Megamergers Can't Help Charter Spectrum As Cord Cutting Exodus Continues

from the bigger-isn't-better dept

You might recall that in 2016 Charter merged with Time Warner Cable and Bright House Networks, promising that the new, combined company would offer a revolution in customer service, broadband speeds, and TV. Instead, what the company's customers got was a steady parade of rate hikes, and a company that has found itself under fire for repeatedly trying to kill or tap dance around merger obligations (like the one stating it can't cap broadband usage for six years). New York State deemed the company's service and behavior so atrocious, it seriously contemplated kicking the company out of the state.

Not too surprisingly, raising rates and offering terrible customer service continue to take a toll on the company. The company lost another 145,000 cable TV customers in the first quarter, as users (annoyed by price hikes) continue to flock to cheaper, more flexible TV options:

"The company posted net video subscriber losses totaling 145,000, compared to a net loss of 111,000 one year ago. The company lost 152,000 residential video subscribers this quarter, a 24% increase over the 121,000 residential subscribers it lost in the year-ago quarter."

Charter also lost 99,000 digital voice customers, as users who've gone wireless only also try to trim back their bloated monthly cable bill. It's odd in that these companies are facing intense new competition in the streaming space, and their first reaction is to double down on video price hikes. Part of that is an effort to recoup the massive debt load incurred by the mergers themselves, a problem AT&T is also struggling with. AT&T spent more than $150 billion on megamergers in recent years, only to face record subscriber defections thanks to endless rate hikes.

Granted cable giants like Charter Spectrum and Comcast have an ace in the hole: the lack of competition in broadband. As many US telcos retreat from upgrading their DSL lines, cable giants are enjoying a greater monopoly than ever. They're taking advantage of this lack of competition by jacking up the price of broadband. In Comcast's case that has included arbitrary, confusing, and punitive broadband usage caps, which not only act as a glorified price hike, but can help these cable giants simultaneously cash in on, and deter the use of, streaming video alternatives.

Charter may have lost video and phone subscribers last quarter, but it managed to add 428,000 residential and business broadband customers in the quarter. Given most of these users don't see an competition for faster speeds, Charter can hike prices at its leisure. And while the previous FCC banned Charter from imposing usage caps for six years, by 2022 those restrictions will be lifted. Between that and the death of net neutrality rules (assuming they're not restored by the ongoing lawsuit against the FCC), it's not hard to see how America's cable monopolies plan to impose all manner of creative nickel-and-dime restrictions on these captive customers.

Who's going to stop them? The current FCC is arguably beholden to the sector, meaning there's neither regulatory nor healthy competitive pressure capable of keeping these lumbering giants in line. The best hope is trying to shovel forth policies that actually bring more competition to underserved markets (including via community broadband or public/private partnerships), something Charter and Comcast's lobbying and policy folks work tirelessly to avoid.

Filed Under: broadband, consolidation, cord cutting, tv
Companies: bright house networks, charter, charter spectrum, time warner cable


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  • identicon
    Anonymous Coward, 3 May 2019 @ 1:42pm

    Maybe it's part of an intentional pattern. Quitting and then re-subscribing as a "new" customer can give you a much cheaper rate... at least for awhile.

    reply to this | link to this | view in chronology ]

    • icon
      Gary (profile), 3 May 2019 @ 1:46pm

      Re:

      Quitting and then re-subscribing as a "new" customer can give you a much cheaper rate

      Does that still work? What with them using computers and all these days.

      Last time I talked to Spectrum, they also knew there was no other service on my street, and said the new customer special wasn't available in my area.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 6 May 2019 @ 8:50am

        Re

        π·π‘œπ‘’π‘  π‘‘β„Žπ‘Žπ‘‘ 𝑠𝑑𝑖𝑙𝑙 π‘€π‘œπ‘Ÿπ‘˜? π‘Šβ„Žπ‘Žπ‘‘ π‘€π‘–π‘‘β„Ž π‘‘β„Žπ‘’π‘š 𝑒𝑠𝑖𝑛𝑔 π‘π‘œπ‘šπ‘π‘’π‘‘π‘’π‘Ÿπ‘  π‘Žπ‘›π‘‘ π‘Žπ‘™π‘™ π‘‘β„Žπ‘’π‘ π‘’ π‘‘π‘Žπ‘¦π‘ 

        Not readily. The "Earthlink vacation" no longer works, nor is there a discount, not all of that was due to the merger. Spectrum is wise to disconnecting for promo status.

        The only method that currently works is a name change. Every 12 months I swap payments with a very trusted friend. Marrieds can invoke maiden names. So far, they haven't countered this.

        Karl never acknowledges it, but if you compare to Comcast, TWC "standard" rates were always below market, and their promo rates even more so - even a Thunderbird MBA could see the potential to pay off the acquisition cost by stabilizing rents.

        So what's Karl's answer? Oh yes, soaking the taxpayers. Enable the local political machine to award contracts to its partisan friends and send us the bill without any accountability, and operate a network on a similar fashion, all the while telling us that they're "competition".

        No thanks.

        reply to this | link to this | view in chronology ]

        • icon
          nasch (profile), 6 May 2019 @ 11:45am

          Re: Re

          Enable the local political machine to award contracts to its partisan friends and send us the bill without any accountability, and operate a network on a similar fashion, all the while telling us that they're "competition".

          Is that your description of community broadband?

          reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 May 2019 @ 1:44pm

    Meet the new cord...same as the old cord.

    reply to this | link to this | view in chronology ]

  • icon
    unrulycow (profile), 3 May 2019 @ 2:28pm

    Competition

    As a Charter customer with no other choices, I'm holding out hope for SpaceX and OneWeb to bring some competition with low latency internet from huge Low-Earth Orbit satellite constellations. SpaceX launches their first batch of satellites this month, OneWeb started theirs in February. Both companies are expecting to start selling service by 2021.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 May 2019 @ 2:46pm

      Re: Competition

      Seems to me that there are two different services needed here--low-latency and mostly low-bandwidth (for web search/browse) and high-bandwidth/any-old-latency (for streaming). SpaceX plus some kind of reseller like Republic Wireless (plus some kind of browser add-on that absolutely refuses to download video or any kind of large blob without specific user input, to keep video ads from killing bandwidth) could give good, economic service.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 3 May 2019 @ 3:46pm

        Re: Re: Competition

        The extra latency of SpaceX's system will be measured in tens of milliseconds, which'll be fine even for terrible websitesβ€”really, for anything other than live music collaboration or fast-reflex gaming. The mesh capability should make the latency lower than fiber beyond 1000 km.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 May 2019 @ 2:50pm

    it,s A catch 22 ,company takes on debt to fund the merger,
    So to pay back the debt , they raise prices,
    High prices increase the rate of people who leave the service and cut the cord .
    Regulators need to learn mega mergers are bad for the consumer,
    the raise prices and reduce competition.
    Some telecoms companys are replacing old copper pipes with
    fibre in the uk,
    since fibre is a better investment in the long term.
    its a lot cheaper to maintain fibre and the speed of data through
    fibre keeps rising.
    IN ireland there 500k people in rural area,s who cannot get broadband .
    The government is paying a private company
    to run fibre to anyone who wants it.
    It will be done using fibre cables .
    It will cost billions to build the new network.
    There has to be more public, private partnerships in the usa
    or else the present situation will get worse as old copper cables degrade and
    fall apart .

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 May 2019 @ 3:10pm

      Re:

      Copper systems have already declined to the point of non-viability. Most are on coax. The lucky few are on fiber.

      reply to this | link to this | view in chronology ]

      • icon
        nasch (profile), 4 May 2019 @ 7:28am

        Re: Re:

        Copper systems have already declined to the point of non-viability. Most are on coax.

        And what are those coax cables made of? Or by "copper" do you mean twisted pair?

        reply to this | link to this | view in chronology ]

  • icon
    Gerald Robinson (profile), 4 May 2019 @ 11:10am

    DSL

    I don't understand the fixation with DSL! It was a dumb idea, quick fix, technology that started out broken and got worse. It can't be upgraded except by replacement with good tech.

    reply to this | link to this | view in chronology ]

    • identicon
      Rocky, 4 May 2019 @ 4:58pm

      Re: DSL

      The rise of DSL is entirely due to the staggering amount of investment spanning a century into building copper infrastructure.

      The latest DSL technologies (VDSL2+) can do up to 300/100 Mbps with no problems which a majority of people would be very happy to have.

      Since the price of fiber has dropped over the years, the old copper-infrastructure can't really compete in the urban areas where people can switch to fiber - which is also why most DSL-customers are located in rural areas.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 6 May 2019 @ 4:41am

        Re: Re: DSL

        DSLs ultimate problem is physics - the distance a customer is from a DSLAM or Central Office equipment. Distance kills speeds, and most telcos are unwilling to add the fiber or equipment in locations closer to customers to provide any level of decent speeds. And most cabinets are over-subscribed for the same reason, with too many lines sucking up the limited back haul. This is a problem with no viable economical solution for solving.

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 May 2019 @ 4:10pm

      Re: DSL

      I use DSL simply because it is my only available alternative to Comcast.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 May 2019 @ 7:17am

    As a long time so-called Cord Cutter. Still Comcast Customer, I got a big fat bill for over usage, another $80 tacked onto my monthly bill. Looks like my rates also just went up once again. That 1 year went quick. I'm going to have to call them back up and see if I can get another so-called deal. It really is a monopoly though. I get most of my TV from the Antenna.

    reply to this | link to this | view in chronology ]


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