Meet the new cable company. Same as the old cable company.
That was Culver City resident Jack Cohen’s feeling the other day when he received his first bill from Spectrum, the newly christened brand from Charter Communications, which has gobbled up Time Warner Cable.
He told me he’d been paying Time Warner about $140 a month for TV, phone and Internet service. But now that Spectrum had reared its head, his bill had shot up to $162.
“I guess they’re trying to get their $8 billion back as quickly as possible,” Cohen, 74, said, referring to the fat bag of cash Time Warner Cable paid to be the exclusive distributor of Dodgers games.
I looked into it and, as it turns out, Charter isn’t suddenly jacking up everyone’s cable rates. Dennis Johnson, a company spokesman, said Cohen’s bill increased only because his 12-month promotional price coincidentally had ended just as the first Spectrum bill was issued.
But that doesn’t mean customers are in the clear. What happened to Cohen could soon happen to other former Time Warner subscribers throughout Southern California.
As current bundles and promotions expire, the Stamford, Conn., company will transition customers to a new — and newly priced — array of service packages, and that will mean price hikes for many people.
At the same time, Charter boasts that it doesn’t lock customers into long-term contracts. That gives people the ability to cancel their service whenever they please. But it also means Charter can raise rates at any time.
In my case, a Spectrum service rep said the monthly $65 promotional price of my Time Warner Internet/phone package will nearly double in December to more than $120. Ouch.
However, she said I’d be able to switch to a similar Spectrum Internet/phone package for $85 a month — a more than 30% increase over my current rate.
The prospect of looming price hikes seems to validate what critics warned before Charter’s merger with Time Warner: With fewer players in the cable market, consumers inevitably will pay more for service.
“Spectrum is proving the worst suspicions of consumers,” said Jamie Court, president of the Santa Monica advocacy group Consumer Watchdog. “Bigger isn’t better when there’s only one broadband line coming into people’s houses.”
The Dodgers channel illustrates that. Time Warner paid $8.3 billion in 2013 for a quarter-century of distribution rights to games. It then discovered that no other major pay-TV company wanted to force customers to pay an extra $5 a month for Time Warner’s SportsNet LA channel.
Some thought Charter’s chief executive, Tom Rutledge, might break the impasse by offering the channel at a lower price. But that’s not going to happen.
As he told my colleague Meg James last month: “We are not giving it away. So if consumers want the Dodger channel, they’ll need to subscribe to us to get it.”
Rutledge also said Spectrum will be less flexible than Time Warner was in offering price cuts to customers who threatened to take their business elsewhere.
“Our goal is to provide superior video service, superior data service and a superior voice service than any of our competitors,” he said. “And hopefully we will be able to upgrade customers into the new Spectrum service.”
Court called this “classic monopoly behavior.”
“They’re tightening their grip,” he said, “because they can.”
Spectrum’s cheapest advertised monthly bundle, its Triple Play Select, costs about $30 for each component — 125 TV channels, Internet and phone. A high-definition cable box will run you an additional $5 a month. Add DVR capability and you’re looking at a total of about $110 a month.
The Triple Play Silver option is pretty much the same except you get 175 channels for about $130 monthly, including HBO and Showtime. DVR service is included but the cable box will still cost $5 a month. Triple Play Gold, with 200-plus channels, boosts the cost to about $150 a month.
A TV/Internet package costs about $95 monthly (and, yes, the box is an additional $5). Internet-only service in SoCal for Charter and former Time Warner customers starts at $60 a month for 100 megabits per second. The price starts at $40 for new customers.
Current customers — that is, Charter and former Time Warner subscribers — can stick with their old packages. But, as my own situation illustrates, hefty price increases are a near-certainty.
“After your discounted promotional period ends, prices are subject to change,” Charter’s Johnson said. “But it is also important to make clear, Spectrum occasionally reviews prices to ensure they match the value of what the customer receives and reflects the cost of providing those services, but doesn’t automatically raise prices every year.”
Can you think of a single year in which your cable rates haven’t gone up? Me neither.
Cohen called Spectrum after receiving his bigger bill. He canceled his TV service, keeping Internet and phone. The new package will cost him $100 a month.
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