Tag Archives: charter

New York and Charter settle broadband buildout dispute, set 100 Mbps download standard

by Steve Blum • , , ,

Charter Communications has a tentative deal with the State of New York’s Public Service Commission and its public service department to keep its cable franchises there. Last year, the NYPSC began the process of revoking Charter’s authorisation to operate in the state by unwinding its purchase of Time Warner cable systems, because the company wasn’t meeting broadband build out obligations imposed when the deal was approved in 2016. According to the commission, Charter was, among other sins, attempting to “skirt obligations to serve rural communities” and was “just lining its pockets”.

That’s all water under the bridge now. The tentative settlement, which still has to be formally approved by the NYPSC, walks back the invective and sets out clearer rules for how Charter’s build out to 145,000 under and unserved homes will proceed. New broadband customers in New York City won’t count, and there are provisions that would seem to force Charter to build new lines in more remote communities.

The settlement also sets 100 Mbps as the minimum broadband speed that a home should have access to…

A residential housing unit or business is eligible to count as one of the required Total Passings if it is located outside of the boundaries of the City of New York and is not passed, served, or capable of being served (by either a standard or non-standard installation), by pre-existing network from Charter or any other provider capable of delivering broadband speeds of 100 Mbps or higher.

Charter would also give $6,000,000 to the State of New York, to be bundled into an existing subsidy program that pays for broadband upgrades. First dibs on that money will go to Internet service providers that can deliver 100 Mbps or better download speeds.

That’s a sharp contrast to California’s broadband subsidy program – the California Advanced Services Fund – which reckons acceptable broadband service to run at 6 Mbps download and 1 Mbps upload speeds. New York gets it right, at least on the download side: the minimum service level that delivers access to modern online services is 100 Mbps down/20 Mbps up.

Charter is also under the gun in California. It was obligated to upgrade its analog only systems to digital capabilities by last November, and its facing another deadline this year to upgrade broadband service in its digital systems to 300 Mbps capability. The California Public Utilities Commission’s public advocates office questioned Charter’s compliance late last year, and an administrative law judge ordered the company to turn over its deployment records.

I assisted the City of Gonzales with its successful effort asking the CPUC to force Charter to upgrade, also during the Time Warner review. I am not a disinterested commentator. Take it for what it’s worth.

Charter is first major cable company to apply for California broadband subsidies, but on its own terms

by Steve Blum • , , ,

Silver wheel ranch

Four more broadband infrastructure grant proposals, filed by Charter Communications, surfaced yesterday. That brings the number of pending applications for California Advanced Services Fund (CASF) construction subsidies to 13, which total out to $27.6 million. Cruzio and Frontier Communications also submitted applications on Wednesday, and the Plumas-Sierra Rural Electric Cooperative filed last Saturday.

Charter is asking for $1.7 million to build out to the 467 homes in the four project areas. Per household costs range from a $1,500 to $14,000. Two of the projects are for mobile home parks, one in Oxnard in Ventura County and the other in Moreno Valley in Riverside County. Another project would extend Charter’s existing system to a street in the San Bernardino County community of Highland, and the fourth is for twelve miles of “new fiber and coax plant” in Perris, in Riverside County. The publicly released project summaries don’t specify what kind of equipment Charter would be using, but the claimed maximum speed level – 940 Mbps download/35 Mbps upload – is consistent with DOCSIS 3.1 technology.

This is the first time that a major cable company has applied for CASF subsidies. A small cable company, CalNeva, received a $511,000 grant in 2017, but up until now the big Californian players – Charter, Comcast, Cox and Suddenlink – have refused to participate. They’ve been reluctant to expose themselves to the regulatory oversight and public benefit requirements that California Public Utilities Commission programs entail.

Those requirements are still too much for Charter, though. It’s asking the CPUC to waive a two year price cap and ban on installation fees that’s standard for service offered via CASF-funded facilities. It doesn’t offer any public policy justification for the exemption, saying only it would have to establish “a separate billing operation” for the subsidised homes and offering the counterintuitive argument that “consumers will be protected from rate increases and benefit from promotions by having the same rates as those available to all of Charter’s California customers”.

That logic is, well, let’s say odd for several reasons. There’s nothing preventing Charter, or any other CASF recipient, from offering customers lower prices. And exposing subsidised customers to the same price hikes that “all of Charter’s California customers” face would hardly be protection from rate increases.

It’s also not obvious that Charter would have to build a new billing system. It’s common practice in the cable and satellite industry to sign contracts with, say, apartment complexes and homeowners associations that include special pricing for particular services. It’s not exactly the same thing – such services are usually billed on a bulk basis – but typically customers also have individual accounts for market rate options.

I’ve never worked with Charter on that kind of arrangement, but I have with others, including Comcast. Billing systems are flexible enough to handle those kinds of exceptions, not to mention the complex and frequently changing mix of promotional rates, incentives to prevent disconnects and other special offers. The technical solutions aren’t necessarily elegant, but it’s not rocket science either. In my experience, the bigger problem is clueless or commission-hungry customer service reps who don’t, or won’t, pay attention to what the billing system is telling them.

Charter deserves credit for at least trying to work with CASF and the CPUC, even if a price protection waiver is “a precondition of its participation in the program”. It’s not easy finding service providers willing to take on the job of building out infrastructure in unserved and often remote communities, with or without taxpayer subsidies. But it’s also reasonable for taxpayer money to come with some strings attached.

Charter Communications – CASF grant proposals, 1 May 2019
Country Squire Mobile Estates, Moreno Valley (Riverside County)
Orchid Drive, Highland (San Bernardino County)
Perris Plant Extension, Perris (Riverside County)
Silver Wheel Ranch Mobile Home Park, Oxnard (Ventura County)

I’m collecting the 2019 CASF infrastructure grant proposals here. Information about the program is here.

CPUC orders Charter to prove its broadband upgrade claims

by Steve Blum • , , ,

Charter Communications was given ten days to deliver granular broadband deployment data to the California Public Utilities Commission yesterday. Administrative law judge Karl Bemesderfer granted a motion by the CPUC’s public advocate office (PAO) to force Charter to hand over information to support its claim that it is meeting the conditions imposed by the commission when its purchase of Time Warner and Bright House cable systems in California was approved in 2016.

Among other things, the commission required Charter to upgrade all of its Californian systems – new and old – to 300 Mbps download capability by the end of this year. The PAO hasn’t been able to verify compliance because the information it received “provided no explanation or supporting data to show how Charter identified or quantified the progress it claimed to have achieved”.

To fix that problem, the PAO

Requested census block level broadband deployment information similar to that provided by Charter to the Public Advocates Office during the proceeding [to approve the Time Warner/Bright House acquisition]…

And then made…

Additional requests for Charter to explain how it calculated the household percentages it provided in its December 2017 progress report letter, and to provide the data Charter used to perform the calculations.

Charter refused. So the PAO asked Bemesderfer to intervene. Despite Charter’s objection, yesterday’s ruling directs Charter to respond to the data requests “with substantive, complete, and accurate responses” by a week from Friday.

The details of the PAO’s data requests and Charter’s response are being treated as confidential. According to the commission’s 2016 decision, Charter must “offer broadband Internet service with speeds of at least 300 Mbps download” by 31 December 2019 to all of the broadband-capable homes in its new, expanded footprint.

I hope the PAO is asking for performance data as well as marketing data. It’s one thing to “offer” service, it’s quite another to deliver it.

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.