Charter Losing Money, Cuts Customer Support

Charter Losing Money, Cuts Customer Support

Date: 5 Dec 2012 | posted in: MuniNetworks | 0 Facebooktwittergoogle_plusredditpinterestmail

A Stop the Cap! story about Charter cutting customer service positions makes a point we make too rarely. Not that customer service from the national cable and telephone companies is terrible and getting worse, but that some are constantly struggling to make a profit.

Investors don’t think too highly of the company either. Charter reported a wider third-quarter loss in November, losing $87 million compared with $85 million lost during the same quarter last year. Executives tell Wall Street the company was in chaos before new management under Tom Rutledge took over operations. Rutledge’s priorities are to invest in new set top boxes, convert more of its systems to digital, raise prices on services, cut back on promotions and retention offers, and centralize customer support operations.

Imagine that! When communities have to make investments and suffer losses, they are accused of failing. Charter is losing money (and recently emerged from a bankruptcy proceeding) and trying to make changes to correct its condition.

This is what happens to many firms in telecommunications. Only when it happens to those that are owned by communities, they are besieged with claims that such a situation is somehow proof that the public cannot own and operate networks.

Note that others, like Comcast, are actually lauded by Wall Street for operating in areas with so little competition that they can increase their rates at will — hard not to make a profit in that case. Which is precisely why existing cable and DSL companies push laws to restrict local authority to build better networks.

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Christopher Mitchell is the Director of the Community Broadband Netwroks Initiative with the Institute for Local Self-Reliance. He runs as part of ILSR's effort to ensure broadband networks are directly accountable to the communities that depend upon them.