Charter Communications has announced price changes and new fees for existing Time Warner Cable customers that will take effect Dec. 15, 2016:

• Late payment fee increases from $8.50 to $8.95
• If a live agent assists you with making a payment over the phone, there is a new fee of $5 for each transaction. Paying with an automated attendant should still be free.
• Damaged/unreturned equipment charges are changed (some fees increasing, others decreasing): Traditional Set top box: $123, Wi-Fi Modem/Extender/Router/Gateway: $78, Access Point: $172

Charter Communications is taking a hard line against extending promotional pricing for Time Warner Cable and Bright House Networks customers and Wall Street predicts a major exodus of customers as a result.

UBS analyst John Hodulik predicts Charter’s new ‘Just Say No to Discounts’-attitude will result in customers saying ‘Cancel’ and he estimates a massive loss of at least 75,000 Time Warner Cable television customers in the third quarter as a result, with many more to follow.

Charter Communications’ executives have ordered a hard line against giving existing customers discounts and perpetually renewing promotional pricing, a practice Time Warner Cable has continued since the days of the Great Recession to keep customers happy.

Time Warner Cable and to a lesser extent Bright House have learned antagonized, price-sensitive customers were increasingly serious about cutting cable’s TV cord for good when the cost becomes too high to justify. Time Warner Cable dealt with this problem by giving complaining customers better deals, often repeatedly. That mitigated the problem of customer loss, allowed the company to retain and grow cable television customers and even helped minimize the practice of promotion shopping common in competitive service areas.

For years, Time Warner and Bright House customers learned they could enroll in a year-long promotion with the cable operator and then switch to a year-long new customer promotion from AT&T U-verse or Verizon FiOS and then jump back to the cable company with a new promotion. In many cases, they even got a gift card worth up to $300 for their trouble. Charter Communications thinks their new “pro-consumer policies” of not charging rapacious equipment fees and sticking to “simplified” prices will delight customers enough to keep their loyalty. Good luck.

Licensed to print money

Wall Street doesn’t believe Charter’s reputation or their ‘New Deal’ for TWC and BH customers will be perceived as making things better, especially for cable television and its cost. As customers roll off promotions at Time Warner Cable, the bill shock of watching rates rise up to $65 a month will speak for itself. The higher the price hike, the more likely it will provoke a family discussion about dropping cable television service for good.

In Los Angeles and Texas, where Charter premiered its new “simplified pricing” for Time Warner Cable customers, the response has been underwhelming, with many customers deriding it as “simply a price hike.”

David Lazarus, a reporter for the Los Angeles Times, characterized the transition from TWC to Charter this way: “Meet the new cable company. Same as the old cable company.”

Culver City resident Jack Cohen provides good evidence of what happens when customers get their first bill from Charter, and it is higher than expected. Cohen received his first bill for $162, $22 more than his last Time Warner Cable bill of $140 a month, because his promotion with TWC expired. As a result, he canceled cable television after Charter wouldn’t budge on pricing. Cohen said “cancel” and never looked back. He now pays the new cable company $40 less than he gave Time Warner Cable, because he now only subscribes to broadband and phone service. Charter’s ‘simplified pricing’ cost the cable company more than the $22 extra they were originally seeking.

Lazarus learned when his own TWC promotional package expires in December, Charter had a great Christmas present waiting… for themselves. Lazarus’ $65 promotion will rise to $120 a month — almost double what he used to pay. But Charter also offered Lazarus a better deal he can refuse, a new Charter-Spectrum package of the same services for the low, low price of $85 a month — still a 30% rate hike.

In Texas, customers coming off promotions are learning first hand how Charter intends to motivate customers to abandon the Time Warner Cable packages Charter promised they could keep — by making them as unaffordable as possible and offering slightly less expensive Charter/Spectrum packages as an alternative.

“But it’s still $45 more than what I was paying Time Warner Cable for the same damn thing,” complained Ty Rogers to a Charter retention specialist, after his Time Warner Cable shot up once Charter took over. He is waiting for Google Fiber to arrive and then plans to cancel everything with Charter.

Charter’s billing practices also are dubbed the weirdest in the cable industry by The Consumerist, because Charter loves to hide taxes, surcharges, and fees by rolling them into other charges on the bill and cannot be accurately accounted for:

Charter breaks out federal, state, or local taxes and fees for some services (TV) but not for others (voice). Also, depending where you live and when you signed up for services, the taxes, fees, and surcharges that do appear may be listed under different sections of the bill or not at all.

While their procedure does result in many fewer line items for consumers, it does produce more confusing bills overall, and make it harder to compare against other providers in a truly apples-to-apples kind of way.

‘No, no, no,’ counters Charter/Spectrum to FierceCable.

“Our internet packages are competitively priced, but we offer faster starting speeds and don’t charge an additional modem lease fee on top of the cost of service (that is an additional $10 at legacy TWC),” Charter spokesman Justin Venech said. “That pricing is better and more attractive to customers. Our video packages are simpler and more robust. For example, our Spectrum Silver package includes over 175 channels plus premium channels HBO, Showtime and Cinemax while a comparable TWC package would have charged extra for premiums.  We don’t add on additional fees and taxes to our voice product that our competitors do, and our equipment pricing for video set-top boxes are much lower with Spectrum than our competitors or legacy TWC or BHN.  Our new Spectrum pricing is $4.99 for a receiver vs over $11 at legacy TWC.”

“That assumes, like every cable company always does, that we want HBO, Showtime, and Cinemax, don’t already own our own cable modem, and are not dancing in the streets over an even bigger television package filled with crap we don’t want,” said Rogers. “Charter also takes away Time Warner’s excellent long distance phone service, which let me call almost all of Europe without any toll charges or an extra cost calling package. I paid Time Warner $10 a month and could talk to someone in France all night long if I wanted. With Charter, it’s more for less.”

Rogers’ promotion included his DVR in the promotion, so comparing Charter’s $4.99 vs. TWC’s $11 for a DVR made no difference to him either.

“You can argue all day about the ‘value’ you are offering, but you can’t argue your way out of a bill that is $45 higher than last month,” Rogers complained.

Overall, the latest spate of cable mergers and AT&T’s acquisition of DirecTV has been bad news for consumers, who face fewer competitive prospects and a new, harder line on promotional pricing. AT&T customers are discovering AT&T is more motivated to get U-verse TV customers to switch to DirecTV and less interested in providing discounts. The cable competition knows that, making fighting for a better deal much tougher if Charter’s only competitor in an area is AT&T. Cable operators also understand there is a built-in reluctance to switch to satellite by a significant percentage of their customers.

Charter’s pre-existing customers not a part of the TWC/BH merger are not too happy with Charter’s Spectrum offers either. At least 152,000 video customers said goodbye for good to the cable operator’s television packages.

Hodulik predicts there are more where that came from as the rest of the country gradually discovers what Charter has in store for them.

Charter Communications is wasting no time looking for increased shareholder value by slashing jobs in states where regulators placed few, if any conditions on the acquisition of Time Warner Cable and Bright House Networks.

The Charlotte Agenda reports North Carolina-based Time Warner Cable employees are just starting to feel the pain of the multi-billion corporate cable merger, with the elimination of 258 jobs in Time Warner Cable’s accounting department in Charlotte. Nearly 20% of the workforce, including 70 senior accountants, 45 staff accountants, 44 accounting supervisors or managers, and an even larger number of finance analysts and accounts payable specialists will be collecting unemployment starting Nov. 1 and extending through the second quarter of 2017.

Company officials claim affected employees can seek employment with Charter Communications at other office locations around the country.

North Carolina regulators effectively rubber-stamped the acquisition of Time Warner Cable in granting its approval. The only condition Charter Communications has to meet is notifying North Carolina’s Department of State Commerce at least 30 days before those unlucky employees are out of a job.

Time Warner’s Enhanced DVR works fine, but those avoiding TWC equipment run into DRM problems.

If you’re accustomed to using Time Warner Cable’s DVR box, you probably don’t realize how heavy-handed Time Warner Cable can be with copy protection, but as set-top box alternatives proliferate, more customers are encountering the frustration of digital rights restrictions.

For several years, customers using alternatives to Time Warner’s set-top boxes or who wanted to store their DVR recordings on another hard drive quickly discovered the cable operator heavily enforces copy protection mechanisms designed to thwart digital archival copies of programs recorded from cable television.

Copy Control Information (CCI) is an invisible flag sent in digital television signals that is designed to give control to copyright owners over how their shows can be duplicated. Since at least 2007, Time Warner Cable and Bright House Networks customers have been frustrated if they use their own DVR or devices like TiVo. When customers attempt to copy their recorded shows to other devices or playback units in their home, the CCI flag often stops the copy cold.

ZatzNotFunny has covered this issue for years, noting Time Warner Cable, Bright House, and Cox have been particularly unfriendly to third-party set-top boxes like TiVo.

Among cable operators, the most common flags are Copy Freely and Copy Once. Many cable operators set their basic cable network CCI flags to “copy freely,” while premium pay movie channels like HBO are set to “copy once” — primarily to allow time-shifting devices like a DVR to record the show. Once your DVR has a copy of a show with a restricted flag, it cannot be copied again.

Digital Rights Management policies are part of the nation’s struggle between Hollywood-inspired copy protection and the public’s right to make and store recordings of programming for their own personal use. Some telecom companies like Verizon and Comcast have come down more in favor of consumers, while Time Warner Cable and Bright House (which have traditionally shared engineering practices and programming contracts for at least a decade) are far more responsive to Hollywood. The result for subscribers with $200 cable bills is endless frustration, especially if they choose not to use the pricey set-top boxes and DVRs supplied by the TWC or Bright House.

CableCARD and TiVo users, as well as those relying on Extenders for Windows Media Center like the Xbox 360 are often stymied by CCI flags, especially when a consumer tries to watch a show in one room and finish it in another using Multi-Room Viewing features.

ZatzNotFunny rates TWC, Bright House and Cox as unfriendly to alternative set-top boxes like TiVo. (Image: ZatzNotFunny)

Wikipedia supplies insight into the available CCI options cable operators can choose to use for cable television channels:

• 0x00 – Copy freely – Content is not copy protected.
• 0x01 – Copy No More – A copy of the content has already occurred and no more copies are permitted.†
• 0x02 – Copy Once – One recording can be made, but it cannot be copied to another device.†
• 0x03 – Copy Never – the content can be recorded and viewed for 90 minutes after transmission, and is not transferable.†
• 0x04 – Content is Copy Once for digital output, but would have Macrovision 7 Day Unlimited restriction applied on the analog outputs. This affects content viewed either on an HDTV with component cabling or on a standard definition TV. It also affects content saved to VCR or DVD when the recorder is connected to an analog output on the DVR.†
• 0x07 – Content is Copy Never for digital content (deleted after 90 minutes) and Macrovision 7 day/24 hour for content recorded from analog channels. Content cannot be transferred via TiVoToGo transfers or MRV, and cannot be saved to VCR or DVD.†

† – Any live stream with a CCI flag set higher than 0x00 is to be encrypted or protected in a way that only trusted platforms that will obey the flag (Such as Microsoft’s PlayReady system used in Windows Media center) can access it.

A Time Warner Cable customer known as MachineShedFred noticed this problem first hand and wrote about it in a complaint to Time Warner Cable back in March, and Stop the Cap! reader Chris N. pointed us to this ongoing issue:

The only software that allows me to use the CableCARD hardware that you officially support and distribute is Windows Media Center, which Microsoft is no longer developing, and is no longer distributing.  All other DVR software available for every platform will not work, as they cannot decrypt the video stream due to the abuse of the CCI flag.

No other cable company in the US abuses the CCI flag in this manner, and every other cable subscriber in the US that isn’t on Time Warner has a wide choice of solutions for enjoying their service better than we can as your subscribers.  Why are you restricting the choices of your subscribers for no reason?  It’s clearly not contractual from the media networks, as they would have pushed for the same stipulations with at least one of your competitors.  Yet, anyone outside of TWC’s monopoly can use any other software they want.

When even Comcast allows their subscribers more subscriber-friendly choices, you know you’re doing it wrong.  Please revisit this ridiculous policy and cease the overuse of the CopyOnce CCI flag that unduly burdens your subscribers by forcing them to replace perfectly good hardware, or replace YOU.

Some believed this problem could eventually resolve itself with Charter Communications’ buyout of Time Warner Cable and Bright House Networks. Would Charter bring their own policies to affected TWC/BH customers, or will Charter customers soon have to contend with the CCI CopyOnce flag loved by Time Warner Cable as well.

An official complaint to the FCC brought a cryptic non-answer answer from William Wesselman, Time Warner Cable’s regulatory compliance counsel. Wesselman implied the liberal use of the CCI  CopyOnce flag was the result of restrictions in contracts with major programmers, which seems unlikely because other cable operators — larger and smaller — have successfully navigated around this issue. Wesselman’s answer implies as Time Warner Cable and Bright House are brought into the Charter hegemony, “the policies of the two companies will ultimately become the same.”

Of course, he never defines which policy Charter, TWC and BH customers across the country will eventually get by sometime in 2017.

Mr. Wesselman’s full response:

At this time, TWC and Charter continue to integrate their two systems into one. Both TWC and Charter, like other distributors of multichannel video programming, negotiate the distribution rights for the content it carries independently with individual rights holders. These bilateral commercial negotiations take into consideration many different factors, include the content protection and digital rights management requirements of the rights holder; applicable law, license and regulations; and the interests of subscribers. Each of these commercial negotiations, and the terms of the agreements that result, are unique to the specific distributor and programmer involved. As the integration of the two companies continues, Mr. X will notice that the policies of the two companies will ultimately become the same based on our agreements.

Arris will manufacture the next generation of set-top boxes for Charter Communications, supporting hybrid IP/QAM video and the legacy technology still in place at Charter-acquired Time Warner Cable and Bright House Networks.

WorldBox 2.0 will support both a traditional and cloud-based user interface, as well as new content options and video features that could eventually bring a cloud-based DVR service for Charter customers. Charter is dealing with at least three different cable system architectures — its own network and those of its two recent acquisitions: Bright House and Time Warner Cable. Charter will be expanding its current downloadable conditional access (DCAS) capability to both those cable companies, expanding Digital Rights Management (DRM) to cable television channels. Time Warner and Bright House reportedly rely on an older CAS system.

Charter is strengthening video security to remotely switch on and off cable TV service for new/disconnecting customers without having to send a truck to the customer’s home.

“While Charter is focused on providing a secure video product on all devices, WorldBox 2.0 provides the same advanced video experience consumers are demanding on traditional television sets, and gives Charter the flexibility to deploy a single platform across our entire expanded network,” said Jim Blackley, Charter executive vice president of engineering and IT, in a statement. “Our ongoing work with Arris – in developing this platform, including the downloadable security component – and the establishment of the warrant program, speaks to the strength of our long-standing relationship and the value of ARRIS’s expertise in large-scale, next-generation deployments.”

Charter’s appreciation for Arris is reflected in an agreement the cable company has with the set-top box vendor to buy up to six million shares of Arris stock over the next 24 months, depending on how much business Charter provides the company.

Charter’s WorldBox 1.0 originally debuted in 2015 with the assistance of Cisco, but Charter has clearly shifted towards Arris. There has been considerable consolidation in the set-top box marketplace over the last year. Cisco sold its cable equipment business to Technicolor and Arris has grown larger after acquiring its competitor Pace.