

So, yes.  I read the blogs, and so do a lot of others here at Insight.  But you can rest assured that we do so not just to placate people but to learn from them.  We actually solve problems for them.  But while we're doing so, we increase customer satisfaction, reduce defections, and therefore increase profitability.

Not a bad outcome for us.

Human Contact Doesn't Cost Extra at Insight

According to recent articles on Broadband Reports and MSNBC, AT&T is planning to charge customers $5 to talk to a live billing representative, even if you're the victim of identity theft. Broadband Reports says: 

We mentioned in March that AT&T is prepped to start charging $5 in May if you want to talk to a live billing rep over the phone. MSNBC discovers the practice after an id theft victim (forced to close her checking account) was charged $2 for trying to pay AT&T in cash:

Payne objected to the "administrative charge" that was added to her bill but got no sympathy. Instead, she said, she was told she should consider herself lucky because the fee was about to go up to $5.

"We want our associates to spend their time helping customers as they are thinking about their wireless plans or looking at phones," AT&T spokesman Mark Siegel says.

You gotta be kidding me. Apparently, AT&T doesn't want to take cash from their customers because they charge an extra $2.00 for the right to pay with the legal currency of the United States of America. 

At Insight, we want to sell services too, but I want you to know that we do not charge you to pay your bill. This doesn't mean we won't charge late fees or other charges for returned checks, etc. -- but never to simply come into our office and pay your bill. In fact, we love for you to stop by -- it might just give us the opportunity to tell you about some really cool new product we are offering and could give you the chance to save some money too!

And the Blogs, They Are a Changin' (The World!)

Two years ago, we had to migrate our broadband service in a very short time.  We ran into some real service issues when we were forced to rush the process.  Customers were temporarily experiencing access, speed and email problems.

We decided to confront the problem head-on.  Of course, all of our dedicated people who had any technical expertise worked day and night to fix the problems.  But we also did other things.  We taped some 30-second spots explaining the problems, telling customers what we were doing about it and, of course, apologizing.  We recorded outbound telephone messages and sent emails and letters.  We also increased our inbound call handling capacity as quickly as we could.

And we went on the blogs.  It was there that we found the silver lining surrounding a really awful experience.  Some of what we saw wasn't pretty but it certainly was enlightening and ultimately very helpful.  We discovered that we could learn a lot from the people who were posting their online experiences -- good and bad.  In particular, I personally began monitoring Broadband Reports, a site with at least a zillion members who know and talk a lot about broadband Internet services.  And our product, customer care and technical folks began monitoring the blogs too. 

Our migration problems came to an end but our focus on the blog world didn't.  We institutionalized monitoring the blogs and now regularly reach out to customers who post if we think we can help them with their issue.  Indeed, we often discuss service changes and improvements that were thought of simply by reading blogs.

Indeed, I recently read (on a blog, of course) that Comcast, the nation's largest cable operator now has a group of people who monitor the blogs and reach out to customers.  That's an absolutely terrific use of resources!  Our experience proves to us how important that is for our business.  We know we have dramatically improved our customer ratings of our broadband service since we began monitoring and learning from the blogs.

To tell you the truth, nowadays, I wake up in the morning and I'm on BBR and some other blogs even before I open the New York Times.

Who said they can't teach an old dog new tricks?

Download movies the same day you can purchase the DVD at the store

For those of you who are iTunes users, I saw an interesting story last week on the blogs about a deal Apple has struck with most of the major movie studios to release their movies on iTunes the same day they are available as DVDs at retailers. Broadband Reports wrote:

Apple this morning dropped the news that customers will now be able to purchase films from iTunes the same day they hit DVD shelves, eliminating the typical 30-45 day delay between DVD launch and digital availability. It appears that a lot of major studios are on board as well, including 20th Century Fox, The Walt Disney Studios, Warner Brothers, Paramount Pictures, Universal, Sony, Lionsgate, Image Entertainment and First Look Studios.

Apple's iTunes online downloads have supplanted CD sales, with Apple recently overtaking Wal-Mart as he largest retailer of music in the U.S. Now, Apple is making the move to do the same thing to DVDs.

With peripherals like the Apple TV, that allows users to view their iTunes movie downloads on their television, early adopters can move their entire home theatre experience online.

Now, even though I'm a Mac fan, this isn't an advertisement for Apple. It's another example of the way that access to broadband Internet has changed our everyday lives. Even with the recent end of the format war between HD-DVD and Blu-ray, the next format battle is already on the horizon and it will be between iTunes, DVD and Blu-ray.

Cable providers invest in wireless broadband network

The New York Times reports this morning that a consortium of Sprint Nextel, Google, Intel, Comcast, Time Warner, Bright House and Clearwire are set to announce today a $12 billion deal to build the nation's first wireless 4G network. The proposed wireless network speeds would be comparable to current home broadband speeds.

Cable providers involved in a wireless venture? It's one more example of the innovations spurred by competition in Internet access. Why in the heck would anyone want to impose government regulations that might stifle creative advancements like this one? Broadband Reports indicates that Sprint Nextel wasn't able to put the capital together on their own for the network, and the cable providers' investments made the deal happen.

While wireless access is not critical to the cable business model, it could be an additive bonus, allowing customers to take their Internet connection with them when they leave their desktop computer.