Xfinity Flex

Comcast today announced the launch of Xfinity Flex, a $5/month service targeting Comcast’s internet-only customers with a streaming set-top box capable of accessing Comcast-approved apps including Netflix, Amazon Prime Video, HBO, and other services.

Subscribers must have a Comcast-supplied internet connection, no video package, and an xFi Gateway (a cable modem/router combination that costs between $10-13 a month to lease). After the new service becomes available nationwide next week, those enrolling will receive a small set-top box comparable to a Roku capable of streaming 4K HDR video. Comcast also supplies its own voice remote, and bundles access to Comcast’s apps that manage in-home Wi-Fi, mobile, security, and automation services for easy access.

“Xfinity Flex will deepen our relationship with a certain segment of our Internet customers and provide them with real value,” said Matt Strauss, executive vice president of Xfinity Services for Comcast Cable. “For just five dollars a month, we can offer these customers an affordable, flexible, and differentiated platform that includes thousands of free movies and shows for online streaming, an integrated guide for accessing their favorite apps and connected home devices, and the ease of navigating and managing all of it with our voice remote.”

A closer look at the device and the fine print suggests customers may want to carefully evaluate whether Flex offers good value for money. Instead of buying a traditional streaming set-top box like Roku, customers can only lease the Flex box for $5 a month… indefinitely. Comcast is not including any programming with the box, just hardware to access streaming content already available, often for free, on other streaming or desktop platforms. Flex’s search function is supposed to make it easier to find programming across a wide number of services, but you will have to subscribe to each service independently.

Comcast also warns that using Flex will count against your monthly data cap.

The 4K capable Roku 3920R can be purchased from Best Buy for $39.99.

Comcast has also carefully designed the box to protect the cable company from any competitive threats. Competing streaming services like DirecTV Now, Sling TV, YouTube TV, Hulu Live, and other services are intentionally blocked, another example of life without net neutrality. The only available path to cable TV programming using Flex is to visit the ‘easy upgrade’ app that will sign you up for Comcast’s X1 cable TV service, presumably the one you cord-cut before you signed up for Flex.

The service is also designed to protect other cable companies from competition from Comcast. Only Comcast internet customers can purchase Flex service, so it is not available to customers of Charter Spectrum, Cox, Altice, or other cable operators.

The $5 subscription fee is also misleading, because you will also have to rent Comcast’s own xFi Gateway, which costs between $10-13 a month, instead of using your own cable modem. That suddenly makes Flex a $15 a month service that essentially just gives you access to a walled garden of the services Comcast approves of for around $180 a year (including the Gateway).

Comcast probably won’t attract a big audience for Flex because of all the restrictions it comes with.

Consider buying a streaming set-top box outright instead of living with Comcast’s restrictions and mandatory gateway fees. Shoppers can find basic Roku devices for purchase under $30, with more capable 4K-compatible devices starting at around $40.

Wireless carriers like AT&T and Verizon Wireless have reneged on promotions offering customers free phones and “buy one, get one free” deals that leave customers on the hook for hundreds of dollars in equipment charges.

With the holiday shopping season about to begin, phone promotions will be heavily advertised. But those deals may be too good to be true, according to consumer protection groups.

The Better Business Bureau said the problems customers are reporting are serious, and growing. Since the beginning of this year, BBB president (Southern Piedmont) Tom Bartholomy said the group has received almost 6,800 complaints about wireless provider advertising, sales, and promotional practices.

“We’re talking hundreds of complaints about a similar type of situation,” Bartholomy told WSOC-TV. “[It] points to an underlying cause, an underlying concern, with those types of promotions.”

WSOC’s consumer reporter has been inundated with complaints from his North Carolina viewers about broken promises:

Rachel Seighman lives in Monroe. She said, “(I) wanted to try to get a cheaper plan for my family. So, I tried AT&T out.”  She said she got her bill and “it was going to be about $60 higher per month than they said.” So, she called AT&T.  “I was told that the price they quoted me at was not correct,” she said.

Cynthia Emrich lives in Stanfield. She took advantage of an AT&T “buy one, get one free” offer for a Samsung phone. But, she said AT&T charged her for both phones.  “So I call them and they said it would straighten itself out, and it never did,” she told Action 9.  She said she called the company every month for 2 1/2 years. “It was frustrating every month.”

Denise Reid lives in Fort Mill. She said she went with a Verizon “buy one, get one free” deal for an iPhone, but that the company charged her full price.  “They could not give me a reason as to why,” she said.  “No reason as to why.”

Joseph Mayberry lives in Hickory. He told Action 9 a similar story. All four customers said they tried to resolve things on their own but couldn’t. “I would call someone.  I would go through the long story of what happened.  I would get to the supervisor level.  I’ve got emails saying I would be credited back and a phone call would follow.  Never got the phone call,” Mayberry said.

Many customers are tripped up by the fine print in promotional offers that frequently contain complicated conditions and opaque language. Some insist company representatives assured them that the promotion was valid only to find out later they were misled. In fact many promotions contain strict provisions that, if not followed precisely, invalidate the promotion.

Here are some common tricks and fine print traps you may encounter getting your “free” phone:

1. Many “Buy 1, Get 1” promotions require the customer to activate and maintain a new line of service to qualify for a free phone, which can cost nearly $50 a month for a plan, including additional surcharges and taxes. Customers that fail to follow through on this condition or quickly terminate the extra line after moving the device to a different line on their account were often charged full price for both phones.
2. Some promotions require customers to sign up for a “device payment agreement” to qualify for the free phone. That is actually a contract to pay off a device with monthly installment payments at 0% interest billed to your mobile account. The free device promotion is often tied to the payment agreement. If a customer buys the first phone and pays for it upfront there is no payment agreement, and no free phone. Some promotions require customers to maintain a device payment agreement for up to 30 months. If a customer violates any terms of the promotion, such as paying the phone off early or selling it, the company might bill you for the “free” phone.
3. Some companies take months to begin crediting your account for the monthly installments that will appear on your bill. Customers will eventually see a monthly device payment charge and a corresponding credit in the same amount for your “free” phone. But until bill credits start to appear in 60-90 days, you are responsible for the installment charges.
4. “Free” phone promotions often conflict with other service plans and features. Customers that have signed up to receive a new phone every two years may have to turn in their “free” phone and walk away from several delayed reimbursement credits before getting they can obtain their next new device.

Many customers underestimate the true cost of complying with the terms necessary to get that “free” phone. That realization usually comes too late to return it, leaving customers with several hundred dollars in equipment fees — a costly mistake that could ruin any holiday.

It is important to carefully study the terms and conditions of all wireless device promotions. The written contract is valid, promises from overeager salespeople are not. Be wary when you see “device payment agreement” or “activate and maintain a new line of service,” or “promo credit applied to account over 24 mos w/in 1-2 billing cycles; promo credit ends when balance paid or line terminated/transferred.” If you do, it could mean you will need to set up an installment payment plan for that “free” phone, keep it on your account as a new line of service for at least two years, and avoid paying it off in advance or attempt to move the phone to a different account or provider.

If negotiating with your provider has failed to resolve a conflict over the promotion, taking your case to the media over the terms of a possibly deceptive promotion can be effective in getting what you thought you were promised. When these customers contacted WSOC-TV and the station took the complaints back to AT&T and Verizon, the company quickly gave all four customers their free phones.

“Nobody would listen to me until [WSOC] actually reached out to them. And then within two hours, I got a phone call from AT&T,” Emrich told the station.  “If it wasn’t for Action 9, I would have never got that refund.”

AT&T claimed in a statement it honors all of its deals. Verizon tried to refer complaints about its promotions to the wireless industry lobbying group — CTIA. That group does not understand why Verizon did that and claims it isn’t familiar with cell phone promotions. Neither are most consumers.

WSOC-TV consumer reporter Jason Stoogenke investigates cell phone promotions that sound too good to be true. (3:36)

Verizon pulled out of a promo for a free iPhone for this North Carolina customer. Nobody knows why. (1:16)

Verizon messed up a promotion offering two phones for the price of one and left this customer out in the cold, telling him he needed to pay full price for both phones. (1:14)

A Verizon 5G small cell installed in Sacramento. (Image courtesy: ZoraQ)

Consumers hoping for the imminent arrival of a “cable killer” from Verizon’s new millimeter wave 5G fixed wireless broadband should not hold their breath.

Verizon executives have been paraded out to celebrate its debuting 5G service as “revolutionary/game changing/transformational” at the same time Qualcomm, which helped define the forthcoming 5G standard claims it will be “as transformative as the automobile and electricity.”

But the ‘Revolution of 5G’ will not be the next fall of the Berlin Wall or Arab Spring. Those revolutionary changes happened almost overnight. Instead, 5G will be quintessential American capitalism at work: overhyped promises to excite the public and attract investors, tempered by the reality that massive amounts of money and at least a decade of work will be needed to blanket only parts of the country with small cells and the newly ubiquitous fiber optic networks required to connect them together.

Verizon already offers hints of that reality, but only in the fine print where it acknowledges its wireless home broadband replacement service, set to launch on October 1, will be only available in parts of four U.S. cities. Verizon isn’t saying what percentage of Sacramento, Los Angeles, Houston, and Indianapolis will be covered, but enthusiastic would-be customers are crowdsourcing their own coverage maps, and the results are underwhelming.

The City of Sacramento released this map showing Verizon’s planned 5G coverage in the city, but customers dispute it. (Image: City of Sacramento)

“Lightning has hit more homes than Verizon 5G will in Sacramento,” reports Jack Del Vecchio, who spent an hour entering addresses on Verizon’s website looking for service. “The city of Sacramento, trying to placate homeowners worried about more cell equipment visually polluting the city, released a map where Verizon claimed it would be offering 5G service by the end of 2018. That clearly is not happening, at least not yet, because most of these neighborhoods do not have small cells installed yet.”

In Indianapolis, reddit user rycummin_IU scanned almost 17,000 addresses and found Verizon service available to just 179 homes and businesses. Only a fraction of customers in Houston and Los Angeles are qualified for service as well.

The vast unavailability of Verizon 5G service in Indianapolis. (Image courtesy: rycummin_IU)

“When they said Houston would be part of the rollout I didn’t think they meant one street,” commented another reddit user. In reality, Verizon 5G will debut in parts of low-income neighborhoods like Acres Home, Gulfton, Second Ward, Third Ward and Near Northside, at the behest of city officials, among a few others. But availability is very scattered, and based on search results, Verizon is only qualifying customers that live within approximately 500 feet of a small cell antenna.

This map shows the limited range of Verizon 5G small cells. In this case, this neighborhood is likely served by one or two small cells, probably in the vicinity of Sugar and Brady and/or Eastwood or Jenkins St. Notice coverage is often unavailable across streets. (Image courtesy: SmokeyTuna)

The most unlikely choice for limited range 5G is notoriously sprawling Los Angeles, and frustrated residents reported service was least likely to be found there.

“I spent 30 minutes plugging in random addresses all over Los Angeles and I finally found one that works,” reports reddit user chantasic. “It’s the big apartment building at 1108 7th Street, Los Angeles, CA, 90017 in [downtown Los Angeles]. If you go just one block west from there on Garland Ave, it’s not available. If you enter in ‘1127 Lucas Ave Los Angeles, CA 90017’ which is a high-rise, then it starts asking you what floor you live on and whether you have any windows that face 7th St. So one of the antennas must be on 7th St.”

“I put in my work address and it worked at 555 South Flower street, which is across from the library on West Fifth Street,” shared another user. A third reddit reader in Los Angeles managed to track down service at Medici Apartments, a complex next to the 110 freeway in the South Westlake area.

Those customers who are lucky enough to live in a qualified service area report the sign-up process to be orderly. A full credit check is done on prospective customers, and assuming one passes it, an appointment for “white glove” installation is scheduled. Verizon has confirmed no self-install option will be available for the time being. Verizon’s installers are trained to find the best possible place to install its 28GHz antenna, which does not perform well penetrating heavy foliage, certain building materials, and low-energy insulated window glass. Verizon plans to monitor the performance of these early 5G installations to gather more information about how the service is working and how to get the best performance from it.

Verizon has released terms and conditions for the service and provided more insight into the installation process, which takes several hours. Customers interested in more information can call this special Verizon 5G hotline — 1-866-217-2223 to order and schedule installation, or find out about 5G Home.

Verizon 5G Home Terms of Service

Two pieces of 5G Home equipment will be installed at your home:

• Indoor or outdoor 5G receiver
• 5G router

The type of receiver (indoor or outdoor) you get depends on the 5G signal strength. If needed, Wi-Fi extenders will be installed in the home, at no charge, to ensure adequate Wi-Fi coverage for the entire house.

What will happen during the 5G Home installation?

An Asurion (third party contractor) technician will complete the following installation process for your 5G Home service and connect your devices:

• Verify and explain the areas in your home where the 5G signal is received.
• Conduct a test to determine whether the 5G receiver can be installed inside or outside your home. The strength of the 5G signal can vary inside and outside your home.
• Conduct a test of the Wi-Fi signal strength of each device throughout the house that is connected to the 5G Home router. A Wi-Fi extender may also be installed at no charge to strengthen the Wi-Fi signal throughout your house or for devices that have a weak Wi-Fi signal.
• Install the receiver, with your approval, either inside or outside on the side of your house.
• Depending on the locations of the receiver and the router, the technician may need to run wires through walls, floors or ceilings.
• Ensure that all your previously Wi-Fi connected devices are now connected to your Verizon 5G Home router.
• Demonstrate how you can use the My Verizon app to manage your router, such as how to restart it when you are away from home, and check the signal strength of the devices connected to the router.

Service Availability. Unfortunately, we can’t guarantee that our 5G Home service will be available at your address, even if we accepted your order. The 5G Home service does not support static IP addresses.

Equipment. We’ll provide you with equipment, which may include an indoor or outdoor receiver, a router, a Wi-Fi extender, and other equipment, to use with your 5G Home service. That equipment will continue to be owned by us, and you can’t use it for any other purpose, move it to a different location or position, tamper with or intentionally damage it, or allow anyone else to service it. We will repair and maintain that equipment at our expense, unless we determine that you misused, abused or intentionally damaged the equipment, in which case, you will have to pay the replacement cost of it. If any of that equipment is stolen, please provide us with a copy of your police report, so that you are not charged for it.

Installation and Access to Your Premises. We will attempt to install the 5G Home service at the address that you provided to us at the time of sale. From time to time, we may access your outdoor receiver to service, inspect, upgrade and/or remove it. If 5G (or 4G LTE backup) coverage is not available at your address, or if we cannot perform installation for any reason, then we will cancel your order.

Changing Service Location. You may not move the 5G Home service to another address. If you are moving to a new address at which the 5G Home service is available and you wish to continue using it, then please contact us to install it at your new address.

Service Cancellation and Equipment Returns. Upon termination of your 5G Home service, you should return the equipment to us in an undamaged condition (subject only to reasonable wear and tear) within 21 days after service cancellation, or you may be charged an unreturned equipment fee, which may be substantial. If you don’t cancel your 5G Home service, then your service charges will continue to apply, even if you return the equipment. If we ask you to leave the outdoor receiver in place, you will not be charged an unreturned equipment fee.

Go ahead, enjoy a free trial and locate (within 100 yards) your ex-boyfriend or girlfriend, husband, wife, or friends. This online demo had few security checks to keep unauthorized users out, despite claims consent was required. (Image courtesy of: Krebs on Security)

A company best known for providing phone service to prisoners and monitoring inmate locations has sold access to the whereabouts of almost every powered-on cellphone in the country without verifying a court order, thanks to a lucrative partnership with America’s top four cell phone companies.

The service, provided by Securus, has proved a handy tool for law enforcement agencies nationwide, allowing one former sheriff of Mississippi County, Mo., to track the whereabouts of a judge and members of the State Highway Patrol, all without their consent.

The New York Times reported in May that despite repeated assurances from cell phone companies that location data sold to third parties would not include personally identifiable information, it now appears in fact, it often does, and not just information about a particular company’s own customers.

Securus’ location service has been available since at least 2013, although some claim the service has been active for much longer than that, and after recent attention from Congress, Verizon, AT&T, and Sprint have announced they will suspend the sale of location data to most third parties as soon as contract termination notices can be sent.

The industry’s commitments to customer privacy appear to be tissue thin, based on the confidential contracts companies like Verizon and AT&T sign with third-party data aggregators, who in turn resell each provider’s location service to an even broader range of companies. Sen. Ron Wyden (D-Ore.) called the contracts “the legal equivalent of a pinky promise” in a letter sent to the Federal Communications Commission.

Verizon, T-Mobile, AT&T, and Sprint all have contracts with two of the country’s largest resellers of location data – LocationSmart and Zumigo. The contracts allow the two firms to pull cellphone users’ locations in real time and sell that information to other companies, including Securus. The contracts claim to need users’ consent before their location information can be revealed, which is either done in an app directly requesting location data or in a thicket of fine print terms and conditions most consumers never read. There is scant evidence cell phone companies independently audit consent records, which means a company or app author could claim blanket consent.

Securus never had a contact with many of the people it tracked — often those suspected of a crime or law enforcement officers. Securus operates its service under provisions permitting law enforcement to access location data without the consent of those being tracked, as long as the law enforcement agency attests to the legality of its request. Laws requiring court orders to track cellphone users vary considerably in different states. Some require a judge’s signature on a court order, others demand a notarized statement from a law enforcement official, while others require no independent review at all.

Cell phone companies may have a loophole to escape legal culpability for revealing private personal location information to unauthorized third parties. Privacy laws have never offered strong privacy protections to consumers for telecommunications services. In March 2017, the Republican majority in Congress stripped what privacy protections did exist during the Obama Administration in a mostly party-line vote condemned by Democrats. After the rules were repealed, mobile providers can track and share people’s browsing and app activity without permission. Several Democrats warned the move would lead to an eventual scandal when providers were caught collecting and selling sensitive personal information without customer consent.

As long as they are following their own voluntary privacy policies, carriers “are largely free to do what they want with the information they obtain, including location information, as long as it’s unrelated to a phone call,” Albert Gidari, the consulting director of privacy at the Stanford Center for Internet and Society and a former technology and telecommunications lawyer told the New York Times. If a cellphone is powered on, constantly updated location information accurate within a few hundred feet is available for sale.

Because cell phone companies work with third-party aggregators, they can claim any privacy violations could be the result of unauthorized or inappropriate use of their location tools. But finding which company ultimately violated a consumers’ privacy requires investigative work because services like LocationSmart also sell services to other aggregators, who in turn sell services to a myriad of companies. That is what appears to have happened with Securus, who accessed location services through a mobile marketing company called 3Cinteractive, which in turn has a contract with LocationSmart. That means a provider can claim at least three layers of possible third-party liability, because requests moved through several hands:

Example: Law enforcement agency request -> Securus -> 3Cinteractive -> LocationSmart -> Verizon

Although law enforcement agencies are supposed to upload legal documents proving informed consent laws do not apply to a particular request, it appears the validity of those documents was not independently verified.

“Securus is neither a judge nor a district attorney, and the responsibility of ensuring the legal adequacy of supporting documentation lies with our law enforcement customers and their counsel,” a Securus spokesman said in a statement. Securus offers services only to law enforcement and corrections facilities, and not all officials at a given location have access to the system, the spokesman added.

But those that did could abuse the system with few consequences. In fact, a security hole left open for a year by LocationSmart appears to have let almost anyone use the service to find friends, family, or anyone else, thanks to a helpful free demo for prospective clients revealed by Robert Xiao, a security researcher at Carnegie Mellon University:

LocationSmart’s demo is a free service (Editor’s Note: the demo has since been locked down) that allows anyone to see the approximate location of their own mobile phone, just by entering their name, email address and phone number into a form on the site. LocationSmart then texts the phone number supplied by the user and requests permission to ping that device’s nearest cellular network tower.

Once that consent is obtained, LocationSmart texts the subscriber their approximate longitude and latitude, plotting the coordinates on a Google Street View map. [It also potentially collects and stores a great deal of technical data about your mobile device. For example, according to their privacy policy that information “may include, but is not limited to, device latitude/longitude, accuracy, heading, speed, and altitude, cell tower, Wi-Fi access point, or IP address information”].

But according to Xiao, a PhD candidate at CMU’s Human-Computer Interaction Institute, this same service failed to perform basic checks to prevent anonymous and unauthorized queries. Translation: Anyone with a modicum of knowledge about how Web sites work could abuse the LocationSmart demo site to figure out how to conduct mobile number location lookups at will, all without ever having to supply a password or other credentials.

“I stumbled upon this almost by accident, and it wasn’t terribly hard to do,” Xiao said. “This is something anyone could discover with minimal effort. And the gist of it is I can track most peoples’ cell phone without their consent.”

Obtaining customer consent to share location details appears to not always be a priority of the location data resellers. For them, a lucrative business depends on easy access to location information that can be sold for targeted marketing campaigns (such as texting a coupon offer when entering a store or sending a special offer if you appear to be visiting a competitor’s store), tracking packages, service calls, or deliveries (such as tracking the cable repair technician, the location of your pizza, or where the parcel service driver is with a package you ordered), or allowing your bank to flag a suspicious credit card transaction when they discover your cellphone is nowhere near the store where the purchase just occurred.

Wyden

The personal risks of unauthorized access are too numerous to count, starting with former boyfriends or girlfriends cyberstalking one’s live location, criminals tracking a target, and law enforcement officials violating your rights.

The revelations in the New York Times, published on May 10, have attracted the sudden attention from America’s largest cell phone companies this week because of Sen. Wyden’s letter informing them they are under scrutiny. No cell phone company wants to endure the media spotlight Facebook has been under since revelations it exposed the personal data of as many as 87 million users without their consent. The carriers, except for T-Mobile, have announced a lock-down.

Verizon: Verizon Communications pledged to stop selling individual customer locations to data brokers, and will wind down contracts with LocationSmart and Zumigo, a competing data aggregator. “We will not enter into new location aggregation arrangements unless and until we are comfortable that we can adequately protect our customers’ location data,” Verizon privacy chief Karen Zacharia wrote in a June 15 letter to Wyden. Verizon did not explain why it took at least two years for the lock-down to begin.

AT&T: Said it “will be ending our work with aggregators for these services as soon as practical in a way that preserves important, potential lifesaving services like emergency roadside assistance.”

Sprint: “Suspended all services with LocationSmart” last month and “is beginning the process of terminating its current contracts with data aggregators to whom we provide location data.” A spokeswoman said that effort “will take some time in order to unwind services to consumers, such as roadside assistance and fraud prevention services.”

T-Mobile: Stopped short of terminating agreements, T-Mobile executives told Wyden it “started one of our periodic reviews several months ago and selected a third-party to assess this program.”

Securus: Securus spokesman Mark Southland said in a statement that the company adheres to its contract, adding that cutting off law enforcement access to location tools “will hurt public safety and put Americans at risk.”

Read the full letters from America’s top-four mobile companies:

• Verizon
• Sprint
• T-Mobile
• AT&T

The New York Public Service Commission has notified Charter Communications it won’t be the victim of an offer that promises one thing and delivers something less, giving the company 14 days to fully accept the terms of its Time Warner Cable/Charter merger approval or face the possibility of having the merger canceled, potentially throwing Charter’s business plans into chaos.

In a move any aggrieved cable customer would appreciate, Charter’s lawyers gave the PSC a deal that looked good on the surface, only to be eroded away in the fine print. In a May 2018 response to the Commission’s “show cause” order, threatening to severely fine the cable company for breaking its commitments to New York State, the cable company effectively responded it wasn’t their fault if the Commission missed the fact the company did not actually agree to everything the state thought it did, and was in full compliance of what it unilaterally agreed to do.

The hubris of the state’s largest cable operator did not go down well in Albany, to say the least. But first some background:

Charter is coming under fire in New York State for failing to meet its obligations to extend service in a timely way to 145,000 New York homes and businesses not part of Spectrum’s service area and also lack access to broadband service. Today the Commission, in a separate action, fined Charter $2 million, to be drawn from a line of credit previously set aside by the cable company, for failing to meet its original broadband buildout targets and failing to remedy its past poor performance.

Charter’s lawyers last month protested their innocence, claiming the company was not out of compliance with its agreement — in fact it was ahead of schedule.

Both things cannot be true, so who is being honest and who is trading in “alternative facts?”

To find out, one has to turn back the clock to 2016. On January 19, Charter’s attorneys sent an acceptance letter to the Commission in response to the regulator’s offer to approve the acquisition of Time Warner Cable if Charter agreed to a series of pro-consumer benefits designed to allow New York customers to share in the lucrative deal.

Charter agreed to dramatically increase Standard internet speeds for its New York customers, first to 100 Mbps by the end of 2018 and again to 300 Mbps by the end of 2019. Charter met its first commitment ahead of schedule and is on track to again increase speeds for New York residents before the end of next year.

The company also agreed to temporarily retain Time Warner Cable’s $14.99 Everyday Low Price Internet program. Although that option has since expired for new customers, existing customers can keep the package until at least next year. But regulators note Charter has frequently made it difficult for New York customers to sign up for the program. Stop the Cap! has documented multiple instances of customers being told the plan was unavailable, or representatives have confused it with Spectrum Internet Assist, a similar budget-priced internet package for those that meet certain income and benefits qualifications.

But Charter’s agreement to expand its service to unserved areas of New York is where most of the current conflict arises. Stop the Cap! strongly recommended in our testimony to the PSC that rural broadband expansion be a part of a series of deal commitments that should be imposed on Charter if the Commission saw fit to approve the merger. The Commission agreed with our recommendation. That allows us to speak authoritatively that the Commission, in concert with the New York State government, framed that expansion commitment as an adjunct to the state’s Broadband 4 All program, Gov. Andrew Cuomo’s rural broadband expansion effort.

Charter would serve an integral role in the effort by extending service to homes and businesses just outside of its current service area. That would save the state millions in costs trying to subsidize other providers to expand into these typically unprofitable areas of the state. The design and intention of the expansion program was clear from the outset, and the Commission specifically requested Charter provide detailed lists of planned expansion areas, so the state could avoid duplicating its efforts and re-target funding to other areas of the state. The goal was to achieve near-universal broadband availability in every corner of New York.

The Commission’s 2016 letter to Charter seemed clear enough:

The conditions adopted in this Order and listed in Appendix A shall be binding and enforceable by the Commission upon unconditional acceptance by New Charter within seven (7) business days of the issuance of this Order. If the Petitioners’ unconditional acceptance is not received within seven (7) business days of the issuance of this Order, the Petitioners will have failed to satisfy their burden under the Public Service Law as described herein, and this Order shall constitute a denial of the Joint Petition.

But in Charter’s response on January 19, 2016, their lawyers got too cute by half (emphasis ours):

In accordance with the Commission’s Order Granting Joint Petition by Time Warner Cable Inc. (“Time Warner Cable”) and Charter Communications, Inc. (“Charter”) dated January 8, 2016, Charter hereby accepts the Order Conditions for Approval contained in Appendix A, subject to applicable law and without waiver of any legal rights.

On May 9, 2018 the state discovered what that language discrepancy meant. Charter’s lawyers responded to the state’s charges that the company was not complying with the terms of the merger approval agreement with a classic “gotcha” letter, claiming Charter’s agreement provided only a “qualified” acceptance of language contained exclusively in Appendix A, and its obligations started and stopped there.

That is a distinction worth millions of dollars. Appendix A basically summarizes Charter’s commitment to expand to 145,000 new passings in New York, but does not explain the expansion program or its purpose. If only Appendix A did apply, it would allow Charter to count any new cable hookup, whether in a rural hamlet or more likely in a condo in Manhattan as a “new passing,” bringing it one customer closer to meeting its expansion commitment. Charter could count new wealthy gated communities, apartment buildings, offices, and converted lofts, despite the fact it would almost certainly wire those customers for service with or without its agreement with the state government. More importantly, Charter would successfully avoid spending tens of thousands of dollars to extend the cable line down a road just to reach one or two rural customers.

Charter’s lawyers seem to think that their clever loophole will win the company significant savings and avoid fines — too bad, so sad if the state’s lawyers failed to appreciate what Charter was actually willing to agree to in 2016 and what the state accepted by default by not catching the discrepancy sooner.

“Contrary to [Charter’s] assertions, however, the Approval Order accorded Charter only two explicit choices: (1) to accept unconditionally the commitments set forth in the body of the Approval Order and Appendix A; or (2) have the Joint Petition rejected, subject to Charter’s right to judicial review,” the Commission rebutted.

In short, the state is calling Charter’s possible bluff. If it truly intends not to agree to the original terms of the agreement, the state has the right to toss out the merger agreement, in part or in full, canceling the merger. Of course, Charter can always take the matter to court and hope it can find a judge that will accept Charter’s ‘partial agreement’ argument.

To say the PSC was displeased with Charter’s novel legal maneuver would be an understatement. In today’s ruling, the PSC severely admonished Charter for its bad behavior:

Charter was not free to pick and choose the conditions it would accept or the portions of the Approval Order with which it would comply, nor was Charter free to accept only some of the conditions in the Approval Order and Appendix A yet still obtain Commission approval of the merger transaction. Charter is likewise not free to rewrite the Commission’s conditions.

In effect, Charter is ripping off the people of New York, and the state’s regulators are having none of it.

“The Commission is troubled by Charter’s position that the Commission’s Approval Order means something other than what it actually states,” the PSC wrote. “Given that many of the obligations in that Order are continuing and will need to be fulfilled in the future, the Commission believes it is critical that Charter acknowledge the obligations it agreed to undertake in exchange for the benefits it received by the Commission’s conditional approval. Anything short of an unconditional full acceptance of the Approval Order and Appendix A would deprive New York state of its fair share of the incremental benefits.”

It is likely we will know where this is headed by mid-July, because the PSC has given Charter 14 days to recommit itself to the PSC’s original merger terms, not just those in infamous Appendix A. It signaled it will no longer debate the matter, either, telling Charter “the Commission will not countenance that conduct” and wants action:

Charter is directed to cure its defective acceptance and file with the Secretary to the Commission a new letter indicating its full unconditional acceptance of the Approval Order and Appendix A thereof within 14 days.

Should Charter, however, fail to provide a new letter indicating full unconditional acceptance, the Commission may pursue other remedies at its disposal, including but not necessarily limited to the following.

First, beginning proceedings pursuant to PSL §216 to rescind, modify or amend the Approval Order, specifically, the Commission’s approval of the transfer of the Time Warner’s cable franchises and associated facilities, networks, works and systems to Charter, in whole or in part.

Second, initiate an enforcement action pursuant to PSL §26 for failing to comply with the Approval Order’s Ordering Clause 1 including an action in Supreme Court to adjudicate the dispute and/or declare the Commission’s conditional approval null and void for lack of an unconditional acceptance.

And, third, initiate a penalty action for being out of compliance with the Approval Order’s unconditional acceptance requirement under PSL §25.

It’s a teachable moment for regulators, one that cable customers have come to learn over decades of bad experiences. It’s never a good idea to trust a cable company.