Charter Communications, doing business as Time Warner Cable, has quickly moved to settle a lawsuit filed last week by the district attorneys of Los Angeles, San Diego, and Riverside, Calif.

The lawsuit, filed in California Superior Court, alleged that Time Warner Cable misrepresented the internet speeds it marketed to California consumers and failed to deliver the level of service advertised.

“We cooperated fully in the review, have resolved this matter comprehensively, and this is expressly not a finding nor an admission of liability,” Charter said in a statement.

The lawsuit is very similar to one filed in New York in 2017 and later settled by Charter involving Time Warner Cable Maxx service, which offered internet speeds in upgraded service areas around New York City up to 300 Mbps.

The suit claimed that Time Warner Cable knowingly oversold its services using infrastructure incapable of meeting the level of service customers paid for. The California suit claimed Time Warner Cable allegedly engaged in unlawful business practices starting as early as 2013. Time Warner Cable was sold to Charter Communications in 2016 and began operating as Spectrum by the end of that year.

The district attorneys requested civil damages and a formal injunction prohibiting Spectrum from advertising internet speeds it cannot support. None of the district attorneys involved in the case had any comment about the settlement. It is not known what damages, if any, Charter has agreed to pay in return for settling the case out of court.

AT&T was unhappy with the low internet speed score the FCC was about to give the telecom giant, so it made a few phone calls and got the government regulator to effectively rig the results in its favor.

“Regulatory capture” is a term becoming more common in administrations that enable regulators that favor friendly relations with large companies over consumer protection, and under the Trump Administration, a very business-friendly FCC has demonstrated it is prepared to go the distance for some of the country’s largest telecom companies.

Today, the Wall Street Journal reported AT&T successfully got the FCC to omit DSL speed test results from the agency’s annual “Measuring Broadband America” report. Introduced during the Obama Administration, the internet speed analysis was designed to test whether cable and phone companies are being honest about delivering the broadband speed they advertise. Using a small army of test volunteers that host a free speed testing router in their home (full disclosure: Stop the Cap! is a volunteer host), automated testing of broadband performance is done silently by the equipment on an ongoing basis, with results sent to SamKnows, an independent company contracted to manage the data for the FCC’s project.

In 2011, the first full year of the program, results identified an early offender — Cablevision/Optimum, which advertised speed it couldn’t deliver to many of its customers because its network was oversold and congested. Within months, the company invested millions to dramatically expand internet capacity and speeds quickly rose, sometimes beyond the advertised level. In general, fiber and cable internet providers traditionally deliver the fastest and most reliable internet speed. Phone companies selling DSL service usually lag far behind in the results. One of those providers happened to be AT&T.

In the last year, the Journal reports AT&T successfully appealed to the FCC to keep its DSL service’s speed performance out of the report and withheld important information from the FCC required to validate some of the agency’s results.

The newspaper also found multiple potential conflicts of interest in both the program and SamKnows, its contracted partner:

• Providers get the full names of customers using speed test equipment, and some (notably Cablevision/Optimum) regularly give speed test customers white glove treatment, including prioritized service, performance upgrades and extremely fast response times during outages that could affect the provider’s speed test score. Jack Burton, a former Cablevision engineer said “there was an effort to make sure known [users] had up-to-date equipment” like modems and routers. Cablevision also marked as “high priority” the neighborhoods that contained speed-testing users, ensuring that those neighborhoods got upgraded ahead of others, said other former Cablevision engineers close to the effort.
• Providers can tinker with the raw data, including the right to exclude results from speed test volunteers subscribed to an “unpopular” speed tier (usually above 100 Mbps), those using outdated or troublesome equipment, or are signed up to an “obsolete” speed plan, like low-speed internet. Over 25% of speed test results (presumably unfavorable to the provider) were not included in the last annual report because cable and phone companies objected to their inclusion.
• SamKnows sells providers immediate access to speed test data and the other data volunteers measure for a fee, ostensibly to allow providers to identify problems on their networks before they end up published in the FCC’s report. Critics claim this gives providers an incentive to give preferential treatment to customers with speed testing equipment.

Some have claimed internet companies have gained almost total leverage over the FCC speed testing project.

The Journal:

Internet experts and former FCC officials said the setup gives the internet companies enormous leverage. “How can you go to the party who controls the information and say, ‘please give me information that may implicate you?’ ” said Tom Wheeler, a former FCC chairman who stepped down in January 2017. Jim Warner, a retired network engineer who has helped advise the agency on the test for years, told the FCC in 2015 that the rules for providers were too lax. “It’s not much of a code of conduct,” Mr. Warner said.

An FCC spokesman told the Journal the program has a transparent process and that the agency will continue to enable it “to improve, evolve, and provide meaningful results as we move forward.”

The stakes of the FCC’s speed tests are enormous for providers, now more reliant than ever on the highly profitable broadband segment of their businesses. They also allow providers to weaponize  favorable performance results to fight off consumer protection efforts that attempt to hold providers accountable for selling internet speeds undelivered. In some high stakes court cases, the FCC’s speed test reports have been used to defend providers, such as the lawsuit filed by New York’s Attorney General against Charter Communications over the poor performance of Time Warner Cable. The parties eventually settled that case.

In 2018, the key takeaway from the report celebrated by providers in testimony, marketing, and lobbying, was that “for most of the major broadband providers that were tested, measured download speeds were 100% or better of advertised speeds during the peak hours.”

Comcast often refers to the FCC’s results in claims about XFINITY internet service: “Recent testing performed by the FCC confirms that Comcast’s broadband internet access service is one of the fastest, most reliable broadband services in the United States.” But in 2018, Comcast also successfully petitioned to FCC to exclude speed test results from 214 of its testing customers, the highest number surveyed among individual providers. In contrast, Charter got the FCC to ignore results from 148 of its customers, Mediacom asked the FCC to ignore results from 46 of its internet customers.

Among the most remarkable findings uncovered by the Journal was the revelation AT&T successfully got the FCC to exclude all of its DSL customers’ speed test results, claiming that it would not be proper to include data for a service no longer being marketed to customers. AT&T deems its DSL service “obsolete” and no longer worthy of being covered by the FCC. But the company still actively markets DSL to prospective customers. This year, AT&T also announced it was no longer cooperating with SamKnows and its speed test project, claiming AT&T has devised a far more accurate speed testing project itself that it intends to use to self-report customer speed testing data.

Cox also managed to find an innovative way out of its poor score for internet speed consistency, which the FCC initially rated a rock bottom 37% of what Cox advertises. Cox claimed its speed test results were faulty because SamKnows’ tests sent traffic through an overcongested internet link yet to be upgraded. That ‘unfairly lowered Cox’s ratings’ for many of its Arizona customers, the company successfully argued, and the FCC put Cox’s poor speed consistency rating in a fine print footnote, which included both the 37% rating and a predicted/estimated reliability rating of 85%, assuming Cox properly routed its internet traffic.

The FCC report also downplays or doesn’t include data about internet slowdowns on specific websites, like Netflix or YouTube. Complaints about buffering on both popular streaming sites have been regularly cited by angry customers, but the FCC’s annual report signals there is literally nothing wrong with most providers.

Providers still fear their own network slowdowns or problems during known testing periods. The Journal reports many have a solution for that problem as well — temporarily boosting speeds and targeting better performance of popular websites and services during testing periods and returning service to normal after tests are finished.

James Cannon, a longtime cable and telecom engineering executive who left Charter in February admitted that is standard practice at Spectrum.

“I know that goes on,” he told the Journal. “If they have a scheduled test with a government agency, they will be very careful about how that traffic is routed on the network.”

As a result, the FCC’s “independent” annual speed test report is now compromised by large telecom companies, admits Maurice Dean, a telecom and media consultant with 22 years’ experience working on streaming, cable and telecom projects.

“It is problematic,” Dean said. “This attempt to ‘enhance’ performance for these measurements is a well-known practice in the industry,’ and makes the FCC results “almost meaningless for describing actual user experience.”

Tim Wu, a longtime internet advocate, likened the speed test program as more theoretical than actual, suggesting it was like measuring the speed of a car after getting rid of traffic.

Frontier residential customers in Nevada could receive a refund and improved service after a court filing from the Nevada Attorney General’s Bureau of Consumer Protection (BCP) found Frontier’s internet services lacking.

Since 2017, BCP has collected scores of complaints about Frontier’s internet service and its performance, mostly regarding slow service, frequent outages, and ongoing billing problems.

The BCP found Frontier liable under NRS Chapter 598 which forbids providers from misleading consumers about internet speed and service performance in marketing and advertising. An Assurance of Discontinuance filed with the court allowed Frontier to settle while avoiding admitting any wrongdoing and agreeing to correct service deficiencies.

The state found Frontier repeatedly did not disclose limitations of broadband service availability and knowingly marketed its DSL service at speeds the company could not provide customers.

According to the court document:

• Frontier is required to “clearly and conspicuously” disclose in its print and broadcast advertising the actual internet speeds available to customers in terms of minimum and maximum speed.
• Customers that sign up for a high-speed plan that Frontier cannot provide may switch to a lower speed plan or discontinue service incurring no penalties or early cancellation fees.
• Existing customers that do not receive at least 90% of the highest speed their current plan advertises will receive a service credit of 50% of the internet charge for each month Frontier did not provide such speed. Credits will begin in 2020 and end three years after the date the court accepts the Assurance.
• Frontier has also agreed to invest at least $1 million to improve internet service in Elko County.

The Wall Street Journal believes the majority of Americans are paying for internet speed they never use or need, but their investigation largely ignores the question of traffic bottlenecks and data caps that require many customers to upgrade to premium tiers to avoid punitive overlimit fees.

The newspaper’s examination was an attempt to test the marketing messages of large cable and phone companies that claim premium speeds of 250, 500, or 1,000 Mbps will enhance video streaming. A total of 53 journalists across the country performed video streaming tests over a period of months, working with researchers at Princeton University and the University of Chicago to determine how much of their available bandwidth was used while streaming videos from Netflix, Amazon Prime Video, YouTube and other popular streaming services.

Unsurprisingly, the newspaper found most only need a fraction of their available internet speed — often less than 10 Mbps — to watch high quality HD streaming video, even with up to seven video streams running concurrently. That is because video streaming services are designed to produce good results even with lower speed connections. Video resolution and buffering are dynamically adjusted by the streaming video player depending on the quality of one’s internet connection, with good results likely for anyone with a basic broadband connection of 10-25 Mbps. As 4K streams become more common, customers will probably get better performance with faster tiers, assuming the customer has an unshaped connection that does not throttle video streaming speeds as many mobile connections do and the streaming service offers a subscription tier offering 4K video. Netflix, for example, charges more for 4K streams. Some other services do not offer this option at all.

Image: WSJ

WSJ:

For most modern televisions, the highest picture clarity is the “full” high-definition standard, 1080p, followed by the slightly lower HD standard, 720p, then “standard resolution,” 480p. The Journal study found a household’s percentage of 1080p viewing had little to do with the speed it was paying for. In some cases, streaming services intentionally transmit in lower resolution to accommodate a device such as a mobile phone.

When all HD viewing is considered—1080p and 720p—there were some benefits to paying for the very highest broadband tiers, those 250 Mbps and above.

Streaming services compress their streams in smart ways, so they don’t require much bandwidth. We took a closer look at specific services by gathering data on our households’ viewing over a period of months. Unlike the “stress test,” this was regular viewing of shows and movies, one at a time.

Netflix streamed at under 4 Mbps, on average, over the course of a show or movie, with not much difference in the experience of someone who was paying for a 15 Mbps connection and someone with a one gigabit (1,000 Mbps) connection. The findings were similar for the other services.

There is a brief speed spike when a stream begins. Netflix reached the highest max speeds of the services we tested, but even those were a fraction of the available bandwidth.

Users watching YouTube might launch a video slightly faster than those watching Netflix, and at lower resolution, but this is a function of how those services work, not your broadband speed, the researchers said.

Whereas Netflix tries to load “nice high quality video” when you press play and hence has higher spikes, YouTube appears to “want to start as fast as possible,” said Paul Schmitt, one of the researchers.

A spokeswoman for Alphabet Inc.’s YouTube said the service chooses playback quality based on factors including type of device, network speed, user preferences and the resolution of the originally uploaded video. A Netflix Inc. spokeswoman said the company aims to deliver quality video with the least possible bandwidth. Amazon.com Inc. had no comment.

The Journal finds little advantage for consumers subscribing to premium speed tiers, if they did so hoping for improved streaming video. The unanswered question is why customers believe they need faster internet speeds to get those improvements in the first place.

The answer often lies in the quality of the connection between the streaming provider and the customer. There are multiple potential bottlenecks that can make a YouTube video stutter and buffer on even the fastest internet connection. Large providers have had high profile disputes with large streaming companies over interconnection agreements that bring Netflix and YouTube traffic to those internet service providers’ customers. Some ISPs want compensation to handle the increasing amount of incoming video traffic and have intentionally not allowed adequate upgrades to keep up with growing subscriber demand. This creates a traffic bottleneck, usually most noticeable at night, when even a small YouTube video can get stuck buffering. Other streaming videos can suffer from repeated pauses or deteriorate into lower resolution video quality, regardless of the speed of your connection.

Another common bottleneck comes from oversold service providers that have too much traffic and not enough capacity to manage it. DSL and satellite internet customers often complain about dramatic slowdowns in performance during peak usage times in the evenings and on weekends. In many cases, too many customers in a neighborhood are sharing the connection back to the phone company. Satellite customers only have a finite amount of bandwidth to work with and once used, all speeds slow. Some other providers do not pay for a large enough pipeline to the internet backbone, making some traffic slow to a crawl when that connection is full.

Customers are sold on speed upgrades by providers that tell them faster speeds will accommodate more video traffic, which is true but not the whole answer. No amount of speed will overcome intentional traffic shaping, an inadequate connection to the video streaming service, or an oversold network. Too bad the Journal did not investigate these conditions, which are more common than many people think.

Finally, some customers feel compelled to upgrade to premium tiers because their provider enforces data caps, and premium tiers offer larger usage allowances. Cable One, Suddenlink, and Mediacom customers, among others, get a larger usage allowance upgrading. Other providers offer a fixed cap, often 1 TB, which does not go away unless a customer pays an additional monthly fee or bundles video service.

Data caps are a concern for video streaming customers because the amount of data that can be consumed in a month is substantial. As video quality improves, data consumption increases. The Journal article does not address data caps.

Finally, the Journal investigation confined itself to video streaming, but internet users are also increasingly using other high traffic services, especially cloud backup and downloading, especially for extremely large video game updates. The next generation of high bandwidth internet applications will only be developed if high speed internet service is pervasive, so having fast internet speed is not a bad thing. In fact, providers have learned it is relatively cheap to increase customer speeds and use that as a justification to raise broadband prices. Other providers, like Charter Spectrum, have dropped lower speed budget plans to sell customers 100 or 200 Mbps service, with a relatively inexpensive upgrade to 400 Mbps also gaining in popularity.

Does the average consumer need a premium speed tier for their home internet connection? Probably not. But they do need affordable unlimited internet service free of bottlenecks and artificial slowdowns, especially at the prices providers charge these days. That is an investigation the Journal should conduct next.

July 8, 2019

Hon. Kathleen H. Burgess
Secretary to the Commission
New York State Public Service Commission
Three Empire State Plaza
Albany, NY 12223-1350

Re: 15-01446/15-M-0388 Joint Petition of Charter Communications and Time Warner Cable for Approval of a Transfer of Control of Subsidiaries and Franchises, Pro Forma Reorganization, and Certain Financing Arrangements – Settlement Proposal

Dear Secretary Burgess,

Stop the Cap!, a party in this proceeding that has regularly contributed to the record since the original application by Charter Communications to transfer control of cable systems formerly owned and operated by Time Warner Cable, is pleased to provide our comments regarding the April 19, 2019 proposed settlement between the Department of Public Service/Public Service Commission and Charter Communications, Inc.

Our organization and our members remain actively interested and engaged on this transaction and the impact it has had on consumers and businesses in New York State. We believe that all New Yorkers were harmed as a result of Charter’s lack of compliance with the 2016 Merger Order.

Stop the Cap! believes the existing settlement proposal lacks adequate compensation for the millions of New Yorkers that are now paying higher prices for internet service, receiving compromised service in the New York City area due to an ongoing, unsettled strike action, rural residents still waiting for Charter to meet its commitments to expand its network, and those low income New Yorkers that have been disadvantaged by the difficulty of obtaining affordable internet service. At the time of this submission, nearly half of Charter’s national footprint provides twice the internet speed New Yorkers now receive, making a mockery of the claim that Spectrum provides best-in-class service in this state.

Therefore, we believe the current settlement proposal as offered is insufficient and does not provide adequate compensation to New York consumers and businesses.

Cost Concerns and Charter’s Impact on New York’s Digital Divide

Stop the Cap! objected to the 2016 merger because of our fears it would result in higher prices for internet service for consumers in New York, exacerbating the digital divide. We believe there is now strong evidence to back our concerns.

Since the DPS/PSC issued the original 2016 Merger Order, New Yorkers now pay substantially more for internet service than was the case with Time Warner Cable. Although Charter has significantly raised broadband speeds in New York State, it has also reduced the number of budget-priced options ordinary customers have for broadband service.

In 2016, prior to the Merger Order, Time Warner Cable charged customers as follows (rates applicable to customers in Rochester, N.Y.)[1]:

• Everyday Low Price Internet ($14.99)
• Basic Internet ($49.99)
• Standard Internet ($59.99)
• Turbo ($69.99)
• Extreme ($79.99)
• Ultimate ($109.99)

In 2019, Spectrum offers faster speeds than Time Warner Cable, but at a higher cost[2]:

• Spectrum Internet ($65.99)
• Spectrum Ultra ($90.99)
• Spectrum Gig ($125.99)

The broadband options for low-income New Yorkers have been drastically reduced by Spectrum. Faster speed is of little concern to low income residents that cannot afford the service. New Yorkers saw their cable bills rise as a direct result of this merger, as we predicted. The minimum cost for standalone broadband service from Spectrum for the majority of consumers is now $65.99 a month, and the company has become far more reticent about negotiating customer retention deals that discount the cost of service than its predecessor Time Warner Cable. In fact, Charter CEO Thomas Rutledge made a point of promising to end the “Turkish bazaar” of pricing promotions at Time Warner Cable after the merger[3]. Customers are now subjected to “take it or leave it” pricing[4].

Spectrum’s concern for low income customers in New York is dubious. Stop the Cap! recommended, and the PSC adopted a condition in the 2016 Merger Order temporarily extending the availability of Time Warner Cable’s $14.99 “Everyday Low Price Internet” (ELP) tier of service, available on a standalone basis to any consumer without pre-qualification. However, after Spectrum announced its own plans and pricing, the company never significantly marketed the option of ELP service to its New York customers. In fact, while the company heavily promoted its own conditional Spectrum Internet Assist (SIA) package, consumers informed us they could not subscribe to ELP in New York because Charter customer service representatives misinformed them the service was no longer available, or they confused it with SIA and told them they were not qualified for discounted internet service. It is our testimony that only the most persistent and well-informed customers were likely to successfully sign up for the ELP program, often requiring multiple attempts to do so[5].

The differences between ELP and SIA are stark. ELP required no pre-qualification and customers could keep the package as long as they liked. SIA is limited to customers that qualify for the National School Lunch Program (NSLP), the Community Eligibility Provision of the NSLP, or seniors 65 and over that qualify for Supplemental Security Income[6]. Customers must re-qualify at set intervals to continue eligibility, leaving out low income households without school-age children or seniors on limited incomes but lack SSI eligibility. More importantly, Charter protects its revenue stream by denying eligibility to all customers with pre-existing Spectrum internet service. To qualify, a customer would have to disconnect internet service for at least 30 days, have no outstanding debt with Charter within one year prior to applying for service, and once an SIA customer be sure not to have any outstanding debt with Charter subject to Charter’s “ordinary debt collection procedures.”[7] ELP service, in contrast, was available as an option at any time, to anyone.

Charter’s Speed Gap

New York residents do not uniformly benefit from the best in class service available from Charter Communications. Nearly half of Charter’s footprint outside of New York now offers customers entry-level download speeds of 200 Mbps at the same price most New Yorkers pay for 100 Mbps[8].

Failure to Comply With Rural Broadband Buildout Obligations

The PSC’s decision to rescind approval of the 2016 Merger Order between Time Warner Cable and Charter Communications was done after substantial evidence showed Charter had failed to meet the important obligations to rural New Yorkers required of it to make the merger meet the public interest test.

These failures were systemic and have compromised our rural economies by delaying much-needed internet access. It is for this reason that much of the settlement must be focused on correcting these deficiencies and, as a penalty for underperformance, broaden the number of required passings to deliver service to an even greater number of residents and businesses.

We welcome the settlement proposal to target penalties to help fund further broadband expansion. After years of talking to rural New York residents, it is clear New York’s rural broadband problem will continue after the conclusion of the state’s own broadband expansion program. We have heard from New Yorkers that are deeply concerned because the providers originally designated to serve their rural addresses have now refused to offer service or wrongly claim it will be made available by another provider. There is significant confusion and we fear many rural addresses are likely to “fall through the cracks” and end up serviced by no one.

Therefore, guaranteeing that rural New Yorkers have access to 21^st century broadband service should be of the highest priority.

More than 78,000 New Yorkers have been assigned inferior internet access through HughesNet, a satellite internet provider[9]. HughesNet will allow those New Yorkers designated for satellite service through the Broadband Program Office (BPO) to use up to 100 GB of data per month before throttling service speeds to 1-3 Mbps for the balance of the billing period[10]. HughesNet also cannot guarantee to meet the FCC’s minimum speed definition of 25 Mbps and more importantly, provides an inadequate usage allowance[11].

Spectrum does not cap data usage or utilize speed throttles, while HughesNet severely throttles internet speeds of customers exceeding a data allowance we consider paltry. Recent research reports the average U.S. household now consumes 282.1 GB per month in areas where flat-rate internet service is offered. This leaves addresses designated for satellite service at a significant disadvantage[12].

The BPO has indicated that addresses assigned to the HughesNet program came as a result of a lack of suitable bids to service those addresses with traditional wireline service. There is clear evidence that providers are dissuaded from serving these high cost areas as a result of a lack of return on investment. Therefore, incentivizing Charter Communications to consider servicing as many of these addresses as practical is in the best interests of New Yorkers.

It is our view that cable broadband service is far superior to many current wireless, satellite, and copper-based DSL services, and we believe that technological capability should be a factor in considering whether to credit Charter for an overlapping new passing. We strongly recommend that Charter be encouraged in every way possible to extend service to as many customers currently designated for satellite internet service as possible. Although the proposed settlement does not punish Charter for extending service into these areas, it is reasonable to assume that the company would not otherwise extend service to these locations without receiving some direct or indirect financial benefit or subsidy. Therefore, we argue that Charter should be credited for any and all new passings in satellite-designated areas, without limit. However, we also believe the 30,000 minimum passing requirement is too low, as is the allowed designation of “substantial compliance” after passing 28,500 homes.

The exceptional amount of confidentiality surrounding Plans of Record among the different providers, including Charter, is not in the public interest and prevents impacted New Yorkers from fully participating in this important process. Since these areas have been historically underserved or unserved, there is little, if any, competitive risk by divulging the Plans of Record publicly. Charter’s rural buildout plans and progress reports should be publicly available. As it stands today, we remain unclear about how many already-passed or planned-to-be-passed homes are a part of the 30,000 the Commission proposes to count. Having that information is crucial to offering informed views about the proposed settlement.

With respect to wireline service overlap, we believe that consumers should benefit from the best possible service provider. We recognize that with limited funds available, duplicative service should be avoided. However, if Charter overlaps with another provider, and if the broadband speed Spectrum offers is superior to what is available from the incumbent wireline provider, it should receive credit for that passing even if in excess of 9,400 addresses, so long as that area is designated as rural and underserved.

Incremental Build Commitment

Stop the Cap! strongly approves of the settlement recommendation to establish a fund for supplementary broadband expansion beyond the original commitments defined in the 2016 Merger Order.

However, we offer some recommendations that we believe will make the fund’s purpose more practical to address the real-life experiences rural New Yorkers encounter when requesting that Charter extend service to a presently unserved address.

Charter Communications, like all cable companies, has a confidential formula to determine a reasonable return on investment when considering whether or not to expand service to a currently unserved address. Cable operators designate an amount the company is willing to pay out of pocket to cover construction/expansion costs. That number is often different for residential and commercial subscribers.

The proposed ceiling of $10,000 is very low in our opinion. Rural New York residents seeking Spectrum cable service are frequently quoted prices far in excess of this amount to extend service from a nearby served location. We believe this ceiling should be at least doubled to $20,000 and should be separate from the amount of money Charter routinely self-funds for qualified buildouts. For example, if Charter is traditionally willing to self-fund up to $2,500 of the cost of supplying service to a new residential or commercial customer, a project budget up to $22,500 would be acceptable to proceed, with $2,500 in funds coming from Charter and the remaining $20,000 coming from the Incremental Build Account.

We also recommend that any address rejected for consideration for service expansion for cost reasons be formally notified and offered an opportunity to participate in the process and permitted to optionally finance any cost in excess of the ceiling amount. The current proposal lacks any provision for the participation of residents and businesses in this process. At least some might choose to voluntarily participate in a cost-sharing opportunity to extend cable broadband service to their address.

Impact of Ongoing Strike in the New York City Area

For more than two years, at least 1,500 Spectrum employees affiliated with the International Brotherhood of Electrical Workers Local 3 have been on strike in the New York City area. As a result, Spectrum customers have been subjected to a declining level of service as highly-qualified technicians remain off the job[13]. Charter Communications’ merger with Time Warner Cable was only approved in New York if it met a public interest test, and there is significant evidence New York City customers are not getting the level of service they would otherwise receive if there was no strike action[14].

As a result, the PSC should carefully study the impact of the strike on New York City customers and find any means available to compel a fair settlement and end this historically long labor dispute. Customers are caught in the middle, and there is evidence Charter may not be employing an entirely local workforce to service its customers in the New York City area. This strike would likely have not occurred had Time Warner Cable still been the incumbent cable provider.

Stop the Cap!’s Recommendations for a Revised Settlement Between Charter Communications and the Department of Public Service/Public Service Commission

1. In recognition of the fact Charter has exacerbated the digital divide by pricing internet service higher than its predecessor, Charter must agree to further extend the availability of its Everyday Low Price Internet ($14.99/month) service to new customers for an additional five year period, reset existing New York customer pricing for this package to $14.99 for the same period, and publish a regular notice in bill statements about the availability of this tier, including the fact it is available to all customers on a standalone basis.
2. In recognition of the fact Charter places unreasonable restrictions on qualifying for its Spectrum Internet Assist program, the settlement agreement should require that for the next five years Charter remove the restriction preventing New York customers from enrolling in the SIA program if they already have Spectrum internet service.
3. In recognition of the fact Charter is not supplying all New York residents with best-in-class service, Charter must immediately boost the download speed of its basic Spectrum Internet package from the current 100 Mbps to 200 Mbps in all service areas in New York State, which matches the speed offered in nearly half of its national footprint. For a period of not less than five years, Charter must agree to provide New York State customers with access to any other speed improvements or upgrades as soon as they become available in any other state serviced by Charter.
4. In recognition of the fact Charter has failed to meet its obligations to expand service to rural New York locations, the Commission should move forward with the revised buildout plan that includes additional new passings beyond what was specified in the 2016 Merger Order, and establish the proposed Incremental Build requirement and associated Spectrum-funded Build Account of not less than $6 million.
5. In recognition of the fact New York addresses designated to receive HughesNet satellite internet service will be at a substantial disadvantage because of slower internet speeds and a usage allowance of 100 GB, well below the national data consumption average, the DPS/PSC do everything possible to compel and/or encourage Charter Communications to extend its service to overlap satellite-designated areas and receive credit towards its buildout requirement for doing so.
6. In recognition of the fact some wireline providers offer superior internet service over others, any formula counting the number of homes provided overlapping wireline internet coverage from Spectrum and an existing incumbent wireline provider should consider the capabilities of both providers. If Spectrum offers superior internet speeds, it should be counted as a new passing. If the incumbent matches or exceeds Spectrum’s available speeds, Spectrum’s new overlapped passing should not be counted.
7. In recognition of the fact that rural consumers and businesses have been left in the dark about the status of their designated internet provider, Plans of Record from Charter Communications under this settlement, as well as other BPO-fund recipients should be made public, including the name and contact information of the designated provider and estimated date of service availability.
8. In recognition of the fact cable companies designate a maximum amount they are willing to pay out of pocket to establish service at a new address/location, that amount should continue to be paid out of pocket by Charter, with additional expenses above that amount, up to $20,000, covered by the Incremental Build Account if designated as an incremental buildout project. Any address considered for a new passing must be notified in advance if the proposal would otherwise be rejected because the estimated cost to extend service is beyond the $20,000 ceiling and the amount Charter would typically pay out of pocket. That resident or business would then be offered the opportunity to optionally pay the specified excess amount within a reasonable period of time to allow the project to move forward.
9. In recognition of the fact that Charter technicians and employees in the New York City area have been on strike for over two years, potentially impacting the quality of service Spectrum customers receive in the area, the DPS/PSC should study the impact of the strike on service quality and do all it can to encourage Charter to settle the strike at the earliest opportunity.

We appreciate the Commission and its staff’s hard work on this matter, and hope you will seriously consider our input and ideas, demonstrating once again that the New York Public Service Commission takes its obligations to the citizens of New York seriously.

Very truly yours,

Phillip M. Dampier

President and Founder

Stop the Cap!

[1] http://stopthecap.com/wp-content/uploads/2019/07/twc-2016-rate-card-rochester.jpg

[2] http://stopthecap.com/wp-content/uploads/2019/07/Charter-Spectrum-2019-Rate-Card-Information.pdf

[3] https://www.fiercevideo.com/cable/charter-s-rutledge-pre-merger-twc-offered-a-turkish-bazaar-promo-offers

[4] https://www.syracuse.com/news/2017/05/thousands_of_time_warner_cable_video_customers_flee_spectrums_higher_prices.html

[5] https://www.reddit.com/r/Spectrum/comments/ab02cu/spectrum_deceiving_customers_about_everyday_low/

[6] https://www.spectrum.com/browse/content/spectrum-internet-assist.html

[7] https://www.spectrum.com/browse/content/spectrum-internet-assist.html

[8] https://newsroom.charter.com/news-views/2018-twas-the-year-of-gig-50-million-locations-and-counting/

[9] https://nysbroadband.ny.gov/new-ny-broadband-program/phase-3-awards

[10] https://www.hughesnet.com/node/102201

[11] http://legal.hughesnet.com/SubAgree-03-16-17.cfm

[12] https://www.telecompetitor.com/report-u-s-household-broadband-data-consumption-hit-268-7-gigabytes-in-2018/

[13] http://amsterdamnews.com/news/2017/aug/10/spectrum-strike-affects-us-all/

[14] https://www.pressconnects.com/story/money/2018/08/08/charter-spectrum-cable-new-york-consumers/898780002/