As part of its investigation of cable and satellite television companies, the U.S. Senate Permanent Subcommittee on Investigations found large discrepancies in how five of America’s largest cable and satellite companies—Charter Communications, Comcast, Time Warner Cable, DirecTV, and Dish—identify and correct overcharges caused by company billing errors.

The subcommittee released its report to coincide with today’s hearings on customer service and billing practices in the cable and satellite television industry. The Senate subcommittee focused its attention primarily on billing errors associated with rented set-top boxes and receivers, not programming packages or add-on services. The bipartisan report found satellite TV company Dish was probably the least prone to billing errors associated with satellite equipment and Time Warner Cable was the worst at identifying equipment billing discrepancies. Even when it did find instances of overbilling, the company refused to give customers automatic full refunds as a matter of “efficiency.”

That “efficiency” is expected to be very profitable for Time Warner Cable, which is likely to collect $1,919,844 from overbilling this year alone. Time Warner Cable estimates that, in 2015, it overbilled 40,193 Ohio customers a total of $430,393 and 4,232 Missouri customers a total of $44,152. Time Warner Cable also told the subcommittee that, during the first five months of 2016, it overbilled customers in Ohio for 11,049 pieces of equipment, totaling $108,221.

Charter Communications only did marginally better, mostly because it is a much smaller cable company. Charter estimates that it has overcharged approximately 5,897 Missouri customers a total of $494,000. Charter, along with Time Warner Cable, made no effort to trace equipment overcharges to their origin unless customers specifically asked them to and did not provide notice or refunds to customers.

Let’s review how the five companies compare:

Time Warner Cable

Time Warner Cable is notorious for its “no refunds unless asked” policy, which often leaves customers uncompensated for service outages and other problems. That policy also extends to equipment-related billing errors. During the 6.5 year time period covered by the subcommittee investigation, Time Warner Cable never automatically refunded or credited customer for equipment overcharges discovered by the company. Instead, Time Warner’s “Revenue Assurance” team quietly identified and corrected billing errors without any notification or explanation to customers, which may explain why your Time Warner Cable bill can change even when you are locked in with a promotion.

The subcommittee discovered Time Warner Cable still relies on two entirely different billing systems. One, “Integrated Communications Operations Management System”, otherwise known as ICOMS, is especially troublesome to navigate at Time Warner because the company does not use standardized coding across the entire company. Placing an order for Internet service in the Northeast Division of Time Warner Cable is completely different from ordering the same product in a city like Kansas City or the west coast. Employees have complained about ICOMS for years, noting it can take up to 30 separate codes entered correctly in the system to add just one product, like High-Speed Internet. A simple data entry error can mess up an order and generate a billing error (or a lost order or service request that is never processed). But Time Warner Cable also relies on a different platform developed by CSG to manage some of its billing. Some of Time Warner Cable’s acquisitions, like Insight Communications, have operated under the Time Warner Cable brand for several years, but still use some of the billing platforms that were in place before Time Warner took over.

The subcommittee found strong evidence ICOMS is a big problem for Time Warner Cable. Attempts to audit the platform often crash, as it did in May of this year, preventing Time Warner Cable from identifying billing issues. At best, the company only aims for an 80% correction rate using its auditing tools.

One audit uncovered 18,000 customers in the Carolinas, Midwest, and Northeast that were being overbilled for modem and CableCARD equipment. Although Time Warner Cable was going to remove the erroneous charges going forward, it had no plans to automatically refund customers it identified as overcharged unless customers somehow realized that themselves and called in to request retroactive credit.

The subcommittee found if an audit showed that a customer had not been billed for equipment or services that the customer had received, the company treats those inconsistencies as undercharges and adds the charge to the customer’s bill going forward. Time Warner Cable does not attempt to retroactively charge the customer for previous months where that customer was undercharged.

If the audit shows that a customer has been billed for equipment or services that he or she does not have, the story is more complicated. In some cases, customers agree to pay for equipment they do not actually have so that they can receive a cheaper package price—for example, a consumer who wants only Internet service might decide the cheapest option is a promotional package including both Internet and cable television. By participating in the promotion, the customer agrees to pay a monthly rental fee for a set-top box but may instruct the company not to provide a set-top box. In such a case, the customer’s billing records will show a charge for a set-top box, but the customer’s equipment records will show that he or she does not physically have a set-top box. In April 2016, for example, Time Warner Cable identified 49,132 pieces of equipment associated with overcharges; of those 37,653 (approximately 77 percent) were not “correctable” overcharges because they were associated with accounts participating in promotional offers.

Time Warner Cable does not attempt to trace billing errors to their origin. Instead, it only provides a partial credit for the month during which the error was discovered. The company will not notify you of the error or for how long it has been on your bill. Unless you call and demand full credit for the overbilling, you will not receive it.

The cable company defends its policy on the ground that it is “efficient.” Going through months of customer bills to identify overcharges would be costly and time consuming, the company argues. The company also claims that the customer is best positioned to notice an overcharge and bring it to Time Warner Cable’s attention.

After reviewing policies at several different companies, the subcommittee cast doubt on Time Warner’s assertions, noting other companies had no problems returning overbilled amounts to customers without a request to do so.

Charter Communications

Unfortunately for customers, not included on the list of companies willing and able to automatically refund overbilling is Charter Communications, which recently acquired Time Warner Cable and Bright House Networks.

The subcommittee called Charter’s process of identifying and correct overbilling “substandard.”

According to Charter, prior to August 2015, the company did not run any systematic audits to reconcile its billing records with equipment records. Charter’s failure to perform regular audits means that overcharged customers could not receive a prospective correction of their bill unless they noticed the problem themselves and contacted Charter. Beginning in August 2015, however, Charter began taking steps to identify equipment overcharges now on its system. Charter will complete that process in June 2016.

Charter recently upgraded some of its systems to make sure that when an employee adds or deletes services and/or equipment, an update to the customer’s billing record occurs automatically. Charter has 21 employees working for its Billing Quality Assurance department. The employees randomly sample bills to check their accuracy and when Charter changes its bill format or presentation, the team is supposed to review the bills to make certain any billing changes do not introduce mass errors. The subcommittee found these auditing methods were unlikely to discover common “one-off” errors, such as when customers are overbilled for equipment or programming on their specific account.

Charter’s alternate methods of identifying discrepancies quickly become more convoluted and less useful after that.

For example, beginning in August 2015, Charter undertook what it called a “controller reconciliation,” in which the company began to reconcile its billing records with equipment data from its 35 “controllers” throughout the country. These “controllers” are designed to manage box authorizations and “from the office” service connection and disconnection so that a truck roll is unnecessary. These systems can also be useful in identifying unauthorized equipment installed at locations where they were never registered or if the box was authorized for channels a customer was not paying to receive. A controller reconciliation allowed Charter to identify anomalies like in Missouri, where almost 6,000 customers were being billed for set-top boxes they were not using.

The subcommittee was unhappy neither Time Warner Cable or Charter seem willing to use “brute manpower to identify how long a customer has been overcharged and automatically grant a refund or credit,” as well as do more to minimize equipment and programming mismatches with billing records.

Comcast

Comcast relies on a very similar auditing process in use at Time Warner Cable to identify billing discrepancies, except once Comcast finds one it identifies how long a customer was overcharged, notifies the customer and automatically credits the customer’s account. Starting late last year, Comcast began running audits weekly to improve billing accuracy. Comcast claims just a 0.3% error rate.

Comcast has more than 60 employees nationwide on the east and west coasts examining billing issues and, when needed, individually investigates each case to identify applicable refunds.

DirecTV

DirecTV doesn’t do regular audits, instead relying on a program called SAS Enterprise Miner to search for billing errors before bills are generated. It can also use the same tools to identify and correct past billing errors. The satellite provider goes as far back as necessary to correct past mistakes, and pointed to instances where credits of thousands of dollars were issued to affected customers. DirecTV’s Revenue Assurance department can also reach out and communicate with employees at all levels of the company to investigate billing issues and prevent future ones. What will change as a result of AT&T’s ownership of the company isn’t known.

Dish Network

Dish was cited by the subcommittee report as having the billing system least likely to generate billing errors. Dish links its equipment and billing systems together, which means any change on one system automatically updates the other.

According to Dish, it is impossible to add or remove equipment without altering the customer’s billing records. Dish provides each customer with one free “receiver”—Dish’s term for the equivalent of a set-top box—and charges $7.00 to $15.00 per month for each additional receiver a customer has. That is the only equipment charge. Dish’s system will only send a television signal to receivers that have been “activated,” which happens as part of the installation process. Once a receiver has been activated, the customer’s billing information is automatically updated to reflect that addition. That system ensures that no receiver is added to a customer’s account unless it has been activated.

Dish customers return their receivers by mail. Dish provides a packaging label so that it can track the receiver once it has been mailed. When the receiver returns to the Dish warehouse, an employee scans the barcode on the receiver, which removes the receiver from the customer’s provisioning records and, in turn, from the customer’s bill.

[flv]http://www.phillipdampier.com/video/Senate Cable Billing Practices 6-23-16.mp4[/flv]

Hearing: Customer Service and Billing Practices in the Cable and Satellite Television Industry

Permanent Subcommittee on Investigations, June 23, 2016 10:00AM ET

(Video starts at 19:55) (2:18:54)

AT&T, Comcast, and Charter have surrounded the city of Cleveland, Tenn., (population 42,774) for more than 20 years, yet after all that time, there are still many homes in the area that have no better than dial-up Internet access..

An effort to extend municipal utility EPB’s fiber to the home service into the community just northeast of Chattanooga on Interstate 75, has run into organized political opposition campaign, part-sponsored by two of the three communications companies serving the area.

Tennessee state Reps. Dan Howell and Kevin Brooks, both Cleveland-area Republicans, understand the implications. With AT&T, Comcast, and Charter resolute about not expanding their coverage areas anytime soon, the only chance Cleveland has of winning world-class broadband anytime in the reasonable future is through EPB, which has already offered to extend service to at least 1,000 customers in rural Bradley County in as little as three months. Most of those customers now rely on dial-up Internet services, because no broadband is available. Reps. Howell and Brooks are trying to get the the red tape out of the way so EPB can proceed, but the Tennessee legislature hasn’t budged.

There is a substantial difference between 30kbps dial-up and 100Mbps — one of the “budget” Internet tiers available from EPB. But some Tennessee lawmakers and corporate-backed special interest groups don’t care. To them, stopping public broadband expansion is a bigger priority, and they have attempted to stall, block, or prohibit municipal broadband, just to protect the current phone and cable companies that are among their generous contributors.

In 2010, Chattanooga became the first in America to enjoy gigabit residential broadband speed not because of AT&T, Comcast, or Charter, but because of the publicly owned electric company, EPB. So what’s the problem with that? The fact EPB spent $320 million on the fiber optic network — about $100 million of that coming from a federal grant — keeps some conservatives, corporate executives, and telecom shareholders up at night. They object to the public funding of broadband, calling it unfair competition for the two incumbent cable companies and one phone company, which have their own “privately funded” networks.

Republican Rep. Mike Carter, who serves Ooltewah, thinks that’s a lot of nonsense. He notes AT&T and other providers already receive government funding to service outlying areas that no other providers dare to tread for a lack of return on their investment.

“[What] convinces me to back expansion of the EPB of Chattanooga is the fact that they received $111 million in stimulus funds, and in the next five years AT&T alone will receive $156 million of your money [in government funding] assessed every month on your bill to provide 10/4-gigabit service in those areas,” Carter explained to the Chattanooga Times-Free Press. “If the EPB’s $111 million matching grant somehow disqualifies those benefits going to my constituents, how do I explain to them that AT&T is receiving non-matching funds?”

“The issue then became, if it is necessary to create the world’s fastest Internet system, why would EPB not offer that for economic growth in its service area?” Carter continued. ” After I heard the story of the [gig’s] creation and realized that the money had already been spent, I asked myself if I would allow a firmly held principle of no competition with private enterprise by government to deny my constituents and neighbors the incredible benefits.”

Justin Owen, president and CEO of the Beacon Center of Tennessee, is dismissive of Carter’s willingness to bend his principles. In his view, those without Internet access have other options instead of getting EPB Fiber on the public dime.

“You can get satellite Internet,” said Owen, who added that governments that invest in fiber technology could be “left behind by disruptive innovation,” which in his mind could be satellite Internet. Satellite customers would disagree.

“Horrible, horrible, horrible, and more horrible,” wrote Trey from another Cleveland — this time in Texas. “Speeds are consistently less than 2Mbps and they advertise up to 12. Try a cell phone booster and use that before resorting to satellite Internet.”

Hundreds of customers shared similar stories about their experience with satellite Internet, and they don’t believe it will be disruptive to anything except their bank account.

Owen and his group have not revealed many details about where its funding comes from, but the group is a member of the State Policy Network, which receives financial support from AT&T, Time Warner Cable, Verizon and Comcast. The group’s former leader, Drew Johnson, was also a former opinion page columnist at the Times-Free Press and used column space to criticize EPB and other issues that ran contrary to AT&T’s agenda in Tennessee.

Despite support from the Chattanooga area’s Republican delegation, many legislators from outside the area remain firmly in support of the telecom companies and their wish to limit or destroy community broadband projects like EPB, claiming they are redundant or are based on faulty business plans likely to fail. But while Comcast used to dismiss EPB’s gigabit service as unnecessary and AT&T considered gigabit speeds overkill, both companies are now racing to deploy their own gigabit networks in Chattanooga to compete.

The residents of Cleveland without broadband today probably won’t have it tomorrow or anytime soon. Many are hoping the Tennessee legislature will relent and let EPB solve their broadband issues once and for all. Cleveland resident Aaron Alldaffer is trying to help gin up interest in a renewed legislative push for EPB Fiber expansion with a Change.org petition.

The BBC World Service Global Business program visited Chattanooga in May 2016 to explore EPB Fiber and discuss its implications. (29 minutes)

You must remain on this page to hear the clip, or you can download the clip and listen later.

The 24-hour emergency hotline at Alcoholics Anonymous in Ventura County, Calif., rang only sporadically back in April and it wasn’t because Simi Valley, Ojai, and Thousand Oaks were overrun with teetotalers.  The director of the center blamed Frontier Communications for phone outages, which began right after it took over phone service for Verizon.

In Garland, Tex., Carolyn Crawford has had nothing but excuses about her service outage, which began April 11.

“When you call you receive scripted responses and when you send a message on Facebook you receive robotic responses,” Crawford told the Dallas Morning News.

In Florida, the Sarasota Tribune put an online form up to collect complaints about Frontier and had 662 registered over just one weekend. One complaint:

“It’s our seventh day with no phone, no Internet and no answers,” said Howard Duff of Bradenton.

He said he had spent 45 minutes to an hour on a cell phone before getting through to someone, then spent hours for several days with Frontier tech support, disconnecting and reconnecting equipment and relaying information about lights. On Thursday, when he reached a Frontier technician who wanted him to begin the same checks, Duff refused to go through it all again. Instead, he was given a repair ticket number and was told someone would contact him. He was still waiting Monday afternoon.

“They really don’t care about the people in Florida,” Duff said. “Who can we call? What can we do?”

Back in late April, more than 11,000 comments from Frontier customers around the country have been posted to its Facebook page, mostly to complain about service problems. They affect both residential and business customers.

Michael Camp of Parker, Tex. says Frontier’s reliability has killed his business’ ability to make international business calls.

“It’s like trying to work in a Third World country,” he said.

The first challenge Frontier customers with service problems face is a dreaded interaction with Frontier’s customer service. The challenges can start right away, such as trying to prove to the phone company you actually are one of their customers.

At S.O.S Resale Boutique and Veteran’s Communication Center in Palm Desert, Calif., the non-profit group spent days trying to get Frontier to restore their phone and Internet service.

“The most frustrating part of the ordeal was that every time you would call, they would say you are not a customer and that you don’t have an account. I would keep arguing that we do,” Erica Stone, founding director of S.O.S., told KESQ-TV. Either way, Frontier didn’t bother to show up for a scheduled appointment anyway.

Mary Harmon, in Long Beach,  was told (after four calls) that a repair technician would come to her house on April 15. That date was changed to Monday, April 18 with a 10-hour window. She told the Long Beach Press Telegram she wasn’t holding her breath.

“I don’t have any faith in them,” Harmon said. I’m so fed up with everything that’s been going on.”

Harmon spent all day Monday at home waiting, only to get a call at 5:25pm that her appointment was rescheduled one week later to April 25.

Considering the onslaught of stories from readers like Harmon, that newspaper has taken to calling Frontier customers “victims.”

But it wasn’t all bad news.

“No Internet or cable,” wrote one customer on Twitter. “But the bill arrived on time.”

What Problems? Frontier Living in Denial

Thousands of complaints later, it is evident Frontier has gotten itself into another fine mess, one predicted in advance by Stop the Cap! each time Frontier decides it wants to buy up some more landlines. No matter how bad things actually got, the company regularly tells its shareholders tall tales that all went well, the problems were small, and the resolutions easy.

Just look at what Daniel McCarthy, Frontier’s CEO, told a Wall Street audience at the recent JPMorgan Global Technology, Media, and Telecom Conference.

“Two months into the integration, and I would describe this integration as, by and large, it has gone better than any one that we’ve done before,” McCarthy said. “If you look at the billing systems, the ERP, payroll, HR, every part of the integration has gone exceptionally well. We’ve actually got through all of our billing, and out the door, we’re back on normal cycles with customers. And we’ve moved to the point now where we’re moving forward with a normal business rhythm around trouble tickets and service orders in the market.”

Frontier customers are unconvinced Frontier’s Rhythm Method is working for them. Elizabeth Galvan of North Hills has another name for it: “a nightmare.” She has had continuous problems with her landline, including Internet outages, since Frontier took over.

Many Stop the Cap! readers also continue to share their grief over outages, billing problems, and the less than sympathetic customer service representatives they encounter.

“We were on hold with Frontier for two hours on Friday and they swore to us they’d be out Wednesday and fix things,” wrote Wanda from Sarasota, Fla. “If the good Lord Jesus himself told them they’d be sent to hell for lying, Frontier already has 1st Class tickets. My ex-husband lied less than this phone company. They told me ‘Miss Wanda, we are sorry we could not get out there but we called you to let you know.’ Oh really? On what phone, the one that hasn’t worked for two weeks? Then he thinks he puts me on hold to reschedule while he tells his friend now I have more time to get my hair done.”

Back in Dallas, Jeffrey Weiss from the Morning News pressed Frontier for a reality check on how bad the problems were.

“There are currently no widespread outages,” came the response from Frontier. “The isolated issues currently being addressed include either individual customer issues from the conversion or the day to day service issues that arise when operating a complex network. In addition, the recent extreme weather in the north Texas area may have impacted some customers’ service, while Frontier allocated resources to repair any damaged equipment in the path of the storm. The customer experience is always at the forefront of our company, and we are committed to each customer’s satisfaction. We are addressing service orders as quickly as possible, prioritizing repairs over new installations and coordinating both customer availability and the management of our ongoing queue of orders. In all cases, that means the next best available time.”

At that time, the Texas Public Utility Commission had collected at least 100 complaints about Frontier, reports spokesman Terry Hadley. Melinda White, Frontier’s regional president for the western region characterized the 2,500 service disruptions suffered by Californians as evidence things were going “relatively well.”

In Florida, the problems were substantial and widespread enough for competing cable operator Bright House to offer customers up to $240 to switch away from Frontier with a special promotion. But before customers sign up, they should be aware despite the ongoing issues, Frontier has no intention of letting anyone out of their contracts.

Frontier spokesman Bob Elek told the Tampa Bay Times, “While all customers will be eligible for service credits on a case-by-case basis, contracts will remain in force.”

That’s ironic, considering Frontier’s marketing pitch for the last several years assured customers there were no contracts or early termination fees. But Verizon had both, and Elek apparently feels if it is fair to give customers promotional pricing, it is fair to penalize them if they disconnect early, even if the service doesn’t work as advertised.

Fast forward more than a month and the problems… and Frontier’s excuses keep on coming.

[flv]http://www.phillipdampier.com/video/KNBC Los Angeles Frontier Official Apologies For Service Outages 5-24-2016.flv[/flv]

Frontier’s Melinda White, regional president for the company’s western region, finally showed up on KNBC Los Angeles to apologize for weeks of frustration and service problems. (2:56)

Blame Verizon

Nearly two weeks ago, Frontier executives were grilled at an Assembly Informational Hearing called by Mike Gatto (D-Los Angeles), when he had a spare moment in-between shilling for AT&T’s universal service/landline abdication bill making its way through the California legislature.

Ironically, Gatto was upset with Frontier — a company that wants to stay in the landline/DSL business — because it couldn’t do the job, while earlier applauding AT&T for being willing to cut the phone lines of rural Californians and have them risk AT&T’s “one-bar” rural wireless service instead.

Members at the Assembly Informational Hearing implored Frontier to fix at least a month of problems the company has consistently denied was that big of a deal. A meeting of the minds between the politicians and Frontier seemed unlikely until Melinda White, Frontier West’s regional president found what she hoped would be a “Get Out of the Hot Seat Free” excuse card.

White told the Los Angeles Times that one reason for all the trouble is Verizon sent them “corrupted” or “incomplete” data on an unspecified number of remotely addressable items like network terminal boxes, modems, and those “interface” devices they slap on the sides of most homes and businesses. Frontier claims it sent initialization messages to those devices that were rejected, and unilaterally shut down in response, causing the large service outages Frontier claimed a few weeks earlier didn’t happen.

“We are sincerely sorry,” White said during the hearing. “Even one customer out of service is one too many.”

Even worse, Frontier claims it found those scamps at Verizon messed up another database containing serial numbers identifying older network terminal boxes, including hundreds located in Long Beach. You know what came next — more outages.

But wait, there’s more. The same phone company that proudly boasts it uses American workers to handle customer service matters had to admit it hired a call center in the Philippines to handle customer transition issues. It was instantly overwhelmed and the call takers were as bewildered as customers trying to deal with Frontier about service outages.

“Unfortunately, that did not work out — to our dismay,” White said.

Like a lot of things coming from Frontier, that is an understatement. Just ask countless customers who reserved repair appointments through this same call center that often forgot or couldn’t pass them on to the U.S. based technicians that were supposed to show up and fix the problems. Result: missed service calls and even angrier customers.

Knowing this, one would assume Frontier would quickly pull the plug on overseas call centers and hire — at attractive wages if needed — more U.S. based employees to get things moving sooner rather than later. White told the Los Angeles Times it would phase those foreign call centers out… later… by the end of July.

The Lawmaker and Regulator CYA Cakewalk

The Frontier buyout and takeover of Verizon landlines didn’t just happen at the behest of the two phone companies. In a state regularly accused of over-regulating business, California regulators and lawmakers both had direct influence on the Frontier-Verizon transaction. It got approved without much effort and only came back to haunt officials when it all went wrong.

Assembly member Jay Obernolte (R-Hesperia) claimed, “These issues have set a record for constituent calls.”

Exactly who is responsible requires the time-honored practice of finger-pointing that always extends outwards, never inwards.

The committee chairman, Mr. Gatto, and vice chairman, Assemblyman Jim Patterson, (R-Fresno), blamed the California Public Utilities Commission (CPUC) as much as Frontier because they approved the takeover deal.

But as California consumers just saw in an embarrassing capitulation to approve the Charter-Time Warner Cable-Bright House merger with deal conditions even worse than what the FCC got, there are questions whether the CPUC could properly vet a Dollar Menu at a McDonalds drive-thru, much less a multi-billion dollar Big Telecom merger:

“Hi, welcome to McDonalds, what can I get the CPUC today?”

“We’ll let you decide, whatever you think is best. We trust you!”

“Okay, drive through to the second window.”

CPUC executive director Tim Sullivan casually mentioned the possibility of an official investigation and the highly-improbable-to-believe possible reconsideration of the buyout. That comes a little late.

While they hold hearings in California, the complaints keep rolling in even into the Memorial Day holiday weekend.

If This is the New Frontier, We Prefer the Old One

Lynn Peterson in Sacramento has kept her phone service with Verizon (and its predecessors) since around the year Back to the Future arrived in movie theaters (July 3, 1985 for trivia fans). After a month or so with Frontier at the helm, she abandoned ship last week.

“My service just kept going out over and over again ever since Frontier became my provider,” Peterson told the Santa Monica Mirror. “Whenever I called customer service they seemed completely indifferent. I have now switched to Time Warner Cable.”

Abby Arnold also severed a bad relationship with Frontier last week, and like a clingy ex in breakup denial, they won’t let it go.

“After a month of trying to resolve issues, I left Verizon/Frontier and signed up with Time Warner,” Arnold wrote. “At least I can watch the Dodgers. One of the many issues in my saga is that I cannot get Frontier to acknowledge that I am no longer their customer. ‘Our system won’t let me cancel your account.’ Argh.”

Customers will have another opportunity to bring their complaints about Frontier to the CPUC’s attention this Wednesday from 4-6pm at a public hearing at Long Beach City Hall.

Texas Mops Up

Some of the worst damage done to Frontier’s reputation was in Texas. Some experts predict Frontier’s name will be mud in that state for months to years.

“My opinion is that Frontier’s brand, reputation, and trust will suffer in the short to medium term (months to years),” David Lei, associate professor of strategy at SMU’s Cox School of Business told the Dallas Business Journal. “The longer the problems persist in any situation for any business or service provider, the greater the customer anger. However, even a good communications/PR strategy remains insufficient in the wake of the scale of disruptions and the seemingly ‘easy’ task of scheduling technicians to houses within the promised time frame. Strategy execution always occurs at the customer level – dealing with each customer truthfully and forthrightly. Yet, it is probably difficult for Frontier’s management to openly acknowledge just how complex the integration task will remain for quite some time.”

Our Recommendations

Frontier has a long history of transition problems whenever it acquires landline networks from other providers, whether Verizon or AT&T. In some cases, these may prove to be nothing more than self-correcting minor inconveniences. But in states like West Virginia, Connecticut, and now Texas, Florida, and California, long outages got painful and expensive for customers, and in some cases could have been life-threatening. With each transition, Frontier claimed it learned how to improve on the process to better reassure customers problems would be few and isolated. But the evidence is overwhelming these problems are bigger than Frontier seems ready to admit. Frontier refuses to release outage statistics broken down by state. Are these transition outages comparable to the day-to-day experiences of a big independent phone company? Allowing the public to see outage numbers for Florida and compare them with West Virginia or New York, for example, would be illuminating.

Regulators can also give Frontier some added incentives to guarantee the transition experience goes “exceptionally well” in the real world, not just in company press releases. Those incentives come in the form of stiff fines and guaranteed, automatic rebates for any customer affected by a service disruption. Right now, Frontier still requires most customers to personally apply for service credits for outages and other disruptions. That is a real hassle if you’ve ever called Frontier by phone and waited on hold, sometimes for an hour or more. Being promised a credit does not guarantee it will actually appear on your bill either.

Consider the experience of Lake Elsinore resident Kristi Coy. Her husband can’t sell video conferencing equipment online because Frontier’s Internet is too slow.

Coy was offered a service credit, but only after the problem was fixed. After the visit, she called Frontier and waited on hold 90 minutes before finally hanging up.

“How much are they going to give me, $20?” she said. “How long will I have to stay on hold? An hour and a half to get a $20 refund? It’s not even worth the time.”

Frontier should have a regulator-reviewed transition plan with contingencies in place for unexpected problems. That plan should prioritize returning customers to service, even if it means backing out of a system transition. Maintaining reliable service should be the first priority, not cost-savings or convenience for the companies involved. A full audit of exactly what Frontier bought from Verizon could have uncovered the discrepancies and corrupted data White blamed for the outages before the transition began. But that costs time and money. The prospect of a regulator-imposed fine costing even more delivers the cost/benefit formula customers (and Frontier, apparently) needs to assure customer protection.

Regulators need to start scrutinizing these consolidation transactions much more carefully, and reject those from companies that have a significant record of failing their customers. Frontier’s disastrous transition in West Virginia in 2010 led to months of news coverage and a number of very serious outages. More than five years later, service complaints are still coming in, mostly focused on poor broadband service. In Connecticut, Frontier had to cough up costly service credits and promotions to stop a flood of customers headed for the exits over Frontier’s messy transition from AT&T. Suspiciously familiar problems including service outages, billing issues, and missed service calls plagued Connecticut in 2015 just as they do in 2016 in Texas, Florida, and California.

We warned regulators in each instance that Frontier’s repeated poor performance should give them pause. We recommended regulators either impose extra requirements as part of any approval agreement or reject these types of deals outright. They chose to believe Frontier instead. So while Frontier executives and shareholders enjoy the proceeds of enhanced revenue and their regular dividend payouts, customers that depend on Frontier, especially small businesses, are in trouble. Dagwoods Pizza Parlor in Santa Monica is just one example.

Dagwoods manager Mark Peters said Frontier’s lousy performance in Southern California “has the potential to destroy small businesses” like his. This past Memorial Day weekend was a partial bust for Dagwoods because their Frontier-supplied phone and Internet service was down again until Frontier finally showed up to fix it.

“It’s a bad situation,” Peters told the Santa Monica Observer. “We can’t take orders, and this is our big night of the week. We’re really bummed out about the whole situation.”

The time for excuses and explanations has come and gone. The time for action, fines, and automatic service credits is overdue, but better late than never.

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WTVT in Tampa reports Florida Attorney General Pam Bondi is now taking a hard look at Frontier’s performance in the state. (2:41)

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When your company has been bought out and you are not exactly sure how that will affect your future employment as a cable installer, perhaps it is understanding why you might simply stop trying. Jacob Fisher’s neighbor decided he had enough of Frontier’s screw-ups in its recent takeover of Verizon FiOS in Dallas, so he took his business to Time Warner Cable. Time Warner Cable’s installer took a new bright orange drop line and meandered it across Jacob’s lawn, through his garden, and finally under his fence on its way to his neighbor’s house. (1:07)

 

If your reputation precedes you, a virtual makeover with a quick name change may be all a company can do to help smooth customers’ ennui about the news one cable company they heard wasn’t very good was taking over for the one they hate with a passion. After all, joining a new family isn’t necessarily good news if their last name happens to be Frankenstein, bin Laden, or Manson.

Charter Communications began running commercials this week on Time Warner Cable and Bright House Networks cable systems “welcoming” customers to the Charter family. Except the Charter logo was nowhere to be found. Like Comcast’s virtual image makeover effort/attempt with its XFINITY brand, Charter is hoping for a “reset” with customers who have heard bad things about Charter from their relatives by using its “Spectrum” brand instead. That logo is expected to appear on cable trucks, billboards, billing statements, and television spots.

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Charter Communications has completed the transactions with Time Warner Cable and Bright House Networks, and soon you’ll get to know us by the name, Spectrum. We are proud to be the fastest growing TV, Internet, and Voice provider in the United States and are committed to bringing you the most advanced products and services for your home and business.

Exciting changes are in the works, but for now, Time Warner Cable, Bright House Networks and Charter Spectrum will continue offering their current suite of services to customers in their markets. In the coming months you’ll hear more from us as it relates to network, product and service improvements. Whether it is new ways to enjoy more shows with unrivaled picture quality, better service, or faster internet speeds, we cannot wait to show you what’s next. (1:04)

We offer three facts to ponder:

Charter’s Internet speeds are not any faster than what a Time Warner Cable Maxx customer can buy today — up to 300Mbps. Charter “Spectrum” tops out at 100Mbps in most of its markets.

Charter may consider its service “unrivaled,” but customers don’t, rating it only a mouse whisker better than Time Warner Cable.

Many customers of both Time Warner and Bright House are indeed concerned with what Charter has in store for them, particularly after conditions preserving cap-free Internet expire.