August 1, 2013

Modem fee sequel: Time Warner ups price by $2

The cable company with a low satisfaction rating says it needs money for upgrades.

By Ray Routhier rrouthier@pressherald.com
Staff Writer

Less than 10 months after it irked customers and prompted two class-action lawsuits by imposing a new $3.95 monthly charge for Internet modems, Time Warner Cable is increasing the fee by more than $2.

click image to enlarge

Less than 10 months after it irked customers and prompted two class-action lawsuits by imposing a new $3.95 monthly charge for Internet modems, Time Warner Cable is increasing the fee by more than $2.

Gabe Souza

The cable and Internet service giant, which has 12 million customers nationally including more than 360,000 in Maine, announced this week that the fees will go up to $5.99 a month in August.

Customers in Maine were notified by email and postcards and in their bills. The increase will be part of customer bills beginning around Aug. 19, said Scott Pryzwansky, director of public relations for the company.

Pryzwansky said customers can opt out of the equipment charge if they buy their own modems. A list of approved, compatible modems is online at twc.com/approveddevices.

A telecommunications industry study, released in May by the American Customer Satisfaction Index marketing research company, ranked Time Warner last or close to last among its major competitors. The study surveyed customers of each company's TV, Internet and phone services.

"When customers see an (increase) in cost, in order to be satisfied, they have to perceive that they are getting something of value in return," said the American Customer Satisfaction Index's director, David VanAmburg. "Being at or near the bottom in customer satisfaction, we'd certainly caution that an increase like this doesn't bode well for Time Warner."

Before November, Time Warner customers used modems at no specific additional charge.

Andy Soule, a Time Warner customer in Bangor, said the modem fee made him "grumble" when it was first imposed. The news about the latest increase made him start looking for alternative Internet services.

"When they started charging last year, I just figured it was a way to make money without raising advertised prices," said Soule, 42, who works as a broadcast engineer for radio stations. "Now I think it's time to switch."

Soule said he pays about $40 a month for a Time Warner high-speed Internet service, and thinks he can get a plan for about $22 a month if he switches to a DSL service.

Time Warner's modem fees are being "adjusted" this month as the company upgrades equipment and tries to "ensure optimal performance for our customers," said Pryzwansky, the public relations director.

"The adjustment in our modem fee will allow us to continue providing equipment in excellent condition and make ongoing investments to ensure we can meet the growing demand of our Internet business," he said.

The modem fees announced in November prompted class-action lawsuits in New York and New Jersey that claimed Time Warner was violating its contracts with customers. Steven L. Wittels, a lawyer in New York, said Time Warner didn't give all affected customers 30 days' direct notice of the new fees.

The lawsuits are still pending.

Time Warner's modem fees are less than some rental fees for modems. Its major cable competitor in Maine, Comcast, charges as much as $7 a month. A class-action lawsuit against Comcast's modem fees was dismissed by a federal judge in May.

The latest increase comes at a time when Time Warner is irked by high fees itself, and is balking at increases proposed by CBS for programming in some major markets. (CBS affiliate stations, such as those in Maine, are not involved in the dispute.) Time Warner has said the network wants increases of as much as 600 percent for the rights to broadcast CBS-owned stations in eight major markets.

The industry study in which Time Warner ranked low was based on surveys of 250 customers of each of the major telecommunications companies. It looked at three categories -- TV, Internet and phone service, VanAmburg said. The eight to 10 companies with the most market share were ranked in each category.

Customers were asked how satisfied they were in nine or 10 areas for each service. Internet service customers, for instance, were asked about interruptions, how easily they understood their bills, quality, reliability, speed, service during peak hours and variety of Internet plans, VanAmburg said.

In the final report, companies were ranked on a scale of zero to 100, with 100 being the best. In the TV category, Time Warner came in last among nine competitors, with a 60. Verizon came in first, with a 73.

For Internet service, Time Warner was seventh among eight companies, with a 63. Comcast was last with a 62; Verizon was first with 71.

For fixed-line phone service, Time Warner was last among eight, with a 68. The top-rated service was "all others," with a 74.

Even though the scores appear low, the report said that, based on previous reports, customers overall seemed "happier" with telecommunications and technologies than they were a year ago. 

Ray Routhier can be contacted at 791-6454 or at:

rrouthier@pressherald.com

 

Were you interviewed for this story? If so, please fill out our accuracy form

Send question/comment to the editors




Further Discussion

Here at PressHerald.com we value our readers and are committed to growing our community by encouraging you to add to the discussion. To ensure conscientious dialogue we have implemented a strict no-bullying policy. To participate, you must follow our Terms of Use.

Questions about the article? Add them below and we’ll try to answer them or do a follow-up post as soon as we can. Technical problems? Email them to us with an exact description of the problem. Make sure to include:
  • Type of computer or mobile device your are using
  • Exact operating system and browser you are viewing the site on (TIP: You can easily determine your operating system here.)