Pai

As a result of the multibillion dollar cable merger between Charter Communications, Bright House Networks, and Time Warner Cable, the three companies involved freely admitted: your cable bill was unlikely to decrease, you won’t have any new competitive options, there was no guarantee your service would improve, or that you would get faster broadband service than what Time Warner Cable Maxx was already delivering to about half its customer base.

While shareholders and Wall Street bankers made substantial gains, top Time Warner Cable executives walked away with multimillion dollar golden parachute packages, and Charter took control of what is now the country’s supersized, second most powerful cable operator, regulators also required the dealmakers share at least a tiny portion of the spoils with customers.

Then President Donald Trump’s FCC chairman — Ajit Pai — took leadership of the telecom regulator. Now all bets are off.

Pai is reconsidering the settled deal conditions imposed by the FCC under the last administration, and wants to give Charter Communications a free pass to let them out of their commitment to compete. Last week, Pai circulated a petition among his fellow commissioners to roll back the commitment Charter acknowledged to expand its service area to at least one million new homes that already get broadband service from another cable or telephone company.

Former FCC chairman Thomas Wheeler sought the competition requirement to prove that cable operators can successfully run their businesses in direct competition with each other, potentially inspiring other cable companies to face off with incumbent operators outside of their own territories. A paradigm shift worked for Google, which inspired ISPs to boost speeds in light of its gigabit Google Fiber service, which reset customer expectations.

The FCC order approving the merger deal was hardly onerous, requiring Charter to compete head-to-head for customers in places the company can choose itself. Lawmakers eliminated exclusive cable franchise agreements years ago, but established major cable operators like Charter have gone out of their way to avoid competing in areas that already receive cable service. While Wheeler may have hoped some of that competition would be directed against fellow cable companies, Charter CEO Thomas Rutledge quickly made clear to investors and the FCC Charter would continue to avoid direct cable competition, instead promising to expand service into non-cable areas that already get DSL service from the phone company or no broadband at all.

“When I talked to the FCC, I said I can’t overbuild another cable company, because then I could never buy it, because you always block those,” Rutledge said. “It’s really about overbuilding telephone companies.”

Charter’s CEO believes most phone companies are not competing on the same level as cable operators and are unwilling to make the necessary investments to upgrade their aging wired infrastructure to offer faster internet speeds. That makes competing with telephone companies like Windstream, Frontier, and Verizon’s DSL-only service areas a much better proposition than trying to compete head-to-head with Comcast, Cox, or Cablevision.

Rutledge’s clear views about Charter’s expansion plans apparently never made it to the American Cable Association, a cable industry lobbying group that defends the interests of independent and smaller cable operators. Despite Rutledge’s public statements, the ACA and its members are afraid Charter could expand on their turf anyway, potentially forcing small cable operators to compete with the same level of service Charter offers. The horror.

The ACA’s arguments found a sympathetic audience in Mr. Pai and now he wants to let Charter off the hook, at the expense of competition and better service for consumers.

Under the proposal circulated by Pai, Charter would still be required to expand its cable broadband service by at least one million new homes, but those homes would no longer have to be in areas outside of Charter’s existing service footprint. In practical terms, this would mean Charter would focus on wiring areas not far from where it provides service today — ‘DSL or nothing’-country. Charter would also be able to fritter away the number of expansions required by counting newly constructed neighborhood developments it would have likely wired anyway, as well as upgrading its remaining shoddy legacy cable systems — some still incapable of offering broadband or phone service.

The ACA’s talking points prefer to emphasize the David vs. Goliath scenario of a big bully of a cable company like Charter being forced to compete (and likely obliterate) existing small cable operators:

“The overbuild condition imposed by the FCC on Charter is stunningly bad and inexplicable government policy,” said ACA president and CEO Matthew Polka, in a statement. “On the one hand, the FCC found that Charter will be too big and therefore it imposed a series of conditions to ensure it does not exercise any additional market power. At the same time, the FCC, out of the blue, is forcing Charter to get even bigger.”

The real goal here is to minimize direct competition at all costs. The FCC’s deal conditions already included the need for more rural broadband expansion. Wheeler’s second goal was to introduce a new model — cable company competing against cable company — fighting for new customers by offering consumers better service and pricing. The existence of such competition would belie the industry’s claim that cable overbuilds and head-to-head competition is uneconomical. Wildly profitable, perhaps not, but certainly possible. Historically, the traditional way cable operators dealt with the few instances of direct cable competition was to buy them out to put them out of business. Rutledge was certainly thinking along those lines when he complained that the FCC’s order to compete did not include permission to eventually devour its competitor, effectively making competition go away.

Had Charter chosen to compete with cable companies not afraid to spend money to upgrade service above and beyond the anemic broadband speeds Charter offers, it would likely find few takers for its maximum 300Mbps broadband service that comes with a $200 install fee.

“Why would we go where we could get killed?” Rutledge admitted.

Industry claims that the cable business is already fiercely competitive are also countered by Rutledge’s own statements making clear direct competition with brethren cable companies on the cusp of speed-boosting DOCSIS 3.1 upgrades was bad for business. Instead, he would focus on competing with inferior phone companies, which he characterized as mired in debt, still skeptical about the financial wisdom of fiber optic upgrades, and the only competitor where dismal 3-10Mbps DSL service presented a ripe opportunity to steal customers away.

Clyburn – A likely “no” vote.

Charter’s merger approval and its conditions are a sealed deal that was acceptable to Charter and its shareholders and at least offered small token treats to ordinary consumers. Mr. Pai’s willingness to reopen and undo those commitments is just one reason we’ve referred to his regulatory philosophy as irresponsible, nakedly anti-consumer, and anti-competitive. Mr. Pai’s willingness to embrace things as they are comes at the same time most consumers are paying the highest broadband bills ever while also facing an epidemic of usage caps, usage billing, and increasing service and equipment fees. Mr. Pai’s other actions, including ending an effort to introduce competition into the set-top box market, curtailing customer privacy, ending inquiries on usage caps/zero rating, threatening to eliminate Net Neutrality, and reducing the FCC’s already anemic focus on consumer protection makes it clear Mr. Pai is a company man, on a mission to defend the interests of Big Telecom companies and their lobbyists (that also have a history of hiring friendly regulators for high-paying positions once their government job ends.)

That conclusion seems apt considering what Mr. Pai said about Chairman Wheeler’s vision of improving broadband: “one more step down the path of micromanaging where, when, and how ISPs deploy infrastructure.” Missing from his statement are consumers who have spent the last 20 years watching ISPs govern themselves while waiting… waiting… waiting for broadband service that never comes.

Mr. Pai’s proposal needs just one additional vote to win passage. That extra vote is unlikely until President Trump appoints another Republican commissioner. Pai’s proposal isn’t likely to win support from the sole remaining Democrat commissioner still at the FCC — Mignon Clyburn.

A stack of revealing company documents obtained by the New York State Attorney General’s office suggest top executives at Time Warner Cable were aware the company was intentionally misleading customers and the Federal Communications Commission with broadband performance promises the company knew it could not keep.

Portions of the documents were made part of the public record as part of a lawsuit filed today by New York Attorney General Eric Schneiderman against Charter Communications and Time Warner Cable (now a subsidiary of Charter). The suit alleges that Time Warner Cable systematically and intentionally underdelivered on its commitments to improve broadband service and oversold its network in New York, causing widespread speed slowdowns and performance issues.

The 87-page complaint reveals Time Warner Cable woefully underinvested in its network, leaving customers with poor internet speeds and obsolete cable modems the company leased to customers for up to $10 a month. But a careful review of other statements from company executives also undermines the cable industry’s arguments for data caps, paid interconnection agreements with content providers, the lack of need for Net Neutrality, and the overuse of marketingspeak that allows cable operators to promise speeds they know they cannot deliver.

This two-part Stop the Cap! report analyzes the lawsuit and its offer of proof and will take you beyond the headlines of the legal action against Charter Spectrum/Time Warner Cable and explore some of the cable company’s confidential emails, memos, and meetings.

The documents reveal a lot of ordinarily highly confidential data points about how many subscribers share a Time Warner Cable internet connection, how many deficient and obsolete cable modems are still in the hands of customers, and how the pervasive need to avoid investing in network upgrades caused executives to repeatedly reject spending requests while approving rate increases.

Typical complaints from Spectrum-TWC customers sent to N.Y. Attorney General’s office.

How Spectrum-Time Warner Cable Brings You Broadband Service

N.Y. Attorney General Eric Schneiderman

Time Warner Cable was one of New York’s most important communications companies. At least 2.5 million New York households — one out of three — get internet access from what is now known as Charter Spectrum. Every broadband customer belongs to a “service group” made up of a number of your neighbors who share the same internet bandwidth. In February 2016, the average Spectrum-TWC service group in New York had about 340 subscribers. The range varied widely in practice, from as few as 32 customers to as many as 621 subscribers belonging to the same group. The fewer the number of customers, the less chance they will encounter a traffic-related slowdown caused by using the internet at the same time. For those congested service groups that do, broadband speeds begin to drop, sometimes precipitously.

The amount of total collective speed available to each service group depends on how much bandwidth the cable operator sets aside for broadband. For the last several years, Time Warner Cable typically reserved eight channels of about 38Mbps each for every neighborhood service group. That is equivalent to about 304Mbps — about the maximum speed one Time Warner Cable Maxx customer can get today. If four customers with 50/5Mbps service decided to “max out” their connection each evening, the remaining 336 customers in the service group would get to collectively share about 104Mbps. If six customers did that, the remaining 334 customers would be left with sharing 4Mbps.

Cable operators have always bet customers won’t be online all at the same time. But as internet usage, particularly online video, has grown, customers are increasingly spending primetime hours of 7-11pm streaming high bandwidth video instead of sitting in front of the television. If a large number of customers in a service group purchasing 15/1Mbps service from Time Warner Cable happened to be viewing HD video at the same time, the speed in that neighborhood could drop to as low as 1Mbps, a far cry from what customers were paying to receive.

Time Warner Cable customers that used to experience nightly slowdowns were told “your node is congested” to explain why speeds were dropping. The engineers that developed the cable broadband standard we know today as DOCSIS, envisioned that upgrades or “node splits” would be periodically required to deal with customer growth and increased traffic. Newer DOCSIS standards also give providers the option of enlarging the amount of shared bandwidth by adding additional channels. In the past, Time Warner Cable performed node splits, dividing up congested neighborhoods into multiple service groups. But with the advent of DOCSIS 3 and 3.1, Time Warner Cable also began expanding the number of channels devoted to broadband, enlarging the amount of shared bandwidth available to customers. Unfortunately for customers, Time Warner Cable was among the slowest of the nation’s cable operators to adopt this strategy.

Delivering Slow Speeds for High Prices

As a result of Time Warner Cable’s lack of investment, the company had to manage its bandwidth limitations in other ways. The documents from the recent lawsuit helped adds to our knowledge of how the company tried and often failed to manage the problem:

1. It avoided regularly increasing internet speeds for its customers. Time Warner Cable customers in most cities were limited to a maximum of 50/5Mbps until the Maxx upgrade program began. Other cable operators were selling speeds several times faster, but Time Warner risked a handful of internet enthusiasts utilizing faster available speeds to consume the bandwidth available to the neighborhood service group. Slower speeds mean fewer upgrades.
2. It advertised speeds and performance company engineers and executives admit in confidential documents they could not consistently deliver (or deliver at all in some instances).
3. It continued to rely on outdated and obsolete cable modems that severely limit subscribers’ speed, regardless of what level of service the customer subscribed to.
4. It avoided network investments for budgetary reasons, even when severely congested neighborhoods exceeded 80-90% usage of all available bandwidth, causing noticeable performance problems for customers.

The lawsuit alleges Time Warner Cable consistently sold internet speed tiers that did not or could not deliver the advertised speeds to consumers. The lawsuit points to three reasons why customers don’t get the speeds they paid for:

Deficient Equipment: Spectrum-TWC leased older-generation, single-channel modems despite knowing that such modems were, in its own words, not “capable of supporting the service levels paid for.” Over the same period, Spectrum-TWC also leased older generation wireless routers to subscribers despite knowing that these routers would prevent them from ever experiencing close to the promised speeds over wireless connections.

Congested Network: Spectrum-TWC failed to allocate sufficient bandwidth to subscribers by reducing the size of its service groups or increasing the number of channels for its service groups. These network improvements would have enabled subscribers to achieve the fast Internet speeds that they paid for. Results from three independent Internet speed measurements confirmed that Spectrum-TWC consistently failed to deliver the promised speeds to subscribers on its high-speed plans.

Limitations of Wireless: Spectrum-TWC misled subscribers by assuring them that they could achieve the same Internet speeds through wireless connections as with wired connections despite knowing that accessing the Internet using wireless routers would sharply reduce the Internet speeds a subscriber would experience

A key goal for Time Warner Cable executives was to push consumers into broadband upgrades that increased the average revenue they receive from each of their customers. A 2013 internal company presentation called broadband upselling a “strategic pillar” to “capture premium pricing.” If customers endured pushy sales pitches, it may have been because the company tied customer service representative compensation to increasing monthly revenue received from subscribers. If the representative sold you more, they earned more.

Although it sounded good on the surface, internal company documents also show there was pushback from company employees who feared aggressive sales pitches would only further alienate customers.

“Our customers NEED to be put into the proper packages so that we are conducting business with integrity,” wrote one employee in a presumably anonymous employee survey. “It seems as if this is a hustlers job trying to out hustle everyone else trying to make the most money WE can and not doing the right thing . . . By operating like this, customers laugh at our integrity as a company.”

Time Warner Cable Accused of Supplying Obsolete Cable Modems at Prices Up to $10 a Month

Your speed: as slow as 20Mbps

Assuming a customer did upgrade their internet speed, the Attorney General alleges at least 900,000 of those customers were given older generation single-channel DOCSIS 1 and DOCSIS 2 cable modems the company knew were incapable of delivering the speed the customer signed up for. Even worse, the company began charging monthly fees up to $10 a month for equipment the rest of the cable industry deemed obsolete.

A February 2015 email written by the former head of corporate strategy suggests senior corporate management knew they were selling broadband plans to customers that would never perform as advertised.

“The effective speeds we are delivering customers in a 20Mbps tier when they have a DOCSIS 2 modem is meaningfully below 20Mbps,” the email read.

The following month a company engineer sent email explaining the company’s network utilization targets would result in customers using older single-channel modems receiving speeds below 10Mbps during peak utilization times, even if they paid for 50Mbps or faster service available in some markets. The engineer recommended only allowing customers subscribed to internet speeds below 10Mbps to have a single channel modem if absolutely necessary.

A year later, Time Warner Cable executives admitted to the Office of the Attorney General of New York that customers with internet speeds of 20Mbps or higher needed a DOCSIS 3 modem. But during that same month, the cable company leased DOCSIS 2 modems to over 185,000 customers on plans of 20Mbps or higher, for $10 a month. Even worse, almost 800,000 New Yorkers subscribed to 20Mbps or higher speed plans with a deficient modem for three months or longer. And still worse, despite a company directive issued in June 2012 to remove DOCSIS 1 modems from its network, over 100,000 New Yorkers were still leasing a first generation and long obsolete cable modem for three months or longer, again for the same $10 a month. The Attorney General alleges the company knew these subscribers would not get the internet speeds their plans promised and continued to supply deficient equipment for years anyway.

Rate Hikes Yes, Spending Money on Urgent Equipment Upgrades No

DOCSIS 2 modems are largely obsolete, but not at Time Warner Cable.

As customers endured near-annual rate hikes on broadband service, Spectrum-Time Warner Cable refused to launch a plan to recall and replace obsolete cable modems because it was beyond the company’s “capital ability.”

This finding came in response to a confidential June 2013 presentation that included a startling admission: 75% of the cable modems connected to customers with Time Warner Cable’s Turbo (20Mbps) internet plan were non compliant. “DOCSIS 2 modems are still being deployed due to budget constraints,” the presentation stated. An alternate plan suggested postcards be sent to affected customers offering to replace their modems if they returned them because of the speed problems those customers experienced. That plan didn’t get far either.

The Attorney General calls the company’s decision a “self-serving” financial move when it rejected its own engineers’ recommendations to swap modems.

In 2013, company officials did begin prioritizing replacing the modems of a select group of their customers — those volunteering for the FCC’s ongoing Sam Knows broadband speed test program, designed to verify ISP performance. Realizing Time Warner’s speed rankings would be in jeopardy if panelists were still using DOCSIS 2 modems, it made a deal with the FCC to have the agency temporarily exclude slower speed results obtained from customers with DOCSIS 2 modems until they were replaced. Customer Service Representatives were instructed to treat all FCC panelists with “VIP treatment” and provide them with the “best in class devices.” (Full disclosure: Stop the Cap! is a broadband customer of Spectrum-Time Warner Cable and serves as a FCC/Sam Knows panelist.) Spectrum-TWC promised after those customers were upgraded, all others with older equipment would receive replacements as well, a commitment the Attorney General claims the cable company broke.

Even after Time Warner Cable launched its Maxx upgrade program, offering speeds up to 300Mbps, the cable company was still dealing with a sizable number of customers still using DOCSIS 2 modems that could not deliver anything beyond 20Mbps. In 2014, the company promised it would supply new modems to all subscribers with older equipment at no charge. An experimental “Ship to All” plan would have automatically sent the equipment to every affected customer. Management rejected the program as too expensive and replaced it with a “Raise Your Hand” plan that required customers to self-identify obsolete equipment, contact customer service and wait through long hold times or go to the inconvenience of visiting a Time Warner Cable store. In the notice to subscribers, Time Warner never disclosed the most important reason they needed a new modem — without it they would receive one-tenth or less of the speeds they paid to receive. Customers who failed to return their DOCSIS 2 modems in good condition were also penalized with an unreturned/damaged equipment fee, even though the equipment is now deemed obsolete across the industry.

Company officials admitted internally that “Raise Your Hand” was a plan destined to fail, with large numbers of customers not bothering to take the bureaucratic steps needed to exchange modems. Customers in upstate New York received no notification at all. It was a financial win for the company, which collected $10 lease payments on obsolete equipment it did not have to spend any money to replace. The company celebrated the savings, noting in a January 2015 internal presentation “[c]hanging the Maxx [Ship to All] approach to a Raise Your Hand approach (65% of subscribers take an active swap, with passive swaps for the balance) helped us reduce our capital budget by $45 [Million].” Later in 2015, the company internally reported the savings were even greater than expected — only 25% of customers responded to the offer to replace their modems.

New York’s Secret 20Mbps Speed Cap

For reasons unknown, Time Warner Cable also quietly began secretly locking down obsolete DOCSIS 2 cable modems with a speed cap of 20Mbps while not informing customers or customer service that the account should not have or be sold a higher speed plan. Nevertheless, Spectrum-TWC continued to charge customers with DOCSIS 2 modems as much as $70 a month for 100Mbps internet access that would never exceed 20Mbps.

Wi-Fi Woes

Time Warner Cable Maxx speeds don’t always do well on Wi-Fi.

Spectrum-TWC’s former vice president of customer equipment observed in an October 16, 2014 internal email to senior colleagues that “we do not offer a [device] today that is capable of the peak Maxx speed of 300Mbps via wireless. Generally a customer connecting via wireless will receive less than 100 Mbps,” using the 802.11n wireless routers that Spectrum-TWC leased to subscribers.

This fact of life affected 4 out of every 5 Time Warner Cable Maxx customers subscribed to 200 and 300Mbps plans who leased a Wi-Fi equipped cable modem from Spectrum-TWC. As of February 2016, that meant over 250,000 New York customers were paying for premium internet speeds they would never get over the supplied 802.11n wireless router. Customers were never informed. But company executives were, and as a result, the executive told his colleagues that “we are going to experience a mismatch between what we sell the customer and what they actually measure on their laptop/tablet/etc.”

A separate Spectrum-TWC technical document discussing wireless connectivity, dated January 2015, concluded that “[i]n a real world scenario, most [802.11n] adapters will produce speeds of 50-100Mbps.”

In fact, a Spectrum-TWC internal presentation, dated June 12, 2014, recommended that the company deploy devices with newer generation 802.11ac wireless routers to all subscribers on speed tiers of 200Mbps or higher because such routers came closer to delivering the promised speed. Spectrum-TWC rejected that recommendation, again for financial reasons.

Coming up tomorrow… advertising faster speeds or broken promises, company executives tell the truth about bandwidth costs, how to grossly manipulate the FCC’s speed tests, throttling your favorite websites for bigger profits, and hassling online game fans.

Higher bills, confusing and conflicting services and pricing, and badly trained customer service representatives are just a few of the problems afflicting customers transitioning from Bright House Networks and Time Warner Cable to service plans being gradually introduced around the country by Charter Communications/Spectrum. Stop the Cap! has collected more than 50 reports from customers experiencing problems, bill shock, lost access to Wi-Fi hotspots, and “bait and switch” promotions promised by one representative only to be reneged on later when the first bill arrives.

The $58/Month Charter Spectrum Rate Hike

Park La Brea resident Lydia Plona is one of dozens of customers in California that have complained to the Los Angeles Times about their soaring cable bills after Charter/Spectrum replaced Time Warner Cable in Southern California. It was among the first regions in the country to say goodbye to Time Warner Cable and hello to Charter and their Spectrum-branded service plans. Unfortunately, Charter has already worn out its welcome with customers like Plona. When Charter was done with her, the $96 Time Warner Cable bill she used to pay was replaced with a new $154 bill from Spectrum — a $58 rate hike per month, which amounts to almost $700 more a year.

Much of the Midwest just completed its transition away from Time Warner Cable and Bright House to Spectrum and confusing pricing and plans and expensive upgrade fees are troubling customers from Wisconsin to Ohio.

Want More than 60Mbps? Pay $199 Upgrade Fee

Micah Lane, a former Time Warner Cable customer in Columbus, Ohio faced a major dilemma — should he switch from his current Time Warner Cable broadband plan to Spectrum? He originally assumed the answer would be yes, believing he could upgrade from a 50/5Mbps Time Warner Cable plan to a 100Mbps Spectrum plan for around $30 more than he had paid Time Warner. He discovered an upgrade was ready and waiting, but would cost him a one-time $199 upgrade fee.

“I was told repeatedly when a Time Warner Cable customer moves to Spectrum, they are automatically assigned a base plan of 60Mbps,” Lane told us. “Any speed above that in a non-Time Warner Cable Maxx market is considered an upgrade subject to the $200 upgrade fee. My parents would not be happy with that on their bill.”

Stop the Cap! has communicated with a dozen Spectrum converts, and heard from at least 40 others about problems experienced with their plan transitions. The most common complaints reference a hard-to-avoid $200 broadband upgrade fee, charged even when moving from a 100Mbps Time Warner Cable plan to a 100Mbps Spectrum plan, and promised bundled package offers that ended up costing much more when the first bill arrived.

Charter’s standard broadband plan offers 60Mbps service.

“You better be ready for the fight of your life because I had to threaten to escalate my complaint to the Better Business Bureau and the FCC to get that $200 fee off my bill,” said Stop the Cap! reader Roger. “Nobody ever told me about the fee but it was applied to my online statement hours after I changed plans and of course there is no way to go back to Time Warner’s plans once you make the change.”

Charter/Spectrum has become increasingly intransigent about that $200 fee, which the company claims is necessary to verify your home connection is suitable for faster internet speeds. But some representatives have also blamed the fee on the need to recoup expenses from network upgrades, even when many of those upgrades were performed by Time Warner Cable before the company was sold.

“There is really massive confusion at Charter and the information you get is totally inconsistent from one operator to the next,” said Paul Friedrich in Cincinnati. He rents an apartment with a roommate and after being told the $200 upgrade fee was non-negotiable, he told Charter to stuff it. “We can get the same or better service without the upgrade fee from Cincinnati Bell so bye bye Spectrum. When we threatened them with canceled service, however, the fee magically disappeared!”

The “savings” Charter promised to bring Time Warner Cable customers have not exactly materialized in Ohio, either.

“I just called TWC/Spectrum to see if I could get upgraded internet,” wrote DSL Reports reader cmiz87 in Grove City. “I’m currently on the old 50/5Mbps plan. To upgrade to the 100/10Mbps plan would cost $104.99/month PLUS a $199.99 “activation” fee, even though I have my own modem. That is just for internet only.”

Especially aggravating to many Time Warner Cable customers in non-Maxx service areas is the special treatment Maxx customers received when their areas were converted to Charter Spectrum. Customers with at least 200Mbps service were initially transitioned from their Time Warner Cable Maxx service plans to Charter Spectrum’s 300Mbps plan without any upgrade fee. For those areas where the clock ran out waiting for Maxx upgrades when Charter completed its deal to acquire Time Warner Cable, it’s ‘pay $200 or no upgrade for you.’

“Customers in northern Kentucky [were already getting] 300Mbps service as a free upgrade for the last six months,” noted DSL Reports reader dougm0. “Last year Time Warner Cable was going door-to-door in my neighborhood in Cincinnati [telling us] you will get 300Mbps service free in a couple of months. Just two weeks ago I chatted with a rep that said I would still get a 300Mbps upgrade automatically when launched.”

Now Charter/Spectrum is charging what he calls “this bogus $200 fee.”

“My wife and I are planning our exit from Charter and going back to Cincy Bell,” he reports. “Free install and same speed for less.”

Business Class for 300Mbps

In Reno and other cities, some Charter customers are moving to Business Class service to get 300Mbps service, which is not yet available in most former Time Warner Cable areas. But it will not be cheap. New customers can sign up with a promotion for as little as $159/month, but after two years that price jumps to $279.

Residential Pricing Confusion

Charter’s residential pricing seemed simple enough when it was announced. But in practice, readers report it is all over the map. In Wisconsin, one customer in Franklin signed up for 300Mbps service for $110 per month and agreed to pay the $200 upgrade fee. But in Green Bay, Spectrum is charging $110 a month for 100Mbps — half the speed — along with the $200 upgrade fee. That was a dealbreaker. In Kenosha, one customer moving from a Time Warner Cable internet plan to Charter Spectrum’s basic 60Mbps plan found two unpleasant surprises on his bill:

01/19/2017 Change Of Service Fee $52.74
01/19/2017 Spectrum WiFi Activation $10.54

Adding even more confusion were prices quoted to another customer in West Wauwatosa:

• Ultra: 300/20Mbps, $105/mo, $199.99 upgrade fee
• Regular: 60/5Mbps, $68.63/mo, no upgrade fee

Confusion for Some Legacy Time Warner Cable Customers As Well

A surprise last upgrade for Time Warner Cable customers in Rochester, N.Y.

In markets that still have not transitioned to Charter Spectrum, there is confusion to be found there as well. Upstate New York will see an introduction to Spectrum service plans in February-March, but a few Time Warner Cable upgrades have been quietly introduced in the meantime. Rochester, N.Y., which never made it officially to the Maxx city upgrade list, now has 100Mbps broadband as an option, but representatives denied it for at least a week when customers called to upgrade.

The new speed option was supposed to only be offered to customers qualified to get it, as upgrades were gradually completed around the area, but a website issue marketed the upgrade to everyone, including to some customers as far away as Buffalo.

For those successfully signing up with what is likely to be their last Time Warner Cable plan, many are hoping the investment will help them avoid the $200 upgrade fee when Spectrum’s 100Mbps plan becomes available in the next month or two. But some former Time Warner Cable customers in other cities already transitioned and two Charter representatives we queried about this scenario say they will be out of luck.

Customers start with a 60Mbps standard internet plan from Charter in non-Maxx areas. If a customer chooses a higher speed plan, even if they had 100Mbps from Time Warner Cable before, the $200 upgrade fee still applies. Both representatives claimed the fee was mandatory.

But some of our readers report success in getting that fee off their bills or it was never charged. Speaking to a supervisor or making a service change with an executive level customer service representative can make a big difference avoiding that fee. Customers who establish contact with a Charter representative as a result of a Better Business Bureau or FCC complaint were able to get the fee consistently waived. Results were more mixed when talking to Charter Spectrum’s regular sales department, even when asking for a supervisor to intervene. It may be a case of finding a representative with the authority to waive the fee.

“Even the representative agreed with us it was unfair to charge us $200 for moving from 100Mbps with Time Warner Cable to 100Mbps with Charter Spectrum,” another Stop the Cap! reader in Texas told us. “But they couldn’t do anything about it. When we threatened to cancel, a retention representative finally intervened and got the fee off the bill, only to have it return a month later. We filed a complaint with the Better Business Bureau and that finally worked to get the fee removed. But my neighbor couldn’t get anyone to budge on that fee.”

Wi-Fi Woes in Florida

Bright House Networks customers are also experiencing transition troubles. Residential customers reportedly lost any static IP addresses they signed up for when they converted to a Charter Spectrum residential plan. Static IP addresses are still available for Spectrum commercial plans. More troubling for many is the loss of access to Bright House Network’s secure Wi-Fi network.

Customers in central Florida who switched from a Bright House plan to a Charter Spectrum plan lost access to “BHN Secure,” “Bright House Networks,” and secured “CableWiFi” hotspots formerly administered by Bright House. Customers used to access those secure networks using their My Services Bright House username and password. But after transitioning to a Charter Spectrum plan, those credentials no longer work. Customers can still use their Bright House Road Runner e-mail address and password to get access to the very insecure open “CableWiFi” hotspot option, but those doing so should exercise extreme caution using it for any confidential communications, banking, or other sensitive online activities.

Charter’s Bad Advice: Change Your Wi-Fi Password to Your Favorite Sports Team!

Techcrunch noticed some very bad advice coming from Charter’s social media team on Twitter, recommending their 31,700 Twitter followers change their Wi-Fi passwords in support of their favorite sports teams.

Change your WiFi password and show guests where your loyalty lies! #ThatsMyTeampic.twitter.com/7kg04D7GN9

— Spectrum (@GetSpectrum) January 23, 2017

The original tweet has been deleted, no doubt after someone realized the dangerous security lapse it introduced to Wi-Fi hackers who could probably guess the favorite teams of the locals.

The FrankenBundle: Fewer Options, Less Confusion, Higher Prices Later

In Indianapolis, former Bright House Networks customers are being told having fewer options is a good thing.

WRTV-TV talked with Charter spokesman Mike Pedalty, who called his former employer’s packages a “Frankenbundle:”

“We kept adding things and confusing customers, where they didn’t understand what we were adding on and how it was packaged,” Pedalty told the TV station. Now he says most customers will choose from three basic TV packages and ‘best of all you won’t have to fight for a promo rate every year, when your current package expires.’

That’s because Charter has no intention of negotiating a better deal for you as prices gradually increase.

Back in Los Angeles, Plona understands what merger benefits she is really getting from the deregulatory atmosphere that permitted Charter to buy Time Warner Cable.

“When you let these companies do as they please, all they do is raise our rates,” Plona said. “It seems like prices go up every time you deregulate.”

Milan Gohil’s customer retention promotion with Time Warner Cable was coming to an end. Following in the footsteps of what tens of thousands of other Time Warner Cable customers have done for the last several years – it was time to call and request another deal.

Unfortunately for Gohil, this year the phone was answered by Charter/Spectrum and not a customer retention specialist at Time Warner Cable. That will be increasingly true for all Time Warner Cable customers as Charter continues its gradual transition towards a Spectrum rebrand across the country. That transition for Bright House customers appears to have been already completed. As a consequence, Time Warner Cable and Bright House offers will be replaced with a “simplified” menu of options from Charter.

For Gohil, a Time Warner Cable Maxx customer, those choices didn’t amount to anything except a speed downgrade and a broken promise.

“I had 200Mbps for $60 a month through Time Warner Cable, but the plan was set to expire in a few days,” Gohil explained. “I spoke to a customer service representative and was told I could upgrade to 300Mbps service for $68 a month, including taxes.”

Believing a good deal was in hand, Gohil readily agreed and while waiting on the phone, the representative activated the new promotion. There was only one problem: Milan ended up with Charter’s default internet plan in Time Warner Cable Maxx service areas converted to Spectrum service – 100Mbps.

“I spoke to a Spectrum tech support agent and was told my account was downgraded and that my TWC legacy pricing was no longer available,” Gohil told Stop the Cap! Trying to get his old 200Mbps Maxx speed plan back at any price proved fruitless.

“I was then put in touch with a Spectrum ‘Customer Solutions’ representative and pleaded with them to reinstate my original TWC legacy plan,” Gohil said. “I was told this was not an option and that if I wanted their Ultra 300 (closest option), there would be a $200 activation fee!”

After an hour of negotiation, Spectrum had won the first battle, leaving a dissatisfied customer behind.

“I had 200Mbps just two hours ago and now have only have half of that. I am EXTREMELY disappointed,” Gohil shared. “I would never have agreed to a drastic reduction in speed to save a few bucks.”

Gohil regrets ever calling Spectrum, and is livid customer service could not restore a plan other Time Warner Cable Maxx customers still have and can keep for the next several years, all because a Spectrum call center agent misrepresented a promotion.

Despite’s Charter’s promises to consumers and regulators that their way of doing business would result in better service at a better price for Time Warner Cable and Bright House customers, many of those converted to Spectrum have told us they’d rather have Time Warner Cable and Bright House back, because more options were available and they were at least open to negotiation.

Finding a supervisor at a problem resolution center proved difficult at first. Time Warner Cable’s executive customer service department, formerly reachable at (212) 364-8300 has been taken over by Spectrum and disconnected. Calls are now being taken by 1-800-892-4357, and that is where we referred Gohil, which turned out to be at least some help.

“After an hour on the line with Spectrum/TWC billing and retention, I was able to get 300Mbps for $80 per month for one year,” said Gohil, but there was a catch. “I was informed that it will go up to $100 in 2018.”

But Spectrum has another nasty surprise in store for customers like Gohil looking for speed upgrades: a $200 activation fee.

Spectrum minimizes the chance customers will encounter this fee by marketing only one internet speed tier to most customers: 60Mbps for most Bright House and non-Maxx Time Warner Cable customers and 100Mbps for those Time Warner customers lucky enough to see Maxx upgrades completed before the cable company was acquired by Charter. Most customer service agents are trained to sell this single internet plan, and we’ve found several not trained to offer customers anything else.

When existing Time Warner Cable or Bright House customers are first converted to a Spectrum plan, the $200 activation fee does not apply. But once a Spectrum customer, any attempt to further upgrade broadband service usually results in a $200 fee. Some customers have managed to negotiate their way out of the fee, but it takes some effort and faith the representative isn’t telling you a tall tale to get you upgraded and off the phone.

“After negotiating with the retention specialist, she implemented the 300Mbps service for me,” Gohil reports. “It was implied that the ridiculous $200 ‘activation fee’ would be waived. However, I wouldn’t be surprised if [it] appears on next month’s bill. I’ll cross that bridge when I get to it.”

For Gohil, cable mergers have never lived up to their promised “consumer benefits” and he’s worried about what is coming next.

“With Trump taking office, it’s certain that broadband consumers are going to continue to be exploited by the telecom duopoly,” writes Gohil. “As a cord cutter and Net Neutrality proponent, I am deeply concerned about the future of America’s broadband landscape.”

Here are some tips from Stop the Cap! for Time Warner Cable and Bright House customers to consider before changing your account.

Time Warner Cable legacy offers in an area not yet switched to Charter Spectrum plans look like this.

If your local area is still being served by Time Warner Cable and their old service plans are still being advertised:

1. If you are on a new customer promotion, have a rebate offer, or a discount you negotiated to remain a customer, Charter will honor the deal until it expires. However, once your offer or the submission deadline for a rebate has been reached, you will probably not be able to negotiate an extension or new offer. Your rates will either gradually or immediately reset to regular pricing and your rebate will be lost.
2. Time Warner Cable seems to have ended most of their customer retention deals under the Time Warner Cable brand, but they are still offering new customer promotional offers. If you are an existing customer facing a rate reset, you can cancel service under your name and sign up with a new customer promotion under the name of another member of your household before the Spectrum plans arrive in your area. This is the only certain method remaining to get a discount off existing Time Warner Cable plans and will generally last one year.
3. You can continue to select any Time Warner Cable legacy service plan advertised on the website, and as long as the transition to Spectrum has not yet happened in your area, you can safely change between those plans. You can also continue an existing plan indefinitely, but you will pay dearly for doing so — eventually forced to pay regular Time Warner Cable pricing which is generally higher than what Charter’s Spectrum plans will cost.

Bright House customers have already been introduced to Charter Spectrum plans.

If you are a Bright House customer (you have already been introduced to Charter Spectrum plans):

1. If you are on a new customer promotion from Bright House or a discount you negotiated to remain a customer, Charter will honor the deal until it expires. However, because your area has now switched exclusively to Charter/Spectrum branding, your current plan has been grandfathered and you cannot change it without losing it and switching to a Spectrum plan.
2. Any “promotion” Charter offers you will be based on a Spectrum plan. You will lose your existing Bright House plan permanently if you accept the offer.
3. Spectrum’s broadband offer will likely default to 60Mbps, which may be a reasonably good deal if you subscribed to a lower speed tier through Bright House itself. Faster speeds may be available but you will need to call to be certain. There is a significant price jump of about $40 a month to upgrade to 100Mbps at regular Charter Spectrum prices. Ask about discounts and if one is available you may want to upgrade immediately. If you decide to upgrade later, you are likely to encounter a $200 upgrade fee.
4. In general, Charter’s offer for Bright House customers will prove initially cheaper than what Bright House offered before at its regular prices. But most Spectrum plans will increase in price after your first and second anniversary unless Charter changes its rate structure. Charter has also strongly discouraged representatives from renewing promotions for existing customers as they expire, so negotiating a better deal is going to be more difficult than before.

When your area has been fully converted to Charter Spectrum, the available plans will look something like this.

If you are a Time Warner Cable Maxx customer now served by Charter/Spectrum (the only plans on the website are branded Spectrum):

1. If you are on a new customer promotion from Time Warner Cable, have a rebate offer from TWC in progress, or a discount you negotiated with TWC to remain a customer, Charter will honor the deal until it expires. However, because your area has now switched exclusively to Charter/Spectrum branding, Charter has a demonstrated history of not honoring requests to renew customer promotions, will not honor rebate requests that have not been already fulfilled by TWC and will not be much help if you have to intervene about a missing rebate.
2. You cannot change your Time Warner Cable Maxx plan features. Once an area has been converted to Spectrum, TWC Maxx plans are grandfathered as-is. If you want to change your plan, you will be offered a Spectrum plan instead. Any “promotion” Charter offers existing Maxx customers will also be based on a Spectrum plan. You will lose your Time Warner Cable Maxx plan permanently if you accept their offer.
3. Choose wisely if you are thinking of moving from Maxx to a Spectrum broadband plan. Spectrum will usually enroll you in their traditional 100Mbps plan by default. If you already have 200 or 300Mbps service, you may see a significant price change switching to Spectrum unless you can negotiate a discount. If you decide to upgrade your speed later, you will also face Charter’s $200 upgrade fee. There are some promotions available that can get 300Mbps service down to about $80/mo for a year, but it will increase to $100/mo the following year. Some customers have successfully negotiated the $200 fee off their bill, but make sure you ask for the name of any representative offering to waive the fee and keep that information handy if the fee shows up anyway.
4. Customer promotions are available for existing customers, but you will have to negotiate and you can expect them to be less generous than what Time Warner Cable offered in the past. Also, Charter has strongly discouraged representatives from renewing promotions as they expire. Charter management is on record stating they feel Time Warner Cable’s tradition of extending ongoing discounts were bad for business.

If you are in a Time Warner Cable area never upgraded to Maxx service -and- you are now served by Charter/Spectrum (the only plans on offer are branded Spectrum):

1. If you are on a new customer promotion from Time Warner Cable, have a rebate offer from TWC in progress, or a discount you negotiated with TWC to remain a customer, Charter will honor the deal until it expires. However, because your area has now switched exclusively to Charter/Spectrum branding, Charter has a demonstrated history of not honoring requests to renew existing customer promotions, will not honor rebate requests that have not been already fulfilled by TWC and won’t be much help if you have to intervene about a missing rebate.
2. You cannot change your current Time Warner Cable plan without switching to an available Spectrum plan.
3. Any “promotion” Charter offers you will be based on a Spectrum plan. You will lose your existing Time Warner Cable plan permanently if you accept the offer.
4. For most customers currently subscribed to a broadband plan up to 30Mbps, Spectrum’s broadband offer will likely be an upgrade worth considering, especially if you are still paying a modem rental fee. Spectrum will widely market just one speed in your area – 60Mbps, and that is the default plan you will get. Because Time Warner Cable already overprovisions their 50/5Mbps Ultimate tier to speeds that approach 60Mbps, Spectrum’s offer will probably be cheaper, but it won’t be faster. Your area will probably also have 100Mbps service available as an alternative, but it won’t be widely advertised. It’s not cheap, adding another $40 a month to your bill. If you think you may want that speed, ask about any discount promotions and sign up at the same time you abandon your Time Warner Cable plan to avoid paying a $200 upgrade fee later on.
5. In general, Charter’s offer for Time Warner Cable customers never upgraded to Maxx will prove initially cheaper than Time Warner Cable’s regular prices. But the rates might not be cheaper if you negotiated a lower bill from Time Warner during the last year. Many Spectrum promotions initially offered are comparable to new customer deals and you can expect rates to increase on your first and second anniversary with Charter, with regular prices returning by the third year. Charter has strongly discouraged representatives from renewing promotions for existing customers as they expire. Charter management is on record stating they feel Time Warner Cable’s practice of offering ongoing discounts were bad for business.

Artist rendition of Charter’s new regional headquarters in Rochester, N.Y.

The northeast region of Charter/Spectrum, encompassing six states, will soon be managed from a new regional headquarters office to be opened in Rochester, N.Y.

Elected officials across western New York joined Gov. Andrew Cuomo to congratulate Charter Communications for its decision to locate its new headquarters in suburban Rochester, where the cable company is expected to add 228 new full-time jobs.

Gov. Cuomo announced Charter will invest more than $2.9 million to renovate its existing offices on Mount Hope Avenue in downtown Rochester and its new 46,000 square-foot facility in Henrietta, which will house regional executives, call center workers, and technicians. New York taxpayers will cover $2.5 million of those costs through the Empire State Development Corporation, a public-benefit corporation that offers tax credits in return for job creation commitments.

“This expansion of one of the nation’s leading cable providers in the Finger Lakes is a clear signal that our economic strategy is driving innovation and transforming the local economy,” Gov. Cuomo said. “Cutting-edge companies are betting on this region like never before and are growing their businesses and creating-good paying jobs in the process. By incentivizing private sector growth, we are generating momentum and strengthening the economy in Monroe County and beyond.”

Cuomo

“By early next year, this beautifully restored facility will allow us to bring together our field operations leadership and vital support functions under one roof,” said Charter executive vice president of field operations Tom Adams. “Through our partnership with the New York State Economic Development Corporation, the Rochester area benefits from an influx of high-paying technical jobs, while our customers across Upstate New York and throughout New England benefit from improved communication, collaboration and efficiency in our operations.” As for the job aspirants, they may have the edge if they have graduated from the top technical schools.

Time Warner Cable employed 460 workers at its existing office in downtown Rochester. Charter’s new regional headquarters will add 230 workers.

Gov. Cuomo has heavily promoted New York as a new corporate-friendly state to create jobs and grow businesses. The “Finger Lakes Forward” initiative has already spent $3.4 billion in the region since 2012 to invest in and attract key industries like photonics, agriculture/food production, and advanced manufacturing. The plan has seen some success for the key regions of Rochester (photonics), Batavia (milk/yogurt production), and Canandaigua (mixed manufacturing), but has not been as successful keeping jobs when businesses have downsizing on their mind.

For Rochester, Charter’s announcement will still result in a net job loss of more than 300 jobs in the telecommunications sector because of Verizon Wireless’ announced closure of its Rochester call center, which will eliminate 645 jobs in the area when the facility closes Jan. 27, 2017. The governor’s office called Verizon’s job cuts “an egregious example of corporate abuse.”