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In many ways it’s a rite of passage in America: being ripped off by your cable company and trying to figure out how they did it. Now a lawsuit against Charter Communications is seeking to uncover just that.
The biggest scam of all – pressuring or forcing subscribers to “rent” the clunky, technologically outdated cable box at a greatly inflated price – is still in place, despite a brief effort by the FCC in 2016 to shut it down.
And then there are hidden costs – such as “broadcast TV fees” and “regional sports fees” – raking in tens of millions of dollars in pure profit for unscrupulous cable companies, despite Consumer Reports focusing on the topic for a number of years, and now Congress even starting to pay attention.
But although we have all grown used to our cable fees rocketing the second you are off the special two-year contract rate, requiring you to call up the company and threaten to move to a competitor until you are offered the next incredible special deal, Charter may have pushed things too far with its latest special offer: a two-year flat fee deal that somehow, it is claimed, grew more expensive every month.
Five Charter Communications customers, based in Ohio and Kentucky, have formally accused [PDF] the company of a bait-and-switch scam for its cable TV service. The biz advertised a fixed monthly rate, they say, but far from being fixed, every few months it cost a little more.
Are the cable companies to blame, or the sports and movie channels that are charging more?
(Score: 4, Interesting) by Anonymous Coward on Friday May 29 2020, @04:45AM (10 children)
Charter is particularly bad. Let's be honest, movie and sports channels are too expensive. ESPN is by far the most expensive of any channel, sports or otherwise. But let's not let Charter off the hook.
I have a grandfathered plan from Time Warner Cable. Charter has raised my rates a lot. But they've also started removing channels from my plan that I used to receive, effectively forcing me to switch to a new plan if I ever want to receive those channels again. In the process, I'll also lose my grandfathered whole house DVR service. If Charter wants to raise my rates, I understand it to a point. But they're being particularly evil about it. And they had no problem screwing over Time Warner Cable's intelligent home subscribers, essentially bricking equipment those customers had purchased and telling them tough luck.
But the reason Charter is being particularly evil about prices is because subscribers are paying for mergers and acquisitions, specifically the purchase of Time Warner Cable. Charter took on a large amount of debt, around $27 billion, to complete the purchase. In the process, they also took on about $23.3 billion in debt that Time Warner Cable had incurred. Now they have to pay off the debt, and that gets passed along to the customers. In total, Charter had about $66 billion in debt after purchasing Time Warner Cable, costs that get passed along to customers. A lot of that debt is poorly rated, meaning that the interest rates on it are higher.
This article describes the situation fairly well: https://thehill.com/blogs/congress-blog/technology/269747-charter-would-have-to-raise-prices-a-lot-to-make-its-merger [thehill.com]. Basically, instead of taking on all the debt to acquire Time Warner Cable, Charter could have spent the money on infrastructure to expand its service area. That would also have added a lot of customers, with the benefits of better infrastructure and serving more customers. Instead, the debt was used to pay Time Warner Cable's shareholders.
Want to know why the prices are so high? Corporate greed is the answer.
(Score: 2) by shortscreen on Friday May 29 2020, @05:01AM
I didn't even subscribe to TV. Only internet access. They raised the price 70% in four years.
(Score: 0) by Anonymous Coward on Friday May 29 2020, @05:10AM (2 children)
It's amazing how the government wants to go after the good guys (Google, Amazon) where there is plenty of competition and things work well for consumers while they allow the bad guys to merge to reduce competition further and make things even worse for consumers in a space where things were already bad for consumers. The government wants to go after the good guys to make things worse for the consumers, they don't go after the bad guys because the bad guys make things bad for consumers.
(Score: 0) by Anonymous Coward on Friday May 29 2020, @07:05AM (1 child)
Those aren't good guys. They're just less savvy at politics and expanded into many domains so more people are in competition with them (meaning out to tear them down). Cable companies just deal with communication and media. The big tech companies do software, do hosting, do logistics, do hardware, do news (scanning existing news sources and reformatting the data so you don't need to visit those news sites), do mapping, etc... A larger surface area means a larger target.
(Score: 0) by Anonymous Coward on Friday May 29 2020, @03:21PM
The government's intent to go after Google and Amazon is purely to make things worse for the consumer. They don't like how these companies do a good job serving consumers when compared to the legacy industries who do a terrible job.
(Score: 2) by JoeMerchant on Friday May 29 2020, @12:13PM
Mergers and acquisitions often leave the resulting entity in extreme debt, and the former owner-operators of the constituent components with a pile of cash so large that they spend the next decade feathering nests in multiple offshore tax havens.
Locally, Miami Heart and Mount Sinai Medical center merged like that - the story is long and complex, but one visible result was a severe reduction in staff at Mount Sinai - like: on weekends they had one (single) security guard / check in point for the entire complex.
🌻🌻 [google.com]
(Score: 4, Funny) by SpockLogic on Friday May 29 2020, @12:57PM (2 children)
When Time Warner became Speculum (or something like that) and they were bought by Charter, I got fed up with the constant price rise for cable TV and decided to cancel. I called and was shunted off to a retention specialist. The drone started off by trying to be chatty and reading the script with “ Let me pull up your details, it won’t take a moment … and while we are waiting what sort of TV do you like watching most? I exploded with “What TV I watch is none of your fucking business. Your job is to cancel my cable subscription, are we quite clear.” It only took a few more minutes and I dumped their equipment back at their office later that day.
I still get regular mailers and calls from them trying to sell cable, streaming or cell service with dishonest and deceptive clams of fixed pricing and no mention of the bullshit fees that are hidden in the small print. When called my response is to immediately ask "Does your mother know you lie to people for a living?” That ends the conversation.
Overreacting is one thing, sticking your head up your ass hoping the problem goes away is another - edIII
(Score: 2) by Booga1 on Sunday May 31 2020, @12:57AM (1 child)
A Comcast rep stopped by here a few months back and knocked on our door. "We noticed you don't have Comcast! Would you like to get fast cable internet and TV," he asked...
I told him we weren't interested. When pushed for the reason why, I said something along the lines of "Comcast isn't a good company. They haven't treated me well, and they've done a lot of things I don't agree with."
The guy of course asks, "Like what?" I told him he didn't have enough time in the day for me to cover it all and they should just move on.
At that point my roommate had come out and the guy asked him, "Would you like to get Comcast?" My roommate said, "I don't have anything nice to say about them and just talking about them makes me mad."
Apparently that was enough to clue the guy in that there were no sales opportunities at our place. I do have to wonder how much the individual sales reps know about the company they're working for.
(Score: 1, Informative) by Anonymous Coward on Sunday May 31 2020, @08:45AM
The door-to-door ones work on commission with a low base. They don't care because if they did, they'd have never taken the job.
(Score: 2) by fadrian on Friday May 29 2020, @01:44PM (1 child)
Want to know why the prices are so high? Corporate greed is the answer.
Corporate greed == Shareholder greed. When the fingers point back at your 401K, are you ashamed? I'm all up for the whole corporations suck thing, but I'm never quite sure about the whole system that enables it, as well as my part in it. That's sort of why I find the answer of "corporate greed" a little unsatisfying.
That is all.
(Score: 0) by Anonymous Coward on Saturday May 30 2020, @05:42AM
Last time I checked, my 401k doesn't come with any voting powers letting me dictate whether we pursue one quarter of sugar rush (for me) + degradation of quality (for you) or we pursue a long term warm 'n' fuzzy for us both.