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Want the Best Deal from Charter/Spectrum? Cancel Your Service for a Few Days and Wait

Former Time Warner Cable and Bright House customers, listen up. A veteran Charter Communications customer who cut cable’s cord for good a few months ago reports Charter’s hard-line on extending retention deals to customers threatening to leave lasts only until you turn in your equipment and cancel your service.

DSL Reports reader mmainprize from Houghton Lake, Mich. wrote he dumped his $180/mo Charter Gold TV with Phone package for good after realizing just how much Charter was gouging him for service.

“I just went through my bills, and remember when internet was only $49 in mid-2015 before increasing to $52 in late 2015,” he writes. “So at the now current price of $65 you can see just how much it has gone up.”

When he called to tell them he was canceling service, they briefly tried to keep him as a customer by cutting back on his cable package for a lower price.

“Double play, Flex pack, you pick 20 channels, etc. At first the offer was internet and basic cable for $90 a month, then $74 a month for internet and “limited basic” (an unadvertised package of local channels, public access, educational and government channels, plus home shopping). I canceled all but internet.”

Within days the phone calls and letters started coming advertising discounts Charter wouldn’t dream of offering when he was still a TV customer.

“I get a call every day now (it is harassment) offering the same prices or lower than what I was offered when canceling,” he writes.

The first offer is $80 for a double play package of TV and internet service. But if you turn them down, they eventually pitch a triple play offer of $89 a month with TV, phone, and internet with free HD and DVD service (equipment extra).

The enticing offer on their website, promoting $29 a month for internet, $29 for TV, and $29 for phone service is available only to new customers. Existing Charter, Bright House, and Time Warner Cable customers cannot get those prices. You must pay more.

Those canceling service qualify as a new customer after a 30 day timeout period. Or skip that and sign up as a new customer under the name of another household member. If you are married, your spouse’s maiden name will suffice.

One thing is certain. Charter’s takeover of Time Warner Cable and Bright House is very unlikely to save most customers any money. Almost 90% of Time Warner Cable customers received discounts from a bundled service package or a retention deal. When those packages expire, your bill will skyrocket. This is exactly what Stop the Cap! told regulators in our opposition to the merger. Since 2008, we have shared one sage piece of advice with readers:

When a cable company comes calling promising you a great new deal, watch your wallet and run!

Corporate/Koch Brother-Linked Group Asks FCC to Repeal Charter/Spectrum’s Data Cap Prohibition

A conservative group funded by corporate interests and the Koch Brothers has asked FCC chairman Ajit Pai to answer its petition and move expeditiously to cancel the prohibition of data caps/usage-based pricing as a condition for FCC approval of Charter Communications’ acquisition of Time Warner Cable and Bright House Networks.

A number of pro-consumer deal conditions were included as part of the merger transaction’s approval, and won the support of a majority of FCC commissioners under the leadership of former FCC chairman Thomas Wheeler, appointed by President Barack Obama.

The Competitive Enterprise Institute (CEI) is hopeful that with Wheeler out of office and a new Republican majority at the FCC under the Trump Administration means the FCC will end requirements that Charter offer unlimited data plans, discounted internet access for low-income consumers, and start allowing Charter to charge fees to Netflix and other content providers to connect to its broadband customers. CEI has every reason to be hopeful, pointing out Chairman Pai is a fan of data caps on residential broadband service, opposes Net Neutrality, and recently effectively killed a Lifeline program that would have extended inexpensive internet access to the poor.

CEI:

As then-Commissioner Pai wrote in 2016, this condition is neither “fair” nor “progressive.” Instead, he called this “the paradigmatic case of the 99% subsidizing the 1%,” as it encourages Charter to raise prices on all consumers in response to costs stemming from the activities of a “bandwidth-hungry few.” Other problematic conditions include the ban on Charter charging “edge providers” a price for interconnection and the requirement that the company operate a “low-income broadband program” for customers who meet certain criteria.

The group is optimistic Pai will oversee the unwinding of Charter’s deal conditions largely pushed by former FCC chairman Thomas Wheeler, after Pai recently led the charge to revoke another condition required of Charter in return for merger approval – a commitment to expand its cable network to pass at least one million new homes that already receive broadband service from another provider.

Pai also opposed the low-income internet program, calling it “rate regulation.” The CEI claimed the requirement will “undermine Charter’s ability to price its services in an economically rational manner.”

“Hopefully, the FCC’s new leadership will seize this opportunity to take a stand against harmful merger conditions that have nothing to do with the transaction at hand—by granting CEI’s petition,” the group wrote on its blog.

Charter/Spectrum Arrives in Northeast/Mid-Atlantic Region, Big Rate Hikes Sure to Follow

The last remaining parts of the country formerly served by Time Warner Cable are rebranding as Charter/Spectrum today, with the introduction of new service plans in upstate New York, western Massachusetts, Maine, and parts of the Carolinas.

“Redefining what a cable company can be,” as Charter Communications promotes to its customers, is a tall order for a cable company that is often loathed by its customers. Our readers have reached out to us all day to suggest, at least so far, Spectrum is the same old cable company, just with a new name.

“If I switch away from my Time Warner Cable plan to adopt a Spectrum plan, my bill will increase $40 a month,” complained Rochester, N.Y. resident June Patterson. “Even the customer service person I talked to said it would be crazy for me to switch plans.”

A customer in Albany, N.Y., reported their bill would increase by $30 a month. Another in Silver Creek, N.Y., claimed a $40 rate rise by switching to a Charter/Spectrum plan.

“I pay $92.06 now for Starter TV and Ultimate Internet in the Ithaca area,” shared another customer on DSL Reports. “After going through two operators, the second one is telling me my price will go up to $125.”

That’s a rate increase of $32.94 a month — $395.28 more a year.

Customers are encountering new plans for television service, but many areas only receive one advertised broadband speed option: 60Mbps. In fact, most areas can also buy 100Mbps service, but it’s very expensive at around $100 a month with a $200 setup fee. Customers have to call to change plans to get either speed. Some customers in former Time Warner Cable Maxx areas have better luck getting the setup fee waived than those living in areas Time Warner Cable never had a chance to upgrade.

In Idaho, The Spokesman Review’s D.F. Oliveria reports Charter/Spectrum is even worse than what Time Warner Cable offered before:

Our new internet service provider, Spectrum (Charter Communications), the company that “merged” with Time Warner’s local cable, has come under increasing fire lately. Many consumers have been calling me about poor customer service, very slow and/or inconsistent internet speeds, higher monthly prices and no printed material available to consumers regarding offerings.

“Since the merger, my bill went up $20 a month and speeds have slowed significantly,” shared ‘Nic’ in northern Idaho. “It’s ridiculous.”

WFTS in Tampa reports former Bright House customers can expect steep rate increases from Charter/Spectrum. (3:21)

In former Bright House territory in Florida, customers saw bills skyrocket by as much as $182 a month, resulting in monthly charges of an unprecedented $305 a month. Charter Communications refused to deal with the affected customers until WFTS-TV’s “Action News” consumer reporter Jackie Callaway intervened and finally got the company to admit the bills were too high by mistake:

Bright House customers Ivan and Linda Sordo say the rate hike hit without warning. The Sordo’s typical bill of $141 shot up to $305 overnight and without warning. And Lillian Rehrig’s normally $123 bill more than doubled to $305. Rehrig says calls to Spectrum got her a partial reduction but no real relief. Her next Spectrum statement came in $120 higher than her old Bright House bill.

What happened in these two cases turned out to be a billing error, an error Spectrum’s owner Charter Communications corrected after we started asking questions.

“When you started speaking with them is only when I got anyone to respond.”

It isn’t known how many other Tampa area customers were also overbilled or if Charter was working to identify and refund those who did not pursue a complaint with a local television newscast.

Charter Communications did tell WFTS-TV the majority of the one million former Bright House customers in the area now being served by Charter/Spectrum will face rate increases of $20-30 a month on average as their current package with Bright House expires. Those customers switching from a grandfathered Bright House or Time Warner Cable package will also automatically lose any promotion those packages were receiving.

In North Carolina, Time Warner Cable is gone and apparently so are some customers’ $300 rebate cards. Time Warner Cable had a long history of customer complaints about its rebate programs, but Charter Communications isn’t too interested in helping customers meet the terms of those rebates and intervene when something goes wrong.

A Steele Creek couple told WSOC-TV Time Warner rejected their rebate after they configured autopay on their Spectrum account with the help of a Charter customer service agent. Despite repeated assurances from customer service, the transition to autopay did not take effect quickly enough and they missed a payment, which canceled their rebate eligibility. Countless hours of negotiations with Charter’s customer service representatives got the couple nowhere. But the promise of bad publicity on the local evening news made the difference, and a $300 gift card was promptly mailed to them. Many other customers simply give up.

WSOC in Charlotte covers the case of the missing Time Warner Cable gift card. Customer service was no help. (1:54)

In Southern California, Spectrum is busy raising rates as well. Hannah Kuhn (76) of Simi Valley saw her bill jump $46 a month after Spectrum took over from Time Warner Cable last fall. Nobody would offer an explanation and in return for her complaints, they evidently shut the grandmother’s cable service off. Most Time Warner Cable customers are enrolled in some type of bundled service promotion. As those promotions expire, Spectrum raises rates to the regular price it intends to charge customers going forward, ending Time Warner Cable’s practice of lowering rates when customers complain.

Most customers with a popular bundled service package rate combining broadband, phone, and television could see their rates rise between $250-360 a year.

Former Time Warner Cable customers across the northeast and mid-Atlantic woke up this morning to incessant advertising like this promoting a “new day” for cable service, courtesy of Charter/Spectrum. (:60)

Sprint a Pawn in Masayoshi Son’s U.S. Investment Scheme

President Trump met with Softbank’s Masayoshi Son in December, 2016.

Japan’s Softbank has a deal tailor-made for President Donald Trump’s desire to inspire companies to invest more in the United States and hire more workers, and all the president has to do is get Washington regulators concerned with mergers, acquisitions, and competition out of Softbank’s way.

Softbank’s Masayoshi Son has delivered a lot of speeches and made a lot of promises since acquiring Sprint in 2013 for $21.6 billion, originally promising to rebuild the struggling wireless company into a potential competitive juggernaut, capable of beating Verizon and AT&T and even take on cable operators. Now he’s offering to invest another $50 billion in the U.S., and create 50,000 new jobs, assuming the business climate is right.

Before accepting such a deal, one should take a closer look at how Sprint is doing three years under Softbank’s ownership. Few would argue with the fact Sprint has languished and fallen to last place among the four national carriers, now behind T-Mobile. Despite Son’s commitment to Donald Trump to invest and hire, Sprint has severely cut investment by more than 60% between 2014 and 2016 and has laid off more than 4,000 employees, most in the United States. Customers continue to complain about the perpetual ‘massive upgrade’ undertaking the company embarked on years ago that never seems to be finished and hasn’t helped service quality as much as customers expected.

In January 2016, BusinessWeek reported SoftBank has “plowed more than $22 billion into Sprint, and yet all of Sprint is now valued at $11.8 billion. The company’s $2.2 billion in cash is about the same as its 2016 debt obligations.”

Ten years earlier, Sprint was worth $69 billion and was prepared to dominate the U.S. wireless industry, but drove customers off with very poor customer service and inadequate investment in its network, allowing competitors like AT&T and Verizon Wireless to leap ahead. Sprint also embarked on an executive-inspired fantasy: a disastrous merger with Nextel that preoccupied the company for years. Softbank taking the lead has done little to change customer perceptions, nor those of some Wall Street analysts who fear Sprint is a bottomless money pit that always promises better times and profits are coming, but never seems to get there.

“You’ve watched a once-great institution deteriorate to the point that it is now a badly, badly compromised asset,” said Craig Moffett, an analyst at MoffettNathanson. “They’ve been living from hand-to-mouth for years, constantly making short-term decisions in order to live to fight another day.”

It calls into question Softbank’s vision to use technology “to reduce loneliness and ease the sadness of people as much as possible.” There are a lot of sad Sprint customers, churning away into the arms of competitors like T-Mobile faster than Sprint can sign new customers up.

Son’s dream depended on his business plan that reduced the number of U.S. competitors to three by merging Sprint and T-Mobile together, something federal regulators under the Obama Administration failed to accept despite Son’s argument the combined resources of the two companies would theoretically make a super-sized Sprint more competitive with AT&T and Verizon.

In contrast to Son’s plan to consolidate the wireless industry to improve Sprint’s financial health, T-Mobile instead decided to boost investments in network upgrades and improved coverage to attract new customers. Ironically, some of the money to pay for those upgrades came from AT&T after it paid a reverse breakup fee of $3 billion in cash and $1–3 billion in wireless spectrum after its merger proposal with T-Mobile collapsed.

While Son promises he will invest billions in the United States, he is already spending much less on Sprint. In 2017, Verizon planned to spend $9.12 per subscriber (adjusted spending per monthly phone-equivalent subscriber), AT&T will spend $9.67 and T-Mobile will spend $9.04. Sprint will lag behind with $6.78 per subscriber in network investments. Moffett predicted of the $22 billion Verizon has committed for capital spending this year, about $11.3 billion will go toward wireless. By contrast, Sprint will spend $2.97 billion, excluding costs of leased phones. T-Mobile is spending just over $5 billion.

In the last two years, customers have delivered a new paradigm to wireless companies: bigger isn’t necessarily better. The only bright spot among all four national carriers in 2016 was the scrappy T-Mobile, once destined for a fire sale by owner Deutsche Telekom. But under the “Uncarrier” leadership of CEO John Legere, T-Mobile USA is worth pure gold in Deutsche Telekom’s global wireless portfolio. The turnaround came not from trying to consolidate the industry but rather giving customers what they have asked for — more data, unlimited data, better deals, and better service. T-Mobile’s network investments paid off, giving the company very competitive 4G LTE speeds and comparable urban and suburban coverage to its larger competitors. Legere has been so successful, the German owners of T-Mobile no longer seem to be interested in selling T-Mobile USA.

Softbank’s record of achievement with Sprint in the last two years has been much less of a success story.

Customer Gains and Losses by Carrier – 2016-Q4 Phone Activators

Investments by Sprint in its wireless network have plummeted 62.7% under the leadership of Softbank from 2014-2016. (Chart: Hal Singer)

In 2015, Sprint’s capex was $3.958 billion. Last year, it was $1.421 billion — less than half the previous year. Mr. Son seems reticent about maintaining the kind of investment necessary to grow Sprint’s network over the long term to keep up with customer demand, instead willing to compete short term on price and promotions. Sprint’s past reputation for poor customer service, a slow data network, dropped calls, and coverage dead zones makes attracting former customers back to Sprint a hard sell, especially considering T-Mobile exists as a credible alternative to Sprint for those seeking cheaper service plans.

Son’s argument to the new administration depends on President Trump and FCC Chairman Ajit Pai being more friendly to the idea of less competition than the Obama Administration. Son may have an uphill battle, considering the former Obama Administration’s opposition to earlier mergers, including T-Mobile and AT&T and T-Mobile and Sprint seems to have paid off for consumers in the form of today’s fiercer competition and a price war.

Convincing President Trump to loosen merger standards to allow Softbank a stronger position in the U.S. market in return for vague and illusory investment and job creation promises is ridiculous considering Mr. Son’s performance with Sprint has not been as rosy as his rhetoric. No president should agree to a de facto bailout deal for Softbank that reduces competition and guarantees higher prices. Mr. Son should instead direct some of the $50 billion he apparently has stashed in waiting to improve Sprint’s network to more effectively compete. If he cannot or will not, the entire country should not pay for his investment mistake by watching more wireless competition get eliminated in yet another merger.

FCC’s Ajit Pai on Mission to Sabotage Charter-Bright House-Time Warner Cable Deal Conditions

Pai

As a result of the multibillion dollar cable merger between Charter Communications, Bright House Networks, and Time Warner Cable, the three companies involved freely admitted: your cable bill was unlikely to decrease, you won’t have any new competitive options, there was no guarantee your service would improve, or that you would get faster broadband service than what Time Warner Cable Maxx was already delivering to about half its customer base.

While shareholders and Wall Street bankers made substantial gains, top Time Warner Cable executives walked away with multimillion dollar golden parachute packages, and Charter took control of what is now the country’s supersized, second most powerful cable operator, regulators also required the dealmakers share at least a tiny portion of the spoils with customers.

Then President Donald Trump’s FCC chairman — Ajit Pai — took leadership of the telecom regulator. Now all bets are off.

Pai is reconsidering the settled deal conditions imposed by the FCC under the last administration, and wants to give Charter Communications a free pass to let them out of their commitment to compete. Last week, Pai circulated a petition among his fellow commissioners to roll back the commitment Charter acknowledged to expand its service area to at least one million new homes that already get broadband service from another cable or telephone company.

Former FCC chairman Thomas Wheeler sought the competition requirement to prove that cable operators can successfully run their businesses in direct competition with each other, potentially inspiring other cable companies to face off with incumbent operators outside of their own territories. A paradigm shift worked for Google, which inspired ISPs to boost speeds in light of its gigabit Google Fiber service, which reset customer expectations.

The FCC order approving the merger deal was hardly onerous, requiring Charter to compete head-to-head for customers in places the company can choose itself. Lawmakers eliminated exclusive cable franchise agreements years ago, but established major cable operators like Charter have gone out of their way to avoid competing in areas that already receive cable service. While Wheeler may have hoped some of that competition would be directed against fellow cable companies, Charter CEO Thomas Rutledge quickly made clear to investors and the FCC Charter would continue to avoid direct cable competition, instead promising to expand service into non-cable areas that already get DSL service from the phone company or no broadband at all.

“When I talked to the FCC, I said I can’t overbuild another cable company, because then I could never buy it, because you always block those,” Rutledge said. “It’s really about overbuilding telephone companies.”

Charter’s CEO believes most phone companies are not competing on the same level as cable operators and are unwilling to make the necessary investments to upgrade their aging wired infrastructure to offer faster internet speeds. That makes competing with telephone companies like Windstream, Frontier, and Verizon’s DSL-only service areas a much better proposition than trying to compete head-to-head with Comcast, Cox, or Cablevision.

Rutledge’s clear views about Charter’s expansion plans apparently never made it to the American Cable Association, a cable industry lobbying group that defends the interests of independent and smaller cable operators. Despite Rutledge’s public statements, the ACA and its members are afraid Charter could expand on their turf anyway, potentially forcing small cable operators to compete with the same level of service Charter offers. The horror.

The ACA’s arguments found a sympathetic audience in Mr. Pai and now he wants to let Charter off the hook, at the expense of competition and better service for consumers.

Under the proposal circulated by Pai, Charter would still be required to expand its cable broadband service by at least one million new homes, but those homes would no longer have to be in areas outside of Charter’s existing service footprint. In practical terms, this would mean Charter would focus on wiring areas not far from where it provides service today — ‘DSL or nothing’-country. Charter would also be able to fritter away the number of expansions required by counting newly constructed neighborhood developments it would have likely wired anyway, as well as upgrading its remaining shoddy legacy cable systems — some still incapable of offering broadband or phone service.

The ACA’s talking points prefer to emphasize the David vs. Goliath scenario of a big bully of a cable company like Charter being forced to compete (and likely obliterate) existing small cable operators:

“The overbuild condition imposed by the FCC on Charter is stunningly bad and inexplicable government policy,” said ACA president and CEO Matthew Polka, in a statement. “On the one hand, the FCC found that Charter will be too big and therefore it imposed a series of conditions to ensure it does not exercise any additional market power. At the same time, the FCC, out of the blue, is forcing Charter to get even bigger.”

The real goal here is to minimize direct competition at all costs. The FCC’s deal conditions already included the need for more rural broadband expansion. Wheeler’s second goal was to introduce a new model — cable company competing against cable company — fighting for new customers by offering consumers better service and pricing. The existence of such competition would belie the industry’s claim that cable overbuilds and head-to-head competition is uneconomical. Wildly profitable, perhaps not, but certainly possible. Historically, the traditional way cable operators dealt with the few instances of direct cable competition was to buy them out to put them out of business. Rutledge was certainly thinking along those lines when he complained that the FCC’s order to compete did not include permission to eventually devour its competitor, effectively making competition go away.

Had Charter chosen to compete with cable companies not afraid to spend money to upgrade service above and beyond the anemic broadband speeds Charter offers, it would likely find few takers for its maximum 300Mbps broadband service that comes with a $200 install fee.

“Why would we go where we could get killed?” Rutledge admitted.

Industry claims that the cable business is already fiercely competitive are also countered by Rutledge’s own statements making clear direct competition with brethren cable companies on the cusp of speed-boosting DOCSIS 3.1 upgrades was bad for business. Instead, he would focus on competing with inferior phone companies, which he characterized as mired in debt, still skeptical about the financial wisdom of fiber optic upgrades, and the only competitor where dismal 3-10Mbps DSL service presented a ripe opportunity to steal customers away.

Clyburn – A likely “no” vote.

Charter’s merger approval and its conditions are a sealed deal that was acceptable to Charter and its shareholders and at least offered small token treats to ordinary consumers. Mr. Pai’s willingness to reopen and undo those commitments is just one reason we’ve referred to his regulatory philosophy as irresponsible, nakedly anti-consumer, and anti-competitive. Mr. Pai’s willingness to embrace things as they are comes at the same time most consumers are paying the highest broadband bills ever while also facing an epidemic of usage caps, usage billing, and increasing service and equipment fees. Mr. Pai’s other actions, including ending an effort to introduce competition into the set-top box market, curtailing customer privacy, ending inquiries on usage caps/zero rating, threatening to eliminate Net Neutrality, and reducing the FCC’s already anemic focus on consumer protection makes it clear Mr. Pai is a company man, on a mission to defend the interests of Big Telecom companies and their lobbyists (that also have a history of hiring friendly regulators for high-paying positions once their government job ends.)

That conclusion seems apt considering what Mr. Pai said about Chairman Wheeler’s vision of improving broadband: “one more step down the path of micromanaging where, when, and how ISPs deploy infrastructure.” Missing from his statement are consumers who have spent the last 20 years watching ISPs govern themselves while waiting… waiting… waiting for broadband service that never comes.

Mr. Pai’s proposal needs just one additional vote to win passage. That extra vote is unlikely until President Trump appoints another Republican commissioner. Pai’s proposal isn’t likely to win support from the sole remaining Democrat commissioner still at the FCC — Mignon Clyburn.

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