Charter Spectrum Tells FCC Broadband Caps Are 'Popular' As It Tries To Kill Merger Conditions Preventing Them

from the bad-things-are-good-for-you dept

To be very clear: American consumers don't like broadband usage caps. At all. Most Americans realize (either intellectually or on instinct) that monthly broadband usage caps and overage fees are little more than monopolistic cash grabs. They're confusing, frustrating price hikes on captive customers that accomplish absolutely none of their stated benefits. They don't actually help manage congestion, and they aren't about "fairness" -- since if fairness were a goal you'd have a lot of grandmothers paying $5-$10 a month for broadband because they only check their email twice a day.

Enter U.S. cable giant Charter (Spectrum), which is currently in the middle of trying to get the FCC to kill the merger conditions applied as part of its 2015 $79 billion acquisition of Time Warner Cable and Bright House Networks. Those conditions, among other things, required that Charter adhere to net neutrality (despite the fact that the GOP has since killed net neutrality rules), and avoid usage caps and overage fees. Both conditions had 7 year sunset clauses built in, and Charter, eager to begin jacking up U.S. broadband consumer prices ever higher, has been lobbying to have them killed two years early.

Charter's lobbying tactics so far have included giving money to groups like the Boys and Girls Club in exchange for gushing support for the elimination of the merger conditions, despite the fact that doing so would harm these groups' constituents with higher prices.

Charter's other major play apparently involves trying to tell the FCC that U.S. consumers really like monthly usage caps and annoying fees, restrictions the cable monopoly claims are "popular." From a filing (pdf) spotted by Ars Technica:

"There is also evidence that some consumers—either those who do not consume a lot of data and/or those who are looking for a lower-cost plan—may want a service where prices are based on the amount of data used... These different plans are proliferating in the market because they offer consumers a cost-effective alternative to unlimited data plans that are more than adequate to meet their needs. The DC/UBP [data caps and usage-based pricing] Condition, however, prevents Charter from keeping pace with its competitors and offering consumers the kinds of plans they are looking for."

This is a cute bit of logic U.S. broadband monopolies have long used that attempts to imply that caps and overage fees are about "fairness." But they've never been about fairness. ISPs love to insist they just want to "experiment with price differentiation," but you will never see a giant ISP offer a super cheap plan for people like your grandma that only check the Weather Channel website and their email a few times a day. And they don't do that because the goal is to drive up the costs of everybody's connection over the longer haul to please investors' needs for higher quarterly returns.

And they can get away with this because in most U.S. markets, their only competition is a phone company that hasn't upgraded its DSL lines since 2004 or so, or no competition at all. If the market actually saw competition and had functional regulatory oversight, you might see plans more closely tailored toward your actual usage. But in a market absent of real pricing competition and overseen by fecklessly captured regulators, what you get instead is endlessly higher prices, usually in the form of sneaky, misleading fees. Charter's filing tries to tap dance around this problem as well:

"Opponents’ claims that the BIAS market is not competitive are beside the point and overstated. The Conditions are unnecessary regardless of the level of BIAS competition because Charter, like other broadband providers, lacks the incentive or ability to discriminate against OVDs. OVDs are critical to the BIAS business and far too large and powerful to thwart with data caps or interconnection fees.

Only a cable monopoly with a 20 year track record of overcharging captive customers could try to argue that a lack of competition is "beside the point." Incumbent telecom monopolies, eager to protect their dwindling TV revenues, have every incentive to use usage caps anti-competitively. And they already are. AT&T, for example, exempts its own streaming video service from its arbitrary usage caps, while financially penalizing users that use Netflix, Amazon, or any other competitor.

There is zero doubt that Charter wants to follow down this path as well. And it certainly will; it just wants to do so slowly to minimize backlash (picture the boiling frog fable with you as the frog). There's also not much doubt that the captured, fact-phobic Trump FCC is eager to help them, proclaiming that letting a cable monopoly price gouge captive customers is about "restoring internet freedom," or whatever half-baked justification is on the menu this week.

Filed Under: broadband caps, consumers, fcc, merger conditions
Companies: charter, charter spectrum

Why Is The Boys And Girls Club Trying To Kill A Cable Monopoly's Merger Conditions?

from the with-friends-like-these dept

Earlier this month, we noted that Charter (Spectrum) had been lobbying the FCC to eliminate conditions affixed to its 2015 merger with Time Warner Cable. As part of those conditions Charter had to not only adhere to basic net neutrality (regardless of the fact that lobbyists had already killed FCC net neutrality rules), but it was also prohibited from imposing arbitrary, bullshit usage caps and overage fees, or engaging in the kind of "interconnection" shenanigans that caused Netflix streams to slow for Verizon customers earlier this decade. It also had to expand broadband coverage, which it failed utterly at.

Most of the conditions are fairly minor, expire in another few years anyway, and by and large protect consumers from the kind of behaviors cable and broadband monopolies are known for. As Charter lobbies the government, it's employing some... strange bedfellows in its quest to kill the conditions. In New York that apparently includes the Niagara Falls Boys and Girls Club, which wrote a letter to the FCC urging the regulator to prematurely axe the conditions:

In its letter, the Boys and Girls club insists that a recent $5,000 donation by Charter to the organization certainly helped it weather the COVID-19 storm, and that "lifting these conditions will level the playing field for Charter while having zero impact on the online video marketplace."

The organization did not respond to a request for comment as to why it's rushing to the defense of literally one of the least liked companies in America. Keep in mind, this is a company that lied to regulators so routinely about whether it had been meeting merger build out conditions, that the company was almost kicked out of New York State, something I've never seen in twenty years of covering telecom.

The organization's claims also aren't true. Usage caps aren't technically necessary, drive up costs for consumers (most notably low income communities), and are routinely abused anti-competitively by giant ISPs. They saddle consumers with additional, confusing costs, something that's not particularly helpful during a pandemic-induced economic crisis. While Charter's merger probably should have been blocked completely, the conditions actively protect the folks the Boys and Girls Club is supposed to be representing, and opposing them undermines the groups constituents.

Of course, corporations funding organizations in exchange for support for terrible policies is nothing new.

A wide variety of groups take telecom cash to repeat whatever they're told, whether it's rural Texas school associations, the U.S. Cattlemen's Association, civil rights advocacy organizations, or even balloonist clubs. Some of these groups are created specifically for this purpose. Other times, these groups are "co-opted" without fully understanding what they're actually supporting in a bid to keep funding flowing. For lobbyists the overall is simple: to create the illusion of broad support for bad ideas the actual public -- minority or otherwise -- actually oppose.

And, to be clear, most objective parties don't support eliminating some fairly modest merger conditions affixed to one of the most despised monopolies in America. Of course as the FCC fielded comments up until July 22, a lot of similar groups were doing the same thing hoping nobody notices:

Most of the time this kind of undocumented quid pro quo (we'll donate to a new event center if you support deregulation or our latest merger) simply involves making a few filings to the FCC that the broader public never sees (and the press never covers because this sort of thing doesn't exactly drive ad eyeballs). But the efforts still routinely undermine the constituents these groups are supposed to be representing, and groups should at least take the time to understand the positions they're taking before wading into the fray.

Filed Under: astroturf, competition, fcc, merger conditions, mergers
Companies: charter, charter spectrum, time warner cable

Charter Spectrum's Bullshit 'Broadcast TV' Fee Soars To $16.45 Per Month

from the nonsensical-surcharges-may-apply dept

Like countless other American business sectors, U.S. cable and broadband providers have been using hidden fees to covertly jack up their advertised rates for much of the last decade. These fees, which utilize a rotating crop of bullshit names, help these companies falsely advertise one rate, then sock the consumer with a significantly higher rate post sale (often when locked into a long-term contract). They also let them falsely try and claim that prices haven't increased, when they pretty clearly have.

Back in 2014, Comcast introduced a new $1.50 per month surcharge on cable bills it called its "Broadcast TV Fee." Said fee was really just a portion of the cost of doing business for Comcast (programming costs), busted out of the full bill and hidden below the line -- again to help the company falsely advertise a lower price. Fast forward to 2020 and the fee is now $15 per month, per user, and growing -- despite a number of lawsuits (correctly) alleging that the fees are misleading and predatory.

And it's not just Comcast. Charter (Spectrum) has also heavily embraced such a fee, its own "broadcast TV surcharge" getting jacked from $13.50 to $16.45 a month starting in August:

Charter has raised the fee repeatedly—it stood at $9.95 in early 2019 before a series of price increases. At $16.45 a month, the fee will cost customers an additional $197.40 per year. Charter sells TV, broadband, and phone service under its Spectrum brand name and is the second largest cable company in the US after Comcast.

One other "handy" benefit to the fee (for Charter and Comcast) anyway, is that it lets the companies tap dance out of consumer "price lock" guarantees or promotional rates, by letting them pretend that arbitrary fee increases are not actual price hikes. Charter also imposes a slightly smaller Broadcast TV fee on its streaming TV plans, with that fee getting jacked from $6 to $8.95 a month. That's, of course, in addition to all the other arbitrary fees and surcharges tacked onto your monthly bill, including broadband usage caps and overage penalties.

It's the sort of running scam that would be prohibited by functioning, objective consumer protection regulators or lawmakers, were we to actually have such a thing.

Filed Under: bogus fees, broadcast tv fee, cable tv, fcc, ftc, price increase, truth in advertising
Companies: charter, comcast

NY AG Opens Inquiry After Charter Spectrum Bungles Its Coronavirus Response

from the monopolizing-stupidity dept

By and large, most major ISPs have handled the labor angle of COVID-19 relatively well, with giants like Comcast and AT&T offered hazard pay, and Verizon slowing new broadband, phone, and TV installations altogether.

Charter, which sells broadband, TV, and phone service under the Spectrum brand, has been a different story entirely. The nation's second biggest cable company is now facing an inquiry by New York's Attorney General after several weeks of bad press highlighting how the company wasn't giving its employees hazard pay or adequate protective gear (many got $25 gift cards to closed restaurants instead), wouldn't let many employees work from home even if it was easy, and even forced people to continue to work in buildings where co-workers tested positive for the virus.

With some 250 Charter employees now sick, New York's Attorney General has opened an inquiry into the company's bungled response:

"The company’s stance on working remotely became the subject of internal debate on March 13, when Nick Wheeler, an engineer in Denver, sent an email to hundreds of colleagues and a senior vice president with the subject line “Coronavirus — Why are we still in the office?”

“Coming into the office now is pointlessly reckless,” wrote Mr. Wheeler, who provided a copy of the email to The New York Times. “Charter, like the rest of us, should do what is necessary to help reduce the spread of coronavirus."

While Charter has since buckled on some of its more stubborn policies, it required weeks of employees leaking to any news outlet that would listen about the company's failure to adequately protect them. Employees are still pissed, and still say the company isn't doing enough to protect its workers (and by proxy many of the communities and customers they serve):

"But even in cases where multiple employees have confirmed testing positive for the virus, which has killed more than 175,000 people worldwide, Spectrum’s call centers and storefronts have kept their doors open, serving as potential hotspots for exposure. While Charter has allowed some workers, in certain circumstances, to temporarily work from home, its pandemic response has largely focused sanitizing its workspaces after hours. Employees fear that this is doing too little to shield them from the disease or prevent them from giving it to customers, whose equipment they handle and whose homes they enter daily."

None of this should be surprising given that Charter literally has one of the lowest customer satisfaction ratings of any company in industry in America (think about that accomplishment for a moment). Big ISPs don't handle disasters very well, as evident by the way cable giants routinely hassle wildfire victims over their cable boxes after having just lost everything. They're not flexible, creative, or adaptive companies, because as government-pampered monopolies in regions with no competition or oversight, there's absolutely no incentive to be.

Speaking of no oversight, the FCC hasn't issued so much as a peep about the company's Keystone-cops-esque approach to handling the pandemic. Nor has the agency had a single word to say about the fact that Charter has been kicking struggling customers offline during the crisis, despite very clearly promising not to as part of a highly theatrical, temporary, and entirely voluntary PR stunt heavily hyped by the agency to give the illusion it was actually helping.

Filed Under: covid-19, employees, hazard pay, new york
Companies: charter

Instead of COVID-19 Hazard Pay, Spectrum Is Giving Its Repair Techs $25 Gift Cards To Closed Restaurants

from the ill-communication dept

Despite its obvious reputational problems, Comcast has actually been stepping up for its workers during the COVID-19 crisis, paying its employees hazard pay, allowing unnecessary personnel to work at home, and closing at least some of its retail locations.

Charter Spectrum, the nation's second biggest cable provider, is another story entirely.

The company spent much of last week dealing with a backlash among employees who say the company is putting both its employees and local customers at risk. Charter initially refused to let employees who didn't need to be in the company's offices to work from home, despite having the capability. Even in instances where there were positive COVID-19 tests at Charter offices, the company still initially refused to let employees work from home. Only when the press got involved did Charter begin to bend, and even then it's still not letting all non-essential workers work remotely.

Charter employees say they're not getting hazard pay or adequate protective gear to do installs in customer homes. Instead, the company apparently thought it would be a good idea to give them a gift card. Not just any gift card, mind you, but a $25 gift card to a restaurant they probably can't visit anyway:

"Spectrum technicians connecting cable and internet for customers during the coronavirus outbreak will receive a $25 gift card for a local restaurant as a "token of our appreciation" from management, after staff called for hazard pay and protective equipment.

“These gift cards never expire, so if you choose a restaurant that is currently not open, the card will remain valid for future use," read the Monday night internal staff email from Tom Adams, the executive vice president of field operations. "Please take some time out of your busy day to enjoy a meal and recharge."

How generous. Needless to say, employees aren't particularly impressed:

"Would you do it for $25?” asked a field technician from Irwindale, California, who asked to remain anonymous, along with the other technicians quoted in this story, to protect his employment. He called Spectrum management "vultures."

While most experts believe the internet should largely hold up under the strain of widespread COVID-19 quarantines, it's going to be hard to keep many residential broadband connections operational with management displaying such an incredible knack for incompetence and penny pinching.

Filed Under: cable, cable techs, covid-19, protecting workers
Companies: charter, charter spectrum

RIAA Realizes It Sued Charter Over A Bunch Of Songs It Doesn't Hold The Copyrights For

from the oops? dept

It's been a year since the RIAA sued Charter Communications, using the same strategy it had used against smaller ISPs Cox and Grande Communications -- that the DMCA actually requires internet access providers to completely kick users off upon the receipt of multiple (unproven) claims of copyright infringement. The RIAA has been plotting out this strategy for the better part of a decade.

For years, we've pointed out a number of problems with this, starting (most importantly) with the fact that accusations are not actual proof of infringement. And to kick people off of their sole access to the internet based solely on accusations would represent a real problem. As first noted by TorrentFreak, Charter has finally filed its answer, defenses, and counterclaims to the complaint. There's a lot of interesting stuff in there, but a key part: the RIAA and its labels and publishing partners quietly admitted that they were suing over songs they did not hold the rights to. That's kind of a big deal. Indeed, it reminds me of the revelation in the infamous Viacom/YouTube lawsuit that Viacom was suing over songs it had uploaded itself for marketing purposes.

From the counterclaims:

On January 15, 2020, Plaintiffs amended the list of works in suit, removing over 450 works from this case (the “Dropped Works”).

The Record Company Plaintiffs dropped 272 sound recordings and the Music Publisher Plaintiffs dropped 183 music compositions.

Upon information and belief, Plaintiffs dropped at least some of these works because they do not “own and/or control in whole or in part the copyrights and/or exclusive rights” the works.

Indeed, Plaintiffs dropped these works after they were ordered to produce further documentation relating to their purported ownership or ability to assert the works in suit in this case.

Despite later dropping these works the Record Company Plaintiffs, or their agent acting on their behalf, nevertheless sent notices to Charter in connection with the Dropped Works, claiming that they “have identified a user … reproducing or distributing an unauthorized copy of a copyrighted sound recording” and that the recipient of the notice “may be liable for infringing activity occurring” on Charter’s network. The Record Company Plaintiffs further claimed in their notices that the user’s “Internet account was used to illegally copy and/or distribute copyrighted music over the Internet” and that the notice contained “the details of the illegal file-sharing, including the time, date, and a sampling of the music shared.” The Record Company Plaintiffs’ notices “assert that the information in the notice is accurate” and that they “have a good faith belief that this activity is not authorized by the copyright owner, its agent, or the law.” The notices further stated that “[u]nder penalty of perjury,” “the RIAA is authorized to act on behalf of its member companies in manners involving the infringement of their sound recordings, including enforcing their copyrights and common law rights on the Internet.”

While the Music Publisher Plaintiffs did not send any notices for the music compositions in suit to Charter, the Music Publisher Plaintiffs’ infringement claims in this case purportedly rely on notices sent by the Record Company Plaintiffs to Charter, including those for the Dropped Works.

Upon information and belief, at least in connection with the Dropped Works, the Record Company Plaintiffs sent notices to Charter with inaccurate information, including but not limited to the misrepresentation that the RIAA was authorized on behalf of Plaintiffs to send a notice relating to these allegedly infringed works, that the Record Company Plaintiff on whose behalf the notice was sent owned or controlled the work, and that the actions alleged to have been taken by Charter’s subscribers constituted infringement of the Record Company Plaintiffs’ rights

The counterclaims go on to note that many of the works that have now been dropped due to the fact that the RIAA and its partners did not hold the copyright were the same songs that were previously used in the Cox Communications case:

Many of the same record companies and music publishers that are in this case pursued damages in Sony Music Entertainment et al. v. Cox Communications, Inc. et al, Case No. 1:18-cv-950 (LO/JFA) (E.D. Va.) (“Sony”) for certain of the Dropped Works, and the jury returned a verdict for certain of the Dropped Works in an amount of nearly $100,000 per work.

Yikes.

Now, some may claim that it doesn't really matter if the RIAA and its various partners held the copyright in these works, but it absolutely does for a whole variety of reasons. Most obviously, you can't sue over copyrights where you don't hold the copyright. But, it also shows the incredible sloppiness with which the RIAA and the labels and publishers go about determining "infringement." And that's why we keep pointing out that it very much matters whether you're kicking people off based solely on "accusations." When you're carpet bombing DMCA notices with an automated system, and no one competent seems to be overseeing the process, you get a ton of mistakes. And having people lose all internet access based on mistakes should be seen as a real problem.

The filing goes on to cite numerous examples of the RIAA and its partners mis-identifying infringement (including citing Techdirt), as well as the excellent and important study on DMCA takedown mistakes by Jennifer Urban, Joe Karaganis, and Brianna Schofield.

And, thus as part of the counterclaims, Charter is making a DMCA 512(f) claim of "knowingly sending materially inaccurate notices." As we've discussed for a while, 512(f) is mostly a dead letter, but it would be nice if someone actually got called on abusive takedown notices. The fact that the RIAA and its partners here, nearly a year after filing suit, suddenly dropped hundreds of songs after being asked to show proof that they actually hold the copyright... seems like as good a target as any.

The other parts of the counterclaims are also interesting. Charter makes the (important) point that it cannot and should not be expected to spy on every action by its users, and therefore it's silly to hold Charter liable for copyright infringement by its users. It would be nice if a court actually recognized that fact, but to date, it's been a struggle.

Filed Under: copyright, dmca, lawsuits, repeat infringer policy
Companies: charter, charter communications, riaa

Cable Execs Now Falsely Claiming Cord Cutting Is Slowing Down

from the self-delusion dept

At no point has the cable industry or its executives been particularly keyed in to the "cord cutting" threat. As streaming video has chipped away at their subscriber bases, most cable giants like Spectrum and Comcast have responded by raising prices. And when confronted by growing evidence that cord cutting (defined as cutting the TV cord but keeping broadband) was a growing trend, most of these same executives spent years first denying cord cutting was happening, then trying to claim the only people doing so were lame man-children living in their moms' basements.

Charter CEO Tom Rutledge was a key part of this cable executive myopia, both failing to see the trend coming, then failing utterly to respond to it in any meaningful way. The result: Charter has been losing subscribers for years, last quarter losing 75,000 cable TV customers. That's not as bad as the 1.36 million pay TV customers lost by AT&T in the same period, but it's not what you'd advertise as "good," either.

Having no meaningful reputation on this subject to stand on, Rutledge last week tried to insist that the threat of users cancelling bloated, costly pay TV bundles and moving to streaming was a phenomenon that would soon slow down:

"I think in aggregate they’re going to slow down,” said Rutledge. “Because I think most single-family homes have big TVs in them and that’s where you get sports, that’s where you get news, that’s where you get live TV like this. It’s still going to be under price pressure. I’m not saying the category isn’t under pressure. But I think the rate of decline will slow."

But there's no actual evidence to support that conclusion. Cord cutting has only been accelerating and breaking records throughout 2019. And with a number of high profile streaming alternatives like Disney+ and Apple TV+ having launched this month, there's absolutely no indication that trend is going to change. That's something being made clear at research firms like UBS, which is actually predicting that things will be getting slightly better for AT&T, and marginally worse for cable giants like Charter:

"UBS predicted that the U.S. pay TV industry will lose another 6.2 million video subscribers in 2020, down slightly from the 6.4 million the analyst firm predicts will be lost in total this year. If that loss comes to bear it will represent a 6.7% rate of decline, ahead of 6.2% in 2019 and well ahead of 1.2% in 2018 when video subscriber losses totaled 1.2 million. “We now expect industry losses to remain in the 6-7% per year range for the medium term, suggesting worsening trends in domestic core affiliate into next year,” wrote UBS analyst John Hodulik in a research report. He said that improvement at AT&T will likely be offset by worsening trends for cable providers and other MVPDs."

The irony here is that Rutledge's prediction would actually be true if cable giants were willing to compete on price and customer service. But they're not, so the losses are likely to continue, especially with new services like Disney+ jumping into the fray at a measly $6 a month.

This is crazy, but maybe don't take predictions from a guy whose response to increased competition is to raise prices, repeatedly. Or from a guy whose company is so disliked, it literally has among the worst customer satisfaction rankings of any company, in any industry in America (pause and think about that accomplishment for a moment). Cable executives could respond to the cord cutting threat (read: cheaper, better competition) by fixing customer service and lowering prices. Instead, they'd rather stick their heads three feet underground, the very reason they're in this predicament in the first place.

Filed Under: cable, cord cutting, predictions, tom rutledge, tv, wishful thinking
Companies: charter

Cable Giant Spectrum On Quest To Outlaw 'Insane' Streaming Password Sharing

from the you're-own-worst-enemy dept

For years, streaming video operators like HBO and Netflix have taken a relatively-lax approach to password sharing. Netflix CEO Reed Hastings has gone so far as to say he "loves" the practice, and sees it as little more than free advertising. Execs at HBO (at least before the AT&T acquisition) have made similar arguments, arguing that young users in particular that share their parents' password get hooked on a particular product via password sharing, then become full subscribers down the road. In short, they see it as added value for the consumer, and have repeatedly stated it doesn't hurt them.

On the other side of the equation sits Charter CEO Tom Rutledge, one of the highest paid execs in media. He, in contrast, has long complained that he views password sharing as "piracy", and has consistently promised to crack down on the practice. Rutledge and his fellow executives gave a particularly rousing "get off my lawn" lecture at a media event a few years back:

"There’s lots of extra streams, there’s lots of extra passwords, there’s lots of people who could get free service,” Rutledge said at an industry conference this month...“It’s piracy,” Connolly said. “It’s people consuming something they haven’t paid for. The more the practice is viewed with a shrug, the more it creates a dynamic where people believe it’s acceptable. And it’s not."

Except it is acceptable. For one, most of these services include password sharing as part of their business model; they include limits on the number of simultaneous streams that can be running under any one account to prevent sharing from undermining too many new sales. And the companies that have been embracing the practice say they've seen no negative impact from it. Again, it's free advertising and a consumer-friendly practice that's factored into the business model. It's certainly not, as Rutledge has often suggested, synonymous with "piracy."

Undaunted, Rutledge has been trying to build a coalition of industry allies focused on stomping out the nefarious practice of password sharing. And as the company strikes programming deals with partners, it's ensuring that a ban on such sharing is part of the process. One big partner in this initiative is Disney, which is expected to put the kibosh on password sharing when it launches its new Disney+ streaming service this fall. All the while, Charter executives are running around calling the practice of password sharing "insane":

"Ultimately our goal is that we can get an alliance of a large enough group of programmers and operators to protect the value of the content that people produce and the content that we distribute and we pay for,” Chris Winfrey, Charter’s chief financial officer, said last week at the Bank of America Merrill Lynch 2019 Media, Communications & Entertainment Conference in Beverly Hills.

Winfrey severely criticized programmers that turn a blind eye to the practice of password sharing, claiming such practices are “insane."

“To think that it doesn’t impact the way we get paid, it does,” Winfrey said. “And it conditions the entire marketplace to think that content should be devalued, it should be free, and that’s the way it is and I shouldn’t have to pay for it. It’s our firm belief that we’d be growing and growing significantly [if it wasn’t for password sharing]."

Except it's not "free," for the reasons outline above. And while you might gain some additional revenue by banning password sharing, you might also lose subscribers to companies that actually value making consumers happy. Charter Spectrum is, if you'd forgotten, statistically one of the least liked companies in America for a long list of reasons, from mindlessly jacking up prices to providing some of the worst customer service of any company, in any industry in America (think about that accomplishment for a second). Blaming all of its problems on the fact people occasionally share streaming TV passwords reflects the entitlement mindset that's pretty common in the too big to fail, government-pampered telecom and broadcast sector.

Filed Under: password sharing, streaming, tom rutledge
Companies: charter, hbo, netflix, spectrum

Cord Cutting Is Setting Records In 2019

from the adapt-or-perish dept

Remember cord cutting? The trend that cable and broadcast execs and countless sector analysts spent years claiming either wasn't real, or didn't matter because it would end once Millennials started procreating?

Well it's still very real, and once again the rate of traditional TV cancellations is setting records. The second quarter is looking to be particularly ugly, with giants like AT&T, Comcast, and Charter Spectrum all seeing big losses, but with AT&T's being particularly ugly:

"But so far this quarter Comcast, AT&T and Charter have reported losing more than 1.25 million subscribers. “As a result of this bloodshed, we are estimating that the rate of traditional cord-cutting will reach 5.5% in 2019 (the worst rate it has ever been),” Nathanson said.

"Even adding back virtual MVPD subscribers, the drop will be 2.7%, a new low,” he said, adding “we would expect that this trend will continue to accelerate over the back-end of 2019."

Again, customers are tired of paying an arm and a leg for a giant bundle of channels they don't watch. So they're axing traditional TV and shifting over to streaming video providers the data says not only offer cheaper, more flexible options, but far better customer service. Or they're getting this content via an over the air antenna (for free), or via piracy. With a number of high-profile streaming options just over the horizon from the likes of Apple and Disney, competition in the space is only going to accelerate.

And while many traditional cable TV companies have responded to this surge in competitors by offering their own streaming alternatives, that's no sure thing either. Just ask AT&T, which not only lost 778,000 traditional video users last quarter, but 168,000 subscribers from its streaming video alternative, DirecTV Now. Why? AT&T gobbled up so many companies in its bid to dominate the space, it became one of the most indebted companies in the world. When it raised streaming TV prices to try and recoup some of this debt, customers unsurprisingly headed for the exits.

Of course it's always worth reiterating that these giant telecom and TV operators have an ace in the hole: the monopoly they hold over broadband access in many markets. Limited competition means they can respond to the loss in video revenue by jacking up the price of broadband. Worse, limited competition means these companies can impose anti-competitive (and utterly technically unnecessary) usage caps and overage fees they'll often use as a competitive bludgeon. Many of these efforts simultaneously jack up your broadband bill, and punish you should you choose a streaming video alternative to their own TV offerings.

With the recent death of net neutrality, it's likely there's a universe of "creative" anti-competitive behaviors these natural monopolies haven't been able to implement yet. Should the rules not be restored, that's likely to change quickly over the next few years, and the impact on your bandwidth bill (and the competitive streaming playing field) isn't likely to be subtle.

Filed Under: cord cutting, internet, tv
Companies: at&t, charter, comcast

Shockingly, Cable TV and Broadband Customer Satisfaction Is Still The Worst In America

from the ill-communication dept

Every few years or so, giant cable and broadband companies like Comcast will proclaim that they've finally seen the light, and will be spending time shoring up their terrible customer service. Like a few years ago, when Comcast proclaimed it had hired a "Customer Experience VP" who would finally make addressing the company's historically terrible customer service a top priority. CEO Brian Roberts also can be found at least once a year claiming that the company is going to finally address the problem by hiring better people, improving support systems, and generally revisiting the company's policies.

But year after year, big cable and broadband companies fail to deliver. Case in point: the latest American Consumer Satisfaction Index was recently released, and ISPs and cable providers continue to see the worst customer satisfaction scores in America. These companies are so bad at what they do, they're routinely bested by even everybody's favorite punching bag: the IRS. When it comes to broadband service on a scale of 100, both Comcast and Charter (Spectrum) continue to see the worst scores in an already terrible sector:

"Internet Service Providers didn’t fare any better than cable companies with the overall industry ratings at the same 62. The only three ISPs with rankings above the average are Verizon FiOS (70), AT&T Internet (69) and Altice (63). At the bottom of the rankings are Frontier (55), MediaCom (56), and Windstream (57). The big cable companies don’t fare well as ISPs – Charter (59) and Comcast (61)."

Things are equally bad on the cable TV front, where despite the rise of competition from streaming providers, incumbent cable ops still can't seem to figure out this whole "treating customers with respect" thing. While most hated industries (airlines) rank in the 70s and more popular brands (Amazon) reach the 80s, cable TV remains struggling in the 50s and 60s:

In the TV sector, the emergence of streaming video has offered consumers some reprieve. Streaming providers like Netflix, Hulu, and Amazon routinely rate much higher in customer satisfaction because they give consumers what they've been screaming for for years: lower prices and more flexible channel bundles. Ultimately, cable operators will be forced to actually compete on price, but they're apparently waiting until countless millions of their paying customers have fled to greener pastures before actually seriously overhauling their business models. Still, competition in the TV space is rising either way.

The broadband space is less promising. With no meaningful regulatory oversight and little competition, there's really no incentive to improve customer service or offer a better product in most markets. The focus remains on growth for growth's sake (megamergers) and scale, without scaling customer service in symmetry. The end result should be fairly obvious, given the broadband sector ranks worse than a long list of widely despised sectors like the airline, banking, and insurance industries. That kind of accomplishment requires some serious, sustained elbow grease and the kind of monopoly myopia money simply can't buy.

Filed Under: broadband, cable tv, customer satisfaction
Companies: at&t, charter, comcast, frontier, spectrum, verizon, windstream