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Charter Donating $10 Million to Civil Rights Groups That Lobbied for Time Warner Cable Merger

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.

Cable Companies See Large Gains in Mobile Customers During COVID-19 Pandemic

With record-breaking unemployment and an economy in tatters, consumers are abandoning high-priced mobile plans and switching to lower priced cable operator mobile plans.

Comcast, Charter/Spectrum, and Altice USA saw dramatic customer gains of 547,000 new customers in the first quarter of 2020, primarily at the expense of AT&T, Verizon, T-Mobile, and Sprint, according to Wall Street analyst firm MoffettNathanson. The four largest wireless carriers saw a collective 1.3% drop in subscribers, which counts as the worst performance the traditional wireless sector has seen since 2014. But their loss was the cable industry’s gain, with three cable operators achieving a 130% increase in new mobile customers during the first quarter of the year. The three cable companies now have a combined 3.7 million wireless customers.

Comcast and Charter contract with Verizon Wireless for 4G LTE and 5G service, while Altice USA provides its mobile customers with access to Sprint’s network. The cable operators keep costs down by favoring Wi-Fi connections wherever possible.

Two factors are driving the growth of cable industry mobile plans:

  1. Price: Altice USA sells its mobile service at just $20/mo per line. Comcast and Charter both sell unlimited data, talk and text plans for $45 a month per line and a “By the Gig” plan option that includes 1 GB of data bundled with unlimited calls and texting for a flat $14/per gig at Charter and $15/1 GB or $30/3 GB or $60/10 GB at Comcast. With unemployment numbers high and consumers worried about the future of the job market, economizing expenses matters.
  2. Network: Comcast and Charter both rely on Verizon Wireless, recognized as one of the strongest wireless performers in terms of coverage and signal quality. Customers can switch to a cheaper cable company mobile plan without sacrificing network coverage.

MoffettNathanson’s Craig Moffett noted that the COVID-19 pandemic closed most wireless retail stores, and there was a wide belief that wireless industry sales would be anemic at best during the spring as people stayed home. Instead, the cable industry heavily marketed its wireless plans and expanded the number of pre-owned devices qualified for “Bring Your Own Device” switching, allowing customers to swap SIM cards instead of being forced to buy new devices.

“Given the levels of economic hardship that have accompanied the lockdowns, one can reasonably imagine that these kinds of hyper-aggressive pricing plans won’t have much trouble breaking through to capture market share,” Moffett said in a research note.

Moffett predicts the second quarter will show an even greater number of customers dropping traditional mobile plans in favor of plans provided by their local cable company. Some customers report saving over $100 a month by switching.

One potential downside: customers must subscribe to other products sold by their cable provider to get the best price on wireless service. Comcast’s Xfinity Mobile applies a $20 per line monthly charge if the customer does not maintain at least one of the following: Xfinity TV, Internet or Voice service. Spectrum customers that cancel internet service with the cable company will pay an additional $20 monthly charge per line, have Spectrum Wi-Fi speeds limited to 5 Mbps, and are not allowed to add any additional mobile lines.

Spectrum Upgrades Standard Speed Plan to 200/10 Mbps in Central Florida and South Texas

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 Spectrum’s “False Ads” Cost Windstream $3-5 Million in Profits, Expert Witness Testifies

Windstream Communications lost between $3.2-5.1 million in lost profits because of a 2019 false advertising campaign run by Charter Communications in areas where the two companies compete for internet customers, claimed an expert witness in a court hearing to determine the damages Charter must pay.

In December, U.S. Bankruptcy Judge Robert Drain issued a summary judgment finding Charter responsible for sending out misleading advertising fliers that violated the federal Lanham Act and false advertising laws in place in some states.

“Shortly after Windstream filed for Chapter 11 protection, Charter commenced a false and misleading advertising campaign designed to cause irreparable injury and damage to Windstream’s reputation and business,” the original lawsuit filed with the U.S. Bankruptcy Court for the Southern District of New York stated. “Charter targeted Windstream customers in Alabama, Georgia, Kentucky, Ohio, Nebraska, and North Carolina, which are several of Windstream’s top performing states.”

“On the envelopes for the advertisement, Charter intentionally utilized Windstream’s trademark and signature color pattern to mislead Windstream customers into believing that the advertisement came directly from Windstream. Indeed, Charter’s advertisement stated that it was ‘Important Information Enclosed for Windstream Customers.’”

The offending Charter flier seems to suggest Windstream is going out of business.

A later investigation found Charter sent at least 800,000 mailers to customers in service areas where Windstream competes with Spectrum.

Jeffrey Auman, executive vice president of sales and marketing at Windstream Communications, told the court last week the false ads directly harmed Windstream’s reputation with its customers, with some left believing the phone company was ceasing operations because of its bankruptcy filing. Auman argued it was fair for Charter to pay damages covering Windstream’s legal expenses to file the lawsuit and cover its advertising and promotional expenses incurred to rebut the ads and retain customers.

A company-provided expert witness testified Windstream lost customers and between $3.2 and $5.1 million in lost profits. Spectrum’s ad campaign also created long term negative “fear, uncertainty, and doubt” about Windstream’s health and ability to service customers. The witness claimed Spectrum’s fliers ended a “growth streak” for the phone company and has caused new customer projections to fall behind.

“It was a big deal with us,” Aubrey testified. “Word of mouth in these small communities means a lot.”

Windstream told Judge Drain the company has spent more than $4.3 million on service credits, promotional retention discounts, and cost-free upgrades to keep customers happy.

Charter has countered Windstream’s customer losses come from its inferior technology, which makes Windstream’s speeds slower and less competitive. Spectrum has upgraded internet customers in the midwest and parts of the southern U.S. to up to 200 Mbps for its Standard internet plan, which is much faster than what Windstream offers many of its DSL internet customers.

Rural New York Legislators Slam Charter Spectrum’s Request to Limit Rural Broadband Funding

With an estimated 90,000 New Yorkers stranded without broadband service, a proposal from Charter Communications to block funding for future projects is coming under fire from a bipartisan group of rural legislators.

Charter, which does business as Spectrum, filed a request with the Federal Communications Commission to exclude certain census blocks for funding under the agency’s new $20.4 billion Rural Digital Opportunity Fund (RDOF). The cable company claims it intends to privately fund expansion of internet service in those areas, and does not welcome government-subsidized competition.

“Good cause plainly exists to grant the waiver to avoid overbuilding areas in which Charter has already begun the process of deploying service and is investing private capital well in excess of $600 million,” company officials wrote. “This will ensure scarce universal service support is deployed to close the gap/digital divide in actually unserved areas. The commission has previously granted rule waivers where, as here, the purposes of the rule would be disserved by its strict application, and where waiver would affirmatively serve the public interest.”

Many of the rural homes Charter claims it intends to serve have been waiting for internet access for well over a decade. Many were hopeful that wait would end shortly after the cable company agreed to expand service to an additional 145,000 rural New York households as part of an agreement with state regulators approving its merger with Time Warner Cable. But a March 2020 audit conducted by the Comptroller of New York found Charter was not meeting its commitments:

“[…] It has been over three years since the merger was approved. Network expansion should have already been provided to approximately 126,875 unserved or underserved premises based on the 2016 Commission Order approving the merger. As of July 2019, Charter had only extended its network to 64,827 premises. Based on the original Order, 62,048 additional customers should have received access to these services. Charter now has until September 2021 to complete the network expansion of 145,000 premises previously scheduled to be completed by May 2020.”

Barrett

Some New York legislators believe Charter is out of line asking the FCC to exclude funding for other rural broadband projects while taking its time meeting its own commitments.

“Charter’s waiver request is simply self-serving and will in no way benefit the residents of upstate New York who, even in the year 2020, are struggling to access adequate broadband by any provider,” Rep. Didi Barrett (D-Hudson) wrote in a letter to the FCC. “Charter’s petition is a blatant attempt to reduce competition and leave consumers with no choice but to wait around for Charter to finish a job that should already be complete. In Upstate New York, tens of thousands of residents and businesses are still waiting for internet service because of Charter’s years-long effort to renege on their obligations to New York State and the people who live in rural communities. We must continue to call Charter out until every household and business is served as planned under their agreement with New York State.”

Republican congresswoman Elise Stefanik from Schuylerville agrees with many of Barrett’s views, blasting Spectrum for seriously delaying its rural rollout commitments. Stefanik worked with FCC Chairman Ajit Pai to change the qualification requirements for the RDOF program, which originally would have excluded New York from receiving funding. If the FCC adopts Charter’s request, it would block much of her district from receiving broadband funds, either because Charter previously indicated it would (eventually) offer service or because the state previously supplied broadband subsidies, which would also seem to disqualify RDOF grants.

“I have heard directly from constituents and local elected officials that this decision would have a severe impact on their ability to gain rural broadband access, which is essential, especially during this time of crisis,” Stefanik said. “Charter’s request would exclude parts of the North Country from this critical federal funding, and I will work with my upstate colleagues and the FCC to keep it available.”

WNYT in Albany reports rural New York communities like Stillwater have waited years for Charter Spectrum to provide broadband service. The addresses Spectrum grudgingly will serve in the area are routinely quoted installation fees starting at $8,000. (2:16)

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