Brindisi: Spectrum preparing to raise internet fees through data caps

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The company that dominates the broadband internet market in much of upstate New York is laying the groundwork for being allowed to cap the data used by residential customers and ultimately raise fees just as more people depend on home internet service, Rep. Anthony J. Brindisi, D-22, Utica, is charging.

Brindisi, a frequent critic of Charter Communications and its Spectrum brand of internet, cable-television and telephone services since he was a member of the state Assembly, held a press conference outside the company’s New Hartford office Friday to draw attention to a recent filing by Charter with the Federal Communications Commission. In the document, the company seeks to have the FCC remove a provision of the 2016 merger approval with Time-Warner and Bright House cable providers that it would not cap customers’ data use.

Brindisi shared a letter he wrote to the FCC urging holding Charter to the no-cap provision, particularly when many people must work from home and many school-age children may need access for remote learning because of the COVID-19 coronavirus pandemic.

“No worker should have their internet access crawl to a stop because they hit their data cap, and no family should be put in the position of having to pay their Internet Service Provider more so their eight-year-old can participate in their third grade class,” Brindisi wrote in the letter. “With millions of Americans out of work in the middle of the global pandemic, Americans need our support.”

Brindisi earlier in the week released a survey of the 22nd District showing the region had the slowest internet speeds among New York congressional districts. Previously, he has complained to state and federal regulators that Charter has not built out its upstate broadband network as fast as it told regulators it would and relies on a misleading way of reporting how broad an area it reaches. He also has complained about its debt collection procedures.

Brindisi faces Republican Claudia Tenney of New Hartford Nov. 3 in a rematch of their 2018 race in which he defeated the then-incumbent in a race not decided until all absentee votes were counted.

In response to Brindisi’s Friday action, a Charter spokeswoman said the company has no intention of capping data but has to file a request or risk losing the chance that the cap will eventually be removed.

“The online video marketplace has exploded in the four years since the merger, which the FCC recognized as a possibility then and therefore included a framework in the 2016 merger approval for these two conditions to sunset in May 2021,” northeast regional communications director Lara Pritchard said in a statement. “Charter has made clear it has no plans to implement data caps or charge for interconnection, but the FCC merger order requires Charter to file this Petition between May 18 and August 18, 2020, or risk losing the sunset option and the flexibility to operate differently two years from now, which every other internet service provider has.”

Charter has also boosted
starting-level speeds, added homes and small businesses, forgave $85 million in customer debt, and hired 1,500 more people in New York state, Pritchard added. It pays its employees $15 an hour and is raising that to $20 in two years, she added.

Brindisi has company in opposing the move.

The New York State Public Service Commission was among many entities filing objections. The commission noted that Charter’s Spectrum is the only available broadband provider in many rural upstate areas and said the company’s request suggests it is considering a cap despite public claims otherwise.

It also dismissed the company’s claims that data caps could be justified because other internet providers are doing so, the PSC noting that other companies have so little share of the upstate market as to be relevant.

“The potential to increase broadband prices by imposing data caps or UBP models on customers with little or no competitive fixed-broadband options is certainly not in the public interest,” the PSC said in a comment filed with the FCC.

“Likewise, relieving Charter of the prohibition to impose data caps and UBP removes protections established in the Merger Order to protect competition while allowing Charter to increase its video profits, making streaming of OVD content more expensive to consumers. In many areas in New York and across the nation, the promise of new fiber-based broadband networks, existing network overbuilding and 5G technology to improve competition in the market has simply not materialized fast enough to make the use of data caps any less tenable and therefore their prohibition should be maintained for the full seven- year period originally contemplated under the Merger Order,” the PSC comment added.

Charter Communications reported its second-quarter revenue of $11.7 billion grew 3.1 percent from the same period a year earlier, driven by residential revenue growth of 4.1%, mobile revenue growth of 96.1% and SMB revenue growth of 2.0%.

In its financial announcement for the period ending June 30, Charter said it added 842,000 residential internet customers in the second quarter, versus second-quarter 2019 residential Internet customer net additions of 221,000. As of June 30, Charter had 26.3 million residential Internet customers.

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