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Bill Shock
Time Warner Cable has redefined bill shock for two of their customers this week as an Ohio man found the cable company trying to bill his credit card $16 million dollars and the Madison County, Ky., Board of Education found their broadband rate going up as much as 1,568 percent.
One of these was a mistake, the other represents a potential nightmare.
Lt. Daniel DeVirgilio received notification from Time Warner Cable his credit card didn’t have a big enough credit limit to sustain the $16,409,107 in charges the cable company tried to get authorized. The Beavercreek, Ohio resident was taking the billing foul-up in stride, joking with the Dayton Daily News that he probably should have gotten Showtime thrown in at those prices.
Time Warner Cable Southwest Ohio officials on Thursday attributed the $16.4 million figure to human error, according to the newspaper. An employee typed in the wrong number for the amount owed, which caused the company’s automated system to generate the letter.
Unfortunately for DeVirgilio, Time Warner left him on hold for nearly 40 minutes trying to straighten out the billing mess. No harm was ultimately done to his credit card, but the 26 year old remains concerned Time Warner could have reported the “delinquent” charge to credit reporting agencies.
Madison County, Ky.
The relatively painless resolution DeVirgilio got in Ohio is unlikely to repeated for school officials in Kentucky, reeling from news Time Warner Cable is demanding an enormous rate increase for Madison County Schools’ fiber optic-based broadband network.
The Richmond Register reports local officials were stunned when the cable operator refused to renew their existing contract, which provides service at a cost of $32,000 a year to county residents. The cable operator instead announced it wanted the school system to pay at least 500 percent more to continue the same level of service in 2011 and beyond: $168,000 a year for county taxpayers with a five year term commitment.
School officials discovered Time Warner Cable was the only provider in the region capable of delivering the type of service the school system requires, and that has given the cable company a safe position to raise prices — dramatically.
Even worse, the Kentucky Department of Education informed the district it could not agree to a five year term even if it wanted to. Year-by-year service was the only way forward, according to county officials.
In response, Time Warner jacked up the price again — this time by 1,568 percent, potentially costing Madison County taxpayers a whopping $504,000 annually. Telephone ratepayers will also deliver a piece of their monthly phone bill to the cable operator from Universal Service Funds that will be diverted to cover at least another $750,000 in fees sought for an annual contract.
“It’s been a very frustrating situation from the beginning,” Superintendent Tommy Floyd told the newspaper. “This makes it very difficult for us to continue our ongoing commitment to serve children. I’m going to continue on behalf of Madison County Schools to find the lowest cost provider of services.”
Time Warner also knows time is running out for the school district. The county must sign a new contract by June 30th or lose its fiber network. That could be a disaster for the school district.
“We use [the network] all day long in each of our buildings,” Floyd said.
State officials wrote a letter to Time Warner Cable demanding an explanation for the rate increase and stating it was unacceptable.
The state and school officials are still waiting for a response from the cable company, which so far has yet to respond.
[Updated 11:30am ET: Stop the Cap! received a response yesterday afternoon from Cynthia Godby, Communications Manager for Time Warner Cable in Cincinnati. In the cause of fairness, and with her permission, we are including her response in full, below:]
“I just read your article about Time Warner Cable and Madison County Board of Education and want to share the facts below about the situation.
- Their current arrangement was made with Adelphia and is not a service that TWC offers. TWC acquired the contract but does not market dark fiber service, and therefore, is phasing out its support of the product. The old Adelphia contract we were operating under allowed for either party to terminate with 6 months written notice. In December 2011 we provided them with written notice that we would no longer be able to support their current service starting July 1st 2011. This is a seven month notice.
- It is inaccurate to portray this as a price increase – it’s a different product that requires a new infrastructure.
- They sent out an RFP asking for pricing for 3 or 5 yr term. We believe we submitted a very competitive bid. In fact, it is our understanding that our bid was among the lowest submitted.
- Over and beyond responding to the RFP requirements, TWC has also suggested several more efficient and cost-effective service options that we feel would meet all of the Board’s needs at a lower price point. We continue to see these service options as excellent alternatives to the stated RFP requirements.
- While they verbally awarded us with the contract, they then wanted to change the terms 4 days prior to the scheduled signing. In response to their request, we submitted a revised bid to reflect a one-year term. As is the case with most all telecommunications providers, a short term contract is priced higher than a long-term contract, simply based on the rate of return on investment.
- We sincerely hope to continue our service relationship with the district and remain committed to working with them to find the best TWC product and price point that meets their needs.”
And I’ll wager contacting Rand Paul would be less than useless in this.
This is EXACTLY the same arrogance that will end Cable providers in the next decade. I can hear the funeral march playing for Time Warner. It’s one thing to screw people behind their back, it’s another to ram it up their front end with your eyes closed and no protection.
More people getting hosed to pay for Glenn Britt’s lifestyle
We know what the actual response is – It’s to make money. What else would be the reason? Elephant in the room anyone?
Imagine that an expressway company provided you an expressway all to yourself for a certain amount of money per year. You could run as many cars on that expressway as you wanted. It didn’t matter how many, the cost was the same whether you ran 25 cars or 25,000 cars. So of course you ran 25,000. Then the expressway company said we can’t afford to do this anymore and made it a shared expressway. They didn’t offer you your own personal expressway anymore. Now you had to pay based on the number of cars you sent on the expressway. Well,… Read more »