Home » TWC » Recent Articles:

N.Y. Public Service Commission Staff Unimpressed With Charter-Time Warner Cable Merger Proposal

ny pscStaffers at the New York State Department of Public Service have recommended the Public Service Commission reject the merger of Charter Communications and Time Warner Cable unless significant concessions are made, largely because the alleged benefits are insufficient for New York cable customers.

Although cable operators are largely deregulated under federal law, state and local governments retain control over cable franchise agreements, which permit operators to sell cable television programming. To complete its merger, Charter Communications must win approval to transfer Time Warner Cable franchise agreements to the merged entity, dubbed “New Charter.” That gives state regulators leverage to win concessions and oversight mostly eliminated after the cable industry was deregulated by the federal government.

New York law requires cable operators seeking to join forces to prove the merger is in the public interest and that ratepayers will obtain a “net positive benefit” from the merger. In plain English, Charter must share the benefits of the merger with cable customers in New York, either from lower prices, better service, or both. Charter proposes to offer those benefits in the form of improved service:

  • Additional investments in all-digital systems in Time Warner’s service areas by completing digitization within 30 months of the close of the proposed transaction. This would include faster (60 megabits per second (Mbps) minimum) broadband speed offerings;
  • Merger-specific efficiencies, which would generate savings in a number of areas including combined purchasing power, overhead, product development, engineering, and information technology;
  • Merging Charter’s New York assets, now isolated from the rest of its service territories, to create efficiencies through reduced costs, improved customer service and additional service offerings;
  • Bringing overseas Time Warner jobs back to the United States and adding in-house positions;
  • Expanding to New York, within three years of the close of the proposed transaction, Bright House Networks’ low-income broadband option (Connect2Compete) which partners with schools to provide a $9.95 low-cost Internet service, discounts on Internet-capable devices, and innovative digital literacy training;
  • Promoting the deployment of advanced voice services and enhancing competition in the voice marketplace by creating a more robust competitor;
  • Pledging not to block or throttle Internet traffic or engage in paid prioritization, whether or not the Federal Communications Commission’s (FCC) Open Internet Order is upheld. This commitment would continue for three years, without regard to the outcome of the ongoing litigation challenging federal reclassification.

charter twc bhThe Public Service Commission staff looked at the reported annual “synergy savings” of $800 million anticipated by New Charter from streamlining operations and winning enhanced volume discounts to determine the “net positive benefit” for New York consumers from the merger. Here is the formula the PSC used:

  • New York customers represent 10.879% of New Charter’s customer base — 2.6 million of New Charter’s 23,900,000 combined Charter and Time Warner Cable customers;
  • The agency presumes customers and shareholders nationwide should each receive 50% of the $800 million in savings;
  • Knowing New York deserves roughly 11% of that $800 million, divided equally between customers and shareholders, New Charter owes New Yorkers $43.5 million in benefits annually.

Staffers at the PSC prefer to deal in hard numbers and solid commitments when determining how New Charter intends to meet its obligation to New Yorkers, and all signs indicate the cable company was less than forthcoming. In colloquial terms, New Charter’s response to the PSC’s math can be summed up, ‘Whatever, you can trust us to work out the details after the merger.’

Alleged Deal “Benefits”

New Charter’s promises to invest more capital in New York than Time Warner Cable came with no specific investment commitments, despite repeated efforts to pin New Charter down on its spending plans. Some of the details about New Charter’s spending proposals are redacted in the document, but it isn’t difficult to discern reading between the lines New Charter has no plans to continue Time Warner Cable’s Maxx upgrade program beyond commitments already made, which in New York is limited to New York City, leaving all of upstate New York off the Maxx upgrade list. PSC staffers believe if Time Warner Cable remained independent, some or all of upstate New York would receive those Maxx upgrades in the near future.

new-charter-combined-footprint-640x480New Charter claims another merger benefit is their plan to upgrade Time Warner customers with new and improved IP-capable ‘Worldbox’ equipment and DVR’s offering more recording capacity. While conceding there were some minor benefits from offering customers more capable equipment, PSC staffers were skeptical New Charter’s plan represented much of a “consumer benefit,” because the equipment is not cheap and New Charter’s plan to eliminate analog television signals will mean every customer will have to rent one of Charter’s new boxes or a near equivalent.

New Charter’s promises of faster Internet speeds and upgraded cable systems would normally be seen as a direct consumer benefit, except Time Warner Cable already committed to its own Maxx upgrade effort that often outperforms what New Charter is promising. “Digitalization and associated speed increases can only truly be considered a benefit if [New Charter] can adequately demonstrate that Time Warner would not have otherwise completed a similar transition to an all digital, faster network in a similar timeframe [roughly 30 months],” PSC staffers concluded.

New Charter’s promise to expand low-income Internet access to Time Warner Cable customers, utilizing Bright House Networks’ Connect2Compete program, comes with many of the same restrictions Comcast’s own Internet Essentials program include. That issue was hotly debated during Comcast’s attempt to acquire Time Warner Cable, and many public interest groups opposed the merger for that reason. New Charter has also made no commitments to continue Time Warner’s no-restriction/no-contract/no-prequalification affordable $14.99 Internet service. In fact, the merger may worsen the affordable Internet problem, not improve it.

New Charter’s proposed expansion of Time Warner Cable’s Wi-Fi hotspot program is vague and mostly undefined beyond a general commitment to deploy at least 300,000 new out-of-home Wi-Fi access points across its national footprint within four years. New York regulators want to know how many of those would be in New York. Using the same formula to find how many New Charter customers are located in New York, it seems reasonable that redacted sections regarding the Wi-Fi hotspot program included an inquiry if New Charter planned at least 30,000 new access points for New York. New Charter did mention that once the proposed transaction is complete, it expected to evaluate the merits of leveraging in-home routers as public Wi-Fi access points, much like Comcast is doing today. Because Time Warner Cable has no firm plans about its Wi-Fi hotspot deployment program beyond this year, PSC staffers found it difficult to determine which company had the better Wi-Fi proposal for New Yorkers.

WiFiZonelogoNew Charter’s plans for expanded business broadband were also found to be vague, making it difficult to measure how much benefit New Charter would bring commercial clients in New York.

Status Quo

Time Warner cable systems will become indirect, wholly owned subsidiaries of New Charter. New Charter states that they are not seeking authority for the transfer of customers or for any changes in rates, terms or conditions of service and New Charter will also continue to provide Lifeline Discounted Telephone Service (Lifeline).

The PSC expects that customers will keep the same digital phone number they had with Time Warner; will have the same billing account information; and, other technology will continue to work seamlessly. In other words, the transaction should be technologically transparent for consumers.

The regulator also acknowledges that, after the proposed transaction, there should be no diminution in the number of service provider options available to consumers in the video market because Charter and Time Warner do not have overlapping service areas in New York. Since the potential for direct competition no longer exists, this assertion is in no way a benefit of the proposed transaction, it simply maintains the status quo.

The Bad and the Ugly

Despite claims from both cable companies there will be no negative impact as a result of the proposed transaction, PSC staff identified a number of serious issues that are likely to result if the merger is approved without any enforceable conditions or commitments:

Charter will be among America's top junk bond issuers. (Image: Bloomberg News)

Charter will be among America’s top junk bond issuers. (Image: Bloomberg News)

New Charter intends to load itself with massive debt to pay for the merger. As a result, the combined company’s credit rating will take a significant hit. PSC staffers fear New Charter will be vulnerable if economic conditions decline, even to the point of default or bankruptcy. But before that happens, New Charter’s need to cope with its debt could result in reduced investment in system upgrades.

“If the operating environment declines for cable companies […] New Charter will have more difficulty maintaining the investments necessary to bring expanded products and provide good service quality to its customers and, thus, this represents the single most substantial risk of the proposed transaction,” the PSC staff warns. “Accordingly, the Commission should seek to mitigate this risk and ensure that New York receives net benefits that are sufficient to offset this and the other potential harms.”

After requesting Charter disclose its often hidden regular, non-promotional prices most cable customers eventually pay, the PSC discovered contrary to Charter’s claims its prices are lower than Time Warner Cable, in fact they are often higher. Time Warner Cable customers typically also receive more cable television channels for their dollar than Charter customers do. Consumers who bundled multiple services together got the best savings, but even those deals were priced comparably to what Time Warner Cable charges. In short, promises of savings are illusory.

Time Warner Cable offers $14.99 to anyone without paperwork.

Time Warner Cable offers $14.99 to anyone without paperwork. Charter does not.

Broadband customers will also lose less-expensive broadband options they receive from Time Warner Cable. New Charter will drop Time Warner’s $14.99 “Everyday Low Price” 2Mbps Internet package, along with its Basic 3Mbps ($29.99) and Standard 15Mbps ($34.99) plans. New Charter’s least expensive broadband option for all consumers will be its Spectrum Internet 60Mbps plan, which carries an initial promotional price of $39.99 a month and a regular price just under $60.

“Time Warner’s lower priced offerings represent choices for New York consumers,” PSC staff concluded. “Any loss of these services would likely result in consumers paying more to ensure they have access to the same level of high-speed Internet service and its important resources.”

Jobs: New York is at risk of losing Time Warner Cable’s five call centers employing about 1,996 staff, 61 retail/walk-in centers employing 2,674 staff, nine corporate offices employing around 1,257 staff, nine service/maintenance locations employing approximately 1,687 staff, two media offices employing 435 staff, and 11 other service related functions employing about 1,003 staff, with total employment in the state of nearly 9,052.

PSC staffers have only received a commitment New Charter will not reduce the number of “customer facing” jobs in New York, but has said nothing about where the rest of its New York employees might be heading.

“There is a real danger that New Charter will look to gain operational efficiencies by moving/consolidating customer-facing jobs and other positions to out-of-state locations, despite any claims to the contrary,” the PSC staff reports. “Out-of-state service centers would make it difficult for it to maintain its current level of customer service. Longer wait times and lack of local knowledge could lead to increased frustration and dissatisfaction on the part of New York customers, and a significant decline in the overall level of service provided.”

What New York Regulators May Demand from New Charter to Approve a Merger

The PSC wants Charter to develop gigabit broadband for New York's top-five cities.

The PSC wants Charter to develop gigabit broadband for New York’s top-five cities.

When the PSC staffers added everything up it found the proposed merger offered little benefit to New Yorkers and would not result in a net positive benefit for New York. The staff recommended the merger be denied unless specific commitments are made to sweeten the deal for New York customers.

First, New Charter should be required to develop a strategic implementation plan to build-out its all-digital network to every remaining unserved or underserved Charter and Time Warner franchise area in New York. This would mean that any resident in a town serviced by either cable company would be able to buy service even if the company does not now offer it. Currently, areas considered unprofitable to serve within a franchise area are often bypassed. This would no longer be permitted, and New Charter would have to wire any commercial building, business, school, or home.

Second, Charter’s record of performance in New York is already less than impressive. In Columbia County, Charter operates an ancient one-way video service-only cable system serving Chatham, N.Y. The PSC staff recommends Charter be required to bring that cable system up to date. More broadly, the staff recommends Charter be forced to spend more money on system upgrades and improved service than Time Warner Cable would have on its own.

Third, qualifications to subscribe to Charter’s proposed $9.95 discount Internet program should be broadened to exclude fewer customers. Its speed should also be raised to at least 10Mbps. For everyone else not qualified to subscribe to Connect2Compete, the PSC staff recommends requiring New Charter to continue offering Time Warner’s Everyday Low Price $14.99 Internet tier at an enhanced speed of 3Mbps for a minimum of five years.

Fourth, Time Warner customers in New York should be granted promotional broadband pricing without modem fees for a minimum of three years, making New Charter’s ongoing price of its 60Mbps tier $39.99 a month, not the $59.99 a month Charter typically charges after one year.

Fifth, New Charter should be required to offer broadband service at speeds up to 100Mbps throughout its New York footprint within 30 months of the close of the proposed merger. New Charter should also be compelled to install infrastructure capable of offering 1,000Mbps (1Gbps) service in New York City, Buffalo, Rochester, Syracuse and Albany by 2020.

Six, New York should require New Charter to change its current merger proposal to decrease leveraged debt and present a plan to restore the company’s credit rating to a level more comparable with Time Warner Cable.

Seven, New Charter should submit to oversight of its customer service performance by New York regulators, which will monitor how New Charter treats its customers. If the company falls below acceptable service standards, the PSC will have the authority to intervene based on an agreement with New Charter.

Finally, New Charter will agree to limit any significant changes to its New York call center or other customer-facing positions for at least two years and provide 90 days notice of any significant job relocations or reductions.

Europe is Now a Toll-Free Local Call for Most Time Warner Cable Phone Customers

Phillip Dampier September 8, 2015 Consumer News, Time Warner Cable 1 Comment

Flag_of_Europe.svgTime Warner Cable’s unlimited local calling area expands to most of Europe today, which means making and receiving calls from across the pond now costs the same as calling your neighbor next door.

Time Warner Cable customers with Nationwide Calling telephone service ($10/mo) can now place unlimited toll-free calls across the U.S., Canada, Puerto Rico, the U.S. Virgin Islands, the Northern Marianas/Guam, American Samoa, Mexico, the People’s Republic of China, Hong Kong, India, and the 28 nations making up the European Union:

Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. (Norway, not an EU member nation, is also now toll-free. Surprisingly, no similar accommodation was made for neutral Switzerland.)

The changes mean no more long distance charges, no calling cards and pin numbers, and no varying rates. The free calling is included in your basic rate for home phone service — there are no add-on plans required. Some customers grandfathered on limited long distance or local-calling only phone plans do not qualify. Those customers are probably now paying more for those older plans than Time Warner today charges for its unlimited calling service.

timewarner twcJust like broadband, the cost to transport phone calls around the world has never been cheaper, and rates continue to fall in most other countries, often below 25 cents a minute. The exceptions are usually high-cost service areas, countries where phone tariffs are set artificially high as a revenue generator or to discourage international calling, or places that have to rely on satellite-delivered telephone service. Some examples:

  • Antarctica: It costs $3+ a minute, starting as soon as someone takes their gloves off to pick up the phone;
  • Ascension Island: Expect to pay $2.30 a minute to make a call to this isolated island in the South Atlantic Ocean that needs no more than 4-digit phone numbers;
  • Cambodia: High tariffs are a decision of the government in Phnom Penh, boosting the price of an international call to about $2.34 a minute.
  • Chad: The corrupt one-party administration in N’Djamena uses international calling revenue to line its pockets, costing $2.40 or more a minute in many cases.
  • Cook Islands: Like many South Pacific island territories, Cook Islands relies on satellite-based telephone services which are expensive. Calling someone there runs about $3 a minute;
  • Equatorial Guinea: A tiny African state with a big appetite for foreign currency, the authoritarian government in Malabo thanks you for paying $2.15+ a minute to call the country;
  • North Korea: Yes you can call North Korea and it’s a relative bargain at just $1.30+ a minute. Just assume the conversation won’t be private;
  • Laos: Around $2.40 a minute. Laos is one of the five remaining Communist states (the others: North Korea, China, Cuba and Vietnam) Don’t call us, we won’t call you;
  • Wallace and Futuna: Like other remote Pacific islands, making and receiving phone calls is dependent on expensive satellite circuits. The bureau responsible for overseeing French territories overseas also takes their cut, which makes calls to these two islands especially expensive at around $4 a minute.

Victim of Explosion Fighting With Time Warner Cable’s Lawyers Over Bottles of Wine

Phillip Dampier August 11, 2015 Consumer News, Time Warner Cable No Comments
Jurors are into their second month hearing testimony about who has responsibility to pay damages over a fiber cable installation gone bad. Now the lawyers are debating the value of the wines stored inside the restaurant.

Jurors are into their second month of testimony about who has responsibility to pay damages over a fiber cable installation that breached a gas line. Now the lawyers are debating the value of the vintage wines stored inside the destroyed restaurant.

On Feb. 19, 2013, a contractor hired by Time Warner Cable to install a fiber optic line instead pierced a two-inch gas line next to the Country Club Plaza and JJ’s Restaurant in Kansas City, Mo. The resulting explosion demolished the restaurant, leaving one worker dead, and another 15 injured.

But the impact of that day still lingers more than two years later as the owner of JJ’s fights Time Warner Cable’s attorneys in court over his damage claim, right down to the value of individual wine bottles stored at the restaurant.

Jimme Frantze, the owner of JJ’s Restaurant, is seeking more than $9.3 million in damages to cover the loss of the building, his net lost income, and the costs involved in starting a new restaurant. Time Warner Cable said no.

Jurors are now into the second month of the trial, which has spent much of its time dwelling on the actions of three companies involved in the explosion and its aftermath: Time Warner Cable, which hired the contractor for the project, Heartland Midwest LLC, the Olathe-based excavating contractor hired to do the work, and Missouri Gas Energy, the company that responded to the initial reports of a natural gas leak.

But these days Time Warner Cable’s attorney is questioning Frantze about how he valued the wine bottles stored at the restaurant.

The Kansas City Star reports Frantze has told jurors it has been difficult to prove the fair value of many of the wines because they are no longer available for retail sale. Frantze lost most of his business records in the explosion and fire that followed, so he has attempted to find comparable bottles online for sale to establish a replacement value.

Time Warner Cable Attorney Ken Snow drilled down on the specific value of several bottles formerly a part of Frantze’s collection.

timewarner twcOne 1929 bottle initially valued at $15,000 was re-estimated downwards by Frantze to $5,000 after he found an appraiser who valued it at a lower amount.

“I just acquiesced,” he said, adding, “There’s a lot of emotion on my part with some of the older vintages.” That 1929 bottle, he added, “was in pristine condition. I probably had it for 30 years.”

Snow also questioned Frantze about his assigned value of $2,600 to a bottle of 2000 wine appraised elsewhere at $1,100. One other bottle was appraised at $575, not the $1,900 Frantze estimated.

Snow also argued JJ’s was not the success story Frantze might suggest. Snow asserted the restaurant was struggling at the time of the explosion, a suggestion contested by Frantze.

On Monday, Frantze appeared in court accompanied by oxygen tanks, two weeks after a liver transplant. The same year of the explosion, Frantze was diagnosed with liver cancer.

Time Warner Cable Nears Completion of San Antonio’s Maxx Upgrade; Faster Speeds for All

twcGreenTime Warner Cable is nearing the end of its $60 million “Maxx” upgrade of San Antonio, company officials said in a news release.

The Maxx upgrade most noticeably boosts broadband speeds up to six times faster than what customers used to receive, at no change in price, up to 300/20Mbps.


Time Warner Cable Maxx Broadband Speed Comparison

Earthlink customers will also get a speed boost.  The traditional EarthLink Broadband plan will become EarthLink Extreme with speed up to 50/5Mbps. EarthLink Cable Max will become EarthLink Ultimate with speed up to 100/10Mbps. Customers who want faster Internet will have to switch back to Time Warner Cable to upgrade above 100Mbps.

As part of the upgrade, Time Warner has converted its analog television signals to all-digital service. Free digital adapters are available to customers until Dec. 28, 2016. After that, each adapter will cost $2.75 a month.

Time Warner Cable Continues Commitment to Keep Unlimited Data, Expand Maxx Upgrades

timewarner twcTime Warner Cable will continue to offer customers unlimited data plans and further expand its Maxx upgrade program until it reaches the company’s entire service area or the merger with Charter Communications is approved by regulators.

CEO Robert Marcus told investors on a morning conference call the company has been “completely committed to delivering an unlimited broadband offering in connection with whatever else we do, because we know customers do place a value on the peace of mind that comes with unlimited plans.”

Marcus continued to admit his company’s experiments with voluntary usage pricing have largely failed, noting the “vast majority” of customers choose unlimited plans, and Time Warner “never had any intention of substituting the availability of unlimited with exclusively usage-based programs.”

The original goal for Time Warner’s voluntary usage pricing options “was to offer customers who use less bandwidth, who maybe just do e-mail, an opportunity to pay less and have an Internet offering that better meets their demands for both usage and price.”

Time Warner Cable goes out of its way to advertise "No Data Caps."

Time Warner Cable goes out of its way to advertise “No Data Caps.”

Most broadband customers do not want usage-based billing or usage-capped Internet, but some providers force such usage plans on customers anyway.

“Different providers have had different philosophies on these things,” Marcus offered.

Marcus reported TWC Maxx deployment in Austin is finished, and the company is working on completing upgrades in Dallas, San Antonio, Raleigh, Charlotte, Kansas City and Hawaii by year-end. The latest markets to be upgraded — San Diego, Wilmington and Greensboro, N.C., will start this year, but speed increases will not begin until next year. The upgrades are improving customer satisfaction with a 35% drop in voluntary disconnects in Maxx service areas, but will cost an estimated $4.45 billion in spending this year by the country’s second largest cable operator.

Time Warner Cable Maxx has been very successful at bringing new customers to Time Warner, attracted by improved broadband speeds and better service, Marcus told investors. Maxx customers see broadband speed upgrades that dramatically boost speeds at no additional cost. Standard Internet speeds in non-Maxx markets are 15Mbps. In Maxx areas, customers receive 50Mbps. Customers signed up for 50Mbps “Ultimate” Internet in Maxx markets see that speed raised to 300Mbps.

Large sections of Time Warner Cable territory have yet to be upgraded, however. Marcus today said he plans to continue the Maxx upgrade effort as the Charter merger proceeds through a lengthy regulatory review process. If the merger is delayed or unsuccessful, Time Warner likely will announce additional cities targeted for upgrades in 2016, but customers should not expect speed changes until later that year or 2017. If the Charter merger is approved, areas bypassed for Maxx upgrades will likely get a more modest upgrade promised by Charter, with maximum broadband speeds of 100Mbps.



Time Warner Cable spent the last quarter pushing lower priced promotions to attract new and returning customers. That, combined with higher programming costs, increased spending on network upgrades, and pension expenses cut into the cable company’s profits, which declined 7.2% in the last quarter.

Time Warner Cable added 66,000 residential customers overall, its best ever second quarter and its first rise in any quarter since 2008, according to Marcus. Time Warner added 172,000 new broadband customers and 252,000 voice subscribers, primarily from a promotion that allows any subscriber to add phone service to their package for $10 a month. But Time Warner is not immune to cord cutting, and lost 45,000 video customers in the second quarter.

The cable company may have stepped up promotions to be certain it can report good results as investors wait for the Charter Communications merger to win or lose regulator approval. A triple play promotion for new customers runs as low as $89 a month and despite touting an earlier philosophy the company did not see much value promoting cheap phone service, it has apparently reversed course, boosting triple play upgrades as a result of reduced pricing.

It is also continuing strong customer retention policies, a sign Time Warner Cable will continue to respond when customers threaten to cancel unless they get a better deal.

“Our whole view of retention hasn’t really changed since the middle part of 2014,” said William F. Osbourn, Jr., acting co-chief financial officer. “Our view is that we will always rather save the customer than lose the customer, but I think we’re pretty disciplined about not giving away the farm in doing that.”

Some other highlights:

  • Programming costs rose 11%, a sure bet another rate increase will be forthcoming in the future;
  • Marcus loves mergers: “The only thing I’d add to that is that from an industry structure perspective, in roughly a quarter of our footprint, the deal [between AT&T and DirecTV] results in two competitors becoming one. And, generally speaking, that’s a positive for all the players in the industry”;
  • Time Warner Cable will continue to encourage customers to use their own set-top box devices (Roku, Apple TV, etc.) as an alternative to the traditional cable set-top box;
  • Roughly 12% of customers now own their own cable modems to escape Time Warner’s rental fee;
  • Despite the clamor for “skinny bundles” 82% of Time Warner Cable customers subscribed to the full video package;
  • In Maxx areas, customers need set-top boxes on all of their connected televisions. Most are opting for the cheapest option, taking an average of two less-capable DTA boxes instead of more expensive set-tops. DVR subscriber numbers have remain largely unchanged after Maxx upgrades.

N.Y. Public Service Commission to Charter/Time Warner Cable: Hope You Are Not in a Hurry

dpsThe New York State Public Service Commission today notified Charter Communications its merger application with Time Warner Cable will require a “more detailed review of the petition,” which means a final decision is unlikely before the end of this year or more likely 2016:

We have received the petition of Time Warner Cable Inc. and Charter Communications, Inc. dated July 2, 2015 seeking authority, pursuant to Public Service Law Sections 100, 101, and 222, to transfer a controlling interest in certain Time Warner Cable telephone systems, cable systems, franchises and assets to Charter and to issue debt. On July 10, 2015, a Supplement was received seeking further approval under PSL § 99(2) for a transfer of Time Warner Cable’s telephone franchises.

According to Sections 99 and 100 of the Public Service Law, such an application is deemed approved after ninety (90) days of filing unless the Commission or its designee notifies the petitioner in writing, within the time period, that the public interest requires the Commission’s review and its written order.

[…] A preliminary review indicates that the public interest requires a more detailed review of the petition. Therefore, pursuant to Public Service Law Sections 99,100, and 101 we are informing you that the Commission will review your petition and will issue a written response in this proceeding.

charter twc bhThe PSC has set a deadline for comments on the merger of Sept. 16 with reply comments due two weeks after that. But on-the-record regional forums will also be held across the state to gather more comments from consumers and stakeholders. Locations of the forums have not yet been announced.

As with Comcast’s merger proposal, a significant review period is expected as the merger of Charter Communications and Time Warner Cable will have profound implications on the entire state. Outside of Long Island and a few boroughs in New York City, Time Warner Cable is by far the most dominant provider serving every major population center in New York.

Two letters have already been added to the record about the merger.

The Rochester Business Alliance filed this letter in “strong support” of the proposed deal, quoting almost entirely from press releases and merger advocacy documents issued by Charter Communications. Time Warner Cable is a “partner member” of the group, better known as the Regional Chamber of Commerce.

RBAlogo“The Rochester Business Alliance advocates for an environment that will promote the success of its members and the local economy,” the group writes on its website. “We help our member companies and their employees stay connected to the issues as well as to the people who can make a difference.”

Michael Kaplan is the first consumer to weigh in on the merger, and he is opposed.

“Just like the Comcast we now have to write to you to ask that you reject this merger,” Kaplan writes. “The only people who benefit from this are the three or four people who will get very rich from it. The rest of the people you are supposed to be protecting? We get much higher cable/Internet rates because they are taking on so much debt that it’s obvious they will have to raise rates significantly. How does this help New York State?”

Kaplan also doesn’t believe Charter’s promise not to usage cap its broadband customers because the commitment expires after three years:

They also promised not to cap or throttle broadband users for three years. Is that a joke?

Time Warner has (due to public backlash) never capped or throttled their Internet. They have not placed data caps on their service which everyone knows is a cash grab.

If you are politically forced into doing this than at the very least Charter MUST keep the current arrangement Time Warner Cable has forever. FOREVER. No data caps, no overage fees, no throttling. Never.

Robert Marcus stands to make over 90 million dollars from the sale of Time Warner. Since his inception as CEO his mission has been to sell the company so he can cash out. He should improve service, equipment, work for us.

We the people are getting sick and tired of it and we are especially of a CEO who is only thinking of his end. What he will personally make. He doesn’t care on how every single person in NY State will get screwed.

Charter Asks FCC to Approve Time Warner Cable/Bright House Merger; Stop the Cap! Urges Changes

charter twc bhCharter Communications last week filed its 362 page redacted Public Interest Statement laying out its case to win approval of its acquisition of Time Warner Cable and Bright House Networks, to be run under the Charter banner.

“Charter may not be a household name for all Americans, but it has developed into an industry leader by implementing customer and Internet-friendly business practices,” its statement reads.

The sprawling document is effectively a sales pitch to federal regulators to accept Charter’s contention the merger is in the public interest, and the company promises a range of voluntary and committed service upgrades it says will improve the customer experience for those becoming a part of what will be America’s second largest cable operator.

Charter’s proposed upgrades fall under several categories of direct interest to consumers:

Broadband: Charter will commit to upgrade customers to 60Mbps broadband within 30 months (about 2.5 years) after the deal is approved. That could mean some Time Warner Cable customers will still be serviced with standard speeds of 15Mbps as late as 2018. Time Warner Cable’s Maxx upgrade program will be effectively frozen in place and will continue in only those areas “consistent with Time Warner Cable’s existing deployment plans.” That will leave out a large sections of the country not on the upgrade list. Charter has committed to impose no data caps, usage-based pricing or modem fees, but only for three years, after which it will be free to change those policies at will.

Wi-Fi: Charter promises to build on Time Warner’s 100,000 Wi-Fi hotspots, most in just a few cities, and Bright House’s denser network of 45,000 hotspots with a commitment to build at least 300,000 new hotspots across Charter’s expanded service area within four years. Charter will also evaluate deploying cable modems that also act as public Wi-Fi hotspots. Comcast already offers over 500,000 hotspots with plans for many more, making Charter’s wireless commitment less ambitious than what Comcast today offers customers.

Cable-TV: Charter has committed to moving all Time Warner and Bright House systems to all-digital service within 30 months. Customers will need to lease set-top boxes designed to handle Charter’s encryption system for all cable connected televisions. Among those boxes includes Charter’s new, IP-capable Worldbox CPE and cloud-based Spectrum Guide user interface system.

Video on the Go: Charter will adopt Time Warner Cable’s streaming platform and apps to provide 300 streaming television channels to customers watching from inside their homes (a small fraction of those channels are available while outside of the home). Customers will not be able to watch on-demand recorded DVR shows from portable devices, but can program their DVRs from apps or the website.

Discount Internet for the Poor: Charter references the fact its minimum entry-level broadband speed is 60Mbps so that does not bode well for Time Warner Cable’s Everyday Low Priced Internet $14.99 slow-speed Internet plan. Instead Charter will build upon Bright House Networks’ mysterious broadband program for low-income consumers.

Based on Charter’s initial proposal, Stop the Cap! will urge state and federal regulators to require changes of these terms before approving any merger. Among them:

  1. All existing Time Warner Cable and Bright House service areas should be upgraded to meet or exceed the levels of service offered by Time Warner Cable’s Maxx program within 30 months. It is not acceptable to upgrade some customers while others are left with a much more modest upgrade program proposed by Charter;
  2. Charter must commit to Net Neutrality principles without an expiration date;
  3. Regardless of any usage-cap or usage-based pricing plans Charter may introduce after its three-year “no caps” commitment expires, Charter must permanently continue to offer unlimited, flat rate Internet service at a reasonable price as an alternative to usage-priced plans;
  4. Customers must be given the option of opting out of any leased/provided-modem Wi-Fi hotspot plan that offers a wireless connection to outside users without the customer’s consent;
  5. Charter must commit to a more specific Wi-Fi hotspot program that details towns and cities to be serviced and proposed pricing for non-customers;
  6. Charter must allow customers to use their own set-top equipment (eg. Roku, Apple TV, etc.) to receive cable television service without compulsory equipment/rental fees. The company must also commit to offering discount alternatives such as DTAs for secondary televisions and provide an option for income-challenged customers compelled to accept new equipment to continue receiving cable television service;
  7. Charter must retain Time Warner Cable’s Everyday Low Priced $14.99 Internet plan regardless of any other low-income discount program it offers. If it chooses to adopt Bright House’s program, it must broaden it to accept applications year-round, simplify the application process and eliminate any waiting periods;
  8. Charter must commit to independent verification of customer quality and service standards and adhere to any regulatory guidelines imposed by state or federal regulators as a condition of approval.
  9. Charter must commit to expansion of its cable network into a reasonable number of adjacent, unserved areas by committing a significant percentage (to be determined) of measurable financial benefits of the merger to the company or its executives towards this effort.

Stop the Cap! will closely monitor the proceedings and intends to participate on both the state (New York) and federal level to guarantee any merger provides consumers with an equitable share of the benefits. We will also be examining the impact of the merger on existing Time Warner Cable and Bright House employees and will promote merger conditions that protect jobs and limit outsourcing, especially overseas.

Some Time Warner Cable Customers Get a Small Speed Boost Thanks to Overprovisioning

Phillip Dampier June 29, 2015 Broadband Speed, Consumer News, Time Warner Cable 6 Comments

timewarner twcTime Warner Cable customers in parts of the northeast have noticed their broadband speeds increased slightly over the last several days.

Stop the Cap! reader Howard Goldberg was among those who noticed Time Warner’s broadband performance in upstate New York has improved, at least for upper tiers.

“Over the past 24 hours, Speedtest.net (against the TWC site in Syracuse, and many others) is reporting 60-62Mbps down and 6.0-6.2Mbps up, an increase from 55/5.5Mbps we have had over the past few years,” Goldberg notes. He is subscribed to Time Warner Cable Ultimate, marketed in upstate New York as 50/5Mbps service.

We noticed the same thing late last week here in Rochester as speed test results now consistently top 60Mbps when using a Time Warner Cable-based server. The upstream speed increase was less visible, but still measurable.

Goldberg also reports ping times have dropped from the 18-22ms range to 13-15ms when using the Syracuse, N.Y. test site, which could also point to a more responsive Internet connection overall.

Cable companies occasionally deliver speeds that are actually faster than what they sell, known as overprovisioning, to improve customer satisfaction and boost their performance in the Federal Communications Commission’s ongoing national speed test program, designed to verify if providers are actually providing the speeds they are marketing to customers.

Are Time Warner customers in other areas seeing similar results? Report your findings in the comment section.

FCC Likely to Toss First Formal Net Neutrality Complaint Against Time Warner Cable

The nation’s first Net Neutrality complaint filed with the Federal Communications Commission accuses Time Warner Cable of refusing to provide the best possible path for its broadband customers to watch a series of high-definition webcams covering San Diego Bay.


Commercial Network Services’ CEO Barry Bahrami wrote the FCC that Time Warner Cable is degrading its ability to exercise free expression by choosing which Internet traffic providers it directly peers with and which it does not:

I am writing to initiate an informal complaint against Time Warner Cable (TWC) for violating the “No Paid Prioritization” and “No Throttling” sections of the new Net Neutrality rules for failure to fulfill their obligations to their BIAS consumers by opting to exchange Internet traffic over higher latency (and often more congested) transit routes instead of directly to the edge provider over lower latency peering routes freely available to them through their presence on public Internet exchanges, unless a payment is made to TWC by the edge provider. These violations are occurring on industry recognized public Internet peering exchanges where both autonomous systems maintain a presence to exchange Internet traffic, but are unable to due to the management policy of TWC. As you know, there is no management policy exception to the No Paid Prioritization rule.

By refusing to accept the freely available direct route to the edge-provider of the consumers’ choosing, TWC is unnecessarily increasing latency and congestion between the consumer and the edge provider by instead sending traffic through higher latency and routinely congested transit routes. This is a default on their promise to the BIAS consumer to deliver to the edge and make arrangements as necessary to do that.

The website responsible for initiating the complaint shows live webcam footage of the San Diego Bay.

The website responsible for initiating the complaint shows live webcam footage of the San Diego Bay.

Bahrami’s complaint deals with interconnection issues, which are not explicitly covered by the FCC’s Net Neutrality rules that prohibit intentional degradation or paid prioritization of network traffic. For years, ISPs have agreed to “settlement-free peering” arrangements with bandwidth providers that exchange traffic in roughly equal amounts with one another. To qualify for this kind of free interconnection arrangement, CNS’ webcams must be hosted by a company that receives about as much traffic from Time Warner Cable customers as it sends back to them — an unlikely prospect.

As bandwidth intensive content knocks traffic figures out of balance, ISPs have started demanding financial compensation from content producers if they want performance guarantees. This is what led Comcast, Verizon and AT&T to insist on paid interconnection agreements with the traffic monster Netflix.

Time Warner Cable is calling on the FCC to dismiss Bahrami’s letter on the grounds it is not a valid Net Neutrality complaint.

“[The FCC should] reject any complaint that is premised on the notion that every edge provider around the globe is entitled to enter into a settlement-free peering arrangement,” Time Warner Cable responds. That is a nice way of telling CNS it doesn’t get a premium pathway to Time Warner Cable customers for free just because of Net Neutrality rules.

CNS250X87Bahrami responds Time Warner’s attitude is based on a distinction without much difference because he is effectively being told CNS must pay extra for a suitable connection with Time Warner to guarantee his web visitors will have a good experience.

“This is not a valid complaint, and there is no way the FCC is going to side with them,” Dan Rayburn, a telecom analyst at Frost & Sullivan and the founding member of the Streaming Video Alliance told Motherboard. “The rules say you can’t block or throttle, but there’s no rule that says Time Warner Cable has to give CNS settlement-free peering. I don’t see how the FCC could possibly say there’s a violation here.”

The FCC made it clear in its Net Neutrality policy it intends “to watch, learn, and act as required, but not intervene now, especially not with prescriptive rules” with respect to interconnection matters.

That makes it likely Bahrami’s complaint will either be tossed out on grounds it is not a Net Neutrality violation or more likely dismissed but kept in what will likely be a growing file of future cases of interconnection disputes between ISPs and content producers. If that file grows too large too quickly, the FCC may be compelled to act.

Hometown Newspaper of Charter Communications Warns Time Warner Deal Not in the Public Interest

Editor’s Note: This editorial in the St. Louis Post-Dispatch is reprinted in its entirety. It comes from a newspaper that has covered Charter Communications since its inception. The Post-Dispatch reporters are also some of Charter’s subscribers — the cable company serves all of metropolitan St. Louis. Charter has never been received particularly well in St. Louis and in other cities where it provides generally mediocre service. Communities across Missouri that have endured poor cable and broadband service have recently taken a serious look at doing something about this by building their own public broadband networks as an alternative. But big money telecom interests, especially AT&T, have found it considerably less expensive to lobby to ban these networks from ever getting off the ground than spending the money to upgrade networks to compete.

charter twc bhOn May 15, the last day of this year’s session of the Missouri Legislature, House Bill 437 finally was assigned to a committee, where it promptly died. Given the power of the American Legislative Exchange Council, it may well be back next year.

HB 437, sponsored by Rep. Rocky Miller, R-Lake Ozark, was full of gobbledygook about “municipal competitive services,” but its effect would have been to condemn Missourians to ever-higher prices for broadband Internet service. Cities would have been forbidden from establishing their own broadband services to compete with private operators, thus holding down prices.

ALEC, which wines and dines state lawmakers and then gets them to pass pro-business “model legislation” in their states, had succeeded in getting restrictions on public Internet providers in 20 states. But in February, the Federal Communications Commission struck down North Carolina’s ALEC-inspired law, so the future of other such laws is uncertain.

About 22 percent of Missourians are still regarded as “underserved,” having no reliable access to broadband service of at least 25 megabits per second — what’s needed to stream video without lags. About 1 in 6 Missourians have only one wired access provider to choose from. More than 400,000 Missourians have no wired broadband at all.

Missouri is ranked 38th “most connected” in the nation by the federal-state Broadband Now initiative. In the 21st century, this is like being underserved by railroads in the 19th century or power lines in the early 20th. In parts of rural Missouri, it’s hard to do business, which helps explain why HB 437 died in committee.

Rep. Rocky Miller (R-Lake Ozark)

Rep. Rocky Miller (R-Lake Ozark)

The basic question is whether companies that invest in high-speed Internet infrastructure should be able to charge whatever they can get away with, or whether broadband service should be treated as a public utility. If it’s the latter, as the FCC determined in February, then government must make sure it’s affordable.

Which brings us to Charter Communications proposed $56 billion takeover of Time Warner Cable and its $10.4 billion acquisition of Bright House Networks. Both deals were announced May 26; both will need approval from the FCC and the Justice Department’s antitrust regulators.

In St. Louis, we have a love-hate relationship with Charter, a homegrown company built atop what was once Cencom Cable. It has dominated the cable TV market here almost as long as there’s been a cable market.

Charter customers endured years of poor service, its bankruptcy, its legal challenges, its ownership and management changes. Just when it got itself together, in 2012, the headquarters was moved from Des Peres to Stamford, Conn., though it retains a significant presence here.

Today our little Charter is a big fish; the Time Warner and Bright House deals would make it the nation’s second-largest cable company, with 24 million customers, behind only Philadelphia-based Comcast, with 27 million.

But cable TV no longer drives cable TV. Internet-based video services, like YouTube and Netflix, have revolutionized the way people, particularly younger people, watch TV. When cable companies first started connecting customers to the Internet through the same cables that delivered TV programming, it was regarded as a nice add-on business. Now broadband delivery is seen as a far bigger part of the future than providing TV programs.

missouriIndeed, when Comcast tried to acquire Time Warner last year, the dominance (nearly 60 percent of the market) that the combined company would have had over broadband service caused federal regulators to look askance. Comcast abandoned its bid in April.

By contrast, a Charter-Time Warner-Bright House combination (it will do business as Spectrum) will control 30 percent of the broadband market. Charter Spectrum will have 20 million broadband subscribers, compared with 22 million for Comcast.

So what can customers expect? Charter’s CEO Tom Rutledge has promised “faster Internet speeds, state-of-the-art video experiences and fully featured voice products, at highly competitive prices.”

This begs the question, competitive with whom? Comcast? Mom-and-pop operations that can’t afford the infrastructure? Municipal service providers who are being ALEC’d out of business?

Neither Charter nor Time Warner has particularly good customer service ratings (though to be fair, Charter is miles ahead of where it used to be, at least in St. Louis). Still, Charter will take on lots of debt to finance the deal, much of it in high-yield junk bonds. The broadband business provides leverage. As analyst Craig Moffett of MoffettNathanson told the Wall Street Journal: “Broadband pricing is almost an insurance policy for cable operators, in that if all else fails, you’ve always got the option to raise broadband rates.”

America wouldn’t let a private operator own 30 percent of its roads and highways. It wouldn’t allow two of them to control half the electricity. If broadband Internet service is a public utility, it must be regulated strictly.

The lesson is old as the hills: The free-marketeers who talk most passionately about competition are generally in the business of trying to eliminate it. Charter and Time Warner are both members of ALEC.

The Charter-Time Warner deal clearly is not in the public interest. The upside for shareholders is huge. The upside for Charter executives is even bigger. But it’s hard to see how Charter’s customers would see much benefit at all.

Search This Site:


Recent Comments:

  • Tamara Shurling: From what I've read the unlimited they are offering is only available in Florida, all of this is such BS! It makes me mad every time I read about it. ...
  • Fred: Same here. I have already filed a complaint with both the FCC and the BB of South-East Florida. The FCC has already sent me a confirmation email stati...
  • D: Has ANYONE here found the actual clause on the agreement terms which states that there is a data cap on Comcast service? I'm in Miami and this fact...
  • Uncle Ron: Just another example of AT&T's cozy and possibly corrupt relationship with -every- PUC in the country. How can they possibly claim any rate basis...
  • Uncle Ron: Why isn't Texas included in this "settlement?" Why would a state -not- be included? Shouldn't this be exposed as well?...
  • Robmak3: Innovation: "The public should choose Verizon FiOS instead of Time Warner Cable" I find my xp with time warner (In the last year, just switched to RC...
  • Lee: http://www.ctcnet.us/CTCCostsForAnchorInstitutions.pdf Not expensive. I doubt the cost per mile has decreased since 2009 prices listed in the above...
  • Paul Houle: Don't let anybody fool you into thinking that optic fiber is "expensive". The problem is not that optic fiber is expensive, it is that monopoly tele...
  • Ralph: Stand in line, Connecticut. Those of us in WV who were Frontier customers prior to them purchasing Verizon's & AT&T's land lines are still wa...
  • Dave Hancock: Innovation: BS - just plain BS!!...
  • Jason Grimm: Comcast has been charging me that modem rental fee for over 5 months. I paid $200 to buy my own modem when I needed to upgrade to docsis 3. I didnt wa...
  • Liz: Dear Connecticut: Now you know what it's like to be in the Green Mountains, the Appalachians, or pretty much any other mountain range anywhere in the...

Your Account: