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Service With a Frown: Senate Slams MVPDs

Charter, Time Warner Cable cited for overcharges at hearing 6/27/2016 8:00 AM Eastern
TakeAway

Cable operators stood what ground they had at a contentious Senate hearing while making the case for why a bad customer-service situation is already getting better.

WASHINGTON — Cable operators were marched up to Capitol Hill last week to take their punishment for what almost all conceded was less than satisfactory customer service.

 

It could have been worse: Sen. John McCain (R-Ariz.), a member of the subcommittee and a tough cable critic, did not make an appearance at the hearing; a couple of Republicans conceded that everybody makes mistakes and even suggested that, with a lower approval rating than cable, Congress was the pot calling the kettle black; and Democrats gave MVPDs some credit for the efforts they have already made. But it was bad enough.

 

The Senate Permanent Subcommittee on Investigations, which offered up two reports stemming from a year-long probe based on information supplied by MVPDs, had more ammunition in its quiver than upselling or hidden fees. One of two reports it released just prior to the hearing on cable billing and customer service found that Charter Communications and Time Warner Cable had failed to reimburse customers for millions of dollars in equipment overcharges.

 

“Between January and April 2016,” said the committee report, “Time Warner Cable overbilled customers nationwide an estimated $639,948.”

 

The report projected that if the overcharges were to continue through the end of the year — Charter said they would not — the total would be $1,919,844 in overcharges.

 

SET-TOP OVERCHARGES

 

Charter told the subcommittee it had overbilled customers by at least $442,691 per month.

 

The overcharges were primarily for set-top boxes that users did not have but were billed for anyway. (A former Time Warner Cable exec told the hearing audience that net-net, there were more undercharges than overcharges, but that did not assuage the concerns of committee chairman Rob Portman (R-Ohio), who said that was little comfort to those who had been overcharged.

 

Charter said it has been doing daily audits and would be improving its current 99.4% accuracy rate. It also said it would be applying that audit system to Time Warner Cable, which it has only owned for a few weeks, and providing credits to customers of both.

 

But the news was hardly all bad. The report also found that while all the MVPDs had overcharges, “other MVPDs have invested effort and resources to prevent overcharges and provide refunds or credits to customers who have overpaid.

 

Comcast and DirecTV provide automatic refunds or credits to overcharged customers, while Dish’s billing system is designed to prevent those types of overcharges from occurring in the first place.

 

Not surprisingly, the talk of charges for nonexistent set-tops fueled the forces pushing the FCC’s set-top proposal to make data and programming available to spur alternatives to monthly fees for boxes.

 

“Cable customers have been overbilled and held hostage by practices that can only exist in a marketplace devoid of real consumer choice and competition,” said Chip Pickering, CEO of INCOMPAS, whose members include set-top proposal backer Google.

 

“The admission by a cable executive in the Senate Oversight and Investigation hearing — that many customer overcharges are the result of swapping customers’ set-top boxes they force them to rent — is just the latest indication that the FCC must act to unlock the box and set consumers free.”

 

On the customer service side, Comcast senior vice president of customer service Tom Karshinak was the first to testify last week, setting the general tone of contrition combined with pledges to do better and explanations of how that was already happening.

 

“Comcast and industry have not always made customer service the priority it should have been,” Karshinak said. “I am sorry for that.”

 

Then he outlined the steps and investments Comcast has made and would make in the future, to improve the experience.

 

He said the company (1) was investing in added training for all employees; (2) had rolled out a cloud-based platform so customers don’t have to keep repeating information; (3) was reassessing policies and fees; and (4) in response to committee concerns, had reaffirmed in writing with its retention specialists that they are expected to “promptly facilitate a disconnect for a customer who isn’t interested in answering questions.”

 

CHANGES AT CHARTER

 

Charter said it, too, was investing in customer service. Kathleen Mayo, executive vice president for customer operations, suggested Charter was still working to rebuild the company out of its 2009 bankrupty — as well as get a handle on TWC’s operations. She also said that Charter had simplified its bills, and that customer service reps have conversations with customers rather than following canned scripts.

 

She said the company has been improving customer service over the last four years, under CEO Tom Rutledge, and that before that Charter had underinvested in the product and outsourced customer service.

 

Survey Says

The key takeaways from two reports on MVPDs by the Senate Permanent Subcommittee on Investigations, according to subcommittee leaders, were:

 

Fees: “Customers were being charged a host of fees that were not prominently displayed in advertised pricing, some of which were for programming that was previously included in a customer’s video package. ”

 

Customer Service: “Customers calling for help on their accounts faced agents whose job it was not just to solve the customer’s problems, but to sell them additional services.”

 

Overcharges and Refunds: “Time Warner Cable and Charter made no effort to trace equipment overcharges to their origin or provide notice or refunds to customers. Charter estimated it overbilled customers by at least $5.3 million annually. During the past six and a half years, Time Warner Cable overbilled its customers nearly $12.5 million.”

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