The head of a state-funded group with direct ties to the Massachusetts governor’s office told local officials in New Marlborough that the Massachusetts Broadband Institute (MBI) “believes in cable companies” and is favoring one — Charter Communications, with an exclusive offer to invest millions in taxpayer dollars to entice Charter to bring its Spectrum cable service to town, while telling would-be competitors the money is only available to Charter Communications.

MBI was created in 2008, originally tasked with investing $50 million in state funds to help resolve the digital divide between eastern and western Massachusetts. MBI also manages the publicly owned, middle mile fiber optic network that towns in western Massachusetts are depending on as part of their plans to connect local residents to the internet.

In 2015, MBI suddenly yanked support for WiredWest, the region’s most robust and credible player in connecting residential homes and businesses. The group had spent several years organizing and educating some two dozen largely rural communities, and was well on its way to constructing a public broadband network for the towns that agreed to sign on to the project. Since 2015, a series of political disputes, bureaucracy, and confusion has stalled broadband expansion.

Peter Larkin, MBI’s board chairman, has been roundly criticized in many western Massachusetts communities for continuing MBI’s slow and cumbersome bureaucracy, frequent policy shifts, and most recently playing favorites with cable companies. Ignoring his own organization’s systemic failures and bureaucratic roadblocks, Larkin has recently leveraged community frustration with the slow pace of progress as an excuse to hand two of the nation’s largest cable operators public taxpayer dollars to complete a project MBI was directly responsible for stalling.

Under the latest proposal, outlined last Friday, Charter Communications would receive $3.1 million to expand Spectrum cable service to at least 96% of the community of New Marlborough. Originally, the town was responsible for $1.44 million in cost sharing with the state, a substantial sum for a community with a population just over 1,500 residents. Larkin last week offered to split the cost to the town, with the town’s share reduced to $720,000 — payable directly to Charter.

“The state is willing to cut the gap in half to make this project go,” Larkin said.

But that deal appears to be good only if the town selects Charter Communications. Over the last year, MBI has been allocating public taxpayer dollars towards private cable and phone companies, especially Comcast and Charter, to get the companies to agree to expand their cable systems in areas both have ignored for decades. WiredWest’s proposal made towns partners in the project. Larkin’s offer suggests taxpayers should pay up to 50% of the expansion costs, while Charter keeps 100% of the revenue and profits.

In the past, MBI’s financial carrots have been enough to get the two cable companies to expand using state matching funds alone, but as the town’s Broadband Committee Chairman Richard Long told the Berkshire Eagle after the meeting, he thinks this is the first time an unserved town in central or western Massachusetts will have to contribute local taxpayer funds as well just to get service from a cable company.

Larkin’s hard sell for Charter raised eyebrows among some in the town, especially after Larkin offered to use state funds to also finance their $720,000 portion of the deal over as much as a decade. Larkin claimed he wanted to get the project done and wanted to be helpful.

“The state may spend moneys or engage in other activities that benefit or incentivize private businesses in order to promote such [economic] development and it may authorize or partner with its cities and towns to do likewise,” Larkin recently wrote in a letter to towns offering to help them get negotiations going with the cable companies.

Town resident Dave Travis called Larkin’s offer something else.

“Call me a whistleblower, concerned citizen, activist for fairness, justice and democracy, but for Massachusetts Broadband Institute to show such blatant preferential treatment [to Charter] when there are qualified, experienced local options feels like corruption, and it needs some serious daylight,” Travis wrote.

WiredWest’s Tim Newman exposed just how far Larkin was willing to go to bat for Charter.

“Is the generosity you’re presenting to our town on behalf of Charter the same generosity if the town were to build its own network?” he asked Larkin.

“We do believe in the cable companies … we think it’s a value worth leaning in a little bit harder for,” he said, suggesting Charter has the financial ability to complete the project.

“So, the short answer is ‘no’ — the $720,000 would not be available?” Newman pressed.

“No,” Larkin answered.

Charter Communications is taking the city of El Centro, Calif., to federal court for interfering in a dispute between Spectrum and a local TV station owner that has resulted in two stations being blacked out on the local cable system for nearly three months.

Northwest Broadcasting, Inc., has been in a contract extension dispute with Charter Communications over multiple stations, including its two El Centro-area affiliates KYMA (NBC) and KWST (CBS). Charter accuses Northwest of gouging, claiming “Northwest demanded an 80 percent increase in carriage fees, more than double the rate Charter pays any other broadcaster anywhere else in the entire country.”

On March 7, 2018, the City of El Centro got involved and cited the cable operator, alleging Charter violated five provisions of Article X of the City Code, and began fining the cable company $100 a day for each violation, assessed each day the dispute continues.

El Centro accuses Charter of:

• Discriminating against subscribers based on specific protected classes;
• Failure to notify the city and subscribers 30 days in advance of any changes to cable service or rates;
• Failure to establish a time frame to respond to service interruptions;
• Failure to refund customers for service interruptions exceeding a stated period;
• Failure to notify the city and subscribers 30 days in advance of any changes to the cable television channel lineup.

El Centro Mayor Sheryl Viegas Walker: “I’m taking it to the streets. I’m so fed up with [Spectrum’s] disregard for this community,” KYMA in El Centro reports. (3:02)

Northwest Broadcasting CEO Brian W. Brady strongly disputes Charter’s claims, dismissing them as “lies,” particularly surrounding the removal of two El Centro stations from Charter’s lineup after the cable company claimed Northwest refused permission to continue carrying the stations while renewal talks continued.

“Charter accepted the first two extensions which were offered to them, however, they refused the third extension and took our stations off with 10 minutes notice,” Brady said.

Charter’s lawsuit argues El Centro officials have no right to intervene in the dispute, force Spectrum to put the stations back on the lineup, or require Charter to issue refunds to customers for channels that are no longer available to them.

“Northwest’s pulling its authorization for Charter to carry its broadcast signals is not a ‘service interruption’ within the meaning of the City Code provisions in question,” Charter argued in its lawsuit. “Even if it were, while El Centro demands that Charter ‘cure’ its alleged violations, the only means for Charter to do so is to finalize a retransmission agreement with Northwest. The City’s citations are thus intended to pressure Charter to accept Northwest’s unreasonable terms by imposing fines and intentionally damaging Charter’s reputation and harming its goodwill and relationships with its existing and prospective customers.”

Charter argued giving refunds to customers over the lost channels was “contrary to Charter’s terms of service, and in so doing improperly interfere [sic] with Charter’s contractual relationship with its customers.”

Charter is relying heavily on California’s statewide video franchise law — the 2006 Digital Infrastructure and Video Competition Act (DIVCA), heavily pushed by telecom lobbyists a decade ago, which stripped most local authority over cable systems and transferred it to the state government. Charter is using DIVCA’s light touch regulations to support its assertion El Centro officials cannot interfere in programming disputes and that their actions during the dispute have only made things worse.

“The effect of the City’s actions has been to harden Northwest’s negotiating position and make a deal on reasonable terms even more difficult,” the complaint says.

“I have never seen a corporate entity act with such disregard for our community,” said El Centro Mayor Sheryl Viegas Walker. “We have a contract with them that spells out certain steps that they’re required to take if those kinds of changes are going to be made. They didn’t do that. We wake up one morning and we’re suddenly without two major channels.”

“Rather than negotiating in good faith like all other parties would do and what the law requires, Charter has taken a ‘take it or leave it’ approach,” added Brady. “In an effort this week to get this back on track, Northwest submitted a new proposal to Spectrum. Spectrum’s representative communicated that they really wanted to get this resolved, but would not counter Northwest’s proposal and would not respond at all in writing. Odd behavior for a company that claims to be negotiating in good faith. It appears that Charter would rather bully a small municipality than to engage in a good faith negotiation.”

It appears other small cities are joining Brady’s cause, complaining to the Federal Communications Commission that Charter was unfairly profiting from station blackouts. In Crescent City, Calif., city officials accused Charter of charging a Broadcast TV surcharge of $7.50-8.85/month, but didn’t change or adjust rates after the Northwest Broadcasting blackout began.

“Despite the fact the fee is itemized and justified as a pass-through, Charter did not eliminate or reduce that fee, even though it was no longer incurring costs associated with carriage of … at least two network affiliates,” Crescent City officials told the FCC.

The two California cities have also been joined by officials in Yuma, Ariz. and Jackson, Wyo., where Charter has removed Northwest Broadcasting stations as well.

“We have learned that it is no different for numerous municipalities which have been forced to sue Charter to collect the fees that are contractually owed to them,” Brady said. “Most disputes are settled because Charter uses their army of lawyers to outspend the municipalities forcing the municipality to settle on Charter’s terms, regardless of their contractual obligations. It’s no different for their customers who have told us that Charter recently raised the broadcast surcharge fee in spite of the fact that the programs they want to watch are unavailable because Charter removed the programming. Many have asked for refunds only to be told no. What is the customer to do, sue Charter?”

Northwest Broadcasting Owned and/or Operated Television Stations

City of license / Market	Station	Channel TV (RF)	Owned since	Affiliation
Yuma, Arizona – El Centro, California	KYMA-DT	11 (11)	2014	NBC
	KSWT	13 (13)	2014	CBS Estrella TV (DT3)
Eureka, California	KJRW	17 (17)	2016	CBS
Pocatello – Idaho Falls, Idaho	KPVI-DT	6 (23)	2016	NBC Decades (DT2) Movies! (DT3)
Greenville – Greenwood, Mississippi	WABG-TV	6 (32)	2016	ABC Fox (DT2)
	WFXW	15 (15)	2016	Silent/Unused
	WNBD-LD	33 (33)	2016	NBC
	WXVT-LD	17 (17)	2017	CBS
Binghamton, New York	WICZ-TV	40 (8)	1997	Fox
	WBPN-LP	10 (40.2)	2000	MyNetworkTV
Syracuse, New York	WSYT	68 (19)	2013	Fox Cozi TV (DT2)
	WNYS-TV	43 (44)	2013	MyNetworkTV GetTV (DT2)
Medford, Oregon	KMVU-DT	26 (26)	1995	Fox MeTV (DT2)
	KMCW-LD	14	2013	Sonlife
	KFBI-LD	48 (48)	2013	MyNetworkTV Telemundo (DT2)
Spokane, Washington	KAYU-TV	28 (28)	1995	Fox Antenna TV (DT2)
Tri-Cities – Yakima, Washington	KFFX-TV	11 (11)	1999	Fox Telemundo (DT2)
	KCYU-LD (Semi-satellite of KFFX-TV)	41 (41)	1995	Fox Telemundo (DT2)

KPVI-TV in Pocatello, Ida. was widely seen in parts of Wyoming over Charter Communications until the station was blacked out in a contract dispute. Now viewers want to see Charter fined. (1:11)

Charter officials claim there was insufficient time to notify subscribers about the loss of Northwest Broadcasting stations from the TV lineup, but Jackson, Wyo., officials noted Charter bought a new domain name reflecting the contract dispute at least two weeks before stations like KPVI were blacked out. (1:02)

Jackson city officials question a Charter representative about refunds for customers paying surcharges for broadcast TV stations no longer on Charter’s lineup. (0:57)

How to File a Petition on this Issue with the Federal Communications Commission:

This petition allows for public comment until April 16, but the FCC requires some special steps for individuals wishing to file comment. Below is a list of the requirements to file a public comment with the FCC regarding Charter Communications:

• Members of the public who wish to comment should do so on or before April 16, 2018.
• Filing should be submitted to the FCC via the electronic comment filing system (ECFS).
  • That system is accessible at https://www.fcc.gov/ecfs/filings.
  • A member of the public should type his or her comments and save them.
  • At the top of the ECFS page, select standard filing and in the “proceedings” box, type 18-91 (the proceeding is MB Docket No. 18-91).
  • Fill out the remainder of the boxes with information that is required (some information is optional).
  • At the end of the form, there is a box where saved comments can be uploaded.
• Comments that contain statements of fact (for example, “Here is what happened to me”) should be supported by an affidavit.
• “Comments or oppositions shall be served on the petitioner and on all persons listed in petitioner’s certificate of service…” The petitioners here are the Cities, and the certificate of service is at the end of the communities’ filing, which can be downloaded from https://www.fcc.gov/ecfs/filing/1032236683943.

Stop the Cap! today filed recommendations with the New York State Department of Public Service suggesting Charter Communications face additional sanctions in New York State if it is found once again to have missed its rural broadband buildout commitment, agreed to as a condition of its merger with Time Warner Cable.

New York’s Public Service Commission has accused Charter/Spectrum of using invalid or unqualified addresses to pad the number of new passings the company is required to achieve each quarter in its latest agreement with the Commission. As a result, the PSC is considering imposing a $1 million penalty and New York City officials are considering franchise revocation proceedings.

“In upstate New York we are focused on rural broadband and our recommended sanctions seek relief for the 75,638 homes and businesses that are going to be saddled with satellite internet access as the state’s rural broadband expansion program winds down,” said Stop the Cap! founder and director Phillip M. Dampier. “We believe Charter should be compelled to make good on disqualified addresses by expanding service to an equal number of customers that are currently assigned to get HughesNet satellite internet instead of true broadband service.”

Under Stop the Cap!’s proposal, Charter would be given a list of all census blocks assigned to satellite service and be required to buildout to many of those homes and businesses, particularly those  just 1-2 miles away from existing Charter infrastructure.

“Some western New Yorkers are livid because Gov. Andrew Cuomo repeatedly promised to ‘fulfill a goal of providing access to high-speed internet to every New Yorker in every corner of this state,’ and offering them satellite internet service breaks that promise,” Dampier said.

The New York State Broadband Program Office’s last round of awards failed to attract bids from providers for the 75,000+ affected homes and businesses. Because the awards program requires providers to pay a significant portion of expansion expenses, with the rest subsidized by the state, these rural addresses were effectively orphaned.

“It appears the state is giving HughesNet $15,426,269 of taxpayer funds to allow the governor to declare ‘rural broadband victory’ — money Hughes will use to discount satellite dish equipment and installation expenses — something it already does out of its own pocket in its marketing campaigns,” Dampier said.

Hughes will charge grant-funded users no more than $60 per month for the next five years, and no more than $49 for installation. But HughesNet’s website shows new customers are given installation for free, and without more information it is hard to discern what each customer will get for around $60 a month. The website shows a satellite plan costing $49.99 a month that includes just 10 GB of usage per month, with a 24-month commitment. A 20 GB plan costs $69.99 a month with the same commitment. Customers also have to pay $449.98 to own the necessary equipment or a one time fee of $99 + $14.99/mo to lease it.

“Satellite internet is not broadband and while it is a useful tool for those living in extremely rural areas, it should not be the only answer for a customer who has neighbors with Spectrum cable service just a mile or two down the road,” Dampier added. “We feel Charter could be an important partner in achieving 100% coverage in New York, if they are compelled to act.”

Stop the Cap! is also recommending a statewide audit of the “new passings” Charter is claiming towards its rural broadband expansion commitments. The group also wants the state to spend the proceeds of the proposed $1 million fine towards further broadband expansion for would-be satellite customers.

“There is no reason to believe Charter is only counting unqualified addresses downstate, so there needs to be a statewide audit,” said Dampier. “The governor made an important commitment to rural New Yorkers and we want to see him keep it to as many people as possible, with Charter picking up more of the costs. It is the least they could do after paying their CEO Thomas Rutledge $98 million after successfully completing the merger deal.”

Submission Follows:

April 5, 2018

Hon. Kathleen H. Burgess
Secretary, Public Service Commission
Three Empire State Plaza
Albany, NY 12223-1350

Dear Ms. Burgess,

In reference to the proceeding 15-M-0388 and 18-M-0178, in which the Commission proposes to disqualify more than 14,000 New York addresses shown as “newly passed with broadband services,” we offer our views about Charter Communications’ buildout performance and make recommendations about possible additional penalties and sanctions that should be considered by the Commission if Charter Communications is found to be in violation of its agreements.

Need for Statewide Audit

If Charter Communications is found to be in violation of its commitment and agreed-upon timetable to expand broadband to 145,000 new homes and businesses, there is no reason to believe addresses miscounted in New York City represent an isolated incident. Indeed, the Commission has already seen fit to impose sanctions against Charter Communications for missing its buildout commitments, and should the Commission now find Charter to be out of compliance once again, it appears the Commission’s earlier threats of forfeiture were not compelling enough to ensure future compliance.

Stop the Cap is concerned that Charter’s counting of invalid or disqualified addresses towards its 145,000 new passings commitment may not be limited to the New York City area.

In Erie County, Charter claims to have completed 4,357 passings, including the City of Buffalo, the Towns of Angola, Eden, Grand Island, and the Village of Williamsville.[1] In Monroe County, Charter claims to have built out service for approximately 3,395 passings, including the City of Rochester, and the Towns of Perinton, Greece, Webster, Gates, and Henrietta. These are remarkable numbers in counties that have shown almost no population growth[2] or dramatic upswing in new major new housing developments.[3] As a result, we urge the Commission to carefully audit Charter’s buildout reports for possible evidence that, like in New York City, there may be a number of unqualified or invalid addresses in upstate New York as well. In fact, the Commission should, at the least, undertake random audits of each report claiming new passings to verify compliance.

Proposed Sanction: Charter should prioritize “make-up” buildouts to reach New York addresses currently assigned by the New York Broadband Program Office to Hughes Network Systems, LLC for satellite-delivered internet access.

Despite efforts by Gov. Andrew Cuomo and the “New NY Broadband Program (NNYBP),” the state’s Broadband Program Office (BPO) has identified at least 75,638 New York locations[4] that will be offered substandard satellite internet access from Hughes Network Systems, LLC.[5] This option is considered a last resort for addresses Charter and other providers have refused to service, despite the potential of funding available during Round III of the NNYBP awards.

Hughes cannot guarantee access to 25 Mbps service 24 hours a day across its New York footprint[6], meaning these locations will not be guaranteed broadband service.[7] The company has also confirmed it will impose a low data usage cap that, when exceeded, reduces broadband speed to well below anything approximating true broadband service.[8]

The decision to supply satellite service instead of wireline internet access may permanently leave these residents and businesses disadvantaged with inferior internet access, with little incentive or a compelling business case for other companies to buildout to these locations, especially after Hughes receives a state subsidy to reduce its service and installation expenses.

While satellite access may indeed be the best available, last resort service for some extremely rural and inaccessible locations in isolated parts of New York, there are many examples of residents living in census block areas now assigned to Hughes Network Systems that are very close to existing Charter service areas.

One example is Mr. Matt Stern, [redacted], Middleport, N.Y.[9] His Niagara County census block has been identified in Round III of the NNYBP expansion program as 360630240013000. That census block has been assigned by the BPO to receive Hughes’ satellite service because Verizon does not offer DSL at his address and Charter did not bid to serve Mr. Stern’s immediate neighborhood because he lives 1.3 miles away from existing Charter facilities. As a result, Mr. Stern is exploring selling his home and moving out of state because his school age children lack internet access.

Should the Commission find it reasonable to strike more than 14,000 addresses from Charter’s latest buildout list, we respectfully recommend the Commission sanction Charter by requiring it to make up the disqualified addresses starting with locations like Mr. Stern’s, currently assigned to get satellite internet service.

Although costlier than counting business parks or new housing projects as new passings that Charter would have likely serviced with or without its commitment to New York State, this sanction will deliver real benefits to many location-disadvantaged rural New York residents and businesses tantalizingly close to existing wired broadband networks, but unlikely to get true broadband service any other way. The Commission can develop a formula to identify addresses in census blocks that are located within a reasonable distance (perhaps 1-2 miles) of existing Charter facilities to keep expansion costs reasonable.

Sanction Proposal: A portion or all of the forfeiture penalties collected as a result of Charter’s alleged missed targets should be devoted to a further expansion of wireline broadband service to areas currently assigned to Hughes Network Systems, LLC.

Drawing $1,000,000 from the letter of credit to penalize Charter Communications for missed targets will, by itself, not bring broadband service to areas that were originally promised true broadband service by Gov. Andrew Cuomo’s NY Broadband Program.[10]

Instead, 75,638 homes and businesses will be offered satellite service that cannot guarantee to consistently meet the FCC’s definition of broadband: 25 Mbps download and 3 Mbps upload speed. In contrast, wireline providers like Charter Communications have committed to offer 100 Mbps service with the option of gigabit speed by the end of 2018.[11]

These locations assigned satellite service attracted no bidders in the final round of the NNYBP awards. Therefore, there is little chance a wireline provider will extend service to these locations without additional subsidies.

By allocating some or all of the proceeds from fines or forfeitures to an additional buildout subsidy program limited to locations currently assigned to satellite internet service, the costs to wire at least some of these census blocks could be more tolerable to wireline providers around the state.

The shared goal by all concerned is to bring 21^st century broadband internet access to every New York home and business. It is our view that Charter’s alleged failure to meet its obligations to New York after getting approval of its multi-billion dollar merger with Time Warner Cable, offers a unique opportunity to compel Charter to share a small amount of the company’s overall revenue towards resolving the urban-rural broadband divide, while at the same time gaining new customers and additional revenue as a result of these service expansions.

Yours very truly,

Phillip M. Dampier
Director

[1]15-M-0388 – Charter’s Build-Out Report – January 8, 2018
[2] New York Counties Population Measurements (https://bit.ly/2Emx4dS)
[3] Year 2017: https://www.census.gov/construction/bps/txt/t3yu201712.txt; Year 2016: https://www.census.gov/construction/bps/txt/tb3u2016.txt
[4] http://stopthecap.com/wp-content/uploads/2018/04/phase_3_awarded_census_blocks_3.xlsx
[5] https://nysbroadband.ny.gov/new-ny-broadband-program/phase-3-awards
[6] “Stated speeds and uninterrupted use of service are not guaranteed. Actual speeds will likely be lower than the maximum speeds during peak hours.” Part 1.1 HughesNet Subscriber Agreement: http://legal.hughesnet.com/SubAgree-03-16-17.cfm
[7] http://www.adirondackdailyenterprise.com/news/local-news/2018/03/hopeful-skeptical-about-broadband/
[8] http://www.lockportjournal.com/news/local_news/frustration-continues-with-broadband-build-out/article_855e3058-fa8e-5b01-94e5-8c3bce287004.html
[9] ibid.
[10] https://www.governor.ny.gov/news/governor-cuomo-announces-next-step-implementation-500-million-new-ny-broadband-program
[11]15-M-0388 – Charter’s Build-Out Report – January 8, 2018

Charter Communications is asking owners of apartment complexes, nursing homes, independent living/assisted care residences, and hotel and motel owners to sign new agreements allowing Spectrum to lock owners into a 10-year contract that includes a provision allowing retroactive rate increases and a requirement to turn over personal information on every resident to the cable company.

A number of apartment complexes bundle “free cable TV” into the lease as a selling point for renters. Others pay a discounted rate that is part of a resident’s monthly rent payment or service fee. These agreements are part of the murky world of “bulk service contracts” for cable service, and disputes between a property owner and Spectrum can cause the loss of cable service for every resident without warning.

Most of the disputes involve apartment complexes, assisted-living facilities, and hotels/motels formerly served by Time Warner Cable. Most are still under relatively short-term contracts with Time Warner Cable, which was acquired in 2016 by Charter Communications. Good Shepherd Fairview Nursing Home in Binghamton, N.Y. and Good Shepherd Communities, a senior living center in Endwell, N.Y., are good examples.

Mike Keenan has been involved in long-term senior care for 30 years, and over that time he has negotiated hundreds of contracts. But as WICZ in Binghamton reports, nothing prepared him for dealing with Spectrum and Charter Communications.

Charter is using its ongoing digital conversion program as a tool to force “bulk contract” holders to sign new agreements with Charter Communications, often replacing still-valid contracts with Time Warner Cable. Many are not happy about the new terms Charter is offering, particularly one that locks them in with Spectrum service for the next decade and another that allows the cable company to raise rates retroactively.

Those unwilling to sign new contracts have been threatened with service being shut off, usually as digital conversion and TV signal encryption reaches their area, which requires new equipment to keep watching. Those complex owners that still refuse to sign are required to share each tenant’s personal details and address with the cable company.

“Spectrum had taken the position that even though we had a contract in force until December 2018 that we needed to sign a new contract immediately,” said Keenan, president and CEO of Good Shepherd Communities. “If not, they threatened that we would lose service at our Good Shepherd Fairview in Binghamton location and our Good Shepherd Villages at our Endwell location.”

Charter was true to its word. Efforts to negotiate obtaining digital adapters or set-top boxes under the old Time Warner Cable contract failed and with no warning, all 161 nursing home residents at Good Shepherd Fairview lost their cable television on Feb. 27. Two weeks later, 264 residents at Good Shepherd Village — the senior living center — also lost their television and internet service.

The loss was devastating to residents, especially at the nursing home.

“Many of the residents are frail, some of them may be bedridden and their TV means everything to them,” Keenan said.

Keenan’s contract with Time Warner Cable was still valid, and its terms made it clear as long as Good Shepherd kept their payments current, they were owed service that Charter ultimately took away from hundreds of residents.

Apartment complex owners around the country are reviewing new contracts from Charter Communications and many are dropping “free cable TV” after decades of offering the service as an amenity included in the rent. Many who are ending their contracts believe a growing number of tenants neither need or want traditional cable service.

The deal-breaker for many is Charter’s insistence on offering a bulk discount only if the entire building signs up for service, which means owners will have to pay out-of-pocket for Spectrum service in vacant units or in apartments where the tenant has service with another provider.

WICZ in Binghamton, N.Y. reports Charter Communications used nursing home residents as pawns to force the hand of a nursing home manager to sign a new Spectrum contract, even though the current one with Time Warner Cable has not expired. (3:11)

“Let’s say you’re paying for Spectrum” – the brand name for Charter’s service – “for 100 percent of the units,” attorney Tara Snow, a partner at Novitt, Sahr & Snow, told Habitat. “You may have 90 or 95 percent of the apartments signing up, but you always have some units that don’t.”

That leaves someone on the hook, either tenants or the property owner, to pay for cable service that nobody is watching. Under Time Warner Cable just a few years ago, the cable company would pay a co-op, condo association, or apartment owner an upfront cash bonus and ongoing “revenue-share fees” for getting a majority of residents — but not all — to sign up for service. It also allowed the company to market holdouts door to door.

No such luck with Charter, which wants to be paid for every unit no matter who is at home. For property owners staying loyal to Spectrum, some are absorbing the extra costs while others pass them on to tenants as part of their rent or monthly maintenance/service surcharges. A few are trying cost sharing arrangements that divide up the total bill equally among all tenants. But as younger renters move in and increasingly show no interest in cable television, the dwindling number who have cable are paying more and more to cover those that don’t.

“People are cord-cutting,” says Brian Scally, vice president of Garthchester Realty, a management firm. “Most people who still want cable want to select their own cable/internet/telephone provider.”

Of the 64 properties he manages, Scally told Habitat fewer than a dozen have signed up for a bulk rate, and those deals were signed years ago.

“I haven’t brought anybody new to bulk rate,” he says.

The other deal breaker for many is Spectrum’s 10-year contract, which locks owners in with a cable company a lot of tenants despise.

As a result, a growing number of apartment complexes and condos are terminating their bulk cable contracts as they expire, and have no intention of renewing under Charter’s draconian terms. Affected tenants are informed the “free” cable television they were receiving is ending and they should make individual arrangements with Spectrum to maintain service going forward.

Hotel and motel owners are also finding fault with Charter Communications, and some are taking their disputes to the Federal Communications Commission.

Yvonne Peach, who owns the Historic Coronado Motor Hotel in Yuma, Ariz., says dealing with Charter has been a nightmare since the merger.

After Charter converted commercial Time Warner Cable and Bright House customers to Spectrum plans and pricing, she lost service to all of her motel rooms for more than a week.

“When they did the change over we didn’t have any cable TV in the hotel for 12 days,” Peach told KYMA-TV.

Spectrum advised her best solution would be to install leased set-top boxes in the hotel’s 126 rooms, a solution she claims caused even more problems. It seems Spectrum’s equipment doesn’t appreciate Yuma’s southwest Arizona heat, and the boxes regularly fail when air conditioning is switched off in unoccupied rooms.

“We’ve had over 100 of them replaced probably in the last I don’t how many months,” she said. “It’s a box that if the room isn’t rented every night it becomes deactivated.”

Those paying to stay in the motel are not happy to reach their rooms and find the television isn’t working either.

“We’ve lost thousands of dollars with people that would move out because of no TV in their room,” Peach said. “It comes and it will say dial an 800 number or something. But you know the guest. They are paying a certain amount for the room and they’re not going to call.”

KYMA-TV in Yuma, Ariz. reports Charter told this hotel owner her cable boxes were not working because they are not being kept air-conditioned. (2:29)

Spectrum ignores her complaints, she claims, transferring her from call center to call center in search of a solution. She finally took her complaint to the FCC, something she does not think should be required after paying the company $1,600 a month for cable television.

In response, Spectrum blamed the lack of air conditioning for its box failures, in addition to the “relocation of the digital adapters by hotel staff, which are dedicated to a particular room on the account.”

In other words, if you move equipment between hotel rooms, Spectrum claims that equipment will deauthorize. Spectrum effectively wants motel guests placed in rooms where their cable equipment is still functioning, preferably where air conditioning is left running.

“If you’ve been driving all day and you get in your pajamas and you’re ready for bed and you’re watching TV and the TV doesn’t work, do you want to move to another room without complaining? No, nobody does,” said Peach.

In upstate New York, heat isn’t a significant problem, but having a bulk account representative in Rochester, 2.5 hours away by car from Binghamton is. The representative did not understand Binghamton and Endwell are two different communities about seven miles apart.

“This whole thing could have been avoided,” Keenan said. He called the New York Public Service Commission to complain and within a day multiple Spectrum trucks arrived loaded with set-top boxes — one per residence, potentially finally resolving the dispute, but not the bad feelings that emerged as a result.

“Time Warner Cable was saying ‘we need our customers,’” Keenan said. “The experience I have had with Spectrum is Spectrum is saying ‘you need me.’”

WICZ-TV follows up the next day with this report explaining why it is important to stay wary of cable companies offering long contracts. (1:09)

Charter Communications is raising rates for its dwindling number of Earthlink customers still subscribed to Earthlink’s legacy internet plans in an effort to avoid Spectrum’s entry-level $65 internet service.

Charter has started to notify customers grandfathered on an Earthlink plan that they are going to be gradually stepping rates up, starting with a $5 increase. Stop the Cap! reader Christopher Rzatkiewicz shared a copy of the bad news on his recent Spectrum bill.

Charter Communications terminated its agreement allowing Earthlink to sell its service over its cable broadband network after completing its merger deal with Time Warner Cable and Bright House Networks. That left an undetermined number of Earthlink customers paying $41.95 a month for Standard Earthlink 15/1 Mbps service, considerably cheaper than Time Warner Cable’s identical, $59.99 15/1 Mbps plan.

This last loophole allowed some customers to avoid switching to Spectrum’s more costly $65 entry-level 100/10 Mbps plan (200 Mbps in select areas). But now Spectrum is gradually taking away Earthlink’s price advantage. The new rate is $46.95 a month, and is likely to continue increasing in similar increments at least twice a year, until its price reaches about $60.

To help convince customers still holding on to older service plans to switch to Spectrum plans and pricing, Charter will continue raising rates on older legacy plans from Time Warner Cable, Bright House, and Earthlink to remove any price advantages those plans may have originally had. That will allow Charter to eventually claim its plans are always cheaper and better.

Charter Communications/Spectrum Standard Broadband Plans

• $46.95 Earthlink Standard¹ (15/1 Mbps)
• $59.99 Time Warner Cable Standard² (15/1 Mbps)
• $44.99 Spectrum Standard New Customer 1-Year Promotion³ (100/10 Mbps⁴)
• $65 Spectrum Standard for Existing Customers (100/10 Mbps⁴)

¹ Earthlink service is no longer available to Charter/Spectrum customers. If you cancel your grandfathered Earthlink plan, you cannot return to this plan in the future.
² Time Warner Cable internet service is grandfathered and no longer available to new customers. If you switch to a Spectrum plan, you cannot return to a Time Warner Cable plan.
³ To qualify as a new customer, either cancel service in your name and enroll as a new customer under another household member’s name or cancel existing service and wait 30 days to re-qualify as a new customer.
⁴ This plan offers 200 Mbps download speed in select areas.