“Meet the new cable company. Same as the old cable company,” wrote Los Angeles Times consumer watchdog reporter David Lazarus, riffing on a Who classic to discuss Charter’s takeover of Time Warner Cable systems in L.A.
Charter’s “Spectrum” brand, Lazarus wrote in an Oct. 4 article titled, “Attention former Time Warner Cable customers: Get ready for your cable bill to go up,” is going to make things even worse for local consumers.
“Spectrum is proving the worst suspicions of consumers,” Jamie Court, president of the Santa Monica advocacy group Consumer Watchdog, told Lazarus. “Bigger isn’t better when there’s only one broadband line coming into people’s houses.”
When a telecom company spends $55.1 billion to buy another with a really bad customer service reputation, cynicism about what’s going to happen to the subscriber experience is to be expected.
But as early commenters on the initial rollout of Charter’s “Spectrum” brand across the MSO’s newly acquired territories, I don’t think either Lazarus or Court made a case here that legacy TWC customers — and those of Bright House Networks, too — are going to get hosed.
In suggesting that prices under Spectrum will rise sharply, Lazarus noted two anecdotal experiences — one his own — about legacy TWC triple-play packages shooting up in price once their promotional period ends.
Those prices were going up regardless as to whether Charter purchased TWC or not.
I asked Court, meanwhile, if he had any hard data to suggest that legacy TWC customers will be paying a lot more after their promotional period ends now that Charter is their service provider.
Court equivocated, suggesting Charter’s decision not to reduce the carriage price of TWC’s failed Dodgers regional sports network is evidence enough that L.A. cable subscribers are in for a raw deal.
“The fact that Charter will continue TWC’s Dodger blackout by refusing to back down means Angelenos are dealing with the same type of extortion tactics, only without any end in sight,” he said. “There was a moment when the cablers wanted a deal that it seemed they were going to play ball with the Dodger fans at large, but Charter is certainly not True Blue.”
OK, that’s a separate can of worms involving an $8.35 billion broadcast licensing deal to the L.A. Dodgers, and all the inflexibility that entails for the company — Charter — that inherited that bad deal in the acquisition.
The question remains, will legacy TWC and BHN customers pay significantly more for internet and TV service under Charter?
“When a legacy TWC or BHN customers’ promotion rate ends they will go into the legacy TWC or BHN pricing for the package they signed up for. We do not put them into a Spectrum package,” Charter’s Justin Venech told me.
“If they don't call to switch to a Spectrum package, they stay in their current package,” he added. “We aren't forcing people to switch. They would just see the logo change on their bill, possibly get a speed boost, but their package would remain the same.”
Charter is billing its service offerings as simpler and more transparent — there’s modem fees, for example, and CPE costs are generally lower overall.
The Triple Play Silver, for example, includes a $49.99-per-month price tag for 175 channels, with internet and phone bundled in for $29.99 each. Factoring in a $4.99 set-top lease cost, and no DVR service charge for the first box, customers are looking at about $115 a month before taxes and fees. Add a second set-top and the requisite $9.99 DVR charge, and the price goes to around $130 plus taxes and fees.
Now, granted, the average TWC promotional rate was probably better. But based on TWC bills I saw before the merger, customers are better off. TWC charged $11.25 just to lease a set-top. It charged $5.99 to lease a modem.
“We don't add on additional fees and taxes to our voice product that our competitors do, and our equipment pricing for video set-top boxes are much lower with Spectrum than our competitors or legacy TWC or BHN,” Venech added. “Our new Spectrum pricing is $4.99 for a receiver vs over $11 at legacy TWC. These are a few examples of how Spectrum provides a simpler package and a better value for customers.”
Charter, which started its Spectrum rebrands in L.A. and Dallas last month, is messaging its customers with an ad campaign that signals a “new day” for cable. Simpler pricing. Fewer fees. Improved customer service. Etc. Etc.
It’s a good time to get it right in market like L.A., where I live. No one has established a beach head with 1-gig services. The company has exclusive access to two very popular sports teams in the Lakers and Dodgers. And there’s an economically strong user base that can still afford a reasonably priced triple play.
If Charter can make it work here, the old triple play model just may have more legs under it than people think. But early perception is important. Largely because of the TWC SportsNet LA fiasco, the Time Warner brand left on a low note.
If meeting the new cable company is just like meeting the old cable company, a lot of folks in this town will decide quickly not to get fooled again.--Daniel