News Analysis
Will Charter soon lose a large number of subscribers due to price increases and package changes forced on former Time Warner Cable and Bright House subscribers?

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That’s a legitimate question now with several newspapers in former Time Warner Cable markets recently reporting that local residents are livid over Charter’s new policies, particularly its new fee structure.

Charter 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.

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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, and non-flexible rates mean higher prices.

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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 most recent article, from the Watertown Daily Times, published June 10, offers a mixed reaction from local residents with some saying Charter is proving good service. But others are voicing deep concerns, and suggesting they will soon switch to a different pay TV provider, or drop pay TV altogether.

“Mr. Santiago said he has considered purchasing his TV and internet services from other companies, but was not certain whether Verizon offered internet in Watertown and “heard DirectTV — it’s junk,” the newspaper writes, referring to one Charter customer. “He also said he may no longer purchase phone or cable through Spectrum and only pay for the internet.”

With Charter reporting that it lost a net of 100,000 video subscribers in the first quarter, largely due to Time Warner Cable defections, the anger building up in the TWC and Bright House markets due to the changes could trigger more sub losses.

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Former subscribers to Time Warner Cable and Bright House might wind up deciding to cut the cord, reduce service, or switch services. If a large number do, investors on Wall Street may begin to question Charter’s plan to assimilate TWC and Bright House with its other systems.

— Phillip Swann