Charter Spectrum Under Fire For Putting The Public At Risk During Coronavirus

from the monopolizing-stupidity dept

Charter Communications literally has some of the worst customer satisfaction ratings of any company in any industry in America. Like Comcast, Charter has spent years merging its way to market domination, and now enjoys a notable monopoly over broadband in numerous U.S. markets. This monopoly, combined with regulatory capture, has resulted in a company that literally doesn't have to give a damn about its customers.

As it turns out, the company doesn't treat its employees much better.

For the last few days, both Gizmodo and TechCrunch have been fielding complaints from a torrent of Spectrum employees who say the company is putting them at unnecessary risk. Employees who say there's no technical reason they can't perform their work remotely have been mandated to continue coming into the office, despite CDC warnings that social distancing will be essential to slow the spread of the pandemic across the United States. Several employees sent internal memos warning all employees the company was ignoring CDC recommendations:

"The CDC guidelines are clear. The CDPHE guidelines are clear. The WHO guidelines are clear. The science of social distancing is real. We have the complete ability to do our jobs entirely from home,” he wrote, reeling off the advice from several state and federal government departments and international health organizations. “Coming into the office now is pointlessly reckless. It’s also socially irresponsible. Charter, like the rest of us, should do what is necessary to help reduce the spread of coronavirus. Social distancing has a real slowing effect on the virus — that means lives can be saved."

But employees who are raising alarm bells that Charter is putting lives at risk are being told to take sick leave or quit:

"Wheeler said he was given an ultimatum. Either he could work from the office or take sick leave. Staff are not allowed to work from home, he was told. Wheeler offered his resignation, but was sent home instead and asked to think about his decision until Monday.

Later in the day, he received a call from work. Charter accepted his resignation, effective immediately."

In some instances, staff are being told to report to work despite positive COVID-19 tests being found at Charter offices. At the heart of the problem is Charter CEO (and formerly Comcast executive) Tom Rutledge, who, much like his belief that streaming password sharing is the biggest problem facing the industry at the moment, doesn't think much of this whole modern telework thing:

"The employees we spoke to said that while Charter has the means to allow staff to work from home, executives are reluctant to relax the policy. Charter chief executive Tom Rutledge said in an internal email to staff this week that employees are “more effective from the office."

The same monopoly mindset -- in which the reality on the ground doesn't, can't, and won't matter because there's no organic or regulatory penalty for bad behavior -- is certainly evident in the way Charter treats its employees. Though it's not just monopoly power, given that Comcast is not only letting its employees work from home but is doling out hazard pay. Which means at the end of the day it comes down to terrible management, and an unwillingness to listen to your own employees, and a top down failure in leadership that's literally now putting human lives at risk. Not just those of Charter employees, but, given the symptomless transmission evident in COVID-19, everybody in the regions that Charter does business.

Update: It sounds like Charter may finally be getting the message.

Filed Under: coronavirus, covid-19, efficiency, health and safety, remote work, tom rutledge, work from home
Companies: charter communications

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

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 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

Charter, Disney Execs Pledge To Crack Down On Streaming Password Sharing 'Piracy'

from the missing-the-whole-point dept

For years now Netflix and HBO CEOs have stated that they see streaming service password sharing as little more than glorified advertising. These execs have long argued that once users realize they enjoy the product, they'll usually sign up for their own account (something particularly true of kids once they leave home and get a job). Even then, these companies already impose a limit on the number of simultaneous streams their services offer, and already charge more for a greater number of streams -- so it's not like these companies are giving away the farm for free anyway.

But for the last several years incumbent broadcast and cable executives have been engaging in breathless hysteria regarding such password sharing. Charter CEO Tom Rutledge has grown increasingly agitated over the practice, arguing that HBO and Netflix's tolerance of password sharing shows a "complete lack of control and understanding in the space," while going so far as to argue that a "lack of control over the content by content companies and authentication processes has reduced the demand for video because you don’t have to pay for it."

Of course you may have noticed that the "demand for video" is higher than ever before, based on Netflix's now 50 million monthly streaming subscribers and the massive rise in all manner of viewing options. And Netflix CEO Reed Hastings (who understands his own business pretty well at this point) has gone so far as to state he "loves" the practice:

"We love people sharing Netflix," CEO Reed Hastings said Wednesday at the Consumer Electronics Show here in Las Vegas. "That's a positive thing, not a negative thing."...A lot of the time, he said, household sharing leads to new customers because kids subscribe on their own as they start to earn income.

Yet some cable and broadcast executives continue their bizarre assault on a problem that isn't. At recent industry events both Rutledge and Disney exec Justin Connolly lamented what they call a rise in password sharing "piracy," hinting that they intend to crack down on the practice in the near future:

"Tom Rutledge has had enough. The chief executive officer of Charter Communications Inc., which sells cable TV under the Spectrum name, is leading an industrywide effort to crack down on password sharing. It’s a growing problem that could cost pay-TV companies millions of subscribers—and billions of dollars in revenue—when they can least afford it.

“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."

You'd think Rutledge, the highest paid executive in America last year, would have a slightly better grasp on the industry he works in and where it's headed. Again, Netflix and HBO impose simultaneous stream limits, so it's not like they're giving away the store. And again, these executives have clearly stated they see password sharing as advertising, so calling it piracy makes no coherent sense. It's a reflection of the hubris often seen in the traditional cable TV sector, where they believe every natural market evolution is an existential threat.

Of course Rutledge is the same CEO that just spearheaded a completely botched merger with Time Warner Cable and Bright House Networks that resulted in higher rates, fewer upgrades, and higher prices. Rutledge's company is also currently being sued for failing to deliver advertised broadband speeds and for using hidden fees to covertly jack up service costs. Disney's ESPN properties, meanwhile, were so blinded by the belief they could nurse the traditional cable cash cow forever, they failed to see the cord cutting trend coming and have lost tens of millions of viewers as a result.

In other words, these two execs have plenty of other problems they need to deal with before focusing all of their ire on a problem that isn't. And when looking for advice on the evolving video market, maybe you should steer clear of folks that pretty clearly have little to no understanding of adaptation or where the market is headed.

Filed Under: justin connolly, password sharing, reed hastings, streaming, tom rutledge
Companies: charter, disney, hbo, netflix

Cable CEO Is Really Pissed That HBO Hasn't Cracked Down On Streaming Password Sharing

from the get-over-it dept

As HBO's streaming service popularity has taken off, the company has yet to crack down on the sharing of passwords, believing it's a great opportunity to have programming junkies market the brand for you. We all of course already knew that sharing HBO Go passwords was a violation of the anti-circumvention clause of the DMCA and an unholy sin. But according to Charter CEO Tom Rutledge, the sharing of streaming service passwords is also a diabolical theft of content that needs to stop immediately.

During the cable giant's recent quarterly earnings call, Rutledge decided to rant a bit about the perceived injustice of college students using their parents' passwords, insisting that HBO's leniency on this front showed a complete misundertanding of the market:

"But to Rutledge, companies like HBO show a "complete lack of control and understanding in the space" by letting password sharing continue, and it's something that must be stopped. "The lack of control over the content by content companies and authentication processes has reduced the demand for video because you don’t have to pay for it,” Mr. Rutledge said on the earnings call. “That’s going on in the college market."

But it's Rutledge who appears to have shown his lack of understanding of the market he serves. The CEO assumes that if you crack down on college kids sharing HBO passwords that these kids are magically going to go out and sign up for cable connections. What's more likely to happen should you crack down on the practice is that that these kids (most of whom are on a budget) will turn to cheaper streaming alternatives like Netflix -- or piracy. But in traditional legacy exec thinking, everybody's a criminal, even though Rutledge's company simply refuses to seriously compete on price.

Earlier this year HBO CEO Richard Plepler said the company keeps a close eye on the password sharing stats, and it's not really a significant number of people. Plepler (the guy Rutledge implies doesn't understand the market) a year earlier made it clear he understood the market perfectly well:

"It’s not that we’re unmindful of it, it just has no impact on the business,” HBO CEO Richard Plepler said. It is, in many ways, a “terrific marketing vehicle for the next generation of viewers,” he said, noting that it could potentially lead to more subscribers in the future. “We’re in the business of creating addicts,” he said.

So, whereas HBO thinks it's a good idea to turn the other cheek on a statistically insignificant practice to generate brand obsession, Charter (soon to own Time Warner Cable and Bright House Networks in a $75+ billion merger) thinks it's a better idea to treat college kids like criminals, and in the process, driving them to Netflix and BitTorrent networks.

Filed Under: cable, competition, hbo, password sharing, streaming, tom rutledge
Companies: charter, hbo