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Charter Watch: Goodbye TWC’s $10 Modem Rental Fee, Hello Spectrum’s $5 Wi-Fi Fee

Former Time Warner Cable and Bright House Networks customers in Florida, Ohio, Michigan, and Wisconsin were glad to see the end of modem rental fees, something promoted as a tangible deal benefit of the merger by new owner Charter Communications. But many of those same customers are now upset to discover that up to $10 modem rental fee has been replaced with a $5 monthly fee for “Wi-Fi service.”

LuAnn Summers, a Bright House customer in Tampa, wrote Stop the Cap! in February to complain her new bill from Charter/Spectrum included a $9.99 activation fee and $5 a month for something called “Wi-Fi Service.” The same fees have since appeared on bills for some customers recently switching away from their old Time Warner Cable service plans to new Spectrum pricing and plans.

Rich D’Angelo in Wisconsin recently took Charter up on its offer to switch away from his legacy TWC plan when his promotion expired in January.

“I was able to get a big speed boost and bundle it with Spectrum’s Silver TV package, which includes two of the premium movie channels I was paying TWC $15 each for every month, and my bill was only supposed to go up $10,” D’Angelo tells Stop the Cap! “Instead, it went up $25 and I feel lied to.”

Wi-Fi sticker shock.

D’Angelo retired his old owned Motorola SB6121 modem in favor of a new network gateway supplied free of charge by Charter because his new package didn’t work with his old modem.

“My 6121 modem was a real workhorse and I bought it right after Time Warner started charging modem fees, but it cannot support Spectrum’s fastest speeds in Wisconsin and I didn’t feel like buying a new modem when Spectrum gives them to customers for free,” D’Angelo explained. “This was the device they handed me and I was not offered any other option.”

Champagne Johnson in Columbus, Ohio also took advantage of Spectrum’s new pricing plans thinking she could save her family money and get better internet speeds from the cable operator that advertises it’s a “new day” for Time Warner Cable subscribers.

“New day but the same old lies and deceit,” Johnson writes Stop the Cap! “Do these cable companies only hire thieves? I was told the cable modem was included, but now I am suddenly getting charged for Wi-Fi, which is crazy. I called Spectrum up and they told me there is a charge if I use their modem for my Wi-Fi. I told them I don’t need their Wi-Fi because I have my own router that works fine and they told me it was included inside their modem and I had to pay for something I won’t use.”

Charter assumes if you use Wi-Fi, you want their Wi-Fi Service

We contacted Charter to learn more about this new charge and what customers can do about it.

It turns out the Wi-Fi charge and activation fee applies when you use a network gateway device provided by the cable company. We learned the reason so many customers are finding this charge on their bill comes as a result of slightly deceptive sales practices when customers choose a Spectrum internet service plan.

“Do you use Wi-Fi at home?” a Charter representative asked us when we inquired about pricing for a new Spectrum service plan to replace our existing Time Warner Cable plan. When we answered yes, the representative said they would send our “free equipment” and noted we would no longer pay a modem rental charge (despite the fact we had owned our own modem at Stop the Cap! HQ for years). “You can either pick it up in a cable store or we can ship it direct to you in a self-install kit.” That equipment was a “network gateway,” which bundles a cable modem and router into a single device.

Our readers confirm that Charter representatives did not ask them if they have an existing in-home router, which probably already provides Wi-Fi access in the home. Nor do they disclose that accepting a network gateway, which was also interchangeably referred to as “a modem” means they are agreeing to pay a $9.99 activation fee and $5/mo ongoing fee for “Wi-Fi service.”

We called three times this afternoon as were given identical information, and no disclosure of any Wi-Fi fees.

On the fourth call, we specifically asked about Wi-Fi fees and the representative told us they did not know the answer and left us on hold for 10 minutes before finally disclosing that Charter does charge both fees. When we asked how to avoid them, we were first told we could not waive the fee if we used Wi-Fi in the home, but a supervisor later clarified that it only applied to their gateway and we could specifically request a “basic modem” or have Wi-Fi disabled on a network gateway, and neither charge would apply.

“How are we supposed to know and understand that in advance?” Johnson asked us.

“Considering more than 90% of Time Warner Cable customers were paying $10 a month for a modem without ever realizing or understanding they could buy their own and avoid that charge, how many Spectrum customers are proficient enough to tell Spectrum they want their network gateway set to bridge mode or want a traditional cable modem without router functionality? It’s clear Charter is going to make $5 a month from a whole lot of customers, and it should be disclosed up front. It even got me and I am a network engineer.”

Summers learned about the controversy of the Wi-Fi charge after googling the fee and discovered a Tampa Bay Times story about the fee.

Spectrum spokesman Joe Durkin told the newspaper the fee should not apply to customers Charter inherited from Bright House who already had internet service. He said Spectrum is reviewing cases the Times has brought to its attention to see if the charges were appropriate.

But that isn’t always the case for customers placing orders on Charter’s website or contacting customer service by phone. In both cases, Charter implied if you want to use Wi-Fi at home, you owe them an extra $5 a month:

Charter’s website suggests that you have to pay $5 a month if you intend to use Wi-Fi at home.

Getting the charges off your bill

Luckily, Charter is readily agreeing to customer requests to remove the charge(s) from customer bills and will supply equipment with Wi-Fi disabled (or not present when using a traditional cable modem). You may need to exchange equipment, however. If either charge appears on your bill, call and complain. While we no longer recommend customers invest in their own cable modems as long as Charter is providing them without a rental fee, we do suggest customers buy their own router and avoid ongoing fees for Wi-Fi service.

Also be aware that if you are still on a legacy Time Warner Cable internet plan, Charter will keep collecting that $10 monthly modem fee until you abandon your Time Warner plan for a Spectrum internet plan. You can still avoid the rental fee by buying your own modem. Charter’s list of supported modems is here.

Earthlink Kills New Customer Promotion for Existing Charter/Spectrum Customers

Nine years after Earthlink began promoting its $29.99 six-month offer for alternative broadband service for Time Warner Cable customers, the completion of Charter Communication’s takeover of Time Warner Cable has eliminated a clever way for customers to get broadband rate relief.

For almost a decade, savvy broadband-only Time Warner Cable customers have been able to bounce between new customer promotions at Time Warner Cable and Earthlink. When a year-long promotion with Time Warner Cable ended, a customer could switch seamlessly to Earthlink for six months and pay just $29.99 a month — charged to their Time Warner Cable bill. When the Earthlink promotion ended, customers were entitled to enroll as a new Time Warner Cable broadband customer and pay a lower rate for up to one year. After that, back to Earthlink.

No more.

Charter Communications closed that loophole this month and now prohibits existing Charter/Spectrum customers from getting promotional rates from Earthlink.

Once Charter customers end a broadband-only new customer promotion, currently $44.95 a month for one year, the rate jumps to $64.99… and stays there indefinitely.

The new restrictions appear in fine print on Earthlink’s website:

Charter Communications eliminated lower-cost broadband options for its customers, but claims its single remaining advertised offer (60Mbps in non-Maxx areas, 100Mbps in former TWC Maxx cities) offers a greater value because it is faster than Time Warner Cable’s Standard Internet 15Mbps plan and ends Time Warner’s practice of charging a $10 modem rental fee.

But it also costs more than earlier promotions at Earthlink ($29.99) and Time Warner Cable ($34.95).

Charter has junked Earthlink’s former promotion for Time Warner Cable customers.

“My broadband bill is now double what it used to be because I cannot switch to a broadband promotion with Charter as my Earthlink promotion ends this month,” reports Jim Deneck, a former Time Warner Cable customer in South Carolina. “I was paying $30 a month and now Spectrum wants to charge me $65 a month. The modem fee savings is irrelevant to me because I bought my modem years ago.”

Charter/Spectrum customers hoping for a better promotion from Earthlink are now also out of luck.

“After Spectrum pricing took effect in my area, my bill went up $30 a month,” writes Stop the Cap! reader Gennifer in Maine. “I was hoping to switch back to Earthlink but after placing an order with Earthlink, a representative from Charter/Spectrum called me and denied my request. It’s false competition. Since when is it okay to sign up with one company and then get a call from another telling me I am not allowed to take my business elsewhere. It’s monopoly abuse!”

Earthlink is entirely dependent on Charter Communications allowing them to resell service over Charter’s cable lines. Earthlink has been cautious not to outcompete either Charter or its predecessor Time Warner Cable, and charges roughly the same rates as a customer would get direct from either cable operator. The only benefit of the arrangement for customers was the ability to bounce between new customer promotions to pay the new customer rate indefinitely, but Charter has made sure that practice stops.

Gennifer did manage to ultimately outwit Charter, but at the cost of time and inconvenience.

“I called Spectrum and canceled my service and we signed up as a new customer under my husband’s name,” Gennifer writes. “Unfortunately, Charter won’t process an order at an address with existing service so you have to cancel and turn in equipment first and then place an order under a different name to qualify for a promotion. They really don’t want to give their customers a break or a discount. I wish we had other options.”

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)

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.

Internal Company Documents Suggest Time Warner Cable Intentionally Deceived Customers

A stack of revealing company documents obtained by the New York State Attorney General’s office suggest top executives at Time Warner Cable were aware the company was intentionally misleading customers and the Federal Communications Commission with broadband performance promises the company knew it could not keep.

Portions of the documents were made part of the public record as part of a lawsuit filed today by New York Attorney General Eric Schneiderman against Charter Communications and Time Warner Cable (now a subsidiary of Charter). The suit alleges that Time Warner Cable systematically and intentionally underdelivered on its commitments to improve broadband service and oversold its network in New York, causing widespread speed slowdowns and performance issues.

The 87-page complaint reveals Time Warner Cable woefully underinvested in its network, leaving customers with poor internet speeds and obsolete cable modems the company leased to customers for up to $10 a month. But a careful review of other statements from company executives also undermines the cable industry’s arguments for data caps, paid interconnection agreements with content providers, the lack of need for Net Neutrality, and the overuse of marketingspeak that allows cable operators to promise speeds they know they cannot deliver.

This two-part Stop the Cap! report analyzes the lawsuit and its offer of proof and will take you beyond the headlines of the legal action against Charter Spectrum/Time Warner Cable and explore some of the cable company’s confidential emails, memos, and meetings.

The documents reveal a lot of ordinarily highly confidential data points about how many subscribers share a Time Warner Cable internet connection, how many deficient and obsolete cable modems are still in the hands of customers, and how the pervasive need to avoid investing in network upgrades caused executives to repeatedly reject spending requests while approving rate increases.

Typical complaints from Spectrum-TWC customers sent to N.Y. Attorney General’s office.

How Spectrum-Time Warner Cable Brings You Broadband Service

N.Y. Attorney General Eric Schneiderman

Time Warner Cable was one of New York’s most important communications companies. At least 2.5 million New York households — one out of three — get internet access from what is now known as Charter Spectrum. Every broadband customer belongs to a “service group” made up of a number of your neighbors who share the same internet bandwidth. In February 2016, the average Spectrum-TWC service group in New York had about 340 subscribers. The range varied widely in practice, from as few as 32 customers to as many as 621 subscribers belonging to the same group. The fewer the number of customers, the less chance they will encounter a traffic-related slowdown caused by using the internet at the same time. For those congested service groups that do, broadband speeds begin to drop, sometimes precipitously.

The amount of total collective speed available to each service group depends on how much bandwidth the cable operator sets aside for broadband. For the last several years, Time Warner Cable typically reserved eight channels of about 38Mbps each for every neighborhood service group. That is equivalent to about 304Mbps — about the maximum speed one Time Warner Cable Maxx customer can get today. If four customers with 50/5Mbps service decided to “max out” their connection each evening, the remaining 336 customers in the service group would get to collectively share about 104Mbps. If six customers did that, the remaining 334 customers would be left with sharing 4Mbps.

Cable operators have always bet customers won’t be online all at the same time. But as internet usage, particularly online video, has grown, customers are increasingly spending primetime hours of 7-11pm streaming high bandwidth video instead of sitting in front of the television. If a large number of customers in a service group purchasing 15/1Mbps service from Time Warner Cable happened to be viewing HD video at the same time, the speed in that neighborhood could drop to as low as 1Mbps, a far cry from what customers were paying to receive.

Time Warner Cable customers that used to experience nightly slowdowns were told “your node is congested” to explain why speeds were dropping. The engineers that developed the cable broadband standard we know today as DOCSIS, envisioned that upgrades or “node splits” would be periodically required to deal with customer growth and increased traffic. Newer DOCSIS standards also give providers the option of enlarging the amount of shared bandwidth by adding additional channels. In the past, Time Warner Cable performed node splits, dividing up congested neighborhoods into multiple service groups. But with the advent of DOCSIS 3 and 3.1, Time Warner Cable also began expanding the number of channels devoted to broadband, enlarging the amount of shared bandwidth available to customers. Unfortunately for customers, Time Warner Cable was among the slowest of the nation’s cable operators to adopt this strategy.

Delivering Slow Speeds for High Prices

As a result of Time Warner Cable’s lack of investment, the company had to manage its bandwidth limitations in other ways. The documents from the recent lawsuit helped adds to our knowledge of how the company tried and often failed to manage the problem:

  1. It avoided regularly increasing internet speeds for its customers. Time Warner Cable customers in most cities were limited to a maximum of 50/5Mbps until the Maxx upgrade program began. Other cable operators were selling speeds several times faster, but Time Warner risked a handful of internet enthusiasts utilizing faster available speeds to consume the bandwidth available to the neighborhood service group. Slower speeds mean fewer upgrades.
  2. It advertised speeds and performance company engineers and executives admit in confidential documents they could not consistently deliver (or deliver at all in some instances).
  3. It continued to rely on outdated and obsolete cable modems that severely limit subscribers’ speed, regardless of what level of service the customer subscribed to.
  4. It avoided network investments for budgetary reasons, even when severely congested neighborhoods exceeded 80-90% usage of all available bandwidth, causing noticeable performance problems for customers.

The lawsuit alleges Time Warner Cable consistently sold internet speed tiers that did not or could not deliver the advertised speeds to consumers. The lawsuit points to three reasons why customers don’t get the speeds they paid for:

Deficient Equipment: Spectrum-TWC leased older-generation, single-channel modems despite knowing that such modems were, in its own words, not “capable of supporting the service levels paid for.” Over the same period, Spectrum-TWC also leased older generation wireless routers to subscribers despite knowing that these routers would prevent them from ever experiencing close to the promised speeds over wireless connections.

Congested Network: Spectrum-TWC failed to allocate sufficient bandwidth to subscribers by reducing the size of its service groups or increasing the number of channels for its service groups. These network improvements would have enabled subscribers to achieve the fast Internet speeds that they paid for. Results from three independent Internet speed measurements confirmed that Spectrum-TWC consistently failed to deliver the promised speeds to subscribers on its high-speed plans.

Limitations of Wireless: Spectrum-TWC misled subscribers by assuring them that they could achieve the same Internet speeds through wireless connections as with wired connections despite knowing that accessing the Internet using wireless routers would sharply reduce the Internet speeds a subscriber would experience

A key goal for Time Warner Cable executives was to push consumers into broadband upgrades that increased the average revenue they receive from each of their customers. A 2013 internal company presentation called broadband upselling a “strategic pillar” to “capture premium pricing.” If customers endured pushy sales pitches, it may have been because the company tied customer service representative compensation to increasing monthly revenue received from subscribers. If the representative sold you more, they earned more.

Although it sounded good on the surface, internal company documents also show there was pushback from company employees who feared aggressive sales pitches would only further alienate customers.

“Our customers NEED to be put into the proper packages so that we are conducting business with integrity,” wrote one employee in a presumably anonymous employee survey. “It seems as if this is a hustlers job trying to out hustle everyone else trying to make the most money WE can and not doing the right thing . . . By operating like this, customers laugh at our integrity as a company.”

Time Warner Cable Accused of Supplying Obsolete Cable Modems at Prices Up to $10 a Month

Your speed: as slow as 20Mbps

Assuming a customer did upgrade their internet speed, the Attorney General alleges at least 900,000 of those customers were given older generation single-channel DOCSIS 1 and DOCSIS 2 cable modems the company knew were incapable of delivering the speed the customer signed up for. Even worse, the company began charging monthly fees up to $10 a month for equipment the rest of the cable industry deemed obsolete.

A February 2015 email written by the former head of corporate strategy suggests senior corporate management knew they were selling broadband plans to customers that would never perform as advertised.

“The effective speeds we are delivering customers in a 20Mbps tier when they have a DOCSIS 2 modem is meaningfully below 20Mbps,” the email read.

The following month a company engineer sent email explaining the company’s network utilization targets would result in customers using older single-channel modems receiving speeds below 10Mbps during peak utilization times, even if they paid for 50Mbps or faster service available in some markets. The engineer recommended only allowing customers subscribed to internet speeds below 10Mbps to have a single channel modem if absolutely necessary.

A year later, Time Warner Cable executives admitted to the Office of the Attorney General of New York that customers with internet speeds of 20Mbps or higher needed a DOCSIS 3 modem. But during that same month, the cable company leased DOCSIS 2 modems to over 185,000 customers on plans of 20Mbps or higher, for $10 a month. Even worse, almost 800,000 New Yorkers subscribed to 20Mbps or higher speed plans with a deficient modem for three months or longer. And still worse, despite a company directive issued in June 2012 to remove DOCSIS 1 modems from its network, over 100,000 New Yorkers were still leasing a first generation and long obsolete cable modem for three months or longer, again for the same $10 a month. The Attorney General alleges the company knew these subscribers would not get the internet speeds their plans promised and continued to supply deficient equipment for years anyway.

Rate Hikes Yes, Spending Money on Urgent Equipment Upgrades No

DOCSIS 2 modems are largely obsolete, but not at Time Warner Cable.

As customers endured near-annual rate hikes on broadband service, Spectrum-Time Warner Cable refused to launch a plan to recall and replace obsolete cable modems because it was beyond the company’s “capital ability.”

This finding came in response to a confidential June 2013 presentation that included a startling admission: 75% of the cable modems connected to customers with Time Warner Cable’s Turbo (20Mbps) internet plan were non compliant. “DOCSIS 2 modems are still being deployed due to budget constraints,” the presentation stated. An alternate plan suggested postcards be sent to affected customers offering to replace their modems if they returned them because of the speed problems those customers experienced. That plan didn’t get far either.

The Attorney General calls the company’s decision a “self-serving” financial move when it rejected its own engineers’ recommendations to swap modems.

In 2013, company officials did begin prioritizing replacing the modems of a select group of their customers — those volunteering for the FCC’s ongoing Sam Knows broadband speed test program, designed to verify ISP performance. Realizing Time Warner’s speed rankings would be in jeopardy if panelists were still using DOCSIS 2 modems, it made a deal with the FCC to have the agency temporarily exclude slower speed results obtained from customers with DOCSIS 2 modems until they were replaced. Customer Service Representatives were instructed to treat all FCC panelists with “VIP treatment” and provide them with the “best in class devices.” (Full disclosure: Stop the Cap! is a broadband customer of Spectrum-Time Warner Cable and serves as a FCC/Sam Knows panelist.) Spectrum-TWC promised after those customers were upgraded, all others with older equipment would receive replacements as well, a commitment the Attorney General claims the cable company broke.

Even after Time Warner Cable launched its Maxx upgrade program, offering speeds up to 300Mbps, the cable company was still dealing with a sizable number of customers still using DOCSIS 2 modems that could not deliver anything beyond 20Mbps. In 2014, the company promised it would supply new modems to all subscribers with older equipment at no charge. An experimental “Ship to All” plan would have automatically sent the equipment to every affected customer. Management rejected the program as too expensive and replaced it with a “Raise Your Hand” plan that required customers to self-identify obsolete equipment, contact customer service and wait through long hold times or go to the inconvenience of visiting a Time Warner Cable store. In the notice to subscribers, Time Warner never disclosed the most important reason they needed a new modem — without it they would receive one-tenth or less of the speeds they paid to receive. Customers who failed to return their DOCSIS 2 modems in good condition were also penalized with an unreturned/damaged equipment fee, even though the equipment is now deemed obsolete across the industry.

Company officials admitted internally that “Raise Your Hand” was a plan destined to fail, with large numbers of customers not bothering to take the bureaucratic steps needed to exchange modems. Customers in upstate New York received no notification at all. It was a financial win for the company, which collected $10 lease payments on obsolete equipment it did not have to spend any money to replace. The company celebrated the savings, noting in a January 2015 internal presentation “[c]hanging the Maxx [Ship to All] approach to a Raise Your Hand approach (65% of subscribers take an active swap, with passive swaps for the balance) helped us reduce our capital budget by $45 [Million].” Later in 2015, the company internally reported the savings were even greater than expected — only 25% of customers responded to the offer to replace their modems.

New York’s Secret 20Mbps Speed Cap

For reasons unknown, Time Warner Cable also quietly began secretly locking down obsolete DOCSIS 2 cable modems with a speed cap of 20Mbps while not informing customers or customer service that the account should not have or be sold a higher speed plan. Nevertheless, Spectrum-TWC continued to charge customers with DOCSIS 2 modems as much as $70 a month for 100Mbps internet access that would never exceed 20Mbps.

Wi-Fi Woes

Time Warner Cable Maxx speeds don’t always do well on Wi-Fi.

Spectrum-TWC’s former vice president of customer equipment observed in an October 16, 2014 internal email to senior colleagues that “we do not offer a [device] today that is capable of the peak Maxx speed of 300Mbps via wireless. Generally a customer connecting via wireless will receive less than 100 Mbps,” using the 802.11n wireless routers that Spectrum-TWC leased to subscribers.

This fact of life affected 4 out of every 5 Time Warner Cable Maxx customers subscribed to 200 and 300Mbps plans who leased a Wi-Fi equipped cable modem from Spectrum-TWC. As of February 2016, that meant over 250,000 New York customers were paying for premium internet speeds they would never get over the supplied 802.11n wireless router. Customers were never informed. But company executives were, and as a result, the executive told his colleagues that “we are going to experience a mismatch between what we sell the customer and what they actually measure on their laptop/tablet/etc.”

A separate Spectrum-TWC technical document discussing wireless connectivity, dated January 2015, concluded that “[i]n a real world scenario, most [802.11n] adapters will produce speeds of 50-100Mbps.”

In fact, a Spectrum-TWC internal presentation, dated June 12, 2014, recommended that the company deploy devices with newer generation 802.11ac wireless routers to all subscribers on speed tiers of 200Mbps or higher because such routers came closer to delivering the promised speed. Spectrum-TWC rejected that recommendation, again for financial reasons.

Coming up tomorrow… advertising faster speeds or broken promises, company executives tell the truth about bandwidth costs, how to grossly manipulate the FCC’s speed tests, throttling your favorite websites for bigger profits, and hassling online game fans.

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