Nearly 200 people turned out for a packed public meeting in Lexington, Ky. to complain about Charter Communications and its Spectrum cable television service.

“Welcome, Spectrum, to the lion’s den,” said Mayor Jim Gray, introducing company representatives. The complaints began right away.

“The biggest slap in the face is that no matter what we pay,” one woman said, “no matter what we set up for autopay, every single month – no purchases, no changes on our end, our bill is never consistent and always growing.”

Prices and poor customer service were the top complaints at a meeting that filled a large room at a local senior center, organized by Lexington city officials.

The problems began after Charter Communications bought Time Warner Cable. As customers’ Time Warner Cable promotions expired, prices skyrocketed. Charter representatives are trained to convert customers to Spectrum-branded packages, which many customers argue costs more.

“There’s always going to be some pains when you change from one company to the next,” Mike Pedelty, a Charter spokesperson, told WKYT’s Garrett Wymer. “There’s different ways Time Warner Cable did things than the way Charter does things. We understand that, we appreciate that. We try to do our best to communicate to our customers, we try to make sure that we let them know their options.”

Customers do not necessarily like those options.

“Spectrum has increased my bill twice while I’m still on the package,” complained customer Loney Burns. When she tried to cut back on her package to save money, Burns was told, “if you want to take them off, we will increase your bill.”

City employee Roger Damon pointed out that most Time Warner Cable customers avoided paying the regular prices Charter uses as a benchmark to claim Spectrum’s packages and pricing costs less. By negotiating with Time Warner Cable, customers could easily obtain a new promotional offer when an old one ran out. After Charter took over, the company stopped giving back-to-back promotions. As a result, a growing number of customers are forced into regular priced Spectrum packages, exactly as Charter CEO Thomas Rutledge intended.

“It’s not a very competitive business, and that’s one of the reasons that we have these challenges with customer service today,” Gray told the crowd. “We have had very, very poor technical service, very poor customer service and price increases with no notice. No one should have to scrub their monthly bills for hidden fees.”

The city’s only recourse is to fine Charter or revoke its franchise. But with the cable industry being largely deregulated, local officials have little bite to deliver after a bark. Fines can be appealed in court and there are no significant examples in recent history where a community revoked a cable franchise and found another company willing to enter another operator’s traditional service area.

WKYT-TV in Lexington covered last week’s public meeting on Charter Communications’ service in Kentucky. (1:21)

Patrick Drahi, Altice, and his friends at Goldman Sachs are depicted as working together to make Altice’s acquisition dreams come true.

Patrick Drahi rarely gives up on his dreams. His latest is to be America’s biggest cable magnate, and there are signs he is laying the groundwork to make that dream come true.

CNBC and some French media outlets report Drahi’s Altice NV and Altice USA are assembling their European and North American financiers, attorneys, and dealmakers to potentially make an offer to acquire Charter Communications. If successful, Altice would leapfrog to the largest cable operator in the United States after combining its Cablevision and Suddenlink systems with Charter’s own legacy systems and those it acquired from Time Warner Cable and Bright House Networks.

Any succcessful deal would likely require an offer of $500 a share for Charter stock, which would make the company worth about $200 billion. Because Altice is dwarfed by Charter, it is unlikely Drahi will be able to raise enough cash on his own to make a deal, and Altice is already mired in debt from its ongoing aggressive acquisitions. Drahi’s biggest competitor for Charter is expected to be Japan’s SoftBank, which has shown an interest in acquiring the cable operator to combine with its wireless carrier Sprint.

Altice isn’t likely to encounter the regulatory hurdles that have caused other colossal cable deals like Comcast’s attempt to buy Time Warner Cable to collapse over regulator opposition.  Drahi’s involvement in U.S. cable has been limited to acquisitions of two smaller players – Cablevision and Suddenlink.

Drahi’s strongest arguments to sell investors on the deal are likely to surround his well-known obsession with draconian cost-cutting at his acquired companies. Drahi would certainly offer investors billions in deal synergies and savings, accomplished through dramatic layoffs, scrutinizing costs right down to replacement coffee makers for the break room and copy paper for the office, and sweeping cutbacks on employee and vendor perks. Drahi has also taken a strong stand against Hollywood studios and cable programmers that seek double-digit rate increases for cable programming. In Europe, Drahi is known for terminating costly contracts with programmers and launching alternative channels Altice owns and operates to replace them.

Drahi is also likely to sell regulators on his current plans to transform cable in the United States away from coaxial cable and towards fiber optics straight through to the home. Drahi has already offered to wire all of France with fiber optics and is presently embarking on a fiber upgrade for his Cablevision systems in New Jersey, New York, and Connecticut. But Drahi’s ambitious fiber plans have been met with suspicion in France where some believe Drahi is all talk and no spending.

He has promised the Macron government he will spend $17.6 billion on building an Altice-owned fiber broadband network in France by 2025 without any taxpayer subsidies. While that sounds laudable, it would mean Altice’s SFR would pull out of the government’s national fiber strategy that depends on different telecom companies building out fiber in different regions of the country.

Drahi is threatening to become a spoiler because before he acquired SFR, the former management cut a deal with Orange – France’s largest telecom company, to jointly build a fiber network for 14 million French households in smaller towns and suburbs. Orange would build and own 80% of the territory, SFR 20%. But because SFR needs access to that fiber network for its own wired and wireless broadband and television services, it will have to pay rental fees to Orange to use the network in most of the territory. Drahi instead wants a 50-50 ownership split to cut costs and Orange has said no. Altice’s plans for its own alternative fiber network would allow it to bypass the Orange-owned network and deliver traffic over its own fiber system. That could mean parts of less-populated France will have two fiber networks to choose from instead of just one.

Drahi

It is an expensive gamble, but investors seem largely unfazed so far, perhaps suspecting Drahi has no intention of actually following through on spending billions on a potentially redundant fiber network in the suburbs and farm country, preferring to believe the threat of doing so will drive Orange back to the negotiating table.

Some American analysts are uncertain whether Drahi can pull off an acquisition deal that would combine Charter, a company many times larger than Altice, with Altice’s much smaller earlier cable acquisitions. Some also suspect he won’t find enough money to attract interest from Charter’s biggest shareholder — John Malone’s Liberty Media and Charter’s current CEO Thomas Rutledge.

But French media has little doubt Drahi can pull it off, especially when he is motivated.

“Patrick Drahi, founder of Altice, has set his limits: he has none,” notes Le Figaro, adding Drahi is a classic industry spoiler, completely happy to blow up cable’s comfortable status quo, even when at risk of attracting the wrath of his competitors.

CNBC reports Altice is preparing a serious offer to acquire Charter Communications. (5:54)

More than 60,000 Charter/Spectrum customers were without broadband, television, and phone service for more than 24 hours after vandals sliced through fiber optic cables at four major service hubs at around 2AM Monday morning.

The service outage idled workers in offices, telecommuters, and shoppers at corner stores. ATM withdrawals and credit card transactions were impossible in some neighborhoods.

Police sources told WCBS they believe striking Spectrum union workers are behind the vandalism, owing to the specialized equipment the vandals needed to successfully cut through the fiber cable’s protective sheath. Those responsible also had to know the exact location of the fiber cables and what cutting them would mean for Charter customers across two boroughs.

“We would never condone that, we would never do that,” on-strike Spectrum technician Ray Reyes told WCBS. IBEW Local 3 made it clear it does not condone the destruction of property, despite a strike that has gone on for months with no end in sight.

This is the second major vandalism incident experienced by Charter in metropolitan New York this year. The first, in April, left 30,000 customers without service for hours. Police have no leads in either incident and no one is likely to be prosecuted.

Affected customers will need to contact Charter/Spectrum and ask for a service credit for the outage. No automatic credits are likely to be given.

Area shop owners are upset because they lose money when credit card and ATM transactions are not available. Mike Patel told WCBS his customers were mad about the outage and he lost at least $500 in credit card transactions, forcing him to turn business away.

WCBS-TV in New York reports Charter’s outage in Brooklyn and Queens affected more than 60,000 customers. (1:35)

Johnson

Sen. Ron Johnson (R-Wis.) is in favor of banishing Net Neutrality and allowing service providers to sell paid broadband fast lanes, claiming some uses of the internet are more important than others.

Speaking alongside FCC Chairman Ajit Pai on a live interview with WTMJ Radio in Milwaukee with no guests in opposition, Johnson claimed unless cable and telephone companies are given additional economic incentives to risk capital, broadband service improvements will be slow in coming.

Johnson added ISPs should be allowed to adopt paid prioritization.

“You might need a fast lane within that pipeline so that [medical] diagnoses can be transmitted instantaneously [and] not [be] held up by maybe a movie streaming,” Johnson said.

“I want everyone to have what I call digital opportunity, and to do that you need to have a regulatory framework that gives all of these companies — satellite, wireless, fiber — a strong incentive to invest,” added Pai.

“As a businessperson, you need the economic incentive to risk your capital and the minute you have government regulation it reduces the certainty in terms of what you can get from return on investment, you are going to invest less,” argued Johnson. “We’re seeing that right now because of what [former FCC] Chairman Wheeler did.”

Pai

Pai argued that outdated FCC rules were also responsible for reducing broadband investment, particularly rules that require phone companies to continue maintaining their existing wireline network to provide universal access to telephone service.

Pai characterized Net Neutrality as government control of the internet.

“Do you want the government deciding how the internet is run?” Pai said, noting he favors “light touch” regulation where private companies manage their own businesses with targeted enforcement action by the FCC. “In 2015, on a party line vote, the FCC went the other way and put the government, rather than the private sector, at the center of how the internet operates.”

By getting rid of the Obama Administration’s Net Neutrality policies, Pai believes that will return the U.S. to an era of where cable and phone companies invest in their networks and expand rural broadband.

“As Chairman Pai said, Net Neutrality is a slogan,” added Johnson. “What you really want is an expansion of high-speed broadband. In order to do that, you have to create the incentives for those smaller ISPs to invest and if they don’t really control their own fiber — if the government tells them exactly how they are going to use their investment — there is less incentive for them to invest so we’ll have less high-speed broadband.”

“Consumers will be worse off because of this term Net Neutrality,” Johnson said.

“We at the FCC need to be focused on investment in infrastructure,” Pai said, not Net Neutrality.

Eleanor Lloyd of Chili, N.Y., was stunned when she was told there was a $5 fee to talk to a Charter/Spectrum customer service representative over the phone.

“So I said, ‘I’d like to talk to a representative.’ ‘Well that’ll cost you, just to let you know we charge $5 to talk to a representative’ and I just was — ‘what?'” Lloyd, who is 86, said at her kitchen table speaking with News10NBC in Rochester, N.Y. on Wednesday.

Lloyd had a billing question for the cable company that took over for Time Warner Cable in western New York this spring. But Charter’s automated call attendant informed her that the cable company now charges to speak to a live person about billing issues.

That news stirred WHEC-TV to do a significant story about the issue on last evening’s 6pm local news. It fits a narrative that greedy cable companies are out for as many bucks as they can successfully remove from their customers’ wallets.

The station reported Lloyd could have her billing questions resolved online for free, which is a problem for her because she does not own a computer. But at least Charter only charges the $5 fee once a month, so future calls during that month will be answered for free.

Lloyd (Image: WHEC)

Unfortunately, the station’s report about this issue isn’t precise enough to be completely accurate.

Charter/Spectrum does charge a $5 fee, but only if a customer chooses not to use Charter’s automated pay-by-phone system to make a payment on their account. The same automated attendant that directs callers to the proper department when they call the cable operator is also fully capable of taking a payment over the phone. The confusion is apparently over whether that fee also applies to customers with billing questions, and we can tell readers it does not.

Charter, which introduced the bill payment fee back in October 2016 has never imposed a fee for a customer calling in to discuss a billing problem or concern. The $5 fee is disclosed in the company’s terms and conditions and it only applies if a customer refuses to use the automated attendant to make a payment on their account. If a subscriber specifically requests a live operator take their payment information, the fee applies. Agents may also be able to waive it on a case-by-case basis, something an automated call attendant isn’t capable of doing.

Therefore, if you have a billing issue, it is actually very easy to avoid the $5 fee:

• If you are calling to discuss your bill, request credit, or ask a question about the bill, there is no fee.
• If you want to make a payment on your account online, there is no charge for that service.
• If you want to make a payment by phone, the automated attendant is capable of taking your payment details over the phone and complete a payment request at no charge.
• If you want to make a payment by phone and don’t want to use the automated call attendant, a $5 fee will generally apply. Ask if they will waive it if you have problems with the automated attendant.

WHEC-TV in Rochester reports a local customer was asked to pay a $5 fee to make payment arrangements over the phone with Charter Communications. (2:39)