Spectrum internet customers can be assured of an additional two years of unlimited internet service after Charter Communications dropped its petition Tuesday with the FCC to allow the cable company to introduce data caps.

The FCC’s Wireline Competition Bureau acknowledged receipt of Charter’s withdrawal of its petition to end a prohibition on the company imposing data caps and usage-based pricing mechanisms two years before the original agreement with the regulator expires on May 18, 2023.

The company claimed it had no immediate plans to impose data caps or usage-based pricing, but its decision to rescind the request assures that. The FCC imposed a seven-year ban on Spectrum imposing data caps as part of its approval of Charter’s 2016 merger with Time Warner Cable and Bright House Networks. The earliest the company can impose data caps is May 18, 2023.

Sources tell Stop the Cap! Charter likely made the decision to withdraw its petition after realizing the current Republican-dominated Commission was not planning to approve it in the waning days of the Trump Administration and it was highly unlikely to win approval under the incoming Biden Administration. It is not uncommon for petitioners to quietly withdraw requests to avoid the publicity of having them publicly rejected.

Charter Communications is petitioning the Federal Communications Commission for permission to usage cap its internet customers two years before the FCC’s ban on the company imposing data caps runs out.

Charter, which does business as Spectrum, is seeking an early exit from some FCC-imposed deal conditions Charter agreed to as part of an approval of its 2016 merger with Time Warner Cable and Bright House Networks. Out of concern that Charter’s merger could harm emerging online video streaming competition, the FCC required the company to not charge fees to streaming services like Netflix and Hulu to carry video traffic to its customers and not impose data caps and usage based billing schemes that would limit online video consumption for seven years.

“New Charter’s increased broadband footprint and desire to protect its video profits will increase incentives to impose data caps and usage-based prices in order to make watching online video more expensive, and in particular more expensive than subscribing to a traditional pay-TV bundle,” the FCC concluded in its 2016 order approving the merger, with conditions. “For seven years, we prohibit New Charter from imposing data caps or charging usage-based pricing for its residential broadband service. This condition ensures that New Charter will continue Charter’s past pricing practices and protects subscribers from paying fees designed to make online video consumption more expensive leading subscribers to stick with a traditional pay-TV bundle.”

Charter last week argued that with cord-cutting at an all-time high and video streaming alternative cable and video packages flourishing, there is no reason to continue the seven-year ban on data caps, noting that many other large providers including AT&T, Cox, Altice, and Comcast are free to impose data caps of their own.

“They are able to do so because, unlike Charter, they are not subject to a condition that artificially and unilaterally restricts the packages available to their customers,” Charter argues in its filing. “The online video distribution marketplace is almost unrecognizable compared to what existed in 2016. […] Consumers have never had more online video choices.”

Charter said a sunset of the prohibition of data caps was now overdue.

“As data usage skyrockets, the [ban on data caps and usage-based billing] artificially hamstrings Charter’s ability to allocate the costs of maintaining its network in a way that is efficient and fair for all of its customers—above-average, average, and light users alike,” the company argued. “Charter should be afforded the same flexibility as other broadband providers to respond to developments in the market. In short, tremendous changes in the marketplace have rendered the [ban on data caps and usage-based billing] no longer necessary, and thus ending it in 2021 would be in the public interest.”

The FCC’s 2016 order approving the merger between Charter Communications, Time Warner Cable, and Bright House Networks, with a 7-year prohibition on data caps, was not unanimous. Separate statements from Republican Commissioners Ajit Pai and Michael O’Rielly were highly critical of most of the deal conditions the then-Democratic majority favored. Four years later, Pai now presides as chairman over a Republican-majority FCC that could take a favorable view of Charter’s request to end deal conditions early.

In 2016, Pai’s spokesperson complained about the imposition of deal conditions in the Charter-Time Warner Cable-Bright House merger, telling The Hill, “The FCC’s merger review process is badly broken. [Then FCC] Chairman Wheeler’s order isn’t about competition, competition, competition; it’s about regulation, regulation, regulation. It’s about imposing conditions that have nothing to do with the merits of this transaction. It’s about the government micromanaging the internet economy.”

Charter’s June 2020 filing focuses almost exclusively on streaming video competition to argue there is no longer any need to ban the company from imposing data caps. The FCC in 2016 concluded that data caps were a powerful anti-competitive weapon that could be used to keep streaming video competition from harming cable television packages. Charter argues that consumers now have many choices for streaming video, including cable-TV alternatives, which proves they have not engaged in anti-competitive behavior.

But Charter ignored the FCC’s other chief concern about data caps and usage billing (UBP): the lack of choice of broadband competitors.

“[…] Subscribers will continue to have no (or limited) alternative cable or fiber […] options when faced with data caps and UBP designed to deter online video consumption,” the FCC concluded.

The FCC hoped that by 2023, consumers would have more options for home broadband service, likely driving usage caps out of the marketplace.

“Seven years may also provide the high-speed […] provider market sufficient time to develop further with additional investments in fiber from established wireline […] providers, Wireless 5G technology, use of smartgrid fiber for broadband, additional overbuilding, and other potential competitors to traditional wired […] providers,” the FCC wrote. “It is our expectation that these developments will foster competition in the market to make the anticompetitive use of data caps less tenable in the future.”

Unfortunately, broadband competition remains fleeting in many parts of the United States, where only one provider offers broadband service that meets the FCC’s standard of 25 Mbps for downloads.

Ironically, Charter executives were against imposing data caps on their customers when the company was seeking approval to acquire Time Warner Cable and Bright House Networks.

FCC:

“Charter in particular emphasizes its aversion to data caps, stating that instead of enforcing usage limits it chooses to market the absence of data caps as a competitive advantage. Charter also argues there is a strong business case for not implementing caps. Specifically, Charter explains that it terminated its enforcement of the usage limits trial in the AUP in January 2012 because the benefits to customers of continuing the trial (minimizing bandwidth consumption to preserve a positive Internet experience) would not exceed the program’s costs. Charter also states that caps create marketing challenges because they complicate consumer purchasing decisions. Furthermore, Charter argues that data caps increase churn among subscribers. Finally, Charter states that it plans to distinguish itself from its competitors based largely on the quality and speed of its broadband offerings and that data caps undermine that marketing message.”

But the FCC remained unconvinced by Charter’s statements. In a review of confidential internal company documents, the FCC found multiple instances where Time Warner Cable had not completely abandoned the idea of data caps, despite multiple high-profile consumer backlashes against the idea.

“We also note that despite Time Warner Cable’s relative lack of success in implementing usage-based billing, its internal documents leave no doubt that it is also incentivized to use data caps to protect its [cable TV] business,” the FCC concluded.

Four years later, Charter is among many cable operators reporting staggering losses of video customers that have chosen to “cut the cord” on cable television and have switched to a streaming competitor. If an incentive to data cap customers to protect video revenue was there in 2016, it stands to be much stronger today in 2020.

The FCC is now seeking public comment on Charter’s proposal until July 22, 2020. Stop the Cap! plans to file extensive comments on the matter and will shortly publish a guide for readers offering sample letters that can be sent to the FCC on this issue.

Al Sharpton: Friend of Charter/Spectrum

During a period of renewed consciousness about the Black Lives Matter movement, many U.S. corporations are stepping up to donate money and resources to address what they call systemic racism. Charter Communications, which owns and operates Spectrum, is one such company.

The cable and broadband provider announced this week it was “investing $10 million” with the National Urban League and Al Sharpton’s National Action Network. The two civil rights groups coincidentally are long-standing recipients of Charter’s sponsorships and donations and are among the cable company’s best non-profit friends, reliably writing letters to regulators urging them to approve whatever is on the cable company’s agenda, including mergers and acquisitions, rolling back regulations, or blocking pro-consumer legislation.

Charter claimed in a press release its $10 million “investment” would help provide low-interest loans to businesses in underserved communities:

Charter’s Spectrum Community Investment Loan Fund (the Loan Fund) will invest $3 million in NUL’s community development financial institution (CDFI), the Urban Empowerment Fund (UEF), which will make individual loans to minority-owned small businesses and, under the direction of and on behalf of NAN, the Loan Fund will invest an additional $3 million in low-interest loans directly to CDFIs. In addition, Charter will provide $3.5 million in PSA value to promote its partners’ Loan Fund opportunities, and will contribute a $500,000 capacity grant to the NUL for revitalizing its CDFI platform including funding for staffing, infrastructure, and operations.

“In all communities, small business ownership and growth are fundamental to developing and sustaining economic power, which is critical to their long-term success,” said Tom Rutledge, chairman and CEO of Charter Communications. “Building on our valued partnerships with the National Urban League and National Action Network, these investments will support small diverse-owned businesses through access to much-needed low-interest capital and help build thriving communities across the country.”

The contributions might also be seen as “returning the favor” for the groups’ work on behalf of Charter’s 2016 merger with Time Warner Cable and Bright House Networks. Both non-profit groups were instrumental in contacting state and federal regulators, urging them to approve that merger that proved unpopular with many consumers.

Spectrum internet customers in parts of Central Florida and South Texas are getting twice the download speed they used to receive thanks to a series of quiet service upgrades still in progress.

Customers in parts of suburban Orlando, including Seminole County, first noticed the speed upgrade in April in towns like Lake Mary. Parts of Kissimmee saw a service upgrade earlier this month. Some neighborhoods in Orlando also began reporting speed upgrades as of mid-May. Some parts of Pasco County, north of Tampa, also received a 200 Mbps upgrade, particularly in planned communities.

Charter Communications is gradually upgrading capacity in the area, formerly served by Bright House Networks. Spectrum traditionally does not announce speed upgrades until an entire service area is complete, which will likely happen in parts of Florida and Texas by early this summer.

In South Texas, San Benito is one of the communities between Brownsville and McAllen seeing Spectrum’s usual download speed doubled from 100 to 200 Mbps.

The speed upgrades come without any additional charges and usually appear automatically. Spectrum has been slowly upgrading its national service footprint to offer the new, higher-speed 200 Mbps Standard service tier. For more than two years, customers in many AT&T landline areas in the midwest and south have had 200/10 Mbps service, designed to help keep the cable company competitive with AT&T’s fiber offering. But service remains stubbornly fixed at 100/10 Mbps in just under half of Spectrum’s service area, particularly in the Northeast, mid-Atlantic, and West regions.

Stop the Cap! expects Spectrum to upgrade all of its service areas to provide 200/10 Mbps service. It remains uncertain exactly when that will happen, however.

Charter Communications has notified customers of Time Warner Cable and Bright House Networks’ home security services that it intends to discontinue both services in February, leaving many customers with hundreds of dollars in equipment that will be rendered useless when the service closes down.

“At Spectrum, we continually evaluate our products to ensure we are bringing you superior, consistent and reliable service. We perform regular reviews of our services and as a result, effective February 5, 2020, we will no longer be providing or supporting Spectrum Home Security service.”

Formerly known as Time Warner Cable IntelligentHome and Bright House Networks’ Home Security & Control, the two home security services are legacies of the two former cable companies acquired by Charter Communications. Charter showed no interest in marketing the security services under the Spectrum brand, although the company agreed to continue supporting existing customers until now. Top executives were reportedly disinterested in the prospect of selling home security products and services.

The news has not been welcomed by customers, many who made substantial investments in optional alarm system add-ons that were purchased by customers. At least one spent over $1,200 bolstering the basic security system offered by the two cable companies with additional door contacts, motion detectors, smoke detectors, keypads, fobs, and other extra cost add-ons. That equipment, which normally supports the Zigbee standard, will be rendered inoperative in February because both companies locked the hardware to their specific cable systems, making it currently impossible to repurpose the equipment with another alarm system or service.

A DSL Reports reader is fuming:

All these devices are Zigbee based, made by a major player in the Zigbee devices game. Under normal circumstances, you would be able to take all your stuff and move it over to your own home automation solution (Samsung SmartThings, Wink, Hubitat to name a few). But nope, not Spectrum’s devices. Early on they were firmware coded to prevent them from being seen and usable within the normal universe of Zigbee devices. With a couple of exceptions Spectrum’s Zigbee devices will only see the Spectrum Zigbee universe. So essentially after Feb. 5, 2020 your house full of Zigbee devices will be useless.

The criminal part in this is that with literally a 10 minute fix and firmware to those devices BEFORE they shutter their service would open them to the universe of compatible Zigbee devices but you can take to the bank that Spectrum isn’t going to do it, otherwise they would have mentioned it with the announcement. All those hundreds of dollars (thousands in some cases) down the drain… how does that make you feel?

Those of you with Home Security should be demanding that Spectrum either buyback each and every device they will be orphaning OR they do the right thing and push a simple firmware update that allows the devices to play in the normal Zigbee universe of devices allowing you to make the decision as to which hub and ultimately service you subscribe to.

Spectrum instead has signed a deal with Abode, a competing provider, that is offering to rip existing Spectrum home security equipment out of subscriber homes and replace it with a new basic system starting at $179 a year. Add-ons will be offered at a 25% discount, but will still require customers to spend hundreds more to replace almost every alarm related sensor in their home. Would-be customers are also warned in the fine print free installation is only applicable for the basic Abode Alarm 8-piece alarm kit. Installation of additional devices or accessories will be at an additional cost, which is likely in the range of several hundred dollars for more elaborate systems.