GIVE us more money and TAKE what we offer you.

Bloomberg News is reporting what many of you already know — it is getting tougher to get a better deal from your cable or phone company.

As Stop the Cap! has documented since the completion of the Time Warner Cable/Bright House/Charter Spectrum merger in 2016, companies are pulling back on promotions, taking advantage of a lack of competition and offering best pricing only to new customers.

Charter Spectrum and Cable One (soon to be Sparklight) are the most notorious for implementing “take it or leave it” pricing. In fact, one of Charter CEO Thomas Rutledge’s chief complaints about Time Warner Cable was its “Turkish Bazaar” mentality about pricing. Rutledge claimed Time Warner Cable had as many as 90,000 different promotions running at the same time, typically targeted on what other companies were theoretically providing service and how serious the representative felt you were about canceling service. Time Warner Cable had basic retention plans available for regular representatives to offer, better plans for retention specialists to pitch, and the best plans of all to customers complaining on the “executive customer service” line or after filing complaints with the Better Business Bureau. There were plans for complaining over the phone and different plans for complaining at the cable store. Rutledge was horrified, because customers were now well-trained on how to extract a better deal every year when promotions ran out.

Last month, Rutledge said he was indifferent about cash-strapped consumers that cannot afford a runaway cable TV bill on a retired/fixed income or the urban poor who can’t imagine paying $65 a month for basic broadband service. To those customers, pointing to the exit is now perfectly acceptable. In fact, companies make more profit than ever when you drop cable television service and upgrade your broadband connection to a faster speed. That is because there is up to a 90% margin on internet service — provisioned over a network paid off decades ago and designed for much less space efficient analog television. Charging you $20 more for faster internet service is nearly 100% profit and costs most companies next to nothing to offer, and Time Warner Cable executives once laughed off the financial impact of so-called “heavy users,” calling data transport costs mere “rounding errors.” 

Even with a much tougher attitude about discounting service, Charter and Comcast are still adding new broadband customers every month, usually at the expense of phone companies still peddling DSL. So if you cancel, there are probably two new customers ready to replace you, at least for now.

Cable One redefines rapacious pricing. The company specializes in markets where the incumbent phone company is likely to offer low-speed DSL, if anything at all. As a result, they have a comfortable monopoly in many areas and price their service accordingly. Cable One’s basic 200 Mbps plan, with a 600 GB data cap, costs $65 a month, not including the $10.50/mo modem fee, and $2.75 monthly internet service surcharge. To ditch the cap, you will pay another $40 a month — $118.25 total for unlimited internet.

In fact, Cable One charges so much money for internet, they even have Wall Street concerned they are overcharging!

When Joshua May tried calling Spectrum to deal with the 29% more it wanted (around $40 a month) after his promotion expired, the customer service representative told him to go pound salt.

“I expected they’d at least offer free HBO or Showtime,” May, 34, of Springfield, Ohio, told Bloomberg News. “They did nothing.”

He did something. He cut the cord. The representative could have cared less.

The product mix cable and phone companies offer has not really changed, but the era of shoving a triple play bundle of internet, TV, and phone service sure has. Charter and Comcast now treat cable television as a nice extra, not the start of a bundle offer. Broadband is the key item, and the most profitable element, of today’s cable package. Beleaguered phone service gets no respect either. Time Warner Cable used to sell its triple play bundle including a phone line for less money than their double play bundle that omitted it. Today, it’s a simple $9.99/mo extra, given as much attention as a menu offering premium movie channels.

Comcast differs from Charter by offering a plethora of options to their customers. If you don’t want to spend a lot for high speed internet, spend a little less for low speed internet. Their television packages also vary in price and channel selection, often maddeningly including a “must-have” channel in a higher-priced package. Like Spectrum, their phone line is now an afterthought.

AT&T and Verizon have their own approaches to deal with reluctant customers. Verizon FiOS customers face steep price hikes when their promotions expire, but the opportunity to score a better deal is still there, if Verizon is in the mood that quarter. Verizon remains sensitive about their subscriber numbers and growth, so when a quarter looks like it will be difficult, the promotions turn up. AT&T prefers to play a shell game with their customers. Most recently, the company has given a cold shoulder to its U-verse product, treating it like yesterday’s news and best forgotten. AT&T literally markets its own customers to abandon U-verse in favor of AT&T Fiber. Verizon and AT&T treat their DSL customers like they are doing them a favor just by offering any service. All the best deals go to their fiber customers.

AT&T Randall Stephenson is a recent convert to the “who cares about video customers” movement. Services like DirecTV Now were originally channel-rich bargains, but now they are a place for rate hikes and channel deletions. Over a half-million streaming customers have already canceled after the most recent price hikes, but Stephenson claims he does not mind, because those bargain-chasers are low-quality customers worthy of purging. AT&T’s dream customer is one who appreciates whatever AT&T gives them and does not mind a parade of rate hikes.

Comcast’s chief financial officer Mike Cavanagh said it more succinctly: seeking subscribers that “really value video and our bundle despite the increases in prices,” and has “the wallet for a fuller video experience.”

Customers who decide to take their business to a streaming competitor are already learning the industry still has the last laugh. As package prices head north of $50/month, that is not too far off from the pricing offered by cable and phone companies for base video packages. In fact, Spectrum has begun undercutting most streaming providers, offering $15-25 packages of local and/or popular cable channels with a Cloud DVR option for around $5 more a month.

If you are one of the millions of former Bright House Networks or Time Warner Cable customers now facing a significantly higher cable bill courtesy of Charter Communications, you are not alone. While incessantly promoting itself as “redefining what a cable company can be,” customers from around the country are complaining Spectrum is charging considerably higher prices for fewer channels and discourages customers from upgrading to higher speed internet services with unjustified setup fees amounting to $200.

It’s all a part of a strategy laid out by Charter Communications CEO Thomas Rutledge, who sees a mission in correcting years of Time Warner Cable and Bright House’s “mispricing” of packages just to keep customers from leaving.

Long term Time Warner Cable customers know the drill. Every year, many call and complain about the high price of cable service and ask customer retention specialists for a better deal to stay. As the economy struggled to recover from The Great Recession, former Time Warner Cable CEOs Glenn Britt and Robert Marcus consciously adopted aggressive “customer retention” deals from 2010-2013 to keep customers threatening to cancel service. Some of these packages were cheaper than new customer promotions. The concept of retention pricing is simple: keeping current customers is less costly than attracting new ones. As a result, customers quickly learned all they had to do to pay a lower cable bill is to ask for a lower cable bill.

Time Warner Cable developed pricing promotions for virtually everyone. Older, fixed income customers were offered cut-rate cable television service when they called to cancel over the size of the bill. Families under economic distress were offered lower priced bundles that included savings as much as $600 annually. Millennials and cord-cutters were offered a half-dozen internet speed tiers at all price ranges, and were usually later targeted with relentless offers to add cable TV to broadband-only packages at cut-rate prices. Time Warner even targeted those stubbornly holding on to low-priced, low-speed DSL by introducing its $14.99 Everyday Low Price Internet offer, at speeds of just 2/1Mbps. That tier, available to anyone, would later become a de facto low-income internet package for those unable to afford the company’s regular broadband prices.

Charter Communications CEO Thomas Rutledge arrived at Charter after spending years at Cablevision, a company that had already started cracking down on promotions and the customers that depended on them year after year as it fought an ongoing price war with Verizon FiOS. Cablevision eventually adopted a “one promotion per customer” policy, refusing to extend new promotional offers to customers rolling off old ones as they expired. Company officials admitted the policy would cost it customers it deemed undesirable, but would assure investors that prices, and earnings would continue to rise well in excess of inflation. The policy of “rate discipline” was applauded on Wall Street where it was seen as serving the interests of shareholders. The increased churn (customers leaving) rate was forgiven as long as revenue continued to grow.

By 2013, Time Warner Cable was under growing pressure to raise prices. Incoming CEO Rob Marcus told investors that year the company would back off on extending promotions and special offers and would stop trying to save every customer that threatened to cancel. He also announced the company would begin restricting who was authorized to offer customer retention deals. Employees were instructed to forward calls from rate-sensitive customers to new national customer retention call centers, where representatives were trained to get customers to voluntarily cut back their cable package before offering a lower rate.

That summer, Time Warner took a beating as more customers chose competitors or followed through on their threats to cancel.

“As we discussed before, this [new pricing] approach represents a conscious decision to pursue subscribers with higher ARPU, higher profit and lower churn even if that means fewer connects,” Marcus told investors in July 2013, defending the results. “So it’s not a surprise that as in the first quarter of 2013, subscriber net adds were down in the second quarter on a year-over-year basis.”

The more Time Warner Cable tried to hold the line on pricing, the more customers left, especially if the competition had a better deal. In early 2014, Comcast announced its intention to acquire Time Warner Cable, starting a lengthy merger review process and distracting the company as it contemplated getting the deal approved in Washington. To protect the value of the company, Time Warner Cable quietly began offering aggressive promotions once again to hold onto customers. Those promotions largely remained as the deal with Comcast collapsed all the way through its acquisition by Charter Communications, which was completed last summer.

Customers were allowed to keep their existing Bright House and Time Warner Cable packages and promotions, and could even sign up for new ones until the company managed to complete rolling out its Spectrum packages and pricing across its acquired service areas over late 2016 and early 2017. Once Spectrum arrived in an area, new customers had to select a Spectrum plan and if a current Bright House or Time Warner Cable customer switched to a Spectrum plan, they could not return to their old plan.

What drives most customers to contemplate switching plans is the bill shock that occurs when an existing promotion or bundled discount expires. Time Warner Cable gradually increased prices on customers coming off of a promotion. Charter hits them all at once with an immediate rate reset to regular prices. The result is a bill increasing $20-50 without warning.

When customers call to complain and attempt to negotiate a better deal, Charter representatives are trained to sell customers regular priced Spectrum plans and bundles. Rutledge calls it sensible and simple pricing. But some customers call it highway robbery, especially when they find out Charter does not consider them to be “new customers” qualified to get the heavily promoted new customer pricing advertised in newspapers and on the website.

Negotiations over pricing with Spectrum’s representatives largely go nowhere. Customers are typically offered “a deal” in the sense Charter’s regular pricing is usually less egregious than Time Warner Cable or Bright House’s “rack rates.” Getting a lower price from Charter as an existing TWC or BH customer typically means cutting back on services.

Charter is likely to continue to lose around 50,000 customers every quarter, if not more, as promotions continue to expire and rates increase dramatically as a result. Rutledge believes once the last Time Warner Cable and Bright House promotions end, the churn rate will settle down. We’re not so sure that is true. Charter’s heavy focus on differentiating its TV package while offering one advertised broadband speed for all is likely to trigger family discussions about cord-cutting over one issue: price. Time Warner Cable customers moving to Charter’s popular Select TV package guarantees losses of several popular cable networks. Getting those channels back will cost at least $12 a month, if not more. That could prompt customers to consider whether cable TV is still worth the price. Time Warner Cable avoided spiking cable TV rates over the last three years precisely to avoid the kind of customer departure stampede Charter is experiencing today.  (To be fair, Time Warner Cable did increase its Broadcast TV and Sports Programming surcharges, but Charter also adopted the Broadcast TV surcharge for its own customers.)

Charter does not prominently publish its retail rates on its website, only promotional rates for new customers. To help readers intelligently decide what package is right for you, we’ve obtained Spectrum’s rate card and enlisted 15 regular readers to interact with Charter to get the best deal possible. This special report is the result as customers navigate to maximize savings without spiking your bill.

Option A – The Big Money Saver: Cancel Service and Come Back as a New Customer

If you want the lowest possible price on Charter service, you will have to cancel your current Time Warner Cable or Bright House package, return your equipment, and potentially survive a 30-day waiting period without Charter service before again qualifying as a new customer. This isn’t a problem if your area is well-served by a competing phone company and many customers in those areas bounce between new customer promotions offered by the cable and telephone company year after year. But if your phone company hasn’t seen fit to upgrade and is still trying to sell low-speed DSL, our savvy readers discovered you can bypass the waiting period and get service back within 24-48 hours, as a new customer at the new customer price.

To manage this, you will need another member of your household willing to put service in their name. Here is how our readers managed it, and following these instructions is important if you want to minimize downtime.

Step 1: Handling your Time Warner Cable/Bright House phone line and email address.

If you have phone service with Time Warner Cable or Bright House and want to keep your phone number, you will need to move it to a new provider. You can pick up a cheap cell phone for under $20 at Walmart or other discount stores and usually port your Time Warner Cable or Bright House phone number to a cheap prepaid cell phone plan you will set up for about a month. Follow all instructions on the cellular provider’s website on how to transfer your number. There is usually no cost for this service. Do NOT cancel your existing cable service until you are notified your phone number was successfully transferred, which can take 24 hours to a week. When you dial your number, it should ring the cell phone. The cable company will automatically cancel your phone service when the number is successfully ported out. If you use TWC’s Phone2Go app, you need to deauthorize all devices on your account from inside the app before canceling service. This will allow you to re-register those devices under your new account.

Also be aware you will lose your rr.com or twc.com email address after canceling service. If you are using either, why? Avoid the hassle by getting an online email address from Gmail (or another provider). This will protect you from future frustrating delays informing your contacts of your latest email address.

Step 2: Return your equipment and cancel service.

Gather your cable box(es), remote(s), cable and/or phone modem and return the equipment to the Charter Cable Store and tell them you are canceling service. When you are asked why you are leaving, explain the rates are too high and you are finished with them. Keep the receipt you are given for returning the equipment until after your final bill arrives to make sure there are no discrepancies.

Step 3: Go home and have a fellow household member sign up as a new customer.

Return home and visit the Spectrum website. You will be entering your home address and will likely be told there is already service at that address. You must return all equipment and cancel service before ordering new service or your order will be canceled.

Proceed by selecting “No, I would like to setup new service for this address.” You will then be shown options to configure your new service. Remember, Charter requires a 30-day waiting period without service before it will consider you a “new customer.” But your spouse, in-home relative, or legal age children can be considered new customers immediately if service is put under their name (if you get pushback for having the same last name, tell them the original account holder has moved out and canceled service and you want to establish service under your own name, or use your maiden name). You can sign up online or use the online chat feature to help expedite your order. If you end up talking to a representative, it will probably be from an offshore call center less likely to hassle you about your qualifications as a new customer. A credit check will be requested. Ask if you can waive that requirement by using a credit card to cover the first month’s payment and skip the inquiry that may land on your credit report.

Building Your New Package

At the time this article was prepared, Charter was heavily promoting an offer of cable TV, broadband, and phone service for $29.99 each for 12 months. Additional cable TV services are available in two packages known as “Silver” and “Gold.” Silver costs an extra $20 a month, Gold effectively costs $40 more when you review the offer carefully. Both bundle premium movie channels with extra basic cable networks you probably used to have with Time Warner Cable or Bright House package. It is important to check what channels are included with each package or you will find some channels missing from your lineup if you switch to Select. If you discover some “must-have” channels are missing, you need not buy premium movie channels as part of the Silver or Gold package if you don’t want them. Charter sells add-ons consisting of bundles of several basic cable channels missing from the Select package for $12 each.

If Charter wanted customers to consider them more honest than their predecessors, they have some work to do.

We found Charter’s promotion to be deceptive because it gives customers the impression they can build lesser packages at the $29.99 price for each component. For example, if you just wanted TV and broadband service, that should cost $59.98 a month for both under the $29.99 each formula, right? Nice try. In fact, that “$29.99 each” price is effectively meaningless because it only applies when choosing a triple-play offer! It would be more honest to advertise a price of $89.97 for Spectrum’s triple-play service. See below to understand what happens when a customer thinks they can save some money by omitting the phone line.

Pick a Package

• Charter/Spectrum’s Select TV package + Internet 60¹Mbps + Nationwide Unlimited Phone Service: $29.99 + $29.99 + $29.99 = $89.97 
• Charter/Spectrum’s Select TV package + Internet 60¹Mbps: $59.99 + $29.99 = $89.98 (It costs more without the phone line!)
• Charter/Spectrum’s Standalone Broadband 60¹Mbps (¹-100Mbps in some areas) = $44.99

It gets even worse for double-play customers if they have a DVR box. Charter waives the $9.99 DVR service fee on the first DVR box in the home, but only for triple play customers. If you skip the phone line and have a DVR, your bill will be $9.99 a month higher without the phone line. You will be better off taking the phone line even if you don’t use it!

Choose Optional Upgrades

• Add Silver TV to Select TV package (Adds additional basic channels + HBO, Cinemax, and Showtime) = Add $20/month
• Add Gold TV to Select TV package (Includes all Silver channels/networks, plus even more basic networks and Starz, StarzEncore, Epix, and The Movie Channel) = Add $40/month
• Add Spectrum Voice International (Unlimited toll-free calls to 70 countries) = Add $5/month
• Add Wi-Fi capability = Add $5/month ($9.99 setup fee may apply)
• Add Internet Upgrade = $104.99 for standalone 100Mbps (non-Maxx) or 300Mbps (Maxx) service + $199 setup fee. For a triple-play internet upgrade: Add $40/mo + $199 setup fee

Missing basic cable channels you want back? If you don’t want to pay the extra $20-40 for Silver or Gold, you can upgrade to get back the basic cable channels gone missing without getting any premium movie channels by choosing one or both add-ons:

Silver Digi Tier 1 ($12) for Select adds the following channels²:

Animal Planet, ASPiRE TV, AXS TV HD, Baby First TV, BBC World News, BET Jams, BET Soul, BYUtv, CBS Sports Network, Centric, CMT, Cooking Channel, Disney Junior, Disney XD, DIY Network, El Rey Network, ESPN Deportes, ESPNews, ESPNU, FM, FOX Deportes, FOX Sports 2, Fuse, FXX, fyi, GAC, Golf Channel, GSN, Lifetime Real Women, LMN, LOGO, MLB Network, MTV Classic, MTV Live HD, MTV2, Nat Geo Wild, NBA TV, NBC Universo, NFL Network, Nick Jr., Nick Music, Nicktoons, Ovation, OWN, Reelz, REVOLT, RFD-TV, Smithsonian Channel, Spectrum News (NYC), Sprout, TCM, TeenNick, Tennis Channel, The Impact Network, Travel Channel, TV One, Univisión Deportes, Uplifting Entertainment, Viceland

Gold Digi Tier 2 ($12) for Select adds the following channels²:

American Heroes, BeIN Sports, BeIN Sports Español, BET, Boomerang, BTN, CNBC World, Comedy Central, Crime & Investigation, Destination America, Discovery Family, ESPN Classic, ESPN College Extra, ESPN Goal Line/Buzzer Beater, FamilyNet, FCS Atlantic, FCS Central, FCS Pacific, FOX Soccer Plus, HDNet Movies, Military History, MLB Strike Zone, MTV, NBC Universal HD, NFL RedZone, NHL Network, Nickelodeon, Outdoor Channel, PAC-12 (Various Regionals), Science Channel, Spike, TV Land, TVG, VH1, Willow Plus Cricket

(²- Channel selection may vary in different geographic areas. This list applies to the Northeast U.S./former TWC territory)

Choose Equipment

Charter DVR box.

Next step is selecting equipment, and this is one area where Charter does better for its customers than its predecessors. At the current time, the cost of the HD-DVR box or an HD box is the same for new customers: $4.99/mo each. The DVR service fee, charged regardless of the number of DVR boxes, is usually $9.99 a month. However, a current triple play promotion waives the fee for the first DVR box. If you want more than one DVR, the $9.99 fee will be levied once on your bill regardless of how many extra DVRs you have. Therefore, if you want more than one DVR, you might as well choose DVR units for every TV set in the home because there is no difference in price between a traditional set-top box and the DVR.

• HD-DVR $4.99/mo per box
• HD Box $4.99/mo per box
• DVR Service: $9.99/mo for two or more DVRs (waived if choosing Triple Play package and have only one DVR box)
• Cable Modem: No charge
• Phone Modem: No charge

If you own your own cable modem, you can continue to use it. If you sign up for both phone and internet service, Charter will likely supply you with a device that handles both the phone and broadband service, but can disable the internet side of the modem to favor your own equipment. Charter does not charge rental fees for either a cable or phone modem. If you do not already own a wireless router for Wi-Fi, Charter will lease you a Wi-Fi equipped modem (usually made by Ubee) for $5 a month. A setup fee of $9.99 may also apply.

Completing Your Order

A self-install kit.

To minimize service interruption, choose the option of a “self-install” kit instead of a service call or having equipment mailed to you. Self-install kits are free without a service charge for a technician to visit to hook up the equipment and you can pick up equipment immediately.

At the end of the order, you should be given your account number and an equipment reservation number. Both are extremely important so be certain to write them down. Use online chat if you did not get one or both. Various verification procedures to activate your equipment and apps may require your account number. If you don’t have it, you may have to wait up to two weeks for your first invoice to be generated showing your account number.

Step 4: Time to pick up your equipment.

Take both your account number and reservation number along with legal photo ID to the nearest Charter Cable Store to pick up your new equipment. Some of our readers accomplished this on the same day they canceled service. You might avoid an awkward encounter by returning equipment at one store location and picking up new equipment at another. The store should give you equipment if your ID at least shows the same physical address where service is located. It depends on local store policies whether the account holder must be present or not.

Step 5: Hook everything up and activate service.

Return home and hook up your equipment. There are a few things you should know, however:

• If you ordered home phone service, there is a mandatory 24-48 hour waiting period before TV and phone services will become active. Internet service may be intermittent at times during this waiting period or not work at all.
• You will be required to complete a quick third-party verification call to activate home phone service and understand Charter’s 911 policies.
• Your cable TV equipment will not authorize until the end of any waiting period, but you can use the Spectrum TV website or app to access TV immediately.
• You may be given a temporary phone number if you are transferring your original landline number back to the cable company until the port request is complete.
• There may be a brief delay of several days before you can use TWC’s or BH’s Wi-Fi hotspots.
• Your first bill will usually be generated within a few days of activating service. Charter bills one month in advance. You can access your bill from the MyTWC, Bright House, or Spectrum account apps. Configure autopay as soon as possible to avoid your account going past-due.

Enjoy 12 months of reasonably priced cable service!

Option B – Understanding Charter’s Pricing for Existing Time Warner Cable/Bright House Customers

The best deals always go to new customers while loyal ones pay more.

Charter Communications considers current TWC/BH customers to be current Charter customers as well and do not qualify for new customer discounts or pricing. However, that does not mean you need to give Charter more money than they deserve.

For most customers, the option of keeping a legacy Time Warner Cable or Bright House Networks package will depend almost entirely on price. Charter is honoring existing BH/TWC bundled service promotions, new customer discounts, and retention plans until they expire (usually after one year, but occasionally two years). To avoid customer bill shock, Time Warner Cable used to gradually reset rates back to regular price over an extended period. Charter does not. Once your promotion is over, your bill will spike by $10-50 a month depending on the promotion you used to have. This rate reset is by design. If you do nothing, Charter will pocket revenue from a rate increase it wouldn’t dare try to impose on every customer. If you call to complain, you just saved Charter marketing expenses trying to convince you to contact them to discuss changing plans.

Because only a minority of customers ever paid regular Time Warner Cable pricing, Charter’s own rates may seem lower in comparison. Retail prices at a cable company are about as useful as the manufacturer’s suggested retail price on a piece of clothing. When the MSRP on a shirt is $55 and you pay $19.95, you may think you are getting a bargain. But if nobody was ever charged $55 for that shirt and it routinely sold for $19.95, that is no deal at all.

Our analysis shows Charter’s rates for existing customers are considerably higher for those who used to bounce from one Time Warner Cable promotion to the next and owned their own cable modem. For customers who just pay the bill and never attempt to negotiate a lower price, Charter’s regular pricing is comparable to slightly less that what customers used to pay Bright House and Time Warner Cable, if you don’t mind losing some TV channels.

The biggest winners of Charter’s Spectrum prices and plans are customers who rent a lot of equipment and subscribe to multiple premium movie channels. Charter charges considerably less for cable equipment and has no modem fee at all. Premium movie channels are bundled into Spectrum’s Silver and Gold TV plans, resulting in significant savings for customers who subscribe to multiple networks. DVR equipment and DVR service fees are also lower.

So get out your current cable bill and review these prices from Charter and compare. Charter does still offer some additional bundled discounts not reflected here. You will not get them unless you ask what offers are available to you. Don’t expect any gift card rebates or other big dollar promotions like Time Warner Cable used to offer. Charter is not a big believer in those kinds of marketing efforts, but the company will pay up to $500 towards any early contract termination fees charged if you switch to them from a satellite or telephone company competitor.

Our recommendations:

• Do not attempt to negotiate using the new customer promotions Charter is advertising. You will get shot down because you are considered an existing customer. If you are primarily focused on price, strongly consider Option A above, despite the hassle. A representative can only give you the deals they are authorized to offer, and Charter’s management has severely curtailed promotional plans, even if it means losing you as a customer.
• You will pay about $65 a month for a basic TV package that, in our area at least, includes just shy of 200 channels. We found that was more than adequate, although we will miss Comedy Central, Nickelodeon, Turner Classic Movies, and BBC World News which are not a part of Spectrum’s base Select package. Adding another $12-24 a month to get these channels back isn’t worth it.
• Charter still sells the equivalent of Broadcast Basic — a small package of over the air stations and some ancillary channels for around $24 a month. It isn’t advertised and frankly is overpriced for what you get, but it is an option if you just want local TV stations.
• If you want HBO, Cinemax, or Showtime, upgrading to Spectrum Silver is worth it. For $20 a month more, you get all three of those premium movie channels plus a number of basic networks that used to be a part of your TWC or BH lineup.
• Check bundled promotions for existing customers carefully. Ask what is currently on offer. You may still find in certain circumstances the triple-play offer of TV, internet, and phone service is very closely priced to the double-play packages.
• If you have a DVR, ask if there are any promotions that waive the $9.99 DVR service fee for the first DVR box. If you are going to have to pay the DVR service fee, check the rates for HD-DVR boxes vs. a traditional HD-set top box. You may just want to put a DVR on every set in the home if the prices are nearly the same. Charter does not offer Whole House DVR service.
• Always choose to pick up any equipment in the local cable store. You will avoid Charter’s truck roll fee to send a technician to your home. Ask about any shipping fees if you want Charter to mail equipment to you. Those fees may be substantial.
• Customer self-install kits are a good option if your home is pre-wired for cable and you require no rewiring. You can get equipment and connection cables for free almost immediately. Don’t spend money at Best Buy or other retailers on HDMI cables and coaxial patch cables. Charter supplies cables at no extra charge that work just fine.
• Charter overprovisions broadband speeds to help the company meet FCC expectations that advertised speeds are comparable to actual speeds. Charter’s 60Mbps (100Mbps in some areas) basic internet service actually performs at around 70/6Mbps in most areas. Charter’s Internet Ultra package (100 or 300Mbps) is not worth the extra expense, particularly when factoring in the $199 setup fee. The more customers that reject upgrading because of the setup fee, the more likely Charter will eventually remove it. There is no justification for the fee other than to gouge consumers looking for faster speeds.
• If you are looking for Charter’s $14.99 Everyday Low Price Internet option and live in New York State, if Charter tells you it isn’t available we would like to know about it. We are monitoring Charter’s compliance with the state’s conditions included in the order granting Charter’s merger with Time Warner Cable and we will forward your complaints to both the state Public Service Commission and Attorney General’s office. If you do not live in New York, this plan is no longer an option unless you already have it.
• Charter’s phone service performs equivalently to Time Warner Cable, but includes a much smaller international toll-free calling area. Spectrum Voice International ($5/mo) gives toll-free calling to 70 countries and is a good value if you regularly call those places.

The following rates are effective April 2017 and packages and pricing will vary slightly in different regions of the country. All prices exclude applicable taxes, franchise fees, and the Broadcast TV Surcharge, which can vary considerably in different service areas (expect to pay an average of $4-7 a month). Charter does not appear to levy a sports programming surcharge.

TELEVISION PACKAGES

$23.89 BASIC SERVICE (Local Channels, C-SPAN, Public, Educational and Government Access, Various Home Shopping Channels)
$64.99 SPECTRUM SELECT (Includes Basic Service, Expanded Service of 120+ basic cable networks)
$84.99 SPECTRUM SILVER (Includes Spectrum Select, Digi Tier 1, HBO, Cinemax and Showtime)
$104.99 SPECTRUM GOLD (Includes Spectrum Silver, Digi Tier 2, TMC, Starz, Encore and EPIX)

Optional Services

$12.00 DIGI TIER 1 (Available with subscription to Spectrum Select, Silver or Gold)
$12.00 DIGI TIER 2 (Available with subscription to Spectrum Select, Silver or Gold)
$38.00 EXPANDED SERVICE (does not include basic service channels)
$7.99 LATINO VIEW (adds additional Spanish language channels not included in Select, Silver, or Gold)

Premium Channels

$15 each: Starz/Encore, EPIX, HBO, Cinemax, Showtime, The Movie Channel, or Starz

Subscription on Demand

$14.99 Too Much For TV On Demand
$6.99 Here TV On Demand
$4.99 Disney Family Movies On Demand
$3.99 Disney On Demand

Other Services (per month)

$9.99 Deutsche Welle Amerika (German)
$24.99 Filipino Pass Plus
$9.99 TV5Monde (French)
$39.99 TVB Jade World (Hong Kong – Cantonese and Mandarin)
$19.99 Mandarin Language Pack (China)
$25.99 Russian Language Package
$19.99 TV Polonia and Polski Radio Warszawa (Polish)
$19.99 SBTN & TVBV (Vietnamese)
$9.99 RAI Italia (Italian)
$19.99-69.99 Hindi Language Networks
$24.99 TV Japan (Japanese)
$12.99 ART TV (Greek)
$12.95 Playboy TV
$12.95 Penthouse
$12.95 Real
$12.95 TEN
$12.95 Hustler
$12.95 VIVID
$24.95 Adult 3-Pack

INTERNET PACKAGES

$14.99 Everyday Low Priced Internet (2/1Mbps) (New York State only)
$14.99 Spectrum Internet Assist (30/4Mbps) (qualified low-income customers only)
$64.99 Spectrum Internet (60/5Mbps or 100/10Mbps depending on area)***
$104.99 Spectrum Internet Ultra (100/10Mbps or 300/20Mbps depending on area)***
$199 One-time Upgrade Fee for Spectrum Internet Ultra
$5 Wi-Fi Service****

SPECTRUM VOICE TELEPHONE SERVICES

$29.99 Spectrum Voice*** (includes unlimited local and long distance calling in U.S., Puerto Rico, Guam, U.S. Virgin Islands, Mexico, Canada, and Northern Marianas)
$19.99 Additional Line
$5 Spectrum Voice International (per line optional add-on; adds unlimited toll-free calling to 70 countries)

INSTALLATION/SERVICE CALL (PER ACTIVITY)

$49.99 Primary Installation/Reconnect (when truck roll required)*
$49.99 Trip Charge**
$49.99 Custom Work Hourly Service Charge
$49.99 Service Call Truck Roll
$49.99 Wall Fish
$49.99 Move Transfer

UNRETURNED EQUIPMENT FEES

$123 Spectrum Receiver
$22 CableCARD™
$130 Tuning Adapter
$496.46 Guide Narration Laptop

MISCELLANEOUS CHARGES (PER MONTH)

(Varies) Broadcast TV Service Charge (expect $4-6/mo on average)
$8.95 Late Fee
$4.99 Reconnection Fee if no truck roll is required
$20 Insufficient Funds/Returned Check Fee
$5 Making a payment over the phone with a customer service representative

* An amplifier may be required for a dwelling with multiple outlets (outlet = digital receiver/modem/eMTA). Technician assessment and professional installation required.
** Applicable when adding and/or relocating outlet, upgrading and/or downgrading services and picking up equipment in some cases.
*** Prices are for standalone service. Rates are lower when service is bundled with TV, internet and/or telephone service.
**** Applies when customers use a Charter-supplied internet modem equipped with built-in Wi-Fi. A $9.99 setup fee may also apply. No fee if you use your own internet router.

Starting tomorrow, new customers signing up for AT&T’s 100+ channel streaming television package will pay $60 a month, up from the $35 promotional price AT&T has been advertising during the holidays.

Today is the last day customers can lock in the $35/month price, and those willing to pay in advance will receive either an Amazon Fire TV Stick (prepay one month) or a 4th generation 32GB Apple TV (prepay three months).

Since launching, DirecTV Now has received mixed reviews. Many customers like the wide range of popular cable channels, and access to HBO and Cinemax for just $5 a month each. But early after launch technical glitches also proved frustrating for many subscribers. Among the most common are cryptic error messages that claim viewers are attempting to stream from outside the U.S. and another that claims customers have too many concurrent streams running. Several app updates have been released to deal with the problems, and complaints seem to be easing.

AT&T hasn’t reported how many customers convert from its free trial to become paying customers, but some analysts remain skeptical if customers without cable television care about a streaming package of linear TV, even at the $35 price point.

Fool.com:

When it first launched, Sling TV seemed like it would be a big hit. That has not proven to be the case possibly because the cord-cutting audience has learned to live without cable and the cord-never folks (people who never had cable in the first place) perhaps don’t miss what they never had.

[…] By putting an end date on this promotion, AT&T can gauge whether enough interest exists in live-streaming television for the company to continue. These are products that seem like a good idea, that have so far been rejected by the marketplace.

That may be because even the top packages from the live-streaming services have holes compared to cable. In most cases they are missing at least some broadcast networks and their interfaces — while not bad for a digital product — are clunky compared to just flipping around with a remote control.

It’s also very possible that cord-cutters and cord-nevers are finding their entertainment elsewhere.

Rutledge: Not worried about the competition

The CEO of Charter Communications continues to consider “cable TV alternatives” like Sling TV and DirecTV Now not much of a threat, because customers appreciate the convenience of having local channels and DVR capability available, and cable operators claim they provide a better set-top box experience.

“I think there’s a lot of reasons why the packages, the big rich packages, will stay together, and why people will continue to pursue their historic [consumer] patterns,” CEO Thomas Rutledge told the annual Citi 2017 Internet, Media and Telecommunications Conference in Las Vegas.

For many ordinary cable TV customers, taking the final step of canceling cable TV has been more psychologically difficult than dropping services like a landline phone because the alternatives available in the marketplace do not yet match the quality and convenience of the cable package.

AT&T apparently also believes a-la-carte cable TV sounds better in theory than practice, considering its marketing efforts have focused on a cable television replacement that most closely resembles traditional cable’s bloated TV lineup. Sling TV’s slim package has not been as successful in the marketplace as some investors had hoped.

For AT&T, there may be more at stake than just a standalone streaming television package. The company announced last week it planned to provide DirecTV Now over its 5G wireless network it plans to test in Austin later this year.

AT&T wants to see how 5G networks manage heavy video streaming traffic, according to a company news release. The development of 5G, which can achieve 14Gbps speeds in lab tests, could be critically important to AT&T’s plan to gradually decommission wired networks in its rural telephone service areas. Should AT&T be able to demonstrate 5G is a more robust replacement for traditional wired communications networks, it could bolster its argument to discontinue wired telephone and broadband service. But it could also mean the eventual end of DirecTV’s costly fleet of satellites in favor of broadband and wireless distribution.

When AT&T announced it would offer 100+ cable television and broadcast network channels under the DirecTV Now brand for $35 a month, Wall Street had a fit.

Craig Moffett, an analyst with Moffett-Nathanson, speculated that AT&T would make at most a profit margin of $5 a month for its $35 a month plan, once programming costs were covered. But then AT&T announced it would sweeten the deal with a free Apple TV Player or Amazon Fire Stick for those confident enough to prepay for the new service. That makes DirecTV Now a purposefully unprofitable service, creating considerable stress for both the cable and satellite industry and their investors.

Variety notes the average DirecTV satellite subscriber delivers about $60 a month in profit to its owner, AT&T. That led the industry magazine to speculate DirecTV Now is a “loss leader” designed to sell its parent company’s AT&T-Time Warner, Inc. merger deal to regulators on the premise of increased competition delivering real savings to consumers.

Thankfully for Wall Street’s nerves, AT&T’s usual practice of marketing things with a lot of fine print emerged in the nick of time, and the $35 dollar price has now turned out to be an introductory offer for early adopters. In the not-too-distant future, AT&T will enroll new customers for its “Go Big” package at a much more profitable $60 a month. Customers who sign up at the $35 rate and stay customers will be able to keep that price as long as they make no changes to their account after the promotion ends.

Moffett

But Moffett warned investors that the traditional cable television model is still under serious threat, and AT&T’s less-promoted “Live a Little” package offering 60 popular cable networks for the everyday price of $35 is the equivalent of AT&T “running with scissors” because it alone could cause millions of cable and satellite customers to cut the cord and stay more than satisfied with a slimmed down cable package.

“Virtually all the channels that anyone would really want, save for regional sports networks” are included in the lighter “Live a Little” package, Moffett added. Customers who loathe watching sports but want a beefier package can also sign up for a $50, 80-channel “Just Right” package that primarily omits sports-oriented channels and a handful of spinoff cable networks few would miss.

Moffett and other Wall Street analysts were hoping AT&T would bloat its cheaper package with home shopping, religion, and other little-watched, low-cost cable networks and then entice customers to upgrade to unlock more popular cable channels. Instead, AT&T’s most premium package — “Gotta Have It” which costs $70 a month adds the “can live without” networks like Boomerang, Cloo, El Rey, Centric, and other little-known channels that typically live unnoticed in Channel Siberia on 500+ channel cable lineups. The highest premium priced package is attractive only for those looking for Starz/Encore channels and the basic cable network that gets no respect — Hallmark Movies & Mysteries (a/k/a the Dick van Dyke Permanent Employment Network.)

“By stacking their base package with all the best networks — likely a requirement for getting the programming contracts at all — they still have the same problem that was highlighted initially,” by Moffett. “Put simply, they aren’t going to make any money.”

That quest for profit is further challenged with subscriber acquisition programs that dole out free Apple TV units to customers willing to prepay for three months of service at the $35 rate or an Amazon Fire Stick (with Echo remote) in return for prepaying for one month of service. Anyone in the market for either device can sign up for DirecTV Now, get the equipment at an attractive price, and consider the 1-3 months of service a free extra bonus. Customers were reportedly lining up at AT&T’s owned and operated retail outlets (not authorized resellers) to pick up devices and sign up for service today.

At these prices and with these promotions, AT&T DirecTV Now could first decimate the subscriber base of its immediate competitors Sling TV and PlayStation Vue, either of which offer a much less compelling value. AT&T can afford to charge a lower price because it has deeper pockets and enormous volume discounts on the wholesale price of cable programming — combining millions of DirecTV and U-verse TV subscribers together to negotiate what industry insiders suspect are major discounts the smaller providers cannot get.

But there are issues likely to be deal-breakers for some would-be DirecTV Now subscribers:

• Local broadcast stations are available only in a handful of selected cities and only a very few include all ABC, NBC, and FOX affiliates. CBS is not participating in DirecTV Now at this time, and that is a major omission;
• NFL Network isn’t on the lineup;
• Regional sports networks are spotty and geographically restricted. Here is a detailed PDF outlining options by zip code;
• There is a limit of two concurrent streams and although video quality is very good, it is not the 1080/HD experience AT&T’s marketing material would suggest. The quality of your internet connection will make a difference;
• No DVR option at this time.

CNET compiled an excellent channel comparison chart to help consumers figure out which, if any, of these upstarts make sense as a cable TV replacement:

$5 a month each for HBO and Cinemax.

Time Warner, Inc. did its part, offering a substantial deal to DirecTV Now to allow customers to add HBO and Cinemax for just $5 a month each, substantially less than what both networks charge customers signing up a-la-carte. This also unlocks access to streaming options on both networks’ websites.

In fact, as a DirecTV Now customer, you will also become an authenticated pay television subscriber, unlocking access on various cable network websites to extra streaming and on-demand options.

The implications of DirecTV Now depend on how long AT&T extends its $35 offer, which is going to be compelling for a lot of Americans. Moffett predicts DirecTV Now could sign up a staggering 11 million Americans — at least two million cannibalized from its own DirecTV satellite customer base, six million cutting the cord on their cable company (including AT&T U-verse) and another three million cord-cutters or “cable-nevers.” Most of the latter are Millennials, and research suggests $35 may be low enough of a price point to sign them up.

AT&T is also raising concerns among internet activists because online streaming of DirecTV Now will not count against an AT&T postpaid customer’s data allowance. This zero rating scheme is seen as an end run around Net Neutrality, particularly because AT&T is not as generous with its competitors. AT&T said it will offer other video streamers the possibility of being exempted from AT&T data allowances, if they pay AT&T for the privilege.

How It Works/Signing Up

AT&T DirecTV Now starts with the Google Chrome 50+, Safari 8+ or Internet Explorer 11+ (on Windows 8 and up) web browsers or the DirecTV Now app. AT&T recommends Chrome for desktop viewing. The service doesn’t work with Firefox, Microsoft Edge, or legacy browsers.

The first step is registering for a 7-day free trial. Before handing over your credit card number, if you scroll down you will find a small free preview option is also available that includes a largely useless streaming barker channel promoting the service and a respectable collection of video on demand options from basic cable networks. The free video streaming option will give you a clue about how the service is likely to perform on your internet connection and devices. For the record, DirecTV Now now supports:

• Amazon Fire TV
• Amazon Fire TV Stick
• Apple TV (4th generation)
• Android^TM phone 4.4 and higher
• Android tablet 4.4 and higher
• Chromecast (for Android only)
• iPad iOS 9 and higher
• iPhone iOS 9 and higher
• iPod Touch version 9 and higher

Support for other devices like Roku is coming next year.

Customers must be within the United States to use the service. If you travel abroad or to any U.S. territories like Guam, the Virgin Islands, or Puerto Rico, DirecTV Now will stop working until you return. When you sign up, keep in mind your billing zip code will mean a lot when it comes to accessing regional sports and local broadcast channels. DirecTV Now uses your billing zip code and your actual location to determine whether you are qualified to access regional sports networks and local stations.

Score a Free Apple TV Player or Amazon Fire TV Stick

Apple TV (4th Generation): Effectively free after prepaying for three months of service.

If you are looking to score an Apple TV (4th generation) or an Amazon Fire TV Stick, you will want to skip the 7-day free trial and enroll in a paid plan immediately, which will allow you to select which player you want. If you want the Apple TV, you will prepay for three months at $35 a month ($105). The Amazon Fire TV Stick only requires you to prepay for the first month of service ($35). One device per email address, but you can sign up for multiple accounts (using individual email addresses) and get a device for each — especially useful for larger families that could run into DirecTV Now’s two-stream limit.

Consider your choices before enrolling. If you want to add premium channels or upgrade your plan, and you select the three-month prepay option to grab an Apple TV Player, adding premium channels like HBO and Cinemax or moving to a higher plan will result in three months of prepaid charges for those upgrades as well, billed automatically to your credit card on file — which amounts to a $30 charge if you select HBO and Cinemax. After your promotional prepaid term ends, your account will continue to be billed at the $35 (plus any add-ons) rate until you cancel. AT&T covers you for the forfeited first free week by extending your bill date out by seven days. Allow 2-3 weeks for the device(s) to be shipped to you.

You can also sign up at an AT&T owned and operated retail store, but be aware AT&T “authorized” reseller stores are not participating in this promotion. That may allow you to bring home a device today.

Don’t care about the device promotions? Take the 7-day free trial, but be aware that you are giving AT&T your credit card number and charges begin immediately after the free week ends unless you cancel. Here’s how:

1. Sign in to your account.
2. From your User Account overview page, select Manage My Plan.
3. Select the Cancel Plan link.
4. Choose one of the listed reasons.
5. Select Cancel Now to confirm cancellation.

Your subscription will continue until the end of the billing cycle. No refunds or credits are provided for partial months. Your account will revert to Freeview demo status after you cancel a subscription.  You can add a subscription package back at any time.

Oddly, AT&T is not charging sales tax for New York, California, Maryland or Virginia residents. Customers in states like Tennessee where AT&T provides local phone service were most likely to face sales taxes. Those signing up early are in the best position to exploit what appears to be an oversight, or it represents the first time the New York Department of Taxation and Finance left money on the table.

Streaming from Your AT&T Wireless Device Does Not Count Against Your Data Allowance

If you’re a DirecTV Now and AT&T Wireless customer, streaming most DirecTV Now movies and programs over the AT&T wireless network won’t count against your data usage allowance, according to AT&T. But believe it or not, AT&T’s fine print indicates advertisements and non-streaming app activity do count! There are some other important disclosures to be aware of:

• You must be on the AT&T Wireless network within the U.S. (U.S. territories are not qualified for zero rating);
• You must be a postpaid, not a prepaid AT&T wireless customer to qualify and must not have “data block” on your mobile line;
• If you are grandfathered on an unlimited data plan, using DirecTV Now will not count against the 22GB data threshold which subjects you to speed throttling;
• This offer may disappear at any time and/or is subject to change.

DirecTV Now Qualifies You as an Authenticated Pay Television Subscriber

Many cable networks require customers enter their cable, satellite, or telco TV login credentials to unlock video streaming and on-demand features. DirecTV Now is a qualified provider for these websites (more coming):

• ABC
• Disney
• Disney Jr.
• Disney XD
• ESPN (WatchESPN)
• Freeform
• HBO GO (requires subscription to HBO)
• MAX GO (requires subscription to Cinemax)

Other networks are not yet enabled for DirecTV Now. CNN, for example, has a prompt for DirecTV satellite customers to log in, but DirecTV Now has its own account registration system.

Local Channels Are Very Spotty

Local over the air channels are very limited on DirecTV Now and are geographically restricted. You can access these channels only if you are located in or very near to the cities listed below and your billing zip code is in the same area. If you travel outside of the immediate area, live streaming will stop working until you return.

Giving the Service a Test

Stop the Cap! enrolled as an ordinary customer this morning and gave the service a rigorous test, including multiple streams over our 50/5Mbps internet connection. The service debuted today, and there is little doubt there is intense interest from consumers, so we expected some performance problems from the initial demand. We didn’t see any evidence of traffic congestion, however, and that is a good sign.

AT&T’s John Stankey explaining DirecTV Now.

A similar test of Sling TV did not perform as well during peak viewing times, when streaming problems emerged. DirecTV Now seems to be built to withstand intense demand.

One customer with a 6Mbps U-verse internet connection “in the boonies” was impressed the video quality of DirecTV Now was high even on a relatively slow DSL-like connection.

“This blows SlingTV away,” the person shared. “I only have U-verse 6Mbps internet service and it is not pixelated or buffering at all. Looks exactly like my regular DirecTV picture.”

AT&T published these recommendations for DirecTV Now customers regarding internet connection speeds:

• 150kbps – 2.5Mbps – Minimum broadband connection speed for Mobile devices
• 2.5 – 5.0Mbps – Recommended for HD quality

We’ve been led to believe DirecTV Now should perform equivalently to 1080i HDTV service (depending on the video source of course). We cannot say we agree it does right now. We noticed significant artifacts on high-motion video and picture graininess that left us feeling this was closer to a 720p HD experience. It isn’t possible to say whether the video player reduced playback quality because of internet traffic issues we were unaware of or if this is how the picture is supposed to look. It did not significantly detract from the viewing experience and the lack of buffering and pixelation was far more important to us.

AT&T store in NYC.

DirecTV Now would serve adequately as a cable TV replacement if it had local station coverage and some type of DVR. At present, DirecTV Now is limited to a “Restart” feature that allows you to restart shows already in progress on certain channels, but you cannot fast-forward or record a restarted show. Once AT&T introduces a cloud-based DVR and fills out the local station lineup, this service could be lethal to overpriced cable TV packages.

AT&T’s marketing attempts to undercut the powerful position of inertia by setting an unknown time limit for customers to enroll in the $35 a month video package. If you don’t sign up today, you may not get the “free” Apple TV or Amazon Fire Stick and a respectable cable TV package for just $35 a month — about half what cable operators are charging these days for their bloated video packages. AT&T doesn’t care if you stick with your current cable provider and signup for DirecTV Now, if only to grab free streaming video equipment while sampling the service. They get their money either way.

Had AT&T permanently kept the price at around $35, many consumers would likely sit back and wait for AT&T to sort out the streaming contract issues it has with the TV networks — CBS in particular, and come up with a DVR solution before those potential customers decided to sign up and make the change. Based on several “hot deals” websites, the mentality among many consumers is to “lock in” the $35 price now and wait for AT&T to build out the package while continuing to invest $35 a month on it. That doesn’t seem so bad when you get free electronics as part of the deal.

Our Final Take

AT&T’s DirecTV Now is a potential winner and worth signing up for because of the introductory price and free equipment offers. But if you decide not to disconnect your cable/satellite television service, it is probably safe to drop DirecTV Now after your prepayment expires and return to resume service a little later. There will probably be some warning when AT&T will end the introductory price for the service, and interested customers can hop back on board before that date arrives. DirecTV Now will be a formidable competitor, but it will fight against consumer resistance to confront the cable company and cut cable’s cord until it solves the local channels issue and has a credible DVR option. The service could also use an add-on to make adding additional concurrent streams possible and more affordable than just signing up for a second account.

Don’t count out Big Cable just yet. With data caps and other internet overcharging schemes, Comcast, Cox, Suddenlink, and others can play games with usage allowances to deter customers from streaming all of their video entertainment online at the risk of blowing past their allowance. DirecTV Now’s $35 price won’t mean much after overlimit fees begin appearing on your internet bill.

Apple TV

Apple’s ability to successfully force its way into the pay television business with a cord-cutter’s streaming TV solution has been left languishing since 2009, thanks to some of America’s largest cable and entertainment companies who think Apple is arrogant and out of touch.

The Wall Street Journal today published a story showing how Apple’s plans to challenge the cable TV industry much the same way it revolutionized digital music has rubbed the big and powerful the wrong way. Apple’s desire to launch a cheaper streaming video service with a slimmed down TV lineup and robust on-demand options has flopped, because executives have no interest in bending to Apple’s way of thinking.

In 2009, Apple decided it wanted in on the streaming pay-TV business. At the same time Time Warner Cable began experimenting with data caps, Apple was approaching local stations and broadcast networks and offering them premium payments — higher than what the cable industry itself paid — for Apple’s choice of stations and cable networks. The deal meant Apple would alone be free to pick only the channels it wanted to carry, a major departure from the industry practice of contract renewals that bundled popular networks with spinoff and lesser-known channels cable operators didn’t want to carry. Apple’s hard-charging negotiator, Eddy Cue, seemed to believe that if Apple was at the negotiating table, that alone would be enough to get a deal done. It wasn’t.

Two years later, Time Warner Cable approached Apple seeking to launch a joint TV venture that could compete nationwide with satellite and phone company competitors. The talks were at the highest levels at both companies, involving Time Warner Cable’s then-CEO Glenn Britt, Cue, and Apple CEO Tim Cook. Cook also approached Brian Roberts, CEO of Comcast, promising him the service would only be sold through cable operators — good news for Comcast but bad news for open competition.

This time, Apple sought money from the cable companies, not the other way around. Cable operators were told they would need to pay $10 a month per subscriber to Apple, with no guarantee that fee would not increase in the future. Just as concerning was Apple’s insistence that subscriber authentication would require customers to use their Apple IDs, a departure from the cable industry’s push to adopt TV Everywhere, where customers could unlock streaming video from any cable network simply by logging in with the username and password they set up with their pay TV provider. Apple was also characteristically secretive about their user interface and left cable industry executives flummoxed when they asked Apple to sketch out what the service would look like on a napkin. An Apple official would only respond that their interface would be great and “better than anything you’ve ever had.” The fact Apple refused to answer the question did not go unnoticed.

Nor did Cue’s unconventional way of negotiating with some of the most powerful entertainment executives in the country. When Jeff Bewkes, CEO of Time Warner (Entertainment) agreed to meet with Cue about Apple licensing Time Warner’s critical networks — which include HBO, CNN, and TNT — Apple’s negotiator showed up 10 minutes late. While Time Warner’s negotiators were smartly dressed in business attire, Cue turned up wearing jeans, a Hawaiian shirt, and sneakers with no socks. It went downhill from there, because Apple insisted on valuable on-demand rights to full seasons of hit shows and permission to let viewers store their favorite recordings on a massive cloud-based DVR that included features like automatic recordings of hit shows and advanced ad-skipping technology.

Crickets.

More than a few programmers used to having their way with cable operators were shocked by Apple’s ‘arrogance’ and unconventional way of doing business. The newspaper reports one former Time Warner Cable executive watched with amusement as stone-faced programmers were unimpressed with Apple’s demands.

Jon Lovitz offers a visual hint what Mr. Cue must have looked like meeting with high-powered execs at Time Warner (Entertainment)

“[They] kept looking at the Apple guys like: ‘Do you have any idea how this industry works?'” said the former executive.

Apple responded ‘doing new things requires changes that often are unsettling.’

A year later the negotiations were on life support, as Apple struggled with the arrival of 2015 with no slimmed down streaming TV package to offer Apple TV owners.

Apple’s demands flew in the face of decades of cable industry business practices, which give channel owners virtual guarantees of rate hikes with each contract renewal, the right to force their spinoff networks on the cable lineup in return for a comfortable renewal process, and the cable industry’s right to an assurance everyone was getting the same kind of deal (except volume discounts). Any deviation from this would result in panic on Wall Street, as investors’ dependence on perpetually improving quarterly financial results based on revenue boosts from new or higher fees would come crashing down if a company like Apple got a better deal.

One industry insider suggested once a company like Apple got a deal on sweetheart terms, every other distributor would demand the same deal (and many have contract provisions that require it). Apple may have assumed that because it managed to get the recording industry to agree to its iTunes digital music distribution deal 15 years earlier, so the cable industry would go. Except the road to cut-throat deals for entertainment programming is littered with dead-end business plans that had to be quickly modified when the discounts ended.

Netflix and Starz both learned expensive lessons when early discounts on licensing deals ended after Hollywood saw how much money those companies made from streaming. When licensing contracts expired, entertainment companies sought massive increases in licensing fees to “fairly share” the proceeds. Netflix ended up walking away from several studios, seriously impacting their online streaming catalog. Eventually, Netflix decided if they cannot beat the studios, they should join them, creating original programming to attract and keep subscribers.

Cue in real life

After almost a decade spent trying to get into the online cable business, Apple now seems more likely to follow Netflix, Amazon, and Hulu, and devote time and money on developing its own original programming. Instead of trying to license and bundle network programming, Apple TV today supports independent apps created by various networks. Viewers still get to watch their favorite shows, Apple does not have to pay for streaming rights, and there is a joint effort to create and support a single login so viewers can get access to content without constantly re-entering usernames and passwords.

Apple’s original shows include “Planet of the Apps,” a reality series, a miniseries being developed by Dr. Dre, and a spinoff of CBS’ “Carpool Karaoke.” The shows serve a dual purpose — entertaining viewers and helping push sales in Apple’s App Store and streaming music service.

Also under consideration are big budget, critically acclaimed original shows and series that could generate positive buzz for Apple TV, like “House of Cards” has done for Netflix.

Developing programming keeps negotiators like Apple’s Mr. Cue from having to challenge a very profitable pay television industry on their terms and spares Apple from creating a cable package of linear TV channels subscribers increasingly don’t care about. Viewers want on-demand access to the shows they want to see and don’t care that much about who supplies them and how.

So in the end, the intransigence of Big Cable and Hollywood studios that are now worried about cord-cutting may have done Apple an enormous favor, sparing them from being entangled in a business that buys and sells channels to fill a bloated and expensive cable television lineup more and more consumers are now deciding they can do without.

Updated: Link to WSJ story corrected.