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.