Disgusted With Charter Spectrum Merger, Lexington To Build Entirely New Fiber Network

from the busting-the-duopoly-logjam dept

When Charter Spectrum acquired Time Warner Cable and Bright House Networks in a blockbuster $69 billion merger last year, the company promised the deal would result in all manner of "synergies" and consumer benefits. But as is the case with most telecom megamergers, most of these acquired users say the deal only resulted in significantly higher prices -- and somehow even worse customer service than the historically awful service the company was already known for. In many areas, users say they've been socked with price hikes up to 40% for the exact same service.

Charter CEO Tom Rutledge, the highest paid executive in America last year, stated that customers were "mispriced" and were simply being shoved in the "right direction."

Things got so bad, that Lexington was forced to hold a town hearing last summer to address overwhelmingly negative public sentiment toward Charter's dysfunction. Like many American cities, consumers in Lexington often only have the choice of one cable broadband provider, since the local phone companies have failed to seriously upgrade their fiber networks. Also like in many American cities, locals tell a tale of a company that faces so little competition in its market, it simply doesn't have to give much of a damn:

"Following a brief presentation where provider representatives highlighted the company's expanding network, workforce, and investments in infrastructure, customers stood up one by one to tell a different story. Among the themes: unpredictable bills, questionable internet speeds, and poor customer service. One customer, Christian Torp, complained that the company repeatedly charged him for his own equipment. "I've probably over the years spent 30 or 40 hours on it," he told WUKY. "I'm a father and an attorney. I don't have the time to spend dealing with their fraud."

It should be noted that Kentucky is one of 23 states that have let incumbent ISPs quite literally write state telecom law protecting towns and cities from building their own networks or striking public/private partnerships for better broadband. Fortunately for Lexington residents, city leaders were able to convince private operator MetroNet to come to town and build a $70 to $100 million network to try and ease the local duopoly logjam. Construction of the network will begin in January, and should start offering some real, gigabit-capable fiber competition by next summer:

"Just in time for Christmas, Santa Claus is coming to town," (Lexington Mayor Jim) Gray said at a news conference officially announcing that Indiana-based MetroNet plans to spend as much as $100 million building a fiber-optic network that covers the city’s entire urban service area. MetroNet pledged Tuesday to spend at least $70 million to build the network over the next three to four years if it receives a cable franchise from the city. Gigabit speed is equivalent to moving data at 1,000 megabits per second. Lexington’s average internet speed is 16.2 megabits per second, according to some studies.

Lexington was fortunate to be attractive enough to private companies to strike such a deal. But in countless less developed cities and rural American markets, private ISPs simply don't think the slower return on their investment is worth their time. As a result, many towns and cities have struggled for years with substandard service and sky-high prices. In turn, many have considered building their own networks or striking partnerships with companies like Google Fiber, only to discover that ISPs like Charter have quite literally purchased laws making that impossible.

So while Lexington was lucky enough to attract a private investor, there's countless U.S. broadband markets that don't get to see this kind of happy ending.

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Filed Under: competition, fiber network, lexington, muni broadband

Companies: charter spectrum