News and Analysis
Charter Communications recently has been rocked with several local newspaper articles charging the company is offering reduced service and higher prices to consumers who previously had Time Warner Cable or Bright House.
If not soon reversed, the local negative coverage could ultimately trigger widespread subscriber defections in the former TWC and Bright House markets.
The cable operator assumed ownership of Time Warner Cable and Bright House in May 2016 when their merger was officially approved by federal regulators. However, in most TWC and Bright House markets, Charter did not make any significant changes to programming plans and pricing structure until this spring.
Charter CEO Tom Rutledge has publicly criticized Time Warner Cable’s previous pricing structure, comparing it to a ‘Turkish Bazaar’ because consumers could negotiate lower fees by simply calling a customer service representative. Rutledge says he wants to set non-flexible rates to ensure greater revenue and profits.
Charter’s new pricing policy — and its decision to move some popular channels to more expensive programming tiers — is not sitting well with the former Time Warner Cable and Bright House customers, according to the newspaper articles which also say subscribers are complaining about Charter’s customer service effort.
The Orlando Sentinel, April 24, 2017:
“Cindy Sims has seen her bills go up since Bright House Networks transitioned to Spectrum less than a year ago. She says she has not had issues with the quality of her cable service, which she uses in four locations at her Apopka home. But she says she’s just not getting the bang for the buck she once did.
“Overall, I’m happy with the service,” she said. “But they are raising prices and doing nothing different.”
The Sentinel has since followed with two more articles in May blasting Charter for poor service and high prices.
Syracuse Post-Standard, May 22, 2017:
“Former Time Warner Cable customers say sharply higher prices from Charter Communications’ Spectrum brand are making them cut the cord or at least think about it.” The article ran under the headline: “Price-Shocked Spectrum Cable Customers React; Ready to Cut Cord.’
Syracuse Post-Standard, May 18, 2017:
“As they get hit with higher prices, legacy Time Warner Cable television customers are dropping Charter Communications’ Spectrum brand by the tens of thousands.”
The Lexington Herald-Leader, May 24, 2017:
“Frustrated by complaints of shoddy customer service and the recent layoffs of 56 employees, Lexington city officials want (Charter) executives to come to city hall to discuss the city’s mounting concerns about the cable company.”
Lexington Herald-Leader, April 28, 2017:
“What the hell?: TV screens go dark as Spectrum cuts channels, raises prices.” The article details how Charter had cut off channels in some homes without warning because they had moved them to more expensive programming plans.
Charter has also been hit with local criticism in some markets for laying off former Time Warner Cable workers at call centers, such as this one in Palm Springs:
The Palm Springs Desert-Sun, May 18, 2017:
“Charter Communications laid off about 200 employees Wednesday at the cable TV provider’s Palm Desert call center, according to the company. The call center on Cook Street was previously under the Time Warner Cable brand.”
Charter officials have told the local newspapers that it’s sticking with the new pricing strategy, and they believe that former Time Warner Cable and Bright House customers will eventually conclude they are getting better value and quality.
But if the negative coverage continues, you have to wonder if Charter will start to lose a significant number of customers in the TWC and Bright House markets.
The cable operator has already acknowledged that its net loss of 100,000 video customers in the first quarter was largely due to defections by former TWC subscribers.
And that was before the company initiated the new pricing plans in most TWC markets.
— Phillip Swann