New York Attorney General Eric Schneiderman achieved victory in his effort to keep a lawsuit accusing Charter Communications and its predecessor Time Warner Cable of engaging in false advertising in a state courtroom.

U.S. District Court Judge Colleen McMahon ruled that Charter’s efforts to transfer the case out of New York County Supreme Court to federal court were improper and not warranted. The case will now head back to its original venue as chosen by Schneiderman — Manhattan Supreme Court.

Charter argued the case belonged in federal court because a federal agency — the FCC — had enforcement powers over Charter’s broadband business. The cable company argued that the Communications Act passed by Congress gave federal courts sole jurisdiction over broadband matters. It also argued Net Neutrality imposed a requirement that states were not allowed to inconsistently regulate broadband providers.

Judge McMahon dismissed both arguments, noting the FCC has not ruled it had pre-emptive power over states to regulate broadband and Congress “did not intend for the federal statute to be the exclusive remedy for redressing false advertising and consumer protection claims.”

Schneiderman’s case alleging Time Warner Cable falsely advertised broadband service at speeds it knew it could not deliver will once again be heard by a New York court.

Time Warner Cable and Bright House Networks customers are now getting a taste of the frustration that original Charter Communications customers have experienced for years in dealing with the company’s complicated TV packages.

Sheila Topmiller in northern Kentucky wasn’t the only former Time Warner Cable customer to see her bill spike after Charter took over and rolled out its new Spectrum TV packages. Her bill increased from $152 to $180 a month — a $28 rate increase. Her triple-play TV lineup had to change, along with her bill.

One of the highlighted points Charter executives told Wall Street and investors regarding its acquisition of Time Warner Cable and Bright House Networks was that Charter’s “simplified pricing” and crackdown on promotions would result in higher average revenue from customers over time. The reasons are simple: fewer value-priced broadband options, illusory TV channel “choice” in packages designed to compel customer upgrades, higher phone pricing, and no more deals for complaining customers.

TV packages are supposed to offer customers at least the illusion of choice, giving options to cut down a TV package in return for a lower bill. But cable operators like Charter Communications are savvy enough to know what channels are considered “must-have” by customers, and can move networks from one tier to another with little notice. This can force subscribers to upgrade to get back channels stripped from their current package. Now Time Warner Cable customers shifting to Spectrum packages are discovering six popular Viacom-owned channels Nickelodeon, MTV, VH-1, Spike, BET, and Comedy Central are only included in the most expensive tier.

Pay-per-laugh

Just a year ago, these six networks were commonly found as part of Charter’s cheapest “Select” TV tier. But new customers found them transitioned first to the Silver tier, and finally to Charter’s most expensive “Gold” package. Existing Charter customers may not have noticed because the networks were often grandfathered into their current package, but ex-Time Warner Cable customers like Topmiller did. She has kids, and Nickelodeon is considered a “must-have” network in her home.

“You have to subscribe all the way to the highest plan to get Nickelodeon,” she complained.

This isn’t the first time channels have been shifted from one package to another, and Charter is not the only cable operator following this practice. In 2012, Comcast got a lot of heat for moving the popular commercial-free Turner Classic Movies from its Digital Starter package to its much more expensive Digital Preferred tier. Customers that wanted TCM back had to pay an extra $22 a month for the upgrade.

Time Warner Cable had its own tiers, but incentivized most customers through bundles and promotions to take its Preferred TV package that bundled Starter, Standard and Variety Pass options together. Time Warner Cable also didn’t bundle premium movie channels into TV packages the way Charter does. Charter’s Silver package, as well as adding basic networks, also bundles HBO, Cinemax, and Showtime. Upgrading to Gold to win back those six Viacom basic networks also gets you the aforementioned premium movie channels plus Starz, TMC, Starz/Encore, Epix, and NFL RedZone. For many customers, Gold is aptly named because it results in a considerably higher bill unless a customer already subscribed to most or all of the available premium networks through Time Warner Cable or Bright House Networks in the past.

To boost revenue, a cable operator need only shift popular cable networks into higher-priced tiers and watch customers follow.

Charter Communications may sell you a Silver or Gold package to restore your old lineup, but there is a better way to get channels back without spending money on premium movie channels you may not want.

Spectrum quietly offers two “digi-pack” options to customers who balk at paying for HBO and other premium networks:

• Digi-pack 1 ($12) gives you access to all Silver-level basic cable networks, but no premium movie channels;
• Digi-pack 2 ($12) gives you access to all Gold-level basic cable networks, but no premium movie channels.

But Charter representatives still claim its TV package “simplification” and new pricing is good for customers.

“It’s actually less money when you factor in there is no modem fee. No data caps, no contract to sign, no modem fees,” said Charter (and former Time Warner Cable) spokesman Mike Pedelty. He doesn’t mention customers could buy their own modems and avoid Time Warner Cable’s modem fees, and Charter’s predecessor also had no data caps or contracts to sign.

Fox Networks Group is nearing a deal with Charter Communications that will keep several Fox-owned channels from disappearing from the Spectrum cable dial.

Recently, Fox has stopped running ads attacking Charter’s potential disruption of FX, National Geographic, and a number of Fox regional sports networks. Fox has also extended its deadline several times, and Fox programming continues uninterrupted on Charter’s cable systems as the talks continue.

Now FNG president and COO Randy Freer is ready to say publicly, “we’re working out the issues.”

Broadcasting & Cable reports one of those issues could be the ongoing lawsuit between Fox News Channel and Charter that was filed after acquiring Time Warner Cable. Charter began paying Time Warner Cable’s considerably lower FNC affiliate fee in markets where Charter’s original cable systems were under contract at a higher rate. One part of the agreement may be a settlement of that lawsuit.

There is no word on exactly when a final agreement will be reached, but it is increasingly unlikely the negotiations will result in any dropped channels for Charter customers.

Every week brings the threat of yet another programming blackout because cable programmers want to be paid more and cable operators want to pay the same or less. This time, Fox Networks Group has sent a final warning to Charter Communications that their customers will lose several cable networks as soon as Wednesday if the two companies cannot reach a renewal agreement.

“Fox and Charter have an agreement to carry the Fox networks that Charter has chosen to ignore,” Fox said in a statement that was updated today. “We’re disappointed that despite our best efforts to reach a resolution, Charter Spectrum subscribers could lose access to multiple Fox sports and entertainment networks on April 12.”

The latest dispute surrounds the lucrative volume discounts that Time Warner Cable formerly negotiated for some of Fox’s non-news-related cable networks. Charter Communications acquired both Time Warner Cable and Bright House Networks to secure those kinds of volume discounts for itself. In general, the larger a cable system is, the lower the wholesale rate charged for cable programming. Charter hoped it could continue paying the lower rates Time Warner Cable managed to secure after acquiring the much larger cable system. But cable programmers are not buying Charter’s approach and in one case sued.

In March, Univision blocked Charter from carrying its Spanish-language networks Univision, Unimás, Galavisión, Univision Deportes and El Rey in a similar dispute. A temporary restraining order brought the networks back to the lineup a day later, at least temporarily. Univision sued Charter Communications in 2016 over the programming fee dispute.

A significant amount of money is at stake depending on which side ultimately wins in court.

In the case of Univision, Charter’s own contract with the Spanish language programmer expired on June 30, 2016. That would normally require Charter to negotiate a contract renewal that it knew would be more costly than what it paid under the old contract. Charter learned Time Warner Cable had negotiated a contract with Univision that delivered better volume discounts and was not set to expire until June 2022.

To allow Charter Communications to argue that Time Warner Cable’s contract should continue to apply after the merger, it structured its acquisition (on paper at least) to allow Charter to claim Time Warner Cable would continue to manage all of its cable systems. Charter’s lawyers argued that because “Time Warner Cable” is in charge, the wholesale rates Time Warner Cable negotiated should now apply to all Charter systems.

Univision, among other programmers, balked at Charter’s creative thinking.

“Everyone knows that is simply not true: the longstanding CEO and the senior executive team of Charter, as well as its pre-existing board of directors, now in fact manage and control all such cable systems, and virtually the entire TWC leadership team has departed,” Univision argued in its 2016 lawsuit.

If the programmers win, Charter will have to negotiate new carriage agreements at 2017 prices instead of continuing to pay the lower rates Time Warner Cable won for itself in the past.

A similar dispute is likely behind the current battle between Charter and Fox. Each time a cable company has to negotiate a new contract, programmers tend to ask for a considerably higher wholesale price for their channels and try to get cable systems to also carry their other networks. When a cable operator refuses to pay what it considers to be an unconscionable renewal rate or does not want to carry the programmer’s other networks, a showdown takes place that often leads to channels being temporarily removed from the lineup. Cable companies usually lose these battles after subscribers get hostile, but some smaller cable operators have walked away from programmers like Viacom for good when the renewal price stayed too high.

As is the tradition in these disputes, Fox launched a website and social media blitz to warn Charter customers they are about to lose access to 19 regional sports channels, FX, FXX, FOX Movie Channel, National Geographic TV, Fox Sports and Fox Deportes and asked customers to start calling Charter and complain. The current dispute does not involve the FOX (TV) Network, the Fox News Channel or the Fox Business Channel.

“We’re disappointed that despite our best efforts to reach a resolution, Charter Spectrum subscribers could lose access to multiple Fox sports and entertainment networks on April 12,” FOX wrote on its website. “Charter’s tactics could result in its subscribers missing our popular programming including Fox Sports’ telecasts of the St. Louis Cardinals and Blues, Kansas City Royals, Cleveland Cavaliers, Cincinnati Reds and many other MLB, NBA and NHL teams on Fox Regional Sports Networks, Fox Deportes, National Geographic, and FX’s hit dramas The Americans and Feud as well as much more award winning programming.”

“Fox is trying to gouge our customers using the increasingly common tactic of threats and removal of programming,” Charter responded in a statement. “They are attempting to extort Charter for hundreds of millions of dollars. We will continue to work towards a fair agreement.”

Fox Networks is using this ad to warn Charter Spectrum customers they could lose Fox programming. (0:30)

With the transition from Time Warner Cable and Bright House Networks to Charter Communications now complete, starting today all stories referring to Charter/Spectrum, Time Warner Cable or Bright House Networks will be found under “Charter Spectrum” in our provider list.

Regardless of the name change, media reports from around the country have little positive to say about customers’ experiences with “New Charter.”

Industry consolidation from mergers and acquisitions does nothing to improve competition, something essential to fix the broken broadband market in the United States, as this PSA illustrates: