In the six months since Charter Communications replaced Time Warner as the local cable provider, its Spectrum subsidiary has united Lexington’s people. Everybody hates Spectrum.
Any day now, I expect to hear my neighbors opening their windows and yelling: “I’m mad as hell, and I’m not going to take it anymore!”
It is as American as apple pie to hate the cable company. Unlike most utilities, cable monopolies face little government regulation. They mostly do as they please and charge whatever the market will bear. You can pay up or you get your TV and Internet elsewhere.
It’s like the old days of Ma Bell, which comedian Lily Tomlin, as Ernestine the telephone operator, famously satirized in the 1970s: “We don’t care. We don’t have to. We’re the phone company.”
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In its quest to maximize profits, Charter keeps setting new standards for customer contempt in Lexington. Spectrum has raised prices, stripped TV channels from basic cable without notice, lowered internet speeds, laid off 56 local customer-service employees and charged customers $5 to make a payment over the phone.
The latest news: Spectrum is abruptly moving local public access channels from the front of its lineup to high-number channels where viewers will have a hard time finding them. GTV3, which broadcasts city government meetings, moves from channel 3 to channel 185; the Fayette County Public Schools’ channel moves from 13 to 197; the University of Kentucky’s channel moves from 16 to 184. And Library Cable Channel 20 is moving to Channel 200.
City officials have expressed outrage, saying some of the company’s actions violate Lexington’s rather toothless cable franchise agreement. They are seeking $20,000 from the company to rebrand GTV3. They also are demanding that company executives attend a public “performance evaluation session” and turn over records of customer complaints. The payment and evaluation session are stipulated in the franchise agreement.
Urban County Council members say they have received hundreds of complaints from constituents, who expect them to do something. Unfortunately, there’s not much they can do. Federal law limits what cities can negotiate in franchise agreements — they can’t negotiate prices, for example — and gives them little authority to police cable monopolies’ performance.
In response to a complaint letter from the city last month, Charter claimed that it is spending $3.1 million on infrastructure improvements, creating 860 outdoor WiFi hot spots and starting a low-cost internet option for some low-income customers. City officials are unimpressed.
The franchise agreement negotiated with Time Warner in 2014 doesn’t expire until 2024, and even then the city won’t have much leverage. Cable franchise law is a sweet deal — if you’re a cable company.
What’s a customer to do? Not much, besides canceling cable. Windstream Communications, which owns Lexington’s legacy telephone system, offers DSL Internet and TV steaming, but in most cases it’s pushing all of that data through old copper phone wires. There also are satellite companies and services such as Roku and Apple TV if you already have high-speed internet.
Theoretically, another cable company could come to Lexington and compete with Spectrum, because the city franchise isn’t exclusive. But that won’t happen. It would be very expensive to install another set of cable lines. It also would be foolish, because coaxial cable is old technology that will eventually be replaced by fiber-optic cable, which can handle more data at faster speeds. But fiber-optic cable is even more expensive to install.
Mayor Jim Gray’s administration has been pursuing a “gigabit” project in hopes of attracting major fiber companies to Lexington, but that hasn’t happened yet. It doesn’t help that almost every city in America is trying to do the same thing.
A few cities, including Frankfort and Chattanooga, have invested in city-owned broadband systems. Lexington officials say that would be too expensive.
The cable TV industry everyone loves to hate offers a real-world study in economics. Free enterprise works best for customers if businesses have effective competition or are subject to effective government regulation. It works best for businesses when they have little or no competition or regulation.
So the next time you hear a business-friendly politician talk about “burdensome regulation,” look at your cable bill and think about who is burdened by the absence of regulation.