Megamergers Can't Help Charter Spectrum As Cord Cutting Exodus Continues

from the bigger-isn't-better dept

You might recall that in 2016 Charter merged with Time Warner Cable and Bright House Networks, promising that the new, combined company would offer a revolution in customer service, broadband speeds, and TV. Instead, what the company's customers got was a steady parade of rate hikes, and a company that has found itself under fire for repeatedly trying to kill or tap dance around merger obligations (like the one stating it can't cap broadband usage for six years). New York State deemed the company's service and behavior so atrocious, it seriously contemplated kicking the company out of the state.

Not too surprisingly, raising rates and offering terrible customer service continue to take a toll on the company. The company lost another 145,000 cable TV customers in the first quarter, as users (annoyed by price hikes) continue to flock to cheaper, more flexible TV options:

"The company posted net video subscriber losses totaling 145,000, compared to a net loss of 111,000 one year ago. The company lost 152,000 residential video subscribers this quarter, a 24% increase over the 121,000 residential subscribers it lost in the year-ago quarter."

Charter also lost 99,000 digital voice customers, as users who've gone wireless only also try to trim back their bloated monthly cable bill. It's odd in that these companies are facing intense new competition in the streaming space, and their first reaction is to double down on video price hikes. Part of that is an effort to recoup the massive debt load incurred by the mergers themselves, a problem AT&T is also struggling with. AT&T spent more than $150 billion on megamergers in recent years, only to face record subscriber defections thanks to endless rate hikes.

Granted cable giants like Charter Spectrum and Comcast have an ace in the hole: the lack of competition in broadband. As many US telcos retreat from upgrading their DSL lines, cable giants are enjoying a greater monopoly than ever. They're taking advantage of this lack of competition by jacking up the price of broadband. In Comcast's case that has included arbitrary, confusing, and punitive broadband usage caps, which not only act as a glorified price hike, but can help these cable giants simultaneously cash in on, and deter the use of, streaming video alternatives.

Charter may have lost video and phone subscribers last quarter, but it managed to add 428,000 residential and business broadband customers in the quarter. Given most of these users don't see an competition for faster speeds, Charter can hike prices at its leisure. And while the previous FCC banned Charter from imposing usage caps for six years, by 2022 those restrictions will be lifted. Between that and the death of net neutrality rules (assuming they're not restored by the ongoing lawsuit against the FCC), it's not hard to see how America's cable monopolies plan to impose all manner of creative nickel-and-dime restrictions on these captive customers.

Who's going to stop them? The current FCC is arguably beholden to the sector, meaning there's neither regulatory nor healthy competitive pressure capable of keeping these lumbering giants in line. The best hope is trying to shovel forth policies that actually bring more competition to underserved markets (including via community broadband or public/private partnerships), something Charter and Comcast's lobbying and policy folks work tirelessly to avoid.

Filed Under: broadband, consolidation, cord cutting, tv
Companies: bright house networks, charter, charter spectrum, time warner cable

Charter Spectrum's CEO Continues To Whine About Streaming Password Sharing

from the get-off-my-damn-lawn dept

For years now, streaming video providers 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" password sharing, and sees it as little more than free advertising. Execs at HBO (at least before the AT&T acquisition), have similarly viewed password sharing in such a fashion, 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 once they actually have disposable income.

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 last year:

"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."

Of course it's far from "piracy" if it's being sanctioned by the companies doing it, with an eye on generating product awareness and happy customers. That last bit is something Rutledge could use some lessons on. Rutledge fixates on password sharing when he should be focused on why exactly his company continues to bleed subscribers to these cheaper, more flexible traditional cable alternatives. Hint: endless rate hikes, historically terrible customer service, and megamergers

Last week Rutledge was at it again. During his company's latest earnings call, Rutledge proclaimed that streaming providers like HBO and Netflix clearly "don't know what they're doing" because they've refused to crack down on the villainous practice of password sharing:

"By the content companies going over the top without having the experience of being distributors, they’ve done that in a way without securing their content, which any distributor would theoretically do if they knew what they were doing. But that hasn’t been the case, so you have free service all over the country through passwords,” Rutledge said. “The reality is television can be had fairly easy without paying for it."

Granted just because television can sometimes be "had fairly easy without paying for it" doesn't mean it's bad, or it's "piracy." Millions of users increasingly are flocking to over the air antennas as an alternative to the bloated, expensive cable bundles execs like Rutledge simply can't move on from. It's worth noting that this is a "problem" that really isn't. Most streaming services already limit simultaneous streams per account, and being able to share your password with a limited set of friends and family members is part of the value equation you're paying for.

It's also worth noting that when HBO or Netflix execs acknowledge the trend, they note there really aren't all that many users actually doing it. As such, if there's something Rutledge wants to spend several years hyperventilating over, it should probably be his company's continued failure to actually listen to consumers, and offer a better product with support that isn't ranked among the worst of any company, in any industry in America.

Filed Under: passwords, piracy, pricing, sharing, streaming, tom rutledge
Companies: charter, charter spectrum

Charter Spectrum Jacks Up Rates (Again) Thanks To Merger 'Synergies'

from the do-not-pass-go,-do-not-collect-$200 dept

When Charter Communications (Spectrum) proposed merging with Time Warner Cable and Bright House Networks in 2016, the company repeatedly promised that the amazing "synergies" would lower rates, increase competition, boost employment, and improve the company's services. Of course like countless telecom megamergers before it, that never actually happened. Instead, the company quickly set about raising rates to manage the huge debt load. And its service has been so aggressively terrible, the company recently almost got kicked out of New York State, something I've never seen in 20 years of covering telecom.

Cities like Lexington, Kentucky continue to explore their legal options in efforts to hold Charter accountable (something it's clear the Trump FCC won't do). Charter, meanwhile, has informed many of these users that they'll be seeing yet another rate hike in November across the company's entire, 41-state territory. All told, users will pay at least $100 more for the same service annually, thanks in part to increases in several of the sneaky fees Charter routinely tacks on to user bills to jack up the advertised price post sale:

"Broadcast TV surcharge will increase from $8.85 to $9.95/month, Charter said, "This reflects costs incurred from local broadcast TV stations."

• Spectrum receivers will increase from $6.99 to $7.50/month.

• An increase from $54.99 to $59.99/month for Spectrum Internet for current customers who subscribe to Spectrum TV.

• An increase from $64.99 to $65.99/month for Spectrum Internet for current customers who do not subscribe to Spectrum TV."

Modest hikes, but they add up. It's worth noting that that "Broadcast TV fee" is simply a part of the cost Charter pays for programming, broken out of the bill, and tacked on below the line to help covertly jack up the advertised rate post sale. It's something most cable operators have been routinely sued for, and regulators enjoy turning a blind eye to (despite largely being false advertising). The company, for its part, continues to insist that these price hikes simply reflect the wonderful service users are now getting from the nation's second biggest cable provider:

"The price of Spectrum Internet reflects the dramatically faster speeds and investments we’ve made in reliability and quality," Michel said. "Earlier this year, we doubled the starting download speed of Spectrum Internet from 100 to 200 megabits per second. Lastly, our receivers are still comparable or lower in price than our major competitors'."

Charter omits that many of these speed hikes only came about thanks to merger conditions, or that its speed increases lagged dramatically behind contemporaries like Comcast as it focused primarily on its last megamerger. Of course higher prices, poor service, and some of the worst ranked customer support of any company in America (no easy feet given the airline and banking industries expertise) are the net result of both the blind deregulation of natural monopolies and our adoration of blindly buying into megamerger promises, a reality that our tech policy never quite seems capable of keying in on.

This is, unfortunately for you, a problem that's only going to get worse before it gets better thanks to a lack of competition in broadband and a refusal to embrace policies that actually encourage said competition. Instead, the telecom industry (with the Trump FCC's help) has been waging a not subtle war on both federal and state consumer protections, while at the same time quietly securing a significant monopoly over faster broadband speeds. You'd think the end result of this would be obvious, but given our refusal to address this reality, you'd apparently be mistaken.

Filed Under: fees, mergers, rates, synergies
Companies: charter, charter communications

The Nation's Second Biggest Cable Company Probably Won't Get Kicked Out Of New York State After All

from the ill-communication dept

Back in July, New York State took the historically-unprecedented step of voting to kick Charter Communications (aka Spectrum) out of New York State. Regulators say the company misled them about why the company repeatedly failed to adhere to merger conditions affixed to the company's $86 billion acquisition of Time Warner Cable and Bright House Networks, going so far as to falsify (according to the NY PUC) the number of homes the company expanded service to. The state has also sued the company for failing to deliver advertised broadband speeds, for its shoddy service, and for its terrible customer support.

But the threat to kick Charter out of the state appears largely to have been a negotiation tactic, as the two sides are now purportedly making progress and engaging in "productive dialogue" as they attempt to hash out their differences. That's at least according to a Charter filing with the state PUC requesting a deadline extension obtained by Ars Technica:

"Good cause exists to further extend this deadline. Charter and the Department have been involved over the past few weeks in productive dialogue regarding the Revocation Order as well as the July Compliance Order and the related special proceeding initiated by the Commission in the [state] Supreme Court pursuant to the July Compliance Order. As part of that dialogue, Charter has been assembling additional information regarding broadband deployment efforts in New York for the Department's and the Commission's review. A further extension would allow additional time for discussions between Charter and the Department before the initiation by Charter of additional Commission or court proceedings."

The state PUC seems to agree, noting in its own order granting a deadline extension (pdf) that Charter has made a few good faith efforts of late, including ceasing running ads misleadingly stating the company expanded broadband to areas it may not have actually wired. While most telecom experts I've spoken to believe this is likely to result in some kind of settlement, this is still a fight that's going to be important to watch moving forward.

For one, Charter has attempted to use the FCC's "pre-emption" language embedded in its net neutrality repeal to try and claim that states have no authority to police ISPs in the wake of obvious federal apathy on consumer issues by the Trump administration and Ajit Pai FCC.

ISPs have lobbied hard (and quite successfully) to not only gut federal (FTC and FCC) oversight of their businesses, but have also been working hard to cripple state oversight. That's a troubling trend for an industry that already faces limited accountability due to the lack of competition in most of their markets, especially given that Charter and Comcast now enjoy a pretty stark monopoly over faster broadband speeds. That monopoly manifests itself in all manner of obvious ways, including soaring prices, unnecessary usage caps, net neutrality violations, and historically-terrible customer service.

So far those efforts haven't gone well for ISPs, with a court shooting down Charter's claim that the FCC's net neutrality repeal means states can't step in to fill the void. But with more than half the states in the nation now pursuing their own net neutrality rules, and other states trying to pass privacy rules in the wake of dismantling of FCC protections last year in Congress, this is a fight that's going to be playing out repeatedly in the months and years to come as states try to fill the vacuum left by a federal government that (unless you're in deep denial) pretty clearly doesn't care much about telecom consumer protection.

And while some states (New York, California, Washington) clearly still think consumer protection is important given the perils of monopoly power, there's countless states that are going to mirror the federal belief that telecom Utopia is accomplished, magically, by letting giant monopolies like Comcast, Charter and AT&T run amok. That's going to be especially problematic for users in states like Tennessee and West Virginia, where letting these historically-unpopular companies rip off taxpayers and over-charge captive customers is seen as a god-given right.

Filed Under: broadband, competition, merger conditions, new york, puc
Companies: charter, spectrum

Charter Spectrum Security Flaw Exposes Private Data Of Millions Of Subscribers

from the Another-day,-another-scandal dept

Last year you'll recall that the cable and broadband industry lobbied the government to kill off broadband privacy rules at the FCC. The rules were fairly basic, requiring that ISPs and cable operators clearly disclose what data is being collected and sold, but also provide working opt out tools for users who didn't want to participate. The rules also contained restrictions requiring that consumers opt in to more sensitive data collection (financial), as well as some requirements that ISPs and cable ops adhere to standard security procedures, and quickly inform consumers when their private data was exposed by a hacker.

In recent months, the cable industry has been showcasing how it's simply not very good at keeping its websites secure. Comcast, for example, has seen three privacy breaches in almost as many months, with security researcher Ryan Stevenson discovering numerous, previously-unreported vulnerabilities that potentially exposed the the partial home addresses and Social Security numbers of more than 26.5 million Comcast customers.

Not to be outdone, now Buzzfeed has found that a vulnerability on the Charter Communications (Spectrum) website made it possible for just about anyone to take over customers’ accounts without a password. According to the report, this flaw was again discovered by Stevenson (who goes by the monicker Phobia), and involved tricking a Spectrum website that let subscribers create a Time Warner Cable (the company Charter just acquired) ID.

If a targeted customer hadn't yet registered for such an ID, a website flaw let a hacker trick the website into creating one by replacing their own IP address with the customer’s using the “X-forwarded-for” technique, a relatively trivial affair:

"The registration website tried to verify subscribers’ identities by asking for their zip codes and phone numbers. But according to the security researcher Phobia, the zip code didn’t need to be correct to proceed to the next page. Only the phone number associated with the account needed to be accurate. Additionally, Ceraolo found that hackers could use a brute-force software program in the phone number field (in other words, repeatedly try different 10-digit combinations), because the Spectrum website did not limit the number of attempts. That means it would be relatively easy for a hacker to take over someone’s account even without an accurate phone number."

Once the bogus ID was created, the hacker subsequently had access to oodles of private user account data, including billing address, email, and account number. That data could, in turn, be used as the cornerstone of social engineering and phishing efforts to glean even more customer information. Not all of Charter's total 23 million customers are impacted; only a smaller subset of the company's 14 million "legacy," pre-merger Time Warner Cable subscribers were impacted. The company also claims that it has no evidence to suggest that these flaws were actually exploited.

But we're still likely talking about millions of potential subscribers, and Charter won't specify just how many users may have had their private data exposed. And if Stevenson's recent track record is any indication, there's plenty more flaws likely waiting in the wings to be discovered.

Filed Under: breaches, broadband, flaws, privacy
Companies: charter, charter spectrum

Charter CEO Apparently Unaware He Runs One Of The Most Despised Companies In America

from the ill-communication dept

As we recently noted, New York state was forced to take some pretty dramatic steps in its quest to hold Charter Spectrum accountable for terrible service and its failure to adhere to merger conditions affixed to its $79 billion union with Time Warner Cable and Bright House Networks. The short version: the company was found to be repeatedly misleading regulators in terms of whether it was adhering to some relatively modest built out requirements affixed to the merger.

Under the deal, Charter was supposed to expand broadband to around 149,000 additional unserved homes across New York State. Charter not only failed to do that, the New York State Public Service Commission repeatedly found that the company was actively trying to mislead regulators in terms of how much of that work was actually completed. After ample warnings and $3 million in fines, the PSC last week took the unprecedented step of voting 4-0 to revoke the company's cable franchise in the state in a bid to force Charter to shape up or ship out.

Charter, for its part, is showing absolutely zero interest in doing so. In a letter to employees, Charter CEO Tom Rutledge stated that the company is gearing up for years of litigation. Litigation that will, apparently, not deter the company from continuing to pursue the company's nonexistent reputation for excellence:

"We intend to defend our rights to the fullest extent of the law and will pursue all avenues for overturning and preventing implementation of the New York Public Service Commission order. There may be years of litigation before we prove that we have done what we said we would. If we can’t settle this in the meantime, it is important that we continue to live up to our obligations and to perform well.

Charter continues to grow in New York State and across our footprint, providing our customers with world-class products and services. Our day-to-day focus on excellence and craftsmanship remains the same."

Charter is, as we've noted repeatedly, literally one of the least-liked companies in any industry in America. Customer Satisfaction surveys like the American Customer Satisfaction Index rate Charter worse than countless, notoriously terrible industries including the airline, banking, and insurance sectors. It even routinely ranks lower than even the IRS and other historically-maligned sectors of the American government. This terrible service is a major reason why New York State had already filed a seperate lawsuit against the company for routinely advertising services it fails to deliver.

That Charter is widely seen as a terrible company is, apparently, news to Rutledge, who on the company's earnings call with the media and analysts insisted that the nation's second-biggest cable company is generally quite well liked by its customers:

"To put it in perspective, we’re operating in 41 states, we have thousands of franchise agreements, and generally we have good relationship with the communities we serve," Rutledge added. "We live up to our commitments and we have in New York State; in fact we’re well ahead of our obligations in terms of speed upgrades and in the build-out itself."

Yes, "good relationships" like the one Charter enjoys in Lexington Kentucky, where city officials were forced to hold an unprecedented, emergency community meeting to discuss precisely what the city should do about the company's terrible and worsening service. And the clearly stellar relationships Rutledge forged when he, the highest paid executive in America in 2016, oversaw rate hikes as high as 35% in countless markets directly post merger. Check out this "good relationship," for example:

"It was bull crap,” Fitzgerald said. “They don’t give us any notice, they just spring it on us in the middle of the month. And then they tell us we’re getting an ‘upgrade.’ This isn’t an upgrade, it’s the same channels we already had!”

Rutledge is, of course, playing dumb here. He knows the company he runs is widely despised. He also knows, especially thanks to a growing monopoly over broadband, that angry consumers often have little to no recourse when it comes to terrible service. Outside of building their own local broadband networks, of course, something Charter lobbyists have ensured isn't an option thanks to protectionist laws passed in 21 states (hooray for empty lip service to free markets!) written by and lobbied for by incumbent ISPs.

Granted New York State isn't likely to kick Charter out of the state if the company simply settles and agrees to comply with merger conditions it already signed off on. Most legal wonks and consumer advocates I've spoken to think that's how this fight ends, especially should Charter struggle early to gain any legal traction.

But the company's hubris and tone deafness remains on pretty proud display, falsely-inflated courtesy of a Trump FCC that has made it clear it's a glorified rubber stamp for telecom monopoly bad ideas (like oh, killing net neutrality, consumer privacy protections, and downplaying competitive concerns). In the interim, the customers Charter has such a "good relationship" with continue to depart (another it lost another 57k cable TV customers last quarter) to cheaper streaming alternatives actually interested in giving consumers what they're asking for.

Filed Under: broadband, new york, tom rutledge
Companies: charter, charter spectrum

New York State Votes To Kick Charter Out Of The State For Poor Service, Failing To Meet Merger Conditions

from the goes-around-comes-around dept

In an unprecedented move, the New York State Public Service Commission has voted 4-0 to kick Charter out of the state. According to the announcement (pdf) by the PSC, Charter has been given sixty days to file a plan with the PSC that will "ensure an orderly transition to a successor provider," including offloading the Time Warner Cable territories acquired in the merger. The PSC also notes the vote was only taken after more than a year of trying to get Charter to adhere to some pretty modest broadband build-out requirements affixed to the deal:

"Charter's repeated failures to serve New Yorkers and honor its commitments are well documented and are only getting worse. After more than a year of administrative enforcement efforts to bring Charter into compliance with the Commission’s merger order, the time has come for stronger actions to protect New Yorkers and the public interest," said Commission Chair John B. Rhodes. “Charter’s non-compliance and brazenly disrespectful behavior toward New York State and its customers necessitates the actions taken today seeking court-ordered penalties for its failures, and revoking the Charter merger approval."

As noted previously, the state has been trying unsuccessfully for more than a year to get Charter to actually comply with merger conditions. Among them was the promise to expand broadband availability to around 149,000 homes across New York State, something Charter not only didn't do, but actively misled regulators into thinking had already been completed. In part, by claiming older, existing expansions were new builds.

If you follow telecom (or other major megamergers) for any amount of time, you'll quickly find that most merger conditions are pretty theatrical in nature. Usually, said conditions are often proposed by the companies themselves and were things they already had planned anyway, making "accomplishing them" rather trivial, zero calorie affairs. Companies sign off on these conditions because it helps them pretend the merger actually benefits the public, and regulators sign off because it provides cheap political brownie points and the illusion that companies are being held accountable. Neither is usually true, especially in telecom.

Even when the conditions are meaningful, it's pretty routine to see telecom giants like Charter or Comcast ignore them completely, usually with zero real repercussions. For its part, Charter issued a statement claiming that this was all just an election year stunt by New York Governor Andrew Cuomo:

"In the weeks leading up to an election, rhetoric often becomes politically charged. But the fact is that Spectrum has extended the reach of our advanced broadband network to more than 86,000 New York homes and businesses since our merger agreement with the PSC. Our 11,000 diverse and locally based workers, who serve millions of customers in the state every day, remain focused on delivering faster and better broadband to more New Yorkers, as we promised."

And while Cuomo's quest to protect his Governorship from challenger Cynthia Nixon likely isn't entirely absent from the move (beating up on hated cable companies often provides easy political brownie points), the state was forced toward tougher options after Charter ignored $3 million worth of fines for missing merger commitments and misleading regulators.

This is also one of several long-standing state efforts to hold Charter accountable to the public. New York is one of 23 states filing suit against the FCC for its net neutrality repeal, and the state is also in the middle of an ongoing lawsuit against Charter for not only providing terrible service and slow speeds, but also for attempting to mislead regulators on other fronts (including gaming an FCC system that uses custom-firmware-embedded routers to test real-world speeds).

The move also has to be viewed in context of the newfound federal apathy toward consumer welfare as illustrated by the elimination of broadband privacy rules and net neutrality consumer protections. States are increasingly trying to fill the void left by a Trump administration that has made it abundantly clear (at least at the FCC) that openly pandering to despised telecom monopolies and then trolling users about it is now considered brainy tech and telecom policy.

It's very likely that New York State is simply trying to force Charter to stop bullshitting and simply adhere to existing conditions, and most consumer advocates I've spoken to think this simply ends with a Charter settling and remaining in the state. Should Charter be forced to offload its New York State assets to another company, that company would likely be somebody like Comcast, which, based on consumer satisfaction studies, wouldn't likely be much of an improvement.

Filed Under: broadband, kicked out, mergers, new york, ny psc, poor service, public service commission
Companies: charter

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

from the ill-communication dept

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.

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

Court Says ISPs Can't Use Net Neutrality Repeal to Dodge Lawsuits For Shitty Service

from the foxes-watching-the-henhouse dept

The Trump FCC's rollback of federal net neutrality rules didn't just kill net neutrality. The repeal also gutted FCC authority over ISPs, shoveling any remaining authority to an FTC that's ill-equipped to actually police ISPs (the entire point and why ISPs lobbied for it). This comically-misleading "Restoring Internet Freedom" order also tries to ban states from protecting consumers. The language, included in the repeal after heavy lobbying by Comcast and Verizon, attempts to "pre-empt" state authority over ISPs.

ISPs quickly got to work trying to use the language to dodge accountability.

Charter Spectrum, for example, has been trying to use the FCC's pre-emption language to dodge a lawsuit for shoddy service. New York State sued Charter last year for falsely advertising speeds company e-mails show execs knew it couldn't deliver. The suit also highlighted how Charter execs routinely gamed a regulator speed test system (comprised of volunteer routers with custom firmware) in an attempt to falsely represent the company's network performance. The company was also accused of artificially inflating congestion to cash in on interconnection disputes.

But Charter's efforts aren't going particularly well. Late last week, The First Department of the Supreme Court, Appellate Division of the State of New York ruled (pdf) that Charter could not lean on the FCC's net neutrality repeal to have the case thrown out, and that it will be proceeding to trial. The ruling found that no, the FCC neutrality repeal did not legally pre-empt states from their right to enforce laws "that prevent fraud, deception and false advertising" in regards to broadband service. Consumer groups were quick to applaud the ruling:

"This is great news for broadband users in New York, and it bodes well for state efforts to protect broadband users generally. Such efforts are especially important given the current FCC’s decision to abdicate many of its consumer protection responsibilities with respect to broadband."

Ironically, some legal experts (like Stanford Law Professor Barbara van Schewick) have argued that when the FCC rolled back Title II and neutered its own authority over ISPs, it also dismantled much of the already-limited authority it had to tell states what they can do. ISPs have promised to sue states that try to protect consumers, but it's not clear their legal footing is particularly sound. Meanwhile, the effort to hold ISPs accountable in the wake of Ajit Pai's industry earlobe nibbling has cultivated a newfound appreciation on some fronts for the importance of state rights.

Obviously this will be a fight that plays out on a state by state level, and ISPs are likely to have better luck in some states than others. It's a story that's going to be worth paying attention to, as it will highlight another angle of consumer harm most people aren't even thinking about when they consider the impact of the extremely unpopular repeal of net neutrality.

Filed Under: broadband, false advertising, fcc, jurisdiction, net neutrality, new york
Companies: charter, charter spectrum

Thanks To No Competition, Broadband Satisfaction Scores Plummet

from the this-is-why-we-can't-have-nice-things dept

For years now we've documented the shitshow that is broadband industry customer satisfaction. That shitshow is generally thanks to a continued lack of real competition in the space, which lets these companies not only mindlessly raise rates like it's going out of style, but it gives companies like Comcast the leeway to experiment with terrible, anti-competitive practices like arbitrary and punitive usage caps and overage fees. And that's of course before you get to the clown car that passes for customer service at many of these companies, which routinely makes headlines for all the wrong reasons.

Year after year we witness a rotating crop of bizarre stories highlighting how terribly these entrenched monopolies treat their subscribers. And each year industry executives insist that they've learned the error of their ways and have dedicated themselves and their budgets to fixing the "consumer experience."

Except because these companies all but own state and federal lawmakers-- and see virtually no competition in their markets (especially at higher speeds)--things never actually get better. Case in point: the American Customer Satisfaction Index has released their latest analysis of customer satisfaction with the broadband industry. And what they found isn't pretty. In short, every single major ISP but one saw a decline in customer satisfaction over the last year:

Note that these scores are worse than every other industry the ACSI tracks, including the airline, insurance, and banking sectors. And these scores are even well below consumer satisfaction with many government agencies, including the IRS.

Comcast in fact is the only company to see no change whatsoever (though its TV services saw a 1 point decline), which is still notable given its 2014 promise that the hiring of a customer experience VP and other well-hyped improvements were going to "revolutionize" the way Comcast consumers were treated. Other companies like Charter (Spectrum) are in absolute free fall, dropping 8% year over year thanks to the poor service, rate hikes and empty promises in the wake of the company's bungled $89 billion acquisition of Time Warner Cable and Bright House Networks.

And while things like gigabit broadband get a lot of media hype, we've noted that the lack of competition driving this problem is only getting worse. Numerous telcos have all but given up on residential broadband to shift their focus toward video advertising and enterprise services. And as they refuse to upgrade millions of DSL subscribers they don't actually want, cable companies like Comcast and Charter are securing a greater monopoly over broadband than ever before.

Some like to claim new wireless technologies (like 5G) will emerge to magically provide competition to these providers. But while 5G wireless will provide faster, lower-latency and more resillient networks, it won't fix the business data service monopoly that drives high prices and many of the competition issues in the wireless sector. Nor will it address the industry's plan to keep putting ma bell back together via an endless array of competition-reducing megamergers. And however promising 5G is, it's not a substitute for uncapped, fixed broadband -- especially in more rural areas and less affluent cities.

While cable secures a growing monopoly over fixed-line broadband, monopoly ISPs (with the Trump administration's help) are gutting all FTC, FCC and state oversight over their regional monopolistic fiefdoms. All while regulators like Ajit Pai whisper sweet nothings about how eliminating popular consumer protections like net neutrality will magically improve sector investment and competition. Surely this all works out well for the consumer, right?

Filed Under: acsi, broadband, competition, customer satisfaction, fcc
Companies: charter, comcast, time warner, verizon