Tag Archives: charter

Charter’s vague compliance claims should be publicly verified by CPUC

by Steve Blum • , , ,

Charter Communications claims it’s providing near-gigabit level broadband service in virtually all of its Californian territory. Well, some of its Californian territory: in a filing with the California Public Utilities Commission, in opposition to a formal vetting of its claims that it is complying with service upgrade conditions imposed by the CPUC when it received approval to buy Time Warner cable systems, Charter says “it is already making service available at 940 Mbps to over 99% of the relevant households passed as of the end of year 2018”.

The filing doesn’t define “relevant” although it’s easy to assume it means all Californian households that had access to broadband service at the time of the merger. Maybe that’s because that’s what it means. Or maybe because Charter is hoping that commissioners are sloppy readers and won’t notice the weasel word.

It is also to be hoped that commissioners will take notice of another filing by Charter earlier this month, in which it promised to finish analog to digital upgrades in several California communities later this year. That’s a direct admission that it hasn’t met another CPUC imposed condition that required those upgrades to be completed by last November. There’s been no public announcement, by Charter or the CPUC, that an extension was requested or granted, although I suppose it’s possible some kind of understanding was reached behind closed doors. Or maybe Charter is hoping that commissioners won’t notice the disconnect.

I know from personal experience that Charter’s first impulse when asked to document compliance is to withhold as much information as possible, offering only as much as you might otherwise glean from their advertisements and other public statements. The threat or reality of CPUC action is an effective way of holding them accountable for a promise, and for holding their attention while they make good on it.

The CPUC should not take self-interested and unverified statements written by Charter’s lawyers at face value. Nor should it allow Charter to hide everything behind a blanket claim of confidentiality. Now is a good time to take a hard, quantitative and verified look at how – whether – Charter has met all of the statewide conditions the CPUC imposed on it in 2016. The matter should be reopened, investigated and, absent a compelling reason to suppress specific information, the results and underlying data should be made public.

Quickly.

I assisted the City of Gonzales with its successful effort at the CPUC to force Charter to upgrade. I am not a disinterested commentator. Take it for what it’s worth.

Charter’s credibility and rural upgrade claims challenged by California regulators

by Steve Blum • , , ,

Charter Communications is facing another inquiry into whether or not it’s telling the truth about obligations it accepted when it bought cable systems owned by Time Warner and Bright House Communications in 2016. The California Public Utilities Commission was asked on Friday by its in-house watch dog – the public advocates office (PAO) – to re-open the case.

The PAO says that there’s reason to think that Charter is fiddling the books when it claims to be meeting broadband system upgrade requirements that were attached to the CPUC’s approval of the purchase. Charter is supposed to provide the CPUC with sufficient data to verify compliance, but it hasn’t done so and wants to put restrictions on whatever information it does offer, according to one of the PAO’s filings

On September 12 and 13, 2018, the Public Advocates Office explained to Charter that the Public Advocates Office’s analysis indicated that a much lower percentage of households had access to increased (higher than 300 Mbps) download speeds than the level Charter reported in its December 2017 letter. To more accurately verify the level of progress Charter has made, Charter must provide by census block, how many households Charter passes and the broadband speeds available to those households…

The Public Advocates Office objected to Charter’s condition that any information it provides must be used exclusively to verify progress report, because it inappropriately seeks to restrict how the information provided by Charter would be used by the Public Advocates Office.

Charter has to upgrade all of its Californian broadband systems to 300 Mbps download speeds by the end of next year, and it was supposed to convert all of its TV-only analog systems to full digital capability by last month. Those legacy analog systems were in lower income, rural communities in Modoc and Monterey counties, and the San Joaquin Valley.

California is the second state to confront Charter’s regulatory performance and upgrade claims. This past summer, the State of New York moved to revoke Charter’s permission to operate there, because of its “repeated failures to meet deadlines”, its “attempts to skirt obligations to serve rural communities, and its ”purposeful obfuscation of its performance and compliance obligations".

The PAO’s demand for accountability is necessary. Charter claims to be meeting its commitments, but confirmation is difficult. The CPUC also has obligations: it’s supposed to ensure that its directives are followed. Friday’s move to keep Charter honest is a welcome Christmas present for all Californians.

I assisted the City of Gonzales with its successful effort at the CPUC to force Charter to upgrade. I am not a disinterested commentator. Take it for what it’s worth.

CPUC should follow New York’s lead, hold Charter to obligations

by Steve Blum • , , ,

The California Public Utilities Commission imposed a long list of obligations on Charter Communications, when it granted permission for the purchase of Californian cable systems belonging to Time Warner and Bright House in 2016. Some of those requirements mirror the conditions that the New York Public Services Commission attached to its approval of the deal.

Unlike the NYPSC, however, the CPUC has not demanded public accountability from Charter. New York regulators nipped at Charter’s heels since the acquisition closed, and then revoked permission and ordered Charter to reverse the sale and give up its New York markets because “the company was not interested in being a good corporate citizen”.

Typically, the CPUC does not take an active role in enforcing conditions attached to telecoms deals. The job of being the cop on the beat is often left up to outside organisations. If you want a particularly vivid example of how that approach does or doesn’t work, take a look at the mess surrounding Frontier Communications’ purchase of Verizon’s wireline phone systems in California in 2016.

Although it’s arguably right to expect outside parties to take responsibility for enforcing their own contracts, there’s little reason to think they’ll take on the additional work of policing the CPUC’s own decisions. For example, when it approved the Time Warner purchase, the CPUC gave Charter two and a half years – until November 2018 – to convert its legacy TV-only analog systems to digital service…

Within 30 months of the closing of the Transaction, New Charter shall convert all households in its California service territory to an all-digital platform with download speeds of not less than 60 Mbps…

On December 31, 2016 and every year thereafter until December 31, 2019 New Charter shall submit a progress report to the Commission and [the CPUC’s office of ratepayer advocates] identifying progress made.

In theory, the CPUC has some idea already as to whether or not Charter is performing. It’ll be a relatively straight forward process to confirm that all of Charter’s analog systems in the San Joaquin Valley, and in Modoc and Monterey counties, have been upgraded to digital service come November. The CPUC should be as proactive in enforcing its own decisions and pursuing the public interest as its New York colleagues.

New York says Charter is “just lining its pockets”, revokes Time Warner purchase

by Steve Blum • , ,

The New York state public service commission started the process of unwinding Charter Communications’ purchase of Time Warner Cable systems, in a decision issued on 27 July 2018. The NYPSC says Charter is evading its responsibility to extend its infrastructure and upgrade its service, particularly in rural areas. Those obligations were imposed when the NYPSC gave its blessing to the acquisition.

According to the NYPSC, Charter’s sins include…

  • The company’s repeated failures to meet deadlines;
  • Charter’s attempts to skirt obligations to serve rural communities;
  • Unsafe practices in the field;
  • Its failure to fully commit to its obligations under the 2016 merger agreement; and
  • The company’s purposeful obfuscation of its performance and compliance obligations to the Commission and its customers.

These recurring failures led the Commission to the broader conclusion that the company was not interested in being a good corporate citizen and that the Commission could no longer in good faith and conscience allow it to operate in New York. Today’s actions are meant to address Charter’s failings and to ensure New York has a partner interested in the public good, not just lining its pockets.

Charter’s response was to call the NYPSC’s rhetoric “politically charged” – fake news, in other words. As you might expect, the company is challenging the ruling, and is demanding more details from the NYPSC. According to a story by Alan Breznick in Light Reading

In the company’s second-quarter earnings call…Charter Communications Inc. Chairman & CEO Tom Rutledge made it clear that Charter has no intention of obeying the state Public Service’s Commission order to exit the state because of its allegedly repeated failures to meet its cable buildout and broadband speed commitments. Instead, Rutledge said Charter will try to resolve the conflict with state regulators and, if necessary, will fight the PSC’s actions in court.

“Hopefully we can work it out,” Rutledge said in response to an analyst’s question on the call, noting that it will likely take some time. “But, if necessary, we’ll litigate. We believe we’re in the right.”

It’s just the beginning of the story. The end is months, if not years, away.

Consumers say they’re paying too much for poor Internet service

by Steve Blum • , , ,

Big Internet service providers hit all time low in customer satisfaction ratings, according to the latest American Customer Satisfaction Index (ACSI) telecommunications company rankings. The survey ranks telecoms companies and service offerings on a 100-point scale. ISPs dropped from an overall industry average of 64 out of 100 in 2017 to 62 this year, and overall the broadband industry is making people very unhappy.

According to ACSI, it’s a case of the bad just getting worse…

Internet service providers (ISPs) are down 3.1% to 62—an all-time low for the industry that along with subscription TV already had the poorest customer satisfaction among all industries tracked by the ACSI.

Customers are unhappy with the high price of poor service, but many households have limited alternatives as more than half of all Americans have only one choice for high speed broadband. Every major ISP deteriorates this year except for Comcast’s Xfinity, which is unchanged.

Verizon’s FiOS fiber to the home service is still top rated with a score of 70, and AT&T wasn’t far behind with 68. Charter Communications and Comcast are below the industry already dismal customer satisfaction average – both scored 60. Suddenlink wasn’t much better at 61, both it and Charter saw a year over year decrease of 5 points.

Frontier Communications and Cox Communications bring up the rear among major California ISPs, with customer satisfaction ratings of 54 and 59, respectively.

As a group, small ISPs did better than average, but still not great, getting a combined score of 63.

On specific aspects of service, call centers are the biggest pain point for consumers, getting a 59 out of 100 rating, while bricks and mortar store staff are well regarding, topping the benchmarks at 76. But all customer experience ratings are down from last year’s…

Internet service is less reliable (69), more prone to outages (68), and performance during peak hours is worse (68). Video streaming quality is unchanged (68), but overall data transfer speed is lagging compared with a year ago (–3% to 67), as is the quality of email, storage, and security (–3% to 69).

The rankings are based on an email survey conducted this past March and April. More than 45,000 customers responded.

Cable, telcos hit rock bottom in consumer satisfaction rankings

by Steve Blum • , , ,

The broadband industry is pissing off its customers. According to the latest American Customer Satisfaction Index (ACSI) telecommunications company rankings, the consumer businesses at the very bottom of the list are subscription television service (a rating of 62 out of 100), Internet service (also 62), video-on-demand service (68) and fixed line telephone service (70).

In other words, the misery caused by your local telco is only exceeded by the pain inflicted by your cable company. Both do a worse job of keeping you happy than the U.S. post office, airlines and health insurance companies (but not by much – they’re tied with social media platforms for fifth worst with a score of 73).

Mobile phone service isn’t much better. It rates a 74. Just above it at 75 are video streaming services and both investor-owned and municipal utilities.

Over-the-top (OTT) video providers like Netflix offer consumers better and friendlier service than cable and telcos, with devastating effect according to ACSI…

OTT operators have raised the bar by providing greater personalization, lower prices, more mobility—and much better customer service. As a result, cable and satellite television customers think they are paying higher prices for lesser value and receiving poor service to boot.

The effect is widespread. The entire sector faces repercussions as many of the same large companies offer service for internet, television, and voice via bundling. Subscription television and internet service providers rank last among all industries tracked by the ACSI. The implication is clear: moving in on the video streaming market won’t be enough to keep TV subscribers unless customer satisfaction improves as well.

Consumer electronics companies do the best, topping the list at 85 out of 100. Of course, there’s nothing like a cold drink to go along with a binge watching session, so breweries and soft drink makers are in second place with an 84. Online retailers and credit unions round out the top five with a score of 82.

Charter’s franchise “should be revoked”, New York state says

by Steve Blum • , , ,

Charter Communications is one step closer to losing its license to operate in New York City, if not New York state as a whole. Earlier this year, the state of New York’s Public Service Commission – its equivalent to the California Public Utilities Commission – slapped a $1 million fine on Charter and said it would “investigate Charter’s compliance with its New York City franchise agreements”.

That investigation seems to have led to legal action. Speaking on behalf of New Governor Andrew Cuomo, a spokesman for the commission said the gloves are off

The New York State Public Service Commission has commenced legal action against Spectrum Media Company for potential violations of its franchise agreement. The State approved Spectrum’s acquisition and its ability to operate in New York based on the fulfillment of certain obligations, including providing broadband access to underserved parts of the State and preserving a qualified workforce.

“The Governor believes it is essential that corporations doing business with the State uphold their commitments, and we will not tolerate abusive corporate practices or a failure to deliver service to the people.

”Large and powerful companies will be held to the same standard as all other businesses in New York. The Spectrum franchise is not a matter of right, but is a license with legal obligations and if those are not fulfilled, that license should be revoked."

It’s not clear if the New York commission is specifically going after Charter’s New York City franchise, or its ability to operate statewide. Either way, it will put a giant hole in Charter’s balance sheet if it’s successful. That’s a strong incentive to negotiate a settlement.

Charter also has obligations in California, that likewise stem from its purchase of Time Warner Cable in 2016. Among other things, by November – thirty months after the deal closed – Charter must “convert all households in its California service territory to an all-digital platform with download speeds of not less than 60 Mbps”. That includes all its analog systems in Kern, Kings, Modoc, Monterey, San Bernardino and Tulare counties.

Charter’s numbers don’t add up, so New York adds a $1 million fine

by Steve Blum • , , ,

Charter Communications is playing numbers games with its build out obligations and the State of New York’s Public Service Commission is blowing the whistle. Not just stopping the game, but also assessing a $1 million penalty.

As in California, conditions were attached to New York’s approval of Charter’s purchase of Time Warner Cable. Those obligations include “the extension of Charter’s network to pass an additional 145,000 homes and businesses across the State”. Charter has four years to complete that build out and must steadily complete 25% of the job each year.

In January, Charter reported mission accomplished for 2017. But the New York PSC went out and ground truthed Charter’s claims of new homes passed, and found the numbers were inflated. Of the 43,000 homes that Charter said it reached with the required “line extensions”, 12,000 were in New York City which, according to the PSC, was already 100% covered…

In addition to the fact that these addresses have pre-existing network already serving their locations, supported by the lack of pole applications associated with any of these passings…the Commission explicitly stated in the Approval Order that Charter’s buildout was required to occur in “less densely populated and/or line extension areas.” New York City is not such an area.

Even in those less densely populated areas, Charter padded its claims, according to the PSC…

Staff advises that many of these claimed newly completed passings actually consisted of cable and equipment upgrades to existing cable plant. In other words, Charter replaced older cabling and equipment on a pole with newer cabling and equipment, but the location had already been passed by the cable network, oftentimes having been originally passed with cable network for years.

So the PSC crossed another 2,000 homes off the list. As a result, Charter was 8,000 homes short of its 37,000 home obligation and got whacked with a $1 million fine. And faces the threat of losing its New York cable franchises completely if it blows it again. As you might expect, Charter begs to differ, calling the PSC’s conclusions “baseless and legally suspect” and promising to fight the order.

State of New York Public Service Commission, Order to Show Cause, Joint Petition of Charter Communications and Time Warner Cable, 19 March 2018.

Cable’s broadband monopoly profile sharpens with 2017 results

by Steve Blum • , , , ,

Share of U.S. broadband households, as of 31 December 2017. Source: Leichtman Research Group.

Comcast and Charter own half of U.S. residential broadband subscribers, and their share of the market – if you want to call it that – is growing. That’s one of the conclusions gleaned from a tabulation of year-end 2017 financial reports by Leichtman Research Group. As with a similar count by FierceTelecom, the numbers show telcos continue to bleed subscribers profusely, while cable – and the overall broadband universe – keep on growing.

Leichtman’s report was published before Wow cable released its final 2017 financial results, so I added those into the totals. Over the course of 2017, the top cable companies added 2.7 million broadband subscribers, while the top telcos lost 626,000 subs. Big cable’s share of the, um, market was up a point to 61%, while the largest telcos lost a point, dropping to 34%.

Overall, the race for broadband customers is down to a two and a half horses. Comcast has 26% and Charter is behind by a nose at 24%. Their combined 50% share (after rounding) is up from 48% at the end of 2016.

AT&T was the only other broadband provider to hit double digits, with 16% of U.S. broadband households. It was also the only big telco to show growth in broadband customers – fiber-to-the-home gains offset DSL loses, producing a net increase of 114,000 subs. Cincinnati Bell, a much smaller fry, was also in the black, adding 5,500 subs. All the other big telcos – Verizon, Frontier, Windstream and FairPoint – ended 2017 with fewer broadband customers than they started it with.

The top providers – seven cable companies and seven telcos – account for 95% of U.S. broadband households, according to Leichtman. Since it’s a choice between one cable and one telephone company, at most, for any given home, it’s technically a duopoly. But one with a junior partner who is on the ropes. Factor in cable’s overwhelming superiority in the 25 Mbps down/3 Mbps up and better category – the minimum federal standard for modern broadband service – and it looks more and more like a one player game.

If it prices like a monopoly, slams and crams like a monopoly and shows a monopoly’s lack of respect to its customers, then it’s a monopoly.

CPUC rejects almost all attempts to block broadband infrastructure subsidies

by Steve Blum • , , , ,

Just a relative handful of census blocks in California will be excluded from state broadband infrastructure subsidies as a result of the first round of jus primae noctis right of first refusals granted to incumbent providers by the California legislature. Four service providers filed claims, and three were completely rejected by California Public Utilities Commission staff. The fourth was partially accepted.

Only one of California’s big monopoly-model broadband service providers tried – unsuccessfully – to make a play. Charter Communications’ notice was rejected. It was not a right of first refusal filing, but rather – as CPUC staff correctly noted – was “an informational submission”. Charter wants the CPUC to block competition in areas where it is obligated to upgrade its analog-only systems to full digital service by this coming November (not May 2019, as it falsely testified in its informational submission).

In order to claim the privileges of jus primae noctis right of first refusal granted by the California legislature, Charter would have to promise to extend service to every home in the census blocks it’s carving out. That would be a wonderful thing, but that’s not what Charter intends to do. It’ll pump digital services through cable plant it’s already installed, but won’t go any further, unless doing so would reach homes with sufficient disposable income to meet Charter’s business model objectives. Which it’ll do anyway, jus primae noctis notwithstanding.

One claimant – Conifer Communications – won the right to block Californian subsidies in a some – but not all – of the census blocks it tried to grab. Whether that ends up being meaningful is another question. In theory, Conifer is obligated to upgrade its service in the census blocks claimed. As a matter of practice, it’ll have a basis for arguing that since it didn’t get everything it wanted, then it needn’t do anything.

Anza Electric Cooperative wasn’t as fortunate. Its claim was tossed because it specified census block groups instead of census blocks. A rational person might conclude that a promise to serve an entire census block group means that all census blocks within it will be served, but rationality is not the same as being bureaucratically correct.

Geolinks’ claim failed on a couple of accounts. It didn’t specify which census blocks it would fully serve. Instead, it drew a line around a larger territory and promised to upgrade whatever unserved census blocks that area might contain. Plus, the rules of the game limit jus primae noctis the right of first refusal to existing service providers. Geolinks doesn’t have its own infrastructure yet in the Monterey County communities it targeted.

There’s still room for administrative appeals and legal challenges, but not a lot of hope. Assuming prospective broadband service competitors pay attention to the fine print, the 2018 round of jus primae noctis right of first refusals has done little harm.