Spectrum appears to be sneaking modem fees back into the equation three years after telling regulators one of the benefits of Charter Communications’ acquisition of Bright House Networks and Time Warner Cable was that Spectrum customers don’t pay modem fees.

Effective April 1st, new Spectrum customers are being charged a one-time fee of $9.99 to either pick up or have shipped a cable modem for self-installation. If a technician installs it for you, the fee is $49.99.

“The one where you’re essentially paying them to go to the store, wait in line, get the modem, and then go home to install it all by yourself is especially nifty,” writes ‘rseiler,’ a forum participant on DSL Reports.

“Just wait for the ‘Bring your own modem’ $9.99 one-time activation fee, since that will be next,” predicted user ‘Techguru30.’

For now, however, the only way to avoid this fee is to activate your own customer-owned modem.

Stop the Cap! today filed comments with the N.Y. Public Service Commission urging the regulators to publicly disclose the nature of their ongoing discussions with Charter Communications.

“Since last July’s vote revoking Charter/Spectrum’s merger approval with Time Warner Cable, the PSC has been engaged in secret talks with the cable company in what we now believe was actually an enforcement bludgeon to get the cable company to meet its commitments,” said Stop the Cap! president Phillip M. Dampier. “We suspect Charter got the message to either clean up its act and follow through on its original merger obligations, or the regulator would make good on its threat to boot the company out of New York. If Charter behaves, the Revocation Order exiling Charter from the state will probably disappear in a final settlement.”

Stop the Cap! agrees with the PSC that Charter should be held to all the merger obligations it originally agreed to, but by keeping the talks secret, consumers and lawmakers have no idea what is happening and cannot intelligently participate in the discussions.

“After multiple extensions, enough is enough,” Dampier said. “Charter also hides from public view almost all the details about its progress in reports to the Commission, making it impossible for rural New Yorkers to know when they might expect to get wired for service.”

Stop the Cap! recommends the PSC take the discussions public and let all New Yorkers have their say about what happens next. The consumer group also reminded the PSC that there are other matters that should be considered in the discussions, including a long-lasting strike of Charter’s workers in the New York City area that is impacting the quality of service for customers.

“Anyone who has had a service problem with Spectrum knows the more experienced a technician you get, the better,” Dampier said. “Using replacement workers or third-party outsourced technicians reduces customer satisfaction and often leaves problems unresolved.”

Stop the Cap! also repeated its recommendation that any assessed penalties or fines that come from any settlement should be targeted to improving broadband service in the state.

“There are more than 75,000 New York homes and businesses that have been thrown under the bus by the New York State Broadband for All program, which assigned slightly subsidized satellite internet access for those locations, making it harder than ever for future funding opportunities for wired broadband to reach these rural residents,” Dampier said. “Most funding programs exclude areas already provided with broadband expansion funds or served by another provider, regardless of how well that provider serves their customers.”

Stop the Cap! suggests that Charter be required to expand its rural broadband commitment to reach as many of the 75,000 stranded rural locations as economically feasible.

“It is about the only solution that can cut through the red tape at this point, because these locations are usually scattered across the state, making it unlikely another provider will ever show much interest,” Dampier said. “I know it isn’t ideal to stick these homes and businesses with a cable company with a poor customer satisfaction score, but when I hear from rural unserved New Yorkers, they are desperate and cannot wait 5-10 years for something else to come along, especially if it turns out to be low-speed DSL.”

Dampier also worries about the reputation of the PSC if it suddenly announces a settlement that allows Charter/Spectrum to stay.

“Last summer, every newspaper in the state reported Charter was being thrown out of New York. Many consumers were thrilled. Then things went quiet as the public learned about extension after extension, delay after delay” Dampier said. “If the Commission suddenly announces the case is settled and Charter can stay without explaining why that is the right decision, a lot of New Yorkers are going to accuse the Commission of selling them out. Comments like that are already appearing in the docket from fed up New Yorkers who have run out of patience.”

The full text of the Stop the Cap! letter follows:

 

February 19, 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.

Dear Secretary Burgess,

Please share our comments with Chairman John B. Rhodes and Commissioners Gregg C. Sayre, Diane Burman, and James S. Alesi.

As a party in the proceeding whose views and recommendations were recognized by the Commission and its staff in drafting a final Merger Order granting Charter Communications its request to merge with Time Warner Cable, we remain actively interested and engaged in this transaction on behalf of consumers in New York.

As you know, most Upstate New Yorkers have just one choice for a telecommunications supplier capable of achieving the FCC’s broadband speed benchmark of 25/3 Mbps. That company is generally Charter Communications. Wireline phone companies in much of western, central, and northern New York offer DSL service to many of their customers, often at speeds well below the FCC’s definition of broadband. At our location, incumbent local exchange carrier Frontier Communications only offers up to 3.1 Mbps, a speed few consumers would consider acceptable in 2019. As a result, whatever cable company offers service in large parts of Upstate and Western N.Y. enjoys a de facto monopoly on broadband service in most of these areas.

In July, 2018 the Commission rightly found that despite multiple warnings, Charter Communications flagrantly failed to meet its obligations to New York as part of the Commission’s Merger Order. Charter Communications has failed to challenge that decision in court or offer credible evidence to rebut your conclusions. In fact, the company has largely relied on selective interpretations of the Merger Order to renege on its rural broadband expansion commitments – a key condition that was necessary for this merger to be in the public interest. While counting new passings in the urban New York City area, the company was also running television ads promoting its rural broadband expansion that we believe misled customers about Charter’s true performance of meeting its commitments to New York.

However, nearly seven months after the Commission voted to effectively expel Charter Communications from New York, the Commission and/or its staff has instead entered into in-camera negotiations with the cable company in what we can only suspect is an effort to enforce Charter’s compliance with the original Merger Order in return for a settlement eventually dispensing with the July 2018 Revocation order.

While we have no objection to the Commission’s actions seeking Charter’s compliance with its merger obligations, we remain concerned that these ongoing negotiations have remained secret for over half a year, with little ability for public interest groups, consumers, and others to provide informed input in those discussions or track their progress. Virtually all of the compliance reports submitted by Charter since the Revocation Order are also heavily redacted, leaving the public and lawmakers in the dark.

A growing number of New Yorkers are now questioning the credibility of the Commission in public comments in the docket. For example, Matt Stern on Nov. 26, 2018 (Comment 572) opined:

“Negotiations done in secret with never ending extensions are not in the best interest of the people of NYS. […] Charter has made little or no line extensions in my town in 20 years. 2 full decades. Many of us live less than 1 mile from the existing infrastructure. This is the same all over upstate NY. We are tired of excuses. If you are unable to secure these necessary infrastructure expansions then resign immediately. We are done waiting.”

Wayne Martin offered in comment 576 (Dec. 15, 2018):

“Surprise, surprise, surprise, another extension granted. The (non)actions of this commission are a slap in the face to the taxpayers of New York.”

On Dec. 18, 2018, Assemblyman Anthony Brindisi (Comment #580) asked the Commission to cease granting extensions to Charter:

“It is simply unacceptable to keep delaying Charter’s exit from New York State if they cannot meet their obligations to customers. While the company keeps getting extensions granted, I am hearing on a daily basis from Charter customers experiencing poor service and increased rates. […] The PSC’s November 23, 2018 order granting Charter an extension until January 11, 2019 to present its exit plan reads, in part, “The Compliance and Revocation Orders were designed to deal with very serious consumer issues presented by Charter’s conduct related to the company’s network expansion.” This is exactly the problem. Charter has had since July to prepare an exit strategy and delaying it any further is not in the best interests of its customers, many of whom rely on cable and internet service for their job, or to communicate with family members.”

On Feb. 6, 2019, Adam Nash complained about the Commission’s repeated extensions in Comment 614:

“[…] I’m concerned with constant extensions Time Warner has been given since July, 2018, so far they’ve been given 5. If this commission was serious on this matter there wouldn’t be this many extensions. It was stated in a article done by the Times Union News in Oct, 2018 that, “Staff believes that the commission should direct that any request granted in response to Charter’s most recent filing be final in form and that any additional time allowed must either result in a settlement agreement being presented to the commission or the cessation of settlement talks,” PSC acting general counsel John Sipos wrote in response to Charter’s request.” This statement was made when it was at its 3rd extension, NYS is at its 5th currently.”

We believe it is long past time for the Commission to publicly disclose the nature of the ongoing negotiations, specific details about the progress that has been made, and the ultimate goal of these discussions. The Commission’s July 2018 Revocation Order provoked shock headlines in the media across the state, and consumers have the expectation Charter will be leaving the state. If that ultimately does not happen, the Commission should be prepared to explain why.[1]

Our group’s view is that Charter Communications must meet each and every obligation in the Commission’s Merger Order if it wants to do business in New York and that a significant penalty is now due for failing to meet those obligations on a timely basis.

We also believe a long-standing labor dispute between the company and its unionized workforce is having an ongoing detrimental impact on the quality of service received by customers in the New York City area. We recommend the Commission undertake an investigation to see how this dispute is impacting customers.

We recommend you review our submission (item #278) of Apr. 5, 2018 recommending specific penalties against Charter that would, among other things, expand the company’s rural broadband expansion commitment even further (either in lieu of, or in addition to, financial penalties) to assist at least some of the 75,000+ unserved New York locations that are being offered substandard satellite internet access[2] from Hughes Network Systems, LLC. These locations lack wired broadband because no provider bid for financial assistance to undertake a buildout during the last round of the New NY Broadband Program, administered by the New York Broadband Program Office.[3]

These addresses are effectively stranded because programs offering public subsidy funding usually disqualify locations already provided with subsidies as duplicative.[4] But satellite internet providers cannot guarantee the speeds required to qualify as broadband, leaving those locations as a distinct disadvantage and less likely to ever get suitable broadband.[5] HughesNet also includes a very low data cap ranging from 10-50 GB.[6] In 2018, the average internet-connected home used 268 GB of data per month.[7] A penalty that includes an incentive or requirement for a private company like Charter to wire many of those locations offers a unique opportunity to resolve this serious problem. Charter offers customers at least 100 Mbps of speed and no data caps.

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

[1] “New York Moves to Kick Spectrum Out of State,” New York Times (Jul. 27, 2018) (https://www.nytimes.com/2018/07/27/nyregion/new-york-spectrum-charter-cable-broadband.html), “NY State Regulators Move to Order Charter Out of New York Over Alleged Broadband Woes,” WNBC-TV/NBC News (Jul. 27, 2018) (https://www.nbcnewyork.com/news/local/NY-PSC-Charter-New-York-489356141.html), “New York’s order kicking Spectrum cable out of state ‘pretty radical’,” The Post-Standard (Syracuse), (Jul. 27, 2018) (https://www.syracuse.com/news/index.ssf/2018/07/new_yorks_move_to_kick_spectrum_cable_out_of_state_pretty_radical.html), “PSC Orders Cable Giant Charter Out of NY,” (Albany) Times-Union, (Jul. 27, 2018)  (https://www.timesunion.com/business/article/PSC-holding-special-meeting-on-Charter-Friday-13109921.php), “New York tells Spectrum Cable to get out of the state,” The Buffalo News, (Jul. 27, 2018) (https://buffalonews.com/2018/07/27/psc-wants-spectrum-cables-owner-to-get-out-of-new-york/)

[2] Satellite Broadband Remains Inferior to Wireline Broadband (VantagePoint) (Sept., 2017) (https://www.vantagepnt.com/wp-content/uploads/dlm_uploads/2018/04/vps-satellite-broadband-remains-inferior-to-wireline-broadband-090717.pdf)

[3] “Broadband Delays Prompt Frustration in Rural NY” Lockport Union-Sun & Journal (Apr. 2, 2018) (http://www.govtech.com/network/Broadband-Delays-Prompt-Frustration-in-Rural-New-York.html)

[4] “While the first round NOFA was silent on the eligibility of such overlapping projects, the second round NOFA specifically stated that areas already served by a RUS incumbent service provider were not eligible for subsequent funding.” (Selected passage from USDA’s “Broadband Initiatives Program – Pre Approval Controls Audit Report 09703-0001-32”) (March, 2013) (https://www.usda.gov/oig/webdocs/09703-0001-32.pdf)

[5] “HughesNet service is available in the contiguous U.S., Alaska and Puerto Rico. Stated speeds and uninterrupted use of service are not guaranteed. Actual speeds will likely be lower than the maximum speeds during peak hours.” (HughesNet Subscriber Agreement last revised March 10, 2017 — PART I – KEY PROVISIONS – 1.1 SPEED CLAIMS AND DISCLAIMERS.) (http://legal.hughesnet.com/SubAgree-03-16-17.cfm)

[6] “HughesNet Gen5 Fair Access Policy for the 10 GB, 20 GB, 30 GB and 50 GB Service Plans” (http://legal.hughesnet.com/FairAccessPolicyGen5.cfm)

[7] “OpenVault U.S. Household Broadband Data Consumption” (Jan. 22, 2019) (http://openvault.com/openvault-broad-based-broadband-usage-acceleration-in-2018-1tb-power-users-double-to-4-12-of-all-households/)

Spectrum customers who thought Time Warner Cable sent out too much junk mail now regret criticizing their old cable company.

“I have really come accept the truth,” writes Stop the Cap! reader Dustin Hedges. “There are worst cable companies than Time Warner Cable and Charter Spectrum is one of them.”

Hedges is tired of the relentless junk mail he receives every week from the cable company, primarily to advertise cable television.

“I cut the cord with them for a reason: they cost too damn much and considering all of the mailers they are sending me, I can now see where some of my cable dollar used to go,” Hedges tells us. “Some of them look like urgent notices about a late bill or claims to contain ‘important information’ about my account, which could mean another damn rate increase, but no — it is just another advertisement for their TV service I quit last year.”

Hedged ditched cable television after Spectrum converted to an all-digital format, requiring customers to start leasing cable boxes on their extra televisions.

“I tried the Roku route and didn’t like it because it took too long to change channels and it often buffered or ran 2-3 minutes late, meaning other things I might want to watch I would miss the start of because the Roku app made me late,” Hedges complains. “What really ticked me off is that they keep raising the cost of the box rental and the boxes they are giving out now are cheap garbage. They don’t even have a clock on the front anymore. My bill would have gone up $35 a month. I cancelled.”

Today, Hedges is a Spectrum internet-only customer, and thinks Spectrum does not appreciate the business he still gives to them.

“I pay these crooks $65 a month for internet service, when I used to pay Time Warner Cable less than $50, and they are still not happy about it,” Hedges complained. “They constantly send me TV offers for 10 channels, 25 channels, or to go right back to regular cable TV where I can fall for the same trap of low prices to start and boom stick to it you with regular pricing later on. I don’t watch it, I tell them I don’t want it, and that they can save everyone’s money by not sending me this junk mail. They tell me they won’t stop the mailers.”

Indeed, Charter Spectrum’s customer mailing policy indicates they do reserve the right to market existing customers additional products and services at any time. If a customer has a triple play package, they rarely receive anything from the cable company, at least until recently when Spectrum Mobile started a big marketing campaign. If one drops TV and/or phone service, the junk mail will soon grace your mailbox. By far, most mailers concern TV service. Spectrum markets cable cord-cutters and cord-nevers slimmed down packages delivered over their Spectrum internet connection. Occasionally, the company will also remind customer landline phone service is also still available, typically for around $10 a month. When Time Warner Cable pushed its Intelligent Home security service, those mailers were a common sight to many customers. Charter Communications has no interest in the security monitoring business, so although it maintains service for existing customers, it no longer markets Intelligent Home to attract new ones.

But we have good news for Mr. Hodges and other customers looking for a possible opt out path for junk mail, sales calls, and worst of all – door knocking sales teams. Charter Spectrum maintains an online privacy preferences form that should eventually stop marketing mailers for other products and services, including cable TV. Just click on the pertinent image(s) to be taken to their respective web pages, complete and submit the forms, and your mail volume should drop.

Legacy Time Warner Cable CPNI Opt-Out Form (only for use by customers still holding on to their old Time Warner Cable packages.)
Legacy TWC customers should also fill out the Privacy Preferences form:

Charter/Spectrum and Legacy Time Warner Cable/Bright House Customers
Privacy Preferences:

A YouTuber produced this rant about endless junk mail from Spectrum. (11:46)

Despite repeated claims from some in Washington that eliminating net neutrality would stimulate U.S. telecommunications companies to invest more in their networks, Charter Communications has announced a dramatic $1.9 billion cut in capital expenditures (CapEx) spending on its Spectrum cable systems for 2019.

Charter posted 2018 revenue of $43.6 billion (up 4.9 percent over 2017), with especially healthy returns for its internet service, which grew 7.1%. Charter earned $11.2 billion in revenue, up 5.9% in the fourth quarter of 2018 alone, partly from rate increases, reduced costs, and additional broadband customers.

Republican FCC commissioners have repeatedly argued that deregulating the internet by sweeping away net neutrality would stimulate companies to invest more in their networks. But it now appears the reverse is true. In 2017, Charter spent $8.7 billion on network investments; in 2018 the company spent $9.1 billion. But this year, with net neutrality no longer the law of the land, the cable company is planning to dramatically cut investments in 2019 to just $7 billion. The combined company, which now includes Time Warner Cable (TWC) and Bright House Networks (BH), has never spent this little on capital expenditures. The 2016 merger between Charter and TWC and BH forced a 189.4% spike in spending after the deal was completed, as Charter began a cable system overhaul and upgrade.

Charter is expecting it can distribute more of its revenue to shareholders, share buybacks, and debt payments as a result of the completion of its all-digital conversion project, which eliminated analog television signals from cable systems to make more room for revenue-enhancing internet service. The company also gets to lease more set-top boxes to customers seeking to view digital television signals on older analog TV sets.

Charter also reports it has successfully completed its DOCSIS 3.1 internet upgrade to more than 99% of its cable systems, allowing the introduction of premium-priced gigabit internet speed.

Charter executives signaled investors earlier this month Charter expects to post greater revenue and profits as a result of the spending reductions, but these new-found gains will have no effect on the company’s ongoing plans to continue mildly aggressive rate increases in 2019.

Charter has not disclosed how much it plans to spend on its new mobile business in 2019. The company is marketing its mobile phone service more aggressively this year as it prepares to accept customers bringing existing phones to its cellular service, powered by Charter’s in-home and in-business Wi-Fi and Verizon Wireless’ 4G LTE network.

Stop the Cap! today appealed to New York’s Freedom of Information Law Officer to force Charter Spectrum to unredact customer complaint statistics on Charter Communication’s performance in New York since its 2016 merger with Time Warner Cable.

“Charter Spectrum’s merger with Time Warner Cable was only approved in New York after the company agreed to certain conditions that would allow the merger to be considered in the public interest,” said Stop the Cap! president and founder Phillip Dampier. “An annual review and at least a 17.5% reduction in the company’s video services complaint rate was part of that deal, but Charter won’t publicly state exactly how much of a reduction the company has achieved, claiming that information is ‘confidential’ and ‘secret.'”

“But Charter had no problem sharing its damage control explanation for why it is still dealing with a lot of angry customers annoyed about the increasing cost of doing business with Spectrum as a result of withdrawing promotions, forcing customers to rent expensive equipment, and deal with pricing and package changes that deliver fewer channels for more money,” Dampier added.

Stop the Cap! argues the public has a right to know how well Charter is meeting its public interest commitments, especially after the state regulator voted last summer to kick the company out of New York (a decision that has been effectively stalled as Charter and DPS staff continue ongoing private settlement discussions.)

“Keeping complaint rates secret is an incentive for Charter to not invest adequately to deliver service improvements and its claim competitors will be able to exploit that information is laughable, as many New Yorkers have no other choice for high-speed internet service. It isn’t as if other cable companies are forcing their way into the state to offer customers another choice,” Dampier argued. “Charter is almost exclusively responsible for its complaint rate, based on how it chooses to conduct business. Had the company adopted more customer-friendly packages, services, and pricing, their complaint rate would have dropped like a rock.”

The letter in full:

February 6, 2019

Records Access Officer
Department of Public Service
Three Empire State Plaza
Albany, New York 12223

To Whom It May Concern:

We are requesting the release of an unredacted version of Charter’s 2018 PSC Video Complaint Data Report (three page letter dated 2/4/2019). Charter’s claim that this “sensitive” and “proprietary” information is useful to competitors is unproven and specious. Complaint rates are effectively modulated by a company’s choice of how it conducts its business, with or without the presence of an effective competitor. In this case, Charter admits its own business decisions, not competition, played a key role in the complaint rate, as shown below.

More importantly, this information was required to be submitted as part of the DPS Merger Approval Order granting Charter’s request to merge with Time Warner Cable. That merger was approved only after Charter agreed to certain obligations that would deliver sufficient pro-consumer benefits to meet the state’s requirement that the merger was in the public interest. A periodic review of Charter’s compliance is part of that process.

Charter is asking to keep such compliance information confidential, unreviewable, and unavailable to third party scrutiny. It also prevents organizations like ours, a party in the proceedings, from reviewing the data and submitting informed views to DPS commissioners and staff about the performance of Charter Communications under the Merger Approval Order.

Further, there is no demonstrable causal link shown between competitive injury and disclosure of video customer complaint rates that are the direct result of poor service experiences with Charter Communications. Charter is effectively asking the DPS to prohibit the public’s access to data that is part of a public interest test.

Allowing Charter to suppress public disclosure of raw data while leaving unredacted its damage control explanations for customer complaints also gives Charter an unfair advantage to explain away those complaints.¹

Requiring Charter to disclose customer dissatisfaction numbers is in the public interest and provides a strong incentive for Charter to provide better, more customer-responsive service to customers in New York, likely reducing the number of complaints from unhappy customers in the first place.

Therefore, we appeal to the FOIL Officer to release an unredacted version of the three-page compliance letter.

¹ “As the Commission is aware, changes—including improvements—can sometimes trigger complaints as customers adjust to new service options, promotions, and packages. Despite the increased level of activity and customer interaction related to integration and product advancement, Charter is pleased to report that both initial and escalated complaints have declined significantly compared to 2014 complaint numbers….” — 2018 PSC Video Complaint Data Submission, Charter Communications, 2/4/2019

Very truly yours,

Phillip M. Dampier
President and Founder