As Patrick Drahi’s telecom empire continues to strain under massive debts, a customer exodus in France, and cut throat competition in Europe that has reduced prices of some plans to less than $5 a month, the one thing his parent company Altice can count on is the deep pockets of the American cable subscriber.

The two cable companies that could make all the difference in helping Mr. Drahi keep the proverbial lights on at Empire Altice are his American acquisitions: Suddenlink and, if regulators ultimately approve, Cablevision. The French newspaper Les Echos notes Suddenlink customers are already helping cover Altice’s terrible financial performance in Europe, thanks to that cable company’s 42.5% profit margin. Suddenlink customers will be doing even more to help bail out Drahi’s difficult situation in France, thanks to future rate increases and the continued implementation of broadband usage plans that will push customers towards upgrades. But there is more to come.

“Cablevision will complete the ‘desensitization’ of France’s turbulent [telecom] marketplace for Altice,” reports the newspaper. Cablevision gives Altice an opportunity to cut costs and rely on New York, New Jersey and Connecticut customers to squeeze money out of the New York-based cable operator, validating Drahi’s “American adventure” — acquiring barely competitive cable companies to bolster revenue and profits. Customers are not expected to see lower cable bills, despite the cost cutting. If you’re concerned about your financial situation or the implications of such mergers, it’s wise to contact an insolvency practitioner for advice tailored to your circumstances.

Overleveraged

Altice’s troubled SFR-Numericable, which provides cable and mobile service in France, continues to endure a wholesale customer exodus, losing another 272,000 wireless customers during the first three months of 2016. Another 61,000 customers canceled cable and broadband service at the same time, despite price cuts. Even with cut-rate promotions, more than 1.4 million customers asked SFR-Numericable for a divorce over the last 15 months.

“They can’t give the service away for free,” says François Beauparlant, who dropped SFR-Numericable in January. “The company specializes in broken promises and shady deals. They promised upgrades and left us with service that regularly fails or Internet speeds only a small amount of what they promoted.”

Beauparlant rebuffed SFR despite its well-publicized offer of a wireless service package with 20GB of data and unlimited calls and text messages for $4.50 a month for a year.

Meanwhile, in Bethpage, N.Y., the neighbors are hopeful that quieter skies are in their future as the long-predicted Great Slash-a-thon at Cablevision is reportedly about the begin, starting with the permanent grounding of the cable company’s fleet of four executive helicopters which regularly fly in and out of Cablevision’s corporate headquarters.

The executives that relied on them won’t have much time to lament the loss, as the New York Post reports Drahi is ready to show Cablevision’s top-10 executives the door within weeks. Drahi wants everyone earning $300,000 or more out of the company as soon as possible.

Altice’s cost-cutting warriors arrive.

“I do not like to pay salaries. I pay as little as I can,” Drahi told investors at a conference last year.

Drahi also said he prefers to pay minimum wage wherever possible, a fact lesser Cablevision employees are likely to find out this summer. While those in lower level positions are likely to get “take it or leave it” offers, the top echelon of well-paid Cablevision executives will be paid even more in golden parachute exit packages, expected to be worth millions.

Among the recipients will likely be CEO James Dolan, general counsel David Ellen and vice-chairmen Hank Ratner and Gregg Seibert. Dolan’s wife Kristen, appointed chief operating officer several years ago, is still up in the air. She won’t be working at Altice’s pay scale, but may form a data-oriented joint venture with Altice later, according to the Post.

Drahi still insists he can find $900 million to cut from Cablevision’s annual budget. Critics of Altice’s acquisition of Cablevision insist those savings will come at the cost of customers, who could end up with the consequences of a dramatically reduced budget to manage upgrades, outsourced customer service, and dubious subcontractors.

Drahi’s willingness to withhold payments from vendors and suppliers to extract discounts is also likely to affect Cablevision’s relationships with cable programming networks and TV stations. The Post reports he is looking to offer slimmed-down cable TV packages, which means confronting powerful entertainment conglomerates like Disney, Viacom, Discovery, Comcast, and News Corp. Playing hardball with Viacom has not gone well for smaller cable conglomerates like Cable One, which dropped Viacom-owned channels from its lineup when it could not win enough price concessions. Disney’s ESPN has shown a willingness to sue if its expensive sports network is shunned from discounted cable TV packages.

Drahi concedes Altice and SFR-Numericable may not be the most popular companies in France, but ultimately it may not matter if he owns and controls the content customers want to watch. He is pouring money into French media acquisitions, including newspapers, launching his own Paris-based news channel, and acquiring TV networks and the exclusive rights to show popular sports like English football on them.

TDS DSL customers have a 250GB data cap in their future.

Arch, a Stop the Cap! reader in eastern Kentucky, just received a notification letter informing him his Internet access is about to be rationed, and unless he buys additional usage before June 1, TDS is likely to charge him penalty overlimit rates.

Like some data caps of the past, TDS is giving customers a small break by remaining unlimited during the overnight hours, but for many customers, it won’t be enough to prevent a higher broadband bill.

“We are writing to you inform you TDS s implementing data-usage allowance plans in your area,” reads TDS’ letter. “Beginning with the June billing period, data usage will be measured during peak time (6am-midnight CST). Data usage during non-peak time will be unlimited. In June and thereafter, if your monthly data usage exceeds the 250GB allowance you will be assessed a $20 overage fee for every 250GB exceeded (up to $60).”

TDS advises Arch that based on his prior usage, he’s very likely to exceed his cap and face overlimit fees.

“My mother got a similar [letter],” writes Arch. “Mine states I am likely to be affected by the cap and my mother’s letter says she will likely not be affected.”

Of course, customers can make the usage cap less of an issue by agreeing to buy more usage up front:

• a 500GB Data Allowance runs $10 extra a month;
• 750GB costs an extra $20 a month;
• 1TB (1,000GB) is priced at an additional $30 a month.

TDS does not offer any justification for their data caps, but it doesn’t have a lot to fear imposing them.

“TDS has no competition at all in my area except for fraudband satellite,” Arch reminds us.

That is also likely true across many other TDS service areas, where the company’s 1.2 million customers live in more than 150 different communities, many rural or suburban.

Charter Communications could not have closer friends than the commissioners on the California Public Utilities Commission who unanimously voted in favor of the merger of Charter Communications and Time Warner Cable while some almost apologized for bothering the cable company with pesky deal conditions.

CPUC president Michael Picker quickly dispensed with the glaring omission of a sunset provision on Charter’s three-year voluntary commitment to abide by the FCC’s Open Internet Order by inviting his fellow commissioners to add it back for Charter’s benefit. How nice of him. The cable company lobbyists in attendance at today’s hearing did not even need to ask.

Picker’s review of the merger benefits effectively recited a Charter press release and he seemed genuinely pleased with himself for making it all possible. For example, the CPUC considered the addition of a provision allowing consumers to buy their own cable modems and set-top boxes without a penalty from their provider “unprecedented,” while never mentioning they failed to adopt recommendations that customers be given a discount for providing their own equipment. Score Charter, which can continue to collect modem fees built into the price of its broadband service even when you provide your own.

Dampier

New Charter’s “exciting” commitment to upgrade to 300Mbps by 2019 sounds good, until one realizes Time Warner Cable was committed to finishing their own 300Mbps upgrade at least one year earlier, and at a lower cost to customers. In fact, while California celebrates 300Mbps by 2019, thanks to the efforts of Stop the Cap! and the New York Public Service Commission, Charter is required to be ready to offer gigabit service across the state that same year. See what is possible when you actually try, CPUC?

The commissioners repeatedly thanked Charter Communications and Time Warner Cable while ignoring the consumer groups that contributed opposing comments and tangible suggestions to improve benefits for consumers — almost entirely ignored by the CPUC. That will cost Californians dearly and borders on regulatory malpractice. If the CPUC required California to at least enjoy the same benefits other state utility regulators won for their constituents, Californians would get a substantially better deal. Instead, the CPUC insisted on giving California and even worse deal than the FCC, by granting Charter’s right to gouge customers with usage caps and usage billing in three years, even after the FCC agreed to seven years of cap-free Internet. Mr. Picker and the other commissioners owe California an explanation for letting them down, and the scandal-plagued CPUC needs to demonstrate it is reforming after the shameful performance of its former chairman Michael Peevey.

“Today was a travesty for Californian consumers, and frankly we were shocked to watch ostensibly independent commissioners carry water for Charter Communications,” said Stop the Cap! president Phillip Dampier. “We saw clear evidence of a commission more concerned about Charter Communications and Time Warner Cable than for the average citizens of California that will face higher cable bills, time limits on unlimited Internet access, and a longer wait for upgrades as a direct result of today’s decision. Consumer groups like Stop the Cap! brought clear and convincing evidence to the commission that the benefits of this merger have time limits and plenty of fine print. We offered concrete suggestions on how to improve the deal for consumers — ideas accepted in other states, but the CPUC clearly wasn’t interested in anything that might make Charter uncomfortable.”

All signs are pointing to a relative cake walk for Charter Communications’ executives this afternoon as they seek final approval from the California Public Utilities Commission to acquire Time Warner Cable systems in the state, with the help of an Administrative Law Judge that is recommending approval with a minimum of conditions.

In fact, the strongest condition Charter may have to accept in California came by accident. As part of Charter’s lobbying effort, it proposed a set of voluntary conditions it was prepared to accept, claiming to regulators these conditions would represent benefits of approving the transaction. One of those was a temporary three-year commitment to abide by the FCC’s Open Internet Order, which among other things bans paid prioritization (Internet fast lanes), intentionally blocking lawful Internet content, and speed throttling your Internet connection.

Somewhere along the way, someone forgot to include the language that sunsets (or ends) Charter’s voluntary commitment after three years.

Without it, Charter will have to abide by the terms of the FCC’s Open Internet Order forever.

Soon after recognizing the change in language, Charter’s lawyers appealed to the CPUC to correct what it called a “drafting error.”

“[New Charter does] not seek modification of the second sentence, which matches their voluntary commitments, but believe[s] that the three-year limitation in the second sentence was intended to— and should—apply to the first sentence as well,” Charter’s lawyers argued two weeks ago.

In other words, the Administrative Law Judge’s apparent attempt to ‘cut and paste’ Charter’s own press release-like voluntary deal commitments into his personal recommendation went horribly wrong. Charter’s lawyers prefer to call it an “intent to track” the company’s voluntary commitments. Either way, Charter’s lawyers all call the new language unfair.

“Holding New Charter indefinitely to FCC rules even after the FCC’s rules are invalidated or modified, and irrespective of future market conditions or the practices or rules governing New Charter’s competitors, would be a highly unconventional requirement,” the lawyers complained.

That provides valuable insight into how “New Charter” is likely to feel about Net Neutrality three years from now. Charter’s lawyers argue it would be unfair to hold them to “invalidated” rules — the same ones the company itself has voluntarily embraced as a condition of approval, but only for now.

Remarkably, in the final revision of the Administrative Law Judge’s recommendations to the CPUC recommending approval, the language that is keeping Charter’s lawyers up at night is still there:

New Charter shall fully comply with all the terms and conditions of the Federal Communications Commission’s Open Internet Order, regardless of the outcome of any legal challenge to the Open Internet Order. In addition, for a period of not less than three years from the closing of the Transaction, New Charter (a) will not adopt fees for users to use specific third-party Internet applications; (b) will not engage in zero-rating; (c) will not engage in usage-based billing; (d) will not impose data caps; and (e) will submit any Internet interconnection disputes not resolvable by good faith negotiations on a case-by-case basis.

Charter’s new service area, including Time Warner Cable and Bright House customers.

If it remains intact through the vote expected this afternoon, New Charter will have to permanently abide by the FCC’s Open Internet Order, with no end date. That condition will apply in California, and because of most-favored state status, also in New York.

Stop the Cap!’s recommendations to the CPUC are also in the same document, although our views were not shared by the judge:

Stop the Cap! objects to [New Charter’s] 3-year moratorium on data caps and usage based pricing for broadband services. It argues that such bans should be made permanent or, if not permanent, should last at least 7 years in parallel with the lifespan of the conditions imposed in the FCC’s approval of the parent company merger. In addition, Stop the Cap! objects to what it asserts will be a major price increase for existing Time Warner customers when Charter’s pricing plans replace Time Warner’s pricing plans.

More broadly, Stop the Cap! president Phillip Dampier called the revised recommendations to approve the deal underwhelming and disappointing.

“By window-dressing what is essentially Charter’s own voluntary offer to the CPUC, the commission is continuing to miss a golden opportunity to win deal conditions that will meaningfully benefit Californian consumers that will otherwise get little more than higher cable and broadband bills,” Dampier told Communications Daily. “Virtually everything Charter is promising customers is already available or soon will be from Time Warner Cable, often for less money. Time Warner Cable committed to offering its customers 300Mbps speeds, no usage caps or usage billing, and all-digital service through its Maxx upgrade program, expected to be complete by the end of 2017 or 2018. The CPUC is proposing to allow New Charter to wait until 2019 to provide 300Mbps service and potentially cap Internet service three years after that, four years less than what the FCC is demanding.”

Among the conditions Charter will be expected to fulfill in return for approval of its merger in California:

• Within a year of the closing of the merger deal, New Charter must boost broadband download speeds for customers on their all-digital platform to at least 60Mbps, an upgrade that is largely already complete.
• Within 30 months, New Charter must upgrade all households in its California service territory to an all-digital platform with download speeds of not less than 60Mbps, an upgrade that has already been underway for a few years.
• By Dec. 31, 2019, New Charter shall offer broadband Internet service with speeds of at least 300Mbps download to all households with current broadband availability from New Charter in its California network. Time Warner Cable essentially promised to do the same by early 2018, with many of its customers already getting up to 300Mbps in Southern California.
• While Charter talks about a bright future for the Time Warner customers joining its family, the company has not done a great job maintaining and upgrading its own cable systems in parts of California. Many smaller communities still only receive analog cable TV from Charter, with no broadband option at all. Therefore, the CPUC is giving New Charter three years to deploy 70,000 new broadband “passings” to current analog-only cable service areas in Kern, Kings, Modoc, Monterey, San Bernardino and Tulare counties. But the CPUC is giving New Charter a break, only requiring them to offer up to 100Mbps service in these communities.
• Time Warner Cable and Bright House customers in California will be able to keep their current broadband service plans for up to three years. Customers will also be allowed to buy their own cable modems and set-top boxes, but there is no requirement New Charter compensate customers who do with a service discount.
• Within six months of the deal closing, New Charter must offer Lifeline phone discounts within its service territory in California.
• New Charter must print and distribute brochures explaining the need for backup power to keep phone service working if electricity is interrupted. Those brochures must be available in multiple languages including, but not limited to, English, Spanish, Chinese and Vietnamese, as well as in accessible formats for visually impaired customers.

The CPUC is also expected to adopt Charter’s own voluntary commitments not to impose usage caps, usage billing, modem fees, and other customer-unfriendly practices for three years, a point that drew strong criticism from Stop the Cap! and the California Office of Ratepayer Advocates for being inadequate.

Both groups proposed that bans on data caps and usage billing should stay in place “until there is effective competition in Southern California, or no shorter than seven years after the decision is issued, whichever is later.”

ORA’s program supervisor Ana Maria Johnson believes the proposed changes don’t go far enough to “mitigate the harms that the merger will likely cause, especially in Southern California.”

Dampier was surprised how little the CPUC seemed to be asking of New Charter, especially in comparison to regulators in New York.

“The New York Public Service Commission did a more thorough job protecting consumers by insisting on faster and better upgrades, including readiness for gigabit service, and the same level of broadband service for all of New Charter’s customers in New York,” Dampier argued. “It also demanded and won meaningful expansion in rural broadband, low-cost Internet access, protection of New York jobs, and improved customer service. It is remarkable to us the CPUC did not insist on at least as much for California.”

The CPUC is expected to take a final vote on the merger deal this afternoon, starting at 12:30pm ET/9:30am PT and will be webcast. It is the 20th item on the agenda.