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Spectrum Satisfaction Ratings Dive on “Take It Or Leave It Pricing” Post Time Warner Cable

Phillip Dampier April 23, 2018 Charter Spectrum, Competition, Consumer News 1 Comment

Charter Communications’ takeover of Time Warner Cable and Bright House Networks has not proved popular, according to a new survey from Temkin Group.

The cable operator received rock bottom scores among customers frustrated about how Charter handles its acquired customers, especially those facing a transition to Spectrum plans and pricing. Customers have filled the company’s own forums with complaints about rate increases for newly required equipment or cable television plan changes that force customers to upgrade to win back channels deleted from their long-standing Time Warner Cable or Bright House lineups.

Customer dissatisfaction about the changes was picked up in Temkin Group’s 2018 Temkin Experience Ratings, U.S., published in March.

Just 35% of Charter/Spectrum customers were emotionally satisfied after interacting with Spectrum, the third worst performing company among the 318 surveyed across 20 different industries. Spectrum saw a ratings drop of 8.2% from 2017-2018, the worst performance decline among all TV and internet service providers,  according to Temkin’s survey.

Spectrum also scored just 57% on the “effort” metric, which measures how difficult it was to interact with the company to resolve a problem. Only 51% reported satisfaction with the ability of Spectrum to resolve their concern or problem, putting Spectrum on Temkin’s “Bottom 50 Organizations” — 312th best performer out of 318 companies. (Comcast, Cox, and Altice-Optimum actually performed slightly worse.)

Temken explains the root cause for perennially poor ratings of cable and phone companies: they often have a monopoly.

“There are some industries that have habitually poor customer experience,” Temken explains. “In many of the cases, these problem stems from some form of monopolistic power. TV service providers and internet service providers have carved out regions and have limited competition.”

This marks the eighth year Temkin has published its Temkin Experience Ratings, generated from compiling the results of a survey of 10,000 U.S. consumers about their recent interactions with 318 significant U.S. companies. Temkin measures three dimensions of a customer’s experience:

  • Success: To what degree were customers able to accomplish what they wanted to do after a recent interaction with a company.
  • Effort: How easy was it to interact with the company.
  • Emotion: How did the customer feel about those interactions.

The TV/internet service category has stood out in recent years for consistently delivering rock bottom ratings — the worst of Temkin’s surveyed industries. Only health insurance companies come close to the dismal ratings phone and cable companies deliver year after year.

Much of the decline in Spectrum’s rating is attributed to an increase in the negative emotions customers experienced after interacting with the company. In the last year, the company has adopted a much firmer position on pricing and packages that customers criticize as “take it or leave it pricing.” Spectrum also recently scaled up digital television conversion in many legacy Time Warner Cable markets, with many customers paying for new set-top boxes to continue receiving cable television service on all televisions in the home. The company has also frustrated early and enthusiastic adopters of broadband speed upgrades with compulsory upgrade fees as high as $199.

Based on Temkin’s four customer experience core competencies, it seems like Charter is mired at the first stage of what Temkin calls ‘Customer Experience Maturity’:

Stage One — Ignore: Organization does not focus on customer experience management and does not view customer experience as a core part of its value proposition.

The best performers in Temken’s annual study were supermarkets, which took five of the top 11 spots. The top-rated company in the 2018 study was Wegmans, a privately held supermarket chain operating in the northeastern U.S. Other top scorers included H-E-B, Publix, Aldi, Wawa, Citizens Bank, USAA, Subway, and Ace Hardware.

Charter Sues El Centro, Calif. for Interfering With Its Blackout of Local TV Stations in Contract Dispute

Charter Communications is taking the city of El Centro, Calif., to federal court for interfering in a dispute between Spectrum and a local TV station owner that has resulted in two stations being blacked out on the local cable system for nearly three months.

Northwest Broadcasting, Inc., has been in a contract extension dispute with Charter Communications over multiple stations, including its two El Centro-area affiliates KYMA (NBC) and KWST (CBS). Charter accuses Northwest of gouging, claiming “Northwest demanded an 80 percent increase in carriage fees, more than double the rate Charter pays any other broadcaster anywhere else in the entire country.”

On March 7, 2018, the City of El Centro got involved and cited the cable operator, alleging Charter violated five provisions of Article X of the City Code, and began fining the cable company $100 a day for each violation, assessed each day the dispute continues.

El Centro accuses Charter of:

  • Discriminating against subscribers based on specific protected classes;
  • Failure to notify the city and subscribers 30 days in advance of any changes to cable service or rates;
  • Failure to establish a time frame to respond to service interruptions;
  • Failure to refund customers for service interruptions exceeding a stated period;
  • Failure to notify the city and subscribers 30 days in advance of any changes to the cable television channel lineup.

El Centro Mayor Sheryl Viegas Walker: “I’m taking it to the streets. I’m so fed up with [Spectrum’s] disregard for this community,” KYMA in El Centro reports. (3:02)

Northwest Broadcasting CEO Brian W. Brady strongly disputes Charter’s claims, dismissing them as “lies,” particularly surrounding the removal of two El Centro stations from Charter’s lineup after the cable company claimed Northwest refused permission to continue carrying the stations while renewal talks continued.

“Charter accepted the first two extensions which were offered to them, however, they refused the third extension and took our stations off with 10 minutes notice,” Brady said.

Charter’s lawsuit argues El Centro officials have no right to intervene in the dispute, force Spectrum to put the stations back on the lineup, or require Charter to issue refunds to customers for channels that are no longer available to them.

“Northwest’s pulling its authorization for Charter to carry its broadcast signals is not a ‘service interruption’ within the meaning of the City Code provisions in question,” Charter argued in its lawsuit. “Even if it were, while El Centro demands that Charter ‘cure’ its alleged violations, the only means for Charter to do so is to finalize a retransmission agreement with Northwest. The City’s citations are thus intended to pressure Charter to accept Northwest’s unreasonable terms by imposing fines and intentionally damaging Charter’s reputation and harming its goodwill and relationships with its existing and prospective customers.”

Charter argued giving refunds to customers over the lost channels was “contrary to Charter’s terms of service, and in so doing improperly interfere [sic] with Charter’s contractual relationship with its customers.”

Charter is relying heavily on California’s statewide video franchise law — the 2006 Digital Infrastructure and Video Competition Act (DIVCA), heavily pushed by telecom lobbyists a decade ago, which stripped most local authority over cable systems and transferred it to the state government. Charter is using DIVCA’s light touch regulations to support its assertion El Centro officials cannot interfere in programming disputes and that their actions during the dispute have only made things worse.

“The effect of the City’s actions has been to harden Northwest’s negotiating position and make a deal on reasonable terms even more difficult,” the complaint says.

“I have never seen a corporate entity act with such disregard for our community,” said El Centro Mayor Sheryl Viegas Walker. “We have a contract with them that spells out certain steps that they’re required to take if those kinds of changes are going to be made. They didn’t do that. We wake up one morning and we’re suddenly without two major channels.”

“Rather than negotiating in good faith like all other parties would do and what the law requires, Charter has taken a ‘take it or leave it’ approach,” added Brady. “In an effort this week to get this back on track, Northwest submitted a new proposal to Spectrum. Spectrum’s representative communicated that they really wanted to get this resolved, but would not counter Northwest’s proposal and would not respond at all in writing. Odd behavior for a company that claims to be negotiating in good faith. It appears that Charter would rather bully a small municipality than to engage in a good faith negotiation.”

It appears other small cities are joining Brady’s cause, complaining to the Federal Communications Commission that Charter was unfairly profiting from station blackouts. In Crescent City, Calif., city officials accused Charter of charging a Broadcast TV surcharge of $7.50-8.85/month, but didn’t change or adjust rates after the Northwest Broadcasting blackout began.

“Despite the fact the fee is itemized and justified as a pass-through, Charter did not eliminate or reduce that fee, even though it was no longer incurring costs associated with carriage of … at least two network affiliates,” Crescent City officials told the FCC.

The two California cities have also been joined by officials in Yuma, Ariz. and Jackson, Wyo., where Charter has removed Northwest Broadcasting stations as well.

“We have learned that it is no different for numerous municipalities which have been forced to sue Charter to collect the fees that are contractually owed to them,” Brady said. “Most disputes are settled because Charter uses their army of lawyers to outspend the municipalities forcing the municipality to settle on Charter’s terms, regardless of their contractual obligations. It’s no different for their customers who have told us that Charter recently raised the broadcast surcharge fee in spite of the fact that the programs they want to watch are unavailable because Charter removed the programming. Many have asked for refunds only to be told no. What is the customer to do, sue Charter?”

Northwest Broadcasting Owned and/or Operated Television Stations

City of license / Market Station Channel
TV (RF)
Owned since Affiliation
Yuma, Arizona – El Centro, California KYMA-DT 11 (11) 2014 NBC
KSWT 13 (13) 2014 CBS
Estrella TV (DT3)
Eureka, California KJRW 17 (17) 2016 CBS
Pocatello – Idaho Falls, Idaho KPVI-DT 6 (23) 2016 NBC
Decades (DT2)
Movies! (DT3)
Greenville – Greenwood, Mississippi WABG-TV 6 (32) 2016 ABC
Fox (DT2)
WFXW 15 (15) 2016 Silent/Unused
WNBD-LD 33 (33) 2016 NBC
WXVT-LD 17 (17) 2017 CBS
Binghamton, New York WICZ-TV 40 (8) 1997 Fox
WBPN-LP 10 (40.2) 2000 MyNetworkTV
Syracuse, New York WSYT 68 (19) 2013 Fox
Cozi TV (DT2)
WNYS-TV 43 (44) 2013 MyNetworkTV
GetTV (DT2)
Medford, Oregon KMVU-DT 26 (26) 1995 Fox
MeTV (DT2)
KMCW-LD 14 2013 Sonlife
KFBI-LD 48 (48) 2013 MyNetworkTV
Telemundo (DT2)
Spokane, Washington KAYU-TV 28 (28) 1995 Fox
Antenna TV (DT2)
Tri-Cities – Yakima, Washington KFFX-TV 11 (11) 1999 Fox
Telemundo (DT2)
KCYU-LD
(Semi-satellite of KFFX-TV)
41 (41) 1995 Fox
Telemundo (DT2)

KPVI-TV in Pocatello, Ida. was widely seen in parts of Wyoming over Charter Communications until the station was blacked out in a contract dispute. Now viewers want to see Charter fined. (1:11)

Charter officials claim there was insufficient time to notify subscribers about the loss of Northwest Broadcasting stations from the TV lineup, but Jackson, Wyo., officials noted Charter bought a new domain name reflecting the contract dispute at least two weeks before stations like KPVI were blacked out. (1:02)

Jackson city officials question a Charter representative about refunds for customers paying surcharges for broadcast TV stations no longer on Charter’s lineup. (0:57)

How to File a Petition on this Issue with the Federal Communications Commission:

This petition allows for public comment until April 16, but the FCC requires some special steps for individuals wishing to file comment. Below is a list of the requirements to file a public comment with the FCC regarding Charter Communications:

  • Members of the public who wish to comment should do so on or before April 16, 2018.
  • Filing should be submitted to the FCC via the electronic comment filing system (ECFS).
    • That system is accessible at https://www.fcc.gov/ecfs/filings.
    • A member of the public should type his or her comments and save them.
    • At the top of the ECFS page, select standard filing and in the “proceedings” box, type 18-91 (the proceeding is MB Docket No. 18-91).
    • Fill out the remainder of the boxes with information that is required (some information is optional).
    • At the end of the form, there is a box where saved comments can be uploaded.
  • Comments that contain statements of fact (for example, “Here is what happened to me”) should be supported by an affidavit.
  • “Comments or oppositions shall be served on the petitioner and on all persons listed in petitioner’s certificate of service…” The petitioners here are the Cities, and the certificate of service is at the end of the communities’ filing, which can be downloaded from https://www.fcc.gov/ecfs/filing/1032236683943.

Capped Comcast Customers Play Columbo to Identify Data Hogging Services

Nathan Gray woke up one morning this month and received an alarming notification from Comcast, his internet provider, claiming he had exceeded his Comcast terabyte data cap and was being billed an additional $10 for a 50 GB allotment of extra data.

“This has never happened before and I was only six days into my monthly billing cycle, so I assumed it must be a mistake,” Gray told Stop the Cap! “But Comcast told me it wasn’t a mistake.”

Gray was hardly alone. One month earlier, “Bogreenwoo” discovered his family had blown the roof off their internet usage, exceeding 1 TB by the middle of the billing cycle, with more usage piling up hour after hour.

“Xfinity was adding 50 GB blocks every day at $10 each and calls to tech support were no help,” he shared on Comcast’s customer support forum.

Similar complaints are brought up on that forum at least weekly, if not more often. Comcast counterclaims that usage exceeding 1 TB a month is so rare, it represents only about 1% of its customer base. But customers with huge internet bills from Comcast who stumble their way to the company’s support forum strongly dispute that notion.

“Well good luck with finding a solution or even finding anyone at Comcast who cares or anyone anywhere else as far as that goes,” shared “Amaasing.” “I have had this issue more than once and have talked with every vice president of customer service and had discussions with the security department and even filed a complaint with the FCC and nothing happened at all.”

Some users, like Amaasing, have received so many bills stung with overlimit fees they now turn their computers off in the evening and unplug their cable modems. In many cases the usage keeps rising anyway.

“Today when I logged in, I had apparently used 196 GB yesterday,” Amaasing wrote. “196 GB in 24 hours?  Seriously?”

For most customers in this predicament, Comcast is quick to blame customers for the usage and leave the detective work up to them. Customer support will not entertain suggestions their usage meter is inaccurate. In their view, it is more likely someone is illicitly connected to your Wi-Fi and stealing your service or you are running some bandwidth-heavy application or your computer has been hijacked by hackers or pirates.

While you are left to investigate which of these might be true, Comcast is free to continue billing your account overlimit fees.

Comcast claims it will forgive customers who exceed their data allowance twice ‘a year’:

“We’ll provide you with two courtesy months, so you will not be billed the first two times you exceed a terabyte while you are getting used to the new data usage plan. This means that you will only be subject to overage charges if you use more than a terabyte for a third time in a 12-month period. If you use more than a terabyte two times or less in a 12-month period, your courtesy month balance will reset to two at the end of these 12 months. However, if you use more than a terabyte three times in a 12-month period, no more courtesy months will be given.”

After “courtesy months” expire, you are on the hook for whatever excess usage Comcast determines you have consumed. Some Comcast customers assume the courtesy month counter resets each calendar year, but in fact it only resets after 12 consecutive months of staying within your allowance limit.

What causes “excess usage” is anyone’s guess. Comcast customers have documented several recent causes why they have mysteriously started blowing through their 1 TB data allowance:

  1. The growing prevalence of 4K video, the highest streaming video quality available through online video streaming services can be responsible for a sudden spike of usage. Netflix and other services that support 4K video content with high dynamic range can eat up 7 GB to 10 GB of data per hour. Many services allow you to downgrade your video settings with minimal quality loss. We recommend trying settings typically labeled 720 or 1080 — the lower the better if you are running up against your allowance.
  2. Third party backup and cloud storage tools: That online backup or cloud storage service you are using may be malfunctioning. There are several reports about Amazon Drive having problems recently, causing files to be repeatedly transferred and driving up usage to several hundred gigabytes a day in some cases. If you use Amazon Drive and have seen a huge spike in usage, try uninstalling or turning off the service for several days and see if usage falls dramatically. Other file and computer backup services that store your data in the cloud can consume a lot of data, especially when installing them on a new computer for the first time. Even some cell phone backup services designed to store your photos in the cloud can malfunction and repeatedly try to send the same photos over and over. Disable these tools for several days and check your usage levels.
  3. Third party usage: Family members doing something bandwidth intensive can also be responsible for dramatic usage spikes. Although downloading video game updates can consume very large amounts of data, game play itself typically has little impact on your data usage. Check with family members to see if they are watching high bandwidth video or have installed a file backup service. Less common is an uninvited guest on your Wi-Fi network. Comcast often points to Wi-Fi security as a major problem when a neighbor gains access to your internet connection to download huge numbers of files. You can change your Wi-Fi password to help lock down your network. Make sure not to use plain word passwords — use a mixture of letters, numbers, and symbols.
  4. Comcast’s meter is simply inaccurate. There is no independent third-party verification or government oversight of Comcast’s usage meter. Most ISPs hire a third-party contractor to design and implement their data measurement meters, but those contractors are ultimately answerable to the provider — not to you, giving little peace of mind to consumers who are forced to trust their cable company to be honest. Our country’s Founding Fathers placed great importance on accurate measuring and weighing tools, so much so it is addressed in Section VIII of Article I of the U.S. Constitution. That section gives authority to Congress to establish accurate and regulated measurement tools. Each state has their own way of managing this, often with a bureau of weights and measurements that independently verifies and certifies — with a tamper-evident sticker, the accuracy of the food scale at your local grocer or the gas pump at a nearby service station. Comcast has resisted similar third-party oversight for its usage meter. But considering the company’s overlimit fees can add a substantial sum to customer bills, having this kind of oversight seems appropriate.

Avoiding the usage cap: Comcast ironically provides its own insurance plan to protect customers from its own arbitrary data allowance. For peace of mind, Comcast collects an extra $50 a month ($20 for gigabit speed DOCSIS 3.1 plans) if you wish to waive the data cap altogether. Data caps are completely under the control of Comcast and are especially prevalent in regions of the country where a lack of competition exists. But Comcast’s arguments in favor of data caps don’t wash at the nation’s second largest cable company – Charter Communications, which markets its internet service as having no data caps at all. In fact, Charter CEO Thomas Rutledge never saw much use for data caps at Charter or Cablevision, the company he used to head.

Debunking arguments for usage caps at Comcast and other ISPs. (5:46)

Times of London: Sprint Parent SoftBank Lays Groundwork for Takeover of Charter/Spectrum

Softbank CEO Masayoshi Son

Japan’s SoftBank “has laid the groundwork” for a $100 billion bid to acquire Charter Communications, better known to its customers as Spectrum, and merge it with Sprint, the American wireless company it controls, according to a report this morning in the Times of London.

London financial district sources leaked information early Monday morning that SoftBank’s billionaire CEO Masayoshi Son has already quietly purchased nearly 5% of Charter Communications stock, a prerequisite for launching a takeover bid. By purchasing a solid stake in Charter, the company hopes to be to taken more seriously about its proposition to combine America’s second largest cable company with the country’s fourth largest wireless carrier.

This isn’t the first time SoftBank has expressed an interest in a merger with Charter. Late in 2017, Masayoshi approached both Charter and its largest shareholder, Dr. John Malone, about the prospect of a merger. Malone was reportedly lukewarm about the deal, while Charter CEO Thomas Rutledge and the rest of his management team opposed the deal. But apart from Malone and Rutledge, many of Charter’s top shareholders were in favor of a merger — particularly the Newhouse family, which sold its interests in Bright House Networks, a mid-sized cable operator, to Charter in 2016.

Masayoshi has been a strong advocate of consolidation in the wireless industry, and has repeatedly lobbied for permission to acquire T-Mobile USA to combine it with Sprint. But regulator concerns during the Obama Administration made such a deal impossible. By targeting the acquisition of a cable operator, SoftBank can argue the transaction will have no material impact on competition because Sprint and Charter Communications operate different businesses.

Altice USA: 90% of Our New Customers Want Broadband Speeds 100+ Mbps

Cablevision customers get very attractive promotions in the highly competitive northeastern United States, while Suddenlink customers in more rural areas pay more.

The majority of Cablevision and Suddenlink broadband customers want speeds of 100 Mbps or greater from the Altice-owned cable operators, and average monthly data usage by those customers is now reaching 200 GB per month.

Those statistics were part of a quarterly financial results presentation by Altice USA executives about how the company is doing in the United States.

Altice’s cable holdings include Cablevision, serving a generally affluent customer base in and around the New York City area where Verizon FiOS is its biggest competitor, and Suddenlink, which serves in less competitive markets where local economies are often challenged and phone company DSL still has a significant presence.

Regardless of whether customers receive broadband from Cablevision or Suddenlink, Altice USA CEO Dexter Goei made it clear consumers want faster internet service and are consuming exponentially more data than ever before.

Goei said Altice will continue to increase internet speeds over its existing hybrid fiber-coax network (HFC) even as it builds out its fiber to the home replacement network in some areas. At least 95% of Cablevision customers can now subscribe to 400 Mbps broadband on the company’s legacy HFC network. Around 72% of Suddenlink customers can get similar speeds today. Gigabit speed is available to 29% of Altice USA customers.

Goei said 90% of new Cablevision and Suddenlink customers now choose internet plans featuring 100 Mbps or faster broadband. The average data use of those customers “is now reaching about 200 GB” per month, Goei reported. For customers on HFC systems, Goei said the maximum speed Altice’s implementation of DOCSIS 3 can support is around 600 Mbps, depending on how many customers are sharing the connection. As customers transition to fiber service in the northeast, faster speeds are planned. In fact, Goei wants Cablevision to offer speeds even faster than Verizon FiOS, its chief competitor.

“In terms of the speed capabilities, we’ll have the ability to do higher speeds than the competition,” Goei said.

Altice USA’s fiber-to-the-home (FTTH) deployment is “well underway” in New York, New Jersey, and Connecticut, with plans to connect several hundred thousand customers to the new network starting later this year. Goei told investors Altice was accelerating the rollout this year with the hope of further reducing network and customer operation costs related to servicing the older coaxial network.

Cablevision and Suddenlink will gradually be rebranded as Altice, and the company has begun familiarizing customers with the new brand name in various ways, including the rollout of its new deluxe set-top box, called Altice One.

“This is our new entertainment platform with an all in one box, including TV, internet, Wi-Fi, integrated apps such as Netflix and a voice activated remote control,” said Goei. “The service includes an improved Wi-Fi experience […] as many TV boxes double up as Wi-Fi repeaters around the home. This is a key part of our strategy of enhancing the customer experience and we’ll have the capacity for ongoing upgrades and the addition of new apps as they become available.”

But that new platform comes at a cost. Currently, Cablevision customers can pay as much as $10 for each set-top box and $5 for a cable modem. Altice One is regularly priced at $25 a month — $10 more for a customer that has one television set-top box and cable modem. That makes Altice’s box among the most costly in the cable industry. The company is trying to hide the cost of its box by bundling it into promotions targeting price sensitive new customers.

In fact, the cost of service is increasingly becoming a factor, especially for Suddenlink customers. Over the last two years, Altice has been “harmonizing” Suddenlink’s rate plans, which used to be set based on the technical capabilities and performance of each cable system. Goei said Suddenlink comprised “five or six different customer bases” — each served by cable systems with different capabilities and rate plans. In the last two years, Suddenlink customers have been introduced to new rate plans, and some are paying considerably higher rates than before, especially for equipment and surcharges.

“All of that activity was probably more than we ever wanted to or anticipated as harmonizing all the different variables is not that easy,” Goei said. “And so we made a very concerted effort to not implement a usual or industry like price increase at the end of 2017, given all the various changes that happened over both customer bases as we harmonized them.” But Goei added the reprieve from rate hikes won’t last forever, promising a “rate event” strategy sometime this year, different from rate changes in past years.

Altice is emphasizing the progress it is making boosting internet speeds at its Cablevision and Suddenlink cable systems.

What Suddenlink and Cablevision charge for service is very dependent on what the competition is offering in Altice’s various markets. Goei paradoxically noted that some of the most attractive rates go to customers living in the most affluent areas of the New York Tri-State Area because of intense competition from Verizon FiOS. Prices have remained so low historically that, in Goei’s view, “it makes it very difficult for third parties to come into these markets” and compete with attractive offers that can match Cablevision. That also explains why Cablevision customers do not deal with data caps while Suddenlink customers often do.

Goei

Conversely, in Suddenlink service areas where less capable competitors exist, prices can be higher and service is considered less affordable. As a result, financial analysts have noted Suddenlink’s broadband growth has been anemic since Altice bought the company, presumably because would-be customers cannot afford the service or have chosen a more economic package sold by the phone company, even if it less capable.

Goei promised Altice would be more “nimble” in the future about targeting pricing in different service areas, taking current conditions on the ground into account when setting rates.

In more general terms, Altice is dealing with the same challenges most cable operators are facing these days. Cord-cutting continues to result in reduced numbers of video subscribers. The company also recently endured a multi-week programming dispute with Starz that cost the company video subscribers in the Cablevision service area. The dispute eventually ended with a new multi-year affiliation agreement that allows Altice systems to carry Starz and Starz Encore networks, on-demand services, and online access for several years.

But Altice clearly sees broadband as its key product going forward, which is why the company is upgrading its Cablevision and Suddenlink systems to support faster internet speeds.

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