New York State Threatens To Revoke Charter's Cable Franchise For Bullshitting

from the ill-communication dept

Wed, Jul 25th 2018 6:34am — Karl Bode

New York State and the nation's second biggest cable provider (Charter Spectrum) aren't getting along particularly well. Early last year, Charter Spectrum was sued by New York State for selling broadband speeds the company knew it couldn't deliver. According to the original complaint (pdf), Charter routinely misled consumers, refused to seriously upgrade its networks, and manipulated a system the FCC used to determine whether the company was delivering advertised broadband speeds to the company's subscribers (it wasn't).

Charter has tried to use the FCC's net neutrality repeal to claim that states can't hold it accountable for terrible service, but that hasn't been going particularly well.

Meanwhile, Charter is also facing heat from the state after the State Public Service Commission found that Charter routinely mislead regulators about its efforts to meet conditions affixed to its $89 billion acquisition of Time Warner Cable and Bright House Networks. As part of that deal, Charter was supposed to expand service to "145,000 unserved and underserved residential housing units and/or businesses within four years." But the company was fined $2 million after regulators found it repeatedly tried to pretend it had expanded services to areas that weren't actually upgraded.

Things have only gotten uglier from there. Last week, the NY PSC accused the company of gaslighting its customers after it repeatedly tried to tap dance around merger obligations despite repeated fines. The company promised a "universe of synergies" ahead of the deal, but consumers only received even higher prices and even worse customer service than the company was already known for:

"Charter's claims are simply false and the commission will not stand idly by while Charter deceives the public and its shareholders," (NY PSC Chairman John) Rhodes said. "Charter's own data shows a gaping hole between its commitments and its performance. New York will not tolerate Charter's gaslighting its own customers into believing it is meeting its promises."

The state PSC says Charter's deception may force it to take an almost-unheard of action, the revocation of the company's cable franchise agreement in the state:

"Not only has the company failed to meet its obligations to build out its cable system as required, it continues to make patently false and misleading claims to consumers that it has met those obligations without in any way acknowledging the findings of the Public Service Commission to the contrary," Rhodes said. "Our patience with Charter has come to an end and now we must move to take much stronger actions."

Historically, state legislatures and regulators are almost comical rubber stamps for regional broadband monopolies, one of several reasons why American broadband tends to be monumentally terrible in many parts of the country (regulatory apathy in the face of limited competition is a pretty fatal combination). But as we're seeing with state-level net neutrality efforts, the federal assault on broadband consumer protections and accountability appear to have resulted in at least a handful of states growing a spine and actually giving a damn.

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Filed Under: cable franchise, misleading regulators, new york
Companies: charter, charter spectrum, time warner cable

30 Comments

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Gary (profile), 25 Jul 2018 @ 6:01am

Charter's Charter
So what would it actually mean for Spectrum customers in New York if this happens? I know the local competition already doesn't want my business.
Would Charter have to close shop, or would they lose their "exclusivity" for the region?
Glad that the state is holding their feet over the fire over their false advertising at least.
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Anonymous Coward, 25 Jul 2018 @ 6:46am

Can't wait to see what the eventual slap on the wrist is.
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Anonymous Coward, 25 Jul 2018 @ 6:51am

Re: Charter's Charter
I had the same question, what would that actually do?
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Anonymous Coward, 25 Jul 2018 @ 6:56am

I am attempting to temper my expectations. I can't help feeling a particular sort of glee and dare I say it a twinkling of hope.
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Reima Zadet (profile), 25 Jul 2018 @ 7:05am

Re: Re: Charter's Charter
Willing to bet it they would loose their exclusivity in the area. Then they would probably reach a deal with Comcast or the other incumbents to avoid expanding in to those areas. So charter just takes the fines and keeps raking in money while screwing everyone over.
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Anonymous Anonymous Coward (profile), 25 Jul 2018 @ 7:05am

Re: Re: Charter's Charter
I'm wondering about who might actually take over? Are there any 'good' alternatives? Are there any alternative companies that would do any better? What is the likelihood that the alternative would do worse?
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Annonymouse, 25 Jul 2018 @ 7:07am

Untill such time as the CEOs CFOs and the Board members are sharing accomodations with Bubba and freinds, I hold little hope for things actually improving.
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Gary (profile), 25 Jul 2018 @ 7:27am

Re: Change of Accomodations
That would require new regulations and laws to protect consumers.
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I.T. Guy, 25 Jul 2018 @ 7:31am

Re: Re: Re: Charter's Charter
Imagine how the Google gigabit deployment would go without the legal battles it faced elsewhere.
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Anonymous Coward, 25 Jul 2018 @ 7:37am

Re: Charter's Charter
Just to be clear, the charter discussed is in New York City, even when the State of New York is concerned.

The franchise basically gives the right to use the public accessways and rights-of-way to build and operate cable networks, and to provide cable services to city residents. It allows (and has) modifications to allow information service transmissions across the same networks. The cable networks are required to be interoperable with other providers in the same spaces. It's a non-exclusive right.

Verizon has a city-wide franchise agreement. Spectrum / Charter has 5 agreements which together cover much of the city. Altice has agreement for the Bronx and Brooklyn. These are headed under "Cable TV" franchises, but include broadband internet as needed.

There are also 5 other "Information Service" franchises agreements.

You can see them all here. https://www1.nyc.gov/site/doitt/business/cable-tv-franchises.page

As far as NY state goes, Charter Spectrum has over 2.5 million customers and over 1,100 franchises throughout the state which could be impacted if their backbone services are extended from the company's main hub in the NYC area.
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Anonymous Coward, 25 Jul 2018 @ 7:43am

Re: Charter's Charter
They might find themselves unable to get permits for public easements (digging / poles). Of course, the complaint was that they weren't building out... maybe NYS should find a few of those elusive areas where competition exists, tell the customers to switch, and remove Charter's hardware from public property. Or just start fining them for operating without a proper license and trespassing.
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Ninja (profile), 25 Jul 2018 @ 7:44am

Maybe it's that tipping point where the companies are offering so damn awful services that you can't say you have the bare minimum working situation. Maybe the telcos have forced their hands a bit more than people are willing to accept this time?
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Anonymous Coward, 25 Jul 2018 @ 8:07am

Re: Re: Charter's Charter

These are headed under "Cable TV" franchises, but include broadband internet as needed.

I wonder if they could terminate those separately. NYS making Charter cut off cable TV service would put serious pressure on them while having less effect on critical services (emergency broadcasts are the only 'critical' part of cable TV).
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Nathan F (profile), 25 Jul 2018 @ 8:28am

Re: Re: Change of Accomodations
Are we 'Think of the Convicts!' now?
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Anonymous Coward, 25 Jul 2018 @ 8:33am

"Maybe it's that tipping point..."
...but I ain't yet bettin' anything I truly cherish. Charter has LOTS o' dough to throw at regulators, legislators, et al.
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That Anonymous Coward (profile), 25 Jul 2018 @ 8:35am

How bad are things when you stop paying the right "consulting" fees & they actually decide to run your ass out of town on a rail?
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Anonymous Coward, 25 Jul 2018 @ 8:37am

Re: Re: Charter's Charter
I don't particularly want to download and go through a bunch of legal documents, but I'd be curious to know what those say about termination—and in particular, what happens to Charter's wires and equipment. Could the state auction that stuff to a competitor?
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SirWired, 25 Jul 2018 @ 8:50am

I've actually had decent luck...
I know that TWC/Charter/"Spectrum" rightly get a whole basketful of abuse for their service, pricing, regulatory B.S., etc., but I've actually been pretty satisfied with them as an individual.

I cut the cord many years ago on TV service and have only been using them for Internet service for years. Over the 15 years I've had that service, the price has gone up 25%, and the speeds have gone up by 15x. That price increase isn't something I'm thrilled about, but I can't argue with those speeds. (Especially since the "competition", AT&T DSL, hasn't budged from a max of 25Mb for years.)

Service has been ok, with maybe three or four outages requiring a truck roll to my house (all having to do with the rats nest of splitters outside the house, the last tech simply eliminated them entirely); the biggest problem was their crappy contract installer using the wrong kind of cable, and it left a sticky ooze all over my wall.
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ShadowNinja (profile), 25 Jul 2018 @ 9:12am

Re: Re: Re: Charter's Charter
Then they would probably reach a deal with Comcast or the other incumbents to avoid expanding in to those areas.

Don't think that would be legal under trust busting laws.

From what I've read only two industries are exempt from the rules and allowed to conspire together like this.
- Baseball teams.
- Health Insurance Companies.
Hence that would very likely run afoul of Federal law. It's the reason why years ago there was a Supreme Court case over drug companies paying competitors not to produce drugs that aren't covered by patents anymore.
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Anonymous Coward, 25 Jul 2018 @ 9:20am

Re: I've actually had decent luck...
Ah, but you're comparing in-country. Compare out of country, and you won't be so enthused. Consider:

https://www.fastmetrics.com/internet-connection-speed-by-country.php

The US doesn't even make the top 10 - and yeah, that's partly due to our overall geographical size, but we're still right in the middle.

Now consider price:

https://www.numbeo.com/cost-of-living/country_price_rankings?itemId=33

Where's the US? 5th most expensive. Now, granted, this is about 15 minutes of quick internet research and it certainly isn't conclusive on it's own, but it's an example of why we're annoyed in general.

Finland gets an average of 16.6 Mbps with an average $26.28 monthly price tag for a 60 Mbps connection.

Meanwhile US is at 14.2 average Mbps and an average $60.58 monthly price tag for a 60 Mbps connection.

There's more out there supporting this disparity between price-to-speed ratio in the US, and the various other countries that have actual broadband competition, and it's this comparison combined with the ABSOLUTE GARBAGE-PILE that passes for Customer Service with the US companies that has people thinking "Fuck the ISPs."
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Anonymous Coward, 25 Jul 2018 @ 11:16am

here's the plan
(wispering)"As long as we've got the money, we can promise our -- captive audien -- er customers the sky. We'll just settle out of court later.
We can afford it."
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Anonymous Coward, 25 Jul 2018 @ 2:47pm

Re: Charter's Charter
Losing the licence means a new company is allowed to step in and Charter has to sell them their cabling and equipment and customer database.

The new company is then free to make appropriate changes to that network as per the sale agreement.

However, its the State that will decide WHO gets to take over, based on what contract they propose to adhere to, and what punishments they're prepared to run with if they fail.
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Anonymous Coward, 25 Jul 2018 @ 2:49pm

Re: I've actually had decent luck...
I was never raped or tortured by John Wayne Gacy.

I was never beaten and gassed in ww2 Germany.

Just because there are exceptions doesn't mean the whole Charter situation isn't a massive shitshow, with the directors etc planning to fleece the company for everything they can (mostly legally) grab and leave the state.

They've already drawn up paperwork for MASSIVE bonuses and "performance" payments so they can take as much cash as possible.
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Anonymous Coward, 25 Jul 2018 @ 5:09pm

Re: Re: Re: Charter's Charter
Interesting... §15.8.3 of the Spectrum/TWC Manhattan South agreement says the city can either make the operator run it under city management for 12 months, or, with compensation, allow "any other Person" to operate it on behalf of the City. (Or a third option: "cease all construction and operation activities in a prompt and workmanlike manner". They can be required to remove their equipment too, at their own expense.)
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Shiety Burl, 25 Jul 2018 @ 7:38pm

You shouldn't bull shit a bull shitter, it just isn't right to do: http://pocketing.online/?cash=20545
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trollificus (profile), 25 Jul 2018 @ 10:56pm

Re: Re: I've actually had decent luck...
The "race to the bottom" approach of the big companies is very discouraging. When you quit one because of bad service, on your way over to their competitor you'll see a bunch of dissatisfied customers heading in the other direction.

And that. ain't. capitalism! It's what I call a "disguised monopoly" where several companies (without even having to formally collude with each other) agree to non-competition, benefiting all of their bottom lines.
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Anonymous Coward, 26 Jul 2018 @ 3:46am

Charter getting threatened? Hoo boy, out_of_the_blue is not going to like this. He hates it when corporations get threatened.
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Anonymous Coward, 26 Jul 2018 @ 7:42am

Re: Re: Re: I've actually had decent luck...
The biggest part of that equation is the number of consumers willing to subscribe despite the bad service. Offer the service cheaply, and people jump on it. They may whine about problems, but they often don't want to bother with the hassle of switching to another provider, even if there are several available. And if they do switch, they typically don't leave feedback on why they left the previous provider. Customer service is a cost that businesses often don't pay for until they have to, and not just in this sector.
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Anonymous Coward, 26 Jul 2018 @ 11:06am

Re: Re: Re: Re: I've actually had decent luck...
> And if they do switch, they typically don't leave feedback on why they left the previous provider.

The providers have lots of information on why people are unsatisfied. Like when I get overbilled (or just can't figure out what the real price will be) and waste hours trying to get it corrected. They shouldn't be shocked when I cancel later; by then, I'm not inclined to help them out with useful feedback, I just want out.

If Charter want to know why people have problems with them, they can listen to the recordings of repeat callers or long calls, they can read Techdirt, and they can read the lawsuits that governments have been filing against them. How about they just quickly fix the problems people are telling them about, rather than forcing people to bitch on social media or to reporters?
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The Wanderer (profile), 26 Jul 2018 @ 8:16pm

Re: Re: Re: I've actually had decent luck...
If I'm not mistaken, the term for that is "oligopoly".
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