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tv   Cable Executives Testify on Customer Service and Billing Practices  CSPAN  June 25, 2016 4:15pm-6:18pm EDT

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the focus of a hearing of the subcommittee on thursday. industry executives outlined what they're doing to address consumer confusion about service package objects, billing rates. this is two hours.
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mr. portman: we are here today to discuss a topic that affects just about every american family. and often frustrates us as american families and that is cable or satellite tv service. for over a year now, we have undertaken an investigation of the cable and television, satellite television industry. as many of you know, we've been issued in this -- interested in this issue. we have a keen interest in making of the satellite companies do the right thing by their subscribers. the subcommittee reviewed literally thousands of documents and interviews countless witnesses to learn more about
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the consumer practices of the 5 largest paid tv providers. this includes comcast, charter, time warner cable, dish network and directv. together these companies serve more than half of all american households and nearly three quarters of those who pay for television programming. today's hearing will focus on the companies' billing and consumer service practices. our joint report outlines troubling findings from two companies that have consistently failed to provide refunds to customers who they know they have overcharged including , thousands people in ohio. i'll talk about those findings in a moment. the second is a report issued by senator mccaskill on a number of interests for consumers, how paid tv companies disclose prices sh what the fees are for and how they teach employees to interact with and retain customers. and without objection, these reports will be made part of the record. during the course of the subcommittee's investigation, we
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discovered something about refunds that frankly i found hard to believe. as anyone with a cable or satellite subscription knows, when your bill arrives every month it has a long list of charges on it. i have a bill in front of me. it is a pretty complicated bill, a base charge for the tv package, maybe $10 for hbo, equipment fees, and surcharges for the set top boxes that you rent. given how many millions of people get television service from these companies, it's inevitable that from time to time a customer will wind up getting charged for something by mistake. that happens. same thing, by the way, happened in the grocery store checkout line sometimes. it's happened to me. mistakes happen. we understand that. what matters in life is how you own up to your mistakes and make things right. but we discovered is that some cable and satellite companies are better than that at doing that than others. all of the companies before us have ways of identifying overcharges to customers and preventing them from happening in the first place. but what happens when they find out they've been overcharging someone for equipment that
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customer doesn't actually have? the first thing they do, of course, is take it off the customer's bill going forward. all the companies before us know how to do that. but not all of them bother to go back and figure out when the overcharge started, calculate how much they owe the consumer and give them a refund. during the time period examined by the subcommittee, time warner cable and charter communications who have just recently merged with each other made no effort , to trace equipment overcharges they identified and provide refunds to their customers. instead, the practice has been to just pocket the past overcharges. to understand the scale of this problem, we asked for specific numbers about overcharges in ohio. here's what we found. during the first five months of 2016 this year, time warner cable overbilled up to 11,000 customers in ohio and those overcharges totaled over $100,000. they estimate that throughout last year it overbilled 40,000 , ohio customers with
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overcharges of more than $430,000. and rather than correct the mistake by refunding the overcharges, the company just kept the money. in my view, that's a ripoff of ohio consumers. i'll be asking the company today how they're going to fix it. specifically, when time warner cable discovered the overcharges, it only dealt with the problem prospectively. it took erroneous charges off the bills going forward, they do not provide any back refunds and did not provide notice to customers so they could investigate the problem themselves. they just kept the money. based on data provided to the subcommittee, time warner cable will overbill the customers nationwide an estimated $2 million for equipment charges in even after discovering the 2016, billing errors. they'll fail to do the work required to provide a full refund. we'll talk about that. they have recently been acquired by charter communications so i hope they work to fix the problems. charter this problems
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-- this problem. but, charter has had problems of their own. -- up untilust august 2015, they did not -- that means they cannot receive the correction of the bill unless they saw the problem themselves and contacted charter. recently, they started to take steps to see these overcharges in the system, but even though it is identified overcharges, removing the charges from future august 2015,ince until today charter has not provided any refunds or notice of the problems to the customers. just like time warner cable. it does not have to be this way. the investigation revealed that dish has had better practices. it provide automatic refunds to customers with an overcharge with their billing system. tole this system is designed prevent any of these overcharges from occurring in the first
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place. so feasibility and my view is not a good excuse, as to village refund customers when they have been overcharged. we have good news to report. as a result of our investigation much better and time warner cable have taken steps to improve practices. time warner performs a monthly audit to find overcharges. going forward, they will provide a one month credit to all customers for each piece of overbilled equipment or service and will provide notice to overbilled customers so they can determine whether to request a credit or refund. that is a good start. but it doesn't make all customers whole. time warner cable is not yet committed to anything for the 40,000 ohio customers, for instance, who were overcharged last year. and we'll get into that discussion later today. charter has announced they will provide a one year credit to all affected consumers. that, of course, goes further to make customers whole. but it would be better to simply ensure that customers receive the full refunds that they're owed. the report shows americans are
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often unhappy with the cable and satellite service, questionable customer service techniques and confusion surrounding billing practices led consumers to feel mistreated. i support a effort to get to bottom of the issues and i feel the best solution to the problem of our poor customer service is more competition. if you don't like your television service provider, you should be able to provide a -- to choose a different provider, to suit your needs and preferences. senator mccaskill and i are going to look into providing more choices for the consumers. i want to thank the senator for her work on this. she and her staff have worked with us in a professional and productive way to make today possible.
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with that i would like to turn to senator mccaskill for opening statements. ms. mccaskill: thank you. i want to thank you for allowing me to pursue along with you and staff, this investigation. i think that we can feel great about the fact that just this investigation and hearing have caused good things to happen for consumers as it relates to paid tv. as you indicated, we've had a change just from the investigation both charter and , time warner agreed to issue credits for thousands of customers who were overbilled and comcast has provided additional guidance to the retension representative allowing customers to cancel without an argument. so we can already claim some small victory as a result of these investigations. and the syrian and i think this today. is an important area for us to continue to look at. it is amazing to me when we began asking for input, the
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volume and passion of input we got from people about how they feel like they are mistreated by their paid tv provider. and this morning for the first time, our nation's largest cable and satellite companies are testifying together before us about their service, customer service and billing practices. they are here because this subcommittee has broad jurisdiction to investigate issues when affect the american -- which affect the american people. i try to have this hearing as the chairman of the consumer protection subcommittee and i got no cooperation from any of these companies in connection with that hearing in the later months of 2014. so, i made a determination then that i wasn't going to give up. and that we were going to stay on this. and i am grateful for chairman portman and his agreement to let this go forward. they provide video services to more than half of all american
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households. they enable more than 71 million subscribers and their families to receive news, entertainment and other programming. and while we may love watching our shows, we do not love our cable and satellite bills. and we hate dealing with the cable and satellite companies. although the companies made gains in the past year, paid tv providers are the most disliked industries in america. this year a survey of consumers found that more than 20% of the people who interacted with tv providers reported having a bad experience during the previous six months. the highest level of any industry. so how i did begin down this road? well, it was with a personal experience. i called one of my providers and asked questions about my bill. and in the process of that conversation, i learned, this is over two years ago, that there was a $10 charge on my bill for a certain service that now was included in the basic package. and i said, well, so i'm paying $10 and i don't have to? and the person on the other end
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of the line kind of said, yeah. you're paying $10 and you don't have to pay it. i said, well were you going to tell me this? and they said, well, no, you have to call in and ask. that's exactly the kind of hide the ball that infuriates people. so if i hadn't called in and asked, that $10 could still be on my bill today. based on the billing practices of the company's represented at -- of the companies represented at this hearing. so we have done a huge investigation and i have reviewed a lot of material and my staff has and i've consumed a lot of information about this. so i decided two days ago i'd take another spin. now i know a lot. now i know the difference between a customer service representative and a retension specialist. now i know what to say and how to say it. so two days ago i called one of my providers. and i'm, on my website people
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-- on my website, people can listen to the recording of this conversation. and i am going to in fairness, , because i don't think this is necessarily one company versus another. i am not going to talk about which company it is. and nor will the recording. and i'm not going to read here nor on the recording will i give , my personal information i was asked to give when i called. but here's how the conversation went. the first part of it until they got me to that magic retection specialist. hello and thank you so much for calling. can i have your name, please? my name is claire mccaskill. can you spell that for me, please. i proceeded to spell it. i proceeded to give the representative my service address. i proceeded to give her the name on the account and say that was my husband's name. and she asked what my relationship was to the account holder. i said it was my husband. and then the woman says, ok. how can i help today? i said i would like to have you remove, there's a fee on here. i'm not sure how it got on here for a protection plan. i don't recall buying that or
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being asked about it and i would like to have it removed. now she wants to get my information about my account and my active credit card to make sure i am the person that i say i am, so she goes through what credit card i have on file. then she says, all right. so you said you're seeing a charge for a protection plan and you'd like to know what it's for. i said, no, i'd like to take it off. oh, you'd like to take it off? yes. alright. but you are aware that protection plan covers equipment upgrade every two years and if you lose your equipment then we'll replace it for you at no charge. i said, well you are saying that equipment i have in my house now is mine or it is yours? well, it's ours. but if there are any issues say, for example, spildz or the or accidentally the cables are cut, we will replace it for you. i said but let's just say if
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, it's your equipment and something goes wrong with it, don't you have to fix it anyway if i get the service i'm paying for? since you own the equipment? well, we, let's say if the remote fails or stops working, the protection plan on the account will fix that free of cost. i said, well what would that cost if the remote quit working, is your remote that you own, what would it cost to get it fixed without the protection plan? the woman says information on that is done in our equipment department so i'd like to you there for more information. i said, no, no, no, i don't want do that because if you do that, i have to wait and tell the story all over again. find out why i cannot .99you to take off the 7 for the protection plan. i'm not saying i'm not able to lettingoff, i'm just you know the benefits you get with the protection plan. i understand, i think i understand. i think frankly it's a rip-off, you own the equipment, i think you have to fix the equipment you own the equipment and
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if you can't fix the equipment, i couldn't get the service and i would go to another provider so i'm asking will you disconnect pay then't want to $7.99, i don't know how it got startedll, i think you putting it on my bill and i wasn't paying close enough attention. all right, she says, but if i actually have the protection plan taken off, there will be a disconnection fee. it would be a $10 disconnection quit paying the $7.99 every month? that's correct and it's a one-time disconnection fee? yes, it's one-time. and what am i paying for? paying for, she says? am i paying for? for you to quit charging me the service, i've got to pay you $10? well, no, basically -- i think switchs time for me to carriers. if you're going to charge me $10 to quit charging me for think it's time to
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switch carriers. well, basically that's the policy so once i take charge,$10 protection it will be automatically on your account. so what you're saying is i want $7.99 every month for the protection plan, you're $10 to doharge me that? you have no choice? no choice. you can't waive that? that's correct. discretion to waive the $10? we do value your business but it's a policy here. once i take it off, there will be the $10 charge and there's nothing you can do about that, you do not have the option to waive and she says, no, i do not. well, who could waive the $10? she said, well, i would have to retentiono the specialist and i'm not really thathow it works in
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department. so then she switched me over to the retention specialist. now, this is typical. it's typical. and more importantly, when she switched me to the retention specialist, i knew what to say. i knew to keep threatening that not give up, keep threatening i was leaving. and by the way, it was a long call. even when we edited it to take out some of the things that are longer than, it was 15 minutes. and at the end of the call, i $7.99 off.get the i was told by the retention specialist i never should have $10 and by thee way, i got so mad and escalated, called in the business, the retention special lift gave me $10 off a month for 12 months. looking at a screen that told them information about me including the fact that i'm a bill'sgood customer, my
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pretty high. i say this because i think this is what the industry may be doesn't completely understand in terms of the anger. we found that customers are charged a host of fees that are not included in advertised pricing, some of that are for programming used to be included in a customer's video package. manyso found that just as customers have long believed some of these fees like h.d. and d.v.r. service fees aren't a true reflection of the cost of the company of the service but based on the revenue goals of the company and the price that the customer is willing to stomach. some of these fees are charging to old customers while new customers get the same services charge. existing customers may not be informed of this. it when they finally figure out, they have to call and complain to get it taken off. we found that customers who help on their accounts faced agents whose job it is not just to solve the but, in's problems fact, to sell them additional services. at one cable company, even when
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the customer called in to ask about why their bill was going up, the company told them, quote, the price adjustment brings within an opportunity to up-sell customers and these agents are compensated, in part, on their ability to sell you more. decides to customer cancel the service, that i have to jump through more hoops. hereugh all the companies today allow people to sign up for service or upgrade their themce online, none of provide customers an option to cancel service online without company to a representative. and if they call, they have to people, like the one i spoke to this week who are trained to prevent the customers hopefullyling and selling you more product. even when customers don't say don't want to have this discussion, the agents are expected to ask questions about why the customer is canceling. customers trying to save money by lowering their level of rude to -- often routed to the assume agent and should be prepared to negotiate aggressively.
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we found evidence that these companies train agents to question the customer's decision channels and make offers in a top-down fashion so the repeatedly push and push and push to get the best deal. found that two of the companies had failed to provide notice -- provide their with notice that they had been overcharged or refund of past overcharges. the chairman pointed out. thousands of people in our states have been impacted by that. the numbers for missouri, time 4,234 missouried customers last year for a total $244,000 and charter estimates it is anally -- annually overcharged i total of each year. i want to acknowledge the cooperation we received from all the companies represented before us today, as well as acknowledge the commitments they have made thisg the process of
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investigation to improve customer service. our investigation suggests there is a long way to go, as did my conversation with one of my providers two days ago. i thank the witnesses for their testimony and look forward to the opportunity to ask you questions. to ourrtman: we'll go panel of witnesses. we appreciate you being here with us this morning. karinshak, senior vice president of customer --vice for capacity where comcast where he oversees all call center operations. with us john keib, president,utive vice chief operating officer of residential services for time warner cable. charge of customer service, service delivery, technical support, marketing and sales. kathleen mayo, responsible for charter communications customer care organization.
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rasesh patel with at&t entertainment group, responsible product strategy and development for directv. schneider,hleen senior vice president of operations for dish network where she oversees customer and slingr all dish tv subscribers nationwide and andges dish's call centers business process improvement operations. appreciate y'all being with us morning and look forward to your testimony. it's the custom of the subcommittee to swear in our time i'd so at this ask to you please stand and raise your right hand. do you all swear that the testimony you're about to give before the subcommittee is the truth, the whole truth and nothing but the truth so help you god? you, let the record reflect that each witness answered in the affirmative. of your written statements will be made part of the record their entirety. i ask you to keep oral testimony to five minutes.
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mr. karinshak, we'd like to hear from you first. portman,shak: chairman member mccaskill and subcommittee. thank you for the opportunity to tohere today and i want thank your staff for the courtesies extended to us throughout the review. why we are here. comcast and the industry as a not always made customer service the priority it should have been. our ability to address customers' needs in a timely fashion has been an issue. our bills haven't always been simple to read and the range of choices and prices we've offered haven't always provided customers with the options they want. i am sorry about that history. tocomcast, we have committed our customers that we will change it and we are taking steps to do just that. went to reaffirm that commitment to you all today and outline some of the actions we are taking. when i started this job, i made a decision to regularly spend time on the phones and in the
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stores with our employees and customers. that is the front line. that is the place where customer shaped.out comcast are when you contact us to get new service, you want to speak with someone who listens to what you and who understands all of our product options. pricent to know the full and you want time to change your mind if what you order isn't need.y what you when you get bills from us, you want them to be easy to read and you don't want to see surprises or changes that you do not understand. a question orwith a problem or to tell us we made polite andyou want responsive service and you want the issue resolved the first all possible. and if you move out of our to chooseea or decide service other than ours, you want to be able to do so without delays and without hassle. we have listened to what you have said. yesterday, i met with some of employees in a
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local store here in the d.c. area and i took some calls customers andour i was heartened by what i experienced. i have submitted a longer the record and won't repeat much of it here but i want to tell you just a few of of our components efforts to improve our customer service and to provide a better customer experience. first, we are investing in additional training and new ournology for all of employees. we are committed to ensuring that when our customers speak to representatives, they're speaking to representatives that have received comprehensive and training. on the technology side, we've rolled out a new cloud-based platform that gives customer service representatives a better holistic view of the customer's account history so that keepmers don't need to repeating the same information when talking to somebody new. reassessingre policies and fees and simplifying our bills to improve experience.customer
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for example, we have eliminated change of service and other fees now allow customers to return equipment free of charge through our partnership with u.p.s. offer all customers a 30-day money-back guarantee and in subcommittee's concerns, we've reaffirmed in a policy statement to all of our specialists that we expect them to promptly facilitate a disconnect for a is not interested in answering questions. third, we are giving all customers better access to products and services that work best for them. we've listened to our customers and are developing new products that better suit their needs. we recently developed the cutting edge x-1 platform which has completely and revamped our customer's entertainment experience and we have expanded free on-demand programming to offer our customer more choices than ever before. and finally, we are measuring all of our employees on customer satisfaction.
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our compensation plan for front-line employees is tied directly to the customer experience. in fact, the compensation for all company employees, including top executives, depends, in part, on these customer service scores, as well. comcast will spend an incremental half billion dollars this year alone on improving the customer experience. as part of that initiative, we newcreating more than 5500 customer service jobs over the next three years including positions that we've already at our new call centers in albuquerque, new mexico, and in tucson, arizona. having spent over six years in the army myself, i'm particularly proud of the fact that we're looking to fill many these positions with our nation's veterans and their families. we believe these and other steps we've taken to improve our are making arience real difference. thank you, again, for the opportunity to testify and i am happy to answer any questions that you may have.
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mr. keib: chairman portman, ranking member mccaskill, good morning. i am john keib. opportunity tohe participate in this hearing. time warner cable recently merged with charter bright houses and networks to form a new company. my role at time warner cable completed the parties these transaction. i'm no longer employed by time warner cable or charter. such, i am testifying today as a former time warner cable also as a private citizen. my most recent position at time warner cable was executive vice operatingand chief officer for residential services. i looked at, service delivery, customer care, and sales operations for the company's residential service. to the extent that questions
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arise as to the future of time warner cable and charter,ul refer to kip mayo. we employed thousands of representatives and field technicians who we trained first and foremost to serve our customers. let me acknowledge that we are issuesare of some of the discussed today. those of you who live in a time warner cable area have probably recent ad campaign in which we acknowledge and highlight prior service explaining there steps we are taking as a company historical short coming. that campaign is a culmination of efforts made during my time at time warner cable toism prove our customer service performance in order to provide the best experience possible. beginning in 2013 under an internal strategy, time warner embarked on an aggressive plan to improve customer service and took several steps towards that goal.
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we invested heavily in our network. we made several technology for broadband and video and initiated an ambitious customer service performance by investing in our employees. we sought to make service the differentiator and become the best service provider not just within telecom but within any industry. our goal is to keep customers and we accomplish that by keeping them happy. our customer service representatives to provide excellent care to our customers. upon hiring our representatives receive 11 weeks of hands-on training as well as weekly ongoing training and coaching sessions with our supervisors. these coaching sessions allow representatives to learn from the actual calls they handle. our focus on customer service difference, as more than four in five customers report they are satisfied with interaction with time warner and our survey suggests our customers are becoming increasingly satisfied. we made great strides in addressing customer issues more efficiently by
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improving phone service levels through enhanced training and better staffing, improving product and service performance and introducing appointment based call-back allowing to call back time warner cable at times that best work for them. as a result of these efforts, volume is down over the past three years the number of calls fielded by service representatives decreased by 12 million which is to better and more efficient customer service. one measure of improved customer one-touch known as resolution where the percentage of calls managed by a single agent. we achieve one-touch resolution nearly 90% of the calls we handle. time warner cable began andoducing one-hour service install windows and our technicians were on time 99% of the time. significantly reduced by 1.6 million the number of times cable technician needed to visit a customer's home to handle a repair. yet?e there
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no. making such changes at a company feat andis no small the desired changes cannot all happen at once. evidence suggests our efforts to pay off. in the latest american consumer satisfaction report, time warner was ranked fourth best the internet provider up from the 13th position two years previously. although we do not have enough time to fully execute our plan, i am proud of the early results and just as i am most proud of our technicians and customer agents who together are pursuing the mission of winning on service. over, i am confident that tenets holds the same about prioritizing customer service. anyok forward to answering questions you have today about time warner cable and thank you for having me here today. sen. portman: ms. mayo? ms. mayo: thank you, chairman ranking member mccaskill and members of the subcommittee. toppreciate the opportunity
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testify here today. my name is kathleen mayo and i'm charter's executive vice of customer operations. i'm here to talk about the progress we've made improving the customer service at charter since the company's morebankruptcy and especially since the change of leadership in 2012. history,lt of its charter's infrastructure was in serious need of capital investment. the company's financial charter hadant that under-invested in repairs which kept the product from performing reliably. at the same time, it tried to cut costs by outsourcing services of customer jobs overseas. in 2012 andw c.e.o. new leadership team, we instituted a new playbook for includedhat streamlining video products, adding value to those products fastestvering the minimum broadband speeds all at highly competitive prices with a improving customer service. our efforts over the last four customerimprove
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service including insourcing customer and field service thousands ofeating american jobs. we have invested significantly in training our employees to be the needs of the customer. since 2012, we have hired over employees, a 40% increase, and majority of those roles are manymer facing positions, brought back from overseas. today nearly 90% of our customer on shore anddled in house and 95% of our in-home performed bys are charter technicians rather than by third-party contractors. locating ourted to facilities in the communities we serve, most recently opening a $16 million state-of-the-art customer operations center in missouri. our transaction with time warner cable, charter expects to hire 20,000 american will fillany of whom customer service jobs that are currently outsourced to call centers located in other countries. this approach has given us greater quality assurance with representatives'
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interactions with customers. our representatives engage in toversations with customers understand unique needs in order to properly assist them. we do not follow canned scripts. to improve the customer experience, we have also taken byps to simplify our bill eliminating common industry fees and expanded self service capabilities. as a result of these steps and the $7 billion we have invested in our network, customer service have declined 25% since 2013. customers need assistance, we have been able to resolve the issue on the first call 80% of the time. those high quality customer interaction are growing our customer base. competitive environment, we've added more than one million customer relationships 2012.the beginning of growing our total customer base early despite having no termination fees to prevent customers from leaving us. our churn is down. our existing customers are staying with us longer and our customer satisfaction has 12%.ved by
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we are pleased with our accomplishments to date and believe the results are to show but we also know that there's still much work to do in order to provide thecustomers with excellence and service they expect and deserve. eliminate accidental overcharges for video equipment, charter instituted checks and balances to create controls in our order entry systems to ensure we get each order right. our recent audit of equipment 99%rmined billing was accurate. of boxesless than 1% where customers are overbilled. is a high accuracy rate, nothing to short of 100% acceptable. we are reconciling every account every day to ensure our billing is accurate. the process of notifying overcharged customers and we are issuing them a 12-month credit. conclusion, we've made significant investments to improve our network. we've streamlined our products.
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pricing andfied in-sourced thousands of jobs to strengthen the american workforce and charter is working every day to improve and show customers we are committed to providing a superior customer service. sen. portman: mr. patel? mr. patel: good morning, chairman portman, ranking member mccaskill and members of the submeat. i -- subcommittee. the opportunity to speak to you about our commitment to customer service. of our brand is to offer customers the best entertainment experience through unique content offerings and good customer service and we're proud of that but we need to get better and are working hard to do so. tothat end, we need complement our great product. i think we have a phenomenal product that offers customers digital experience, sunday ticket, first to go to
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h.d. but sometimes the great product isn't complemented with great customer experience and it frustrates our customers so to 2012, i started a group that focused on being the customer inside the organization, reporting directly to the c.e.o. goal was not just customer service. our goal was to relook the entire business through the customer's eyes, to conduct significant analysis on what goingy customers are through, and to be the internal voice of the customer in the that astion so decisions are being made and policies are being set, the isce of the customer represented. and to be a champion for the really see improvements all the way through and to that end, we've made a but we've got a so this is ago and very personal issue for me. c.e.o. to asked our
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really lead this organization and so i'm glad to be here today. our commitment to serving customers and giving them more choices has never been stronger. we recently announced in march over-the-topch services that will provide customers flexibility and choices and lower cost offerings to customer. it will essentially allow them our content distributed over the internet in a more simple business model and offering. directv has ranked higher in customer satisfaction than cable for 16 years in a row but we recognize we need to raise the this ever evolving competitiveland scape with rising content costs. if customers are going to pay more for the service, they can, should and will expect more. service is an essential component of our accordinglywe have devoted and will continue to devote significant resources awards our goal of delivering
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superior customer experience. i have been with the combined at&t and directv company for 15 years in a number of different roles and as you introduced i'm currently senior vice president of product management but from 2012 until at&t's 2015 acquisition of directv, i served as senior vice customer of experience. in that role, i led directv's enterprise-wide customer centric effort to improve the experience across all customer touch points. initiative began with a comprehensive evaluation of all and practices. we conducted detailed research on exactly what the customer was going through and we shared much that resource with the -- research with the subcommittee analysis onn operational data in order to prioritize our efforts to what customers.portant to and we've invested hundreds of millions of dollars in that experience initiative which has produced real results for our customers. an annual 18ted
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million phone calls to our call centers over the last three demonstrates customers are experiencing fewer issues. reduced over 300,000 service truck -- 300,000 fewer times someone has to take a day off work in order to meet with a technician. reduced complaints by 44% and introduced a new simplified that clearly showed customers what the full retail price of their services were, the discount amount was and that was transparent every month about communicating when the discount expires. we made it a point on page one to proactive identify anything that's changed from the previous month. directv also maintains a to proactively
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address billing errors and if we find an issue that is part of a continuously monitoring query, that will look for that problem going forward and it's our proactively address billing errors and notify andomers we made an error reimburse affected customers and we even do so if that person is a customer with us. we'll credit their account. but we have plenty of room for to that regard, at&t and directv will spend more towardsbillion enhancing the customer service from 2016 to 2017. while we do take pride in the progress that we've made over the past three years, we know that customer satisfaction is a never-ending journey and we can, do better.need to in that regard, i sincerely welcome the committee's input. through this process, i've run across a couple of things i myself have discovered that will in ourhange organization. we're confident that as a combined company, we will
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enhance our ability to provide our customers with the services products and they deserve. i thank you for the opportunity today and look forward to answering your questions. sen. portman: thank you, mr. patel. ms. schneider? ms. schneider: chairman portman, ranking member mccaskill and members of the subcommittee. dish's three, founders decided consumers affordable an alternative to cable. we launched in 1996 and were reinventingn television distribution and providing meaningful competition within the paid-tv industry. dish is the nation's fourth provider withv about 14 million subscribers, employees and have with independent retailers. there are 146 retailers in ohio in missouri.
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we are proud that dish is the broadcastder of local channels in all 210 u.s. media markets, ensuring that even the most rural customers receive the same high-quality television as customers in urban areas. the issues we'll discuss in this hearing are complex but here's the simple truth for dish. our success as a business depends on satisfied customers. we have spent the last two decades working to provide a first-rate entertainment in making our customers happy. see thesh customers value of our products and services, understand our bills, seamless installation of reliable products and responsive repairs and service changes. at dish, our sales, installation, customer service, billing, product development and programming teams are constantly working hand in hand to make these customer expectations. and we've received outside efforts,on for these
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including an a-plus rating from the better business bureau. j.d. power awards for customer satisfaction for four years running and a top ranking in categories by the american customer satisfaction index, including lowest customer complaints. we diligently track the latest points and adjust policy, procedures, training materials and offerings. we make sure agents have the necessary tools to match each with the best programming, technology and value for that customer's needs. when a call comes in, our policy to resolve, prevent and promote. first, resolve the customer's issue, prevent any future issues and only after that, promote the value of dish. we also keep innovating and coming up with the best technology to meet customer of tv anywhere, any time. that's what's behind our award hopper,set top box, the and sling tv, our groundbreaking live tv internet streaming service.
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we're in a highly competitive business with major up-front acquiring eachin customer to the tune of $800 per subscriber at dish. four years of having the customer for us to recoup vying fors and customers are often two to three telco or satellite companies. usually one or more of those competitors is a company that, dish, can bundle tv offerings with broadband and phone service. the bundleof beating has to be keeping our customers satisfied with a quality of what we're value of giving them. unfortunately, dish cannot alone address two of the biggest overall customer complaints that we face. one, the high price of two, theng, and inability for our customers to select which channels they receive. content industry needs to be a part of that conversation. of rising paye television rates is the skyrocketing costs of acquiring
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programming content mostly due growingcasters' ever demand for transmission consent fees. huge price have increases leading to scores of withholding signals. dish and other paid-tv companies have called on congress and the to update outdated laws distributorsow tv negotiate content with broadcasters, and moderating paid-tv prices and perhaps lowering them. i will end with this. while dish is proud of its billing service and practices, we are also committed to continued improvement and constantly ask ourselves what can we do better? we are not perfect. do our bestakes but to fix the mistakes that happen and learn from them. we welcome the advice of the on ways that the overall service experience can be made better for subscribers.
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thank you and i look forward to your questions. sen. portman: thank you, ms. schneider. we're going to have the opportunity to ask questions from the panel. we have seven-minute initial round questions and then five minutes for second round because we have a number of members here, i'm going to keep my initial questions shorter than be here until'll the end. and let me start if i could, by saying that i appreciate the testimony. we learned a lot, including issues that we may be following competitionms of and ensuring that people have let me zero in on providingof not refunds to customers. beingib, i appreciate you here in your capacity as a with anyitizen, not particular company, yet we were in charge during the time period into, which is before time warner cable merging with forward, someing
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of the time warner practices that don't provide customers to for chargesefund they shouldn't have incurred, particularly with regard to equipment. my question to you would be, when you look at the ohio customers in 2015 were charged $430,000 they charged. have been they're getting no refund for that. even the first five months of ohio customers00 are being overbilled over $100,000. mistakes happen. about that. i mentioned the checkout counter grocery store example of that where sometimes they make a they correct it and they don't say, we're going to charge you less next time you come in. say, you know, we're going to make you good. so it seems to me that the looked intod have these overcharges, as other companies represented here have, thedetermined how long customer had been billed for these charges, simply to provide them a refund for that.
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do you agree with that? mr. keib: i think i agree with that. but if given the opportunity, i would like to give a quick the situation that we're discussing and how we and refunds.s sen. portman: quickly, if you would. mr. keib: i would like to bring not comeing that did up, i think, when we started, which is that we're actually undercharging customers significantly more than we're overcharging them. that's what we found and our revenue part of insurance program and i think that's noteworthy in the context this discussion. $150mpany, we provide over million in credits a year to customers and a lot of those are with customerime service agents and many are done when we know the origination of and when weir date customersfy the exact impacted, we do provide notice and the exact amount of what the credit's going to be.
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several years ago we built out something called the revenue program and this revenue assurance program was find thesegned to kinds of issues and over time we found these issues and what the revenue assurance program found as it looks to tie out whether chargedpment is properly on these accounts is that of the 37 million pieces of activent that we have, on our network, a very small fraction were improperly billed. and on top of that, if you bring it down to the customer level, was about i think .07% of customers with video equipment and .03% of our modems. so as what i said earlier about winning on service, we take it very seriously and it doesn't 10,000 outer if it's of 2.5 million customers, that 10,000 or 11,000 is what we've get right and. sen. portman: let me interrupt you for a second. we're talking about 40,000
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customers in ohio alone in 2015 overcharged. about manyalking more thousands of that in other states represented around this panel. easy to say, well, we under charged some people, we overcharged others, it nets out. for those 40,000 families. not for the family that's getting overcharged. you shouldn't undercharge, either. you should have business care ofs that take that. there'ssuggesting that any benefit to undercharging or overcharging. that if suggesting is you're overcharged and you find out about it, you out to make what othernd that's businesses do. i used the example of the checkout counter but it's true withher businesses we deal every day. my question to you is really simple. shouldn't you have, having those people, simply provided them and still you're not doing it because what you're give them au'll month credit where it could be years of having equipment they for.overcharged
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isn't that accurate? mr. keib: it is not accurate to say they've been overcharged for years. sen. portman: how do you know that? i could take time to explain that in the revenue assurance program we are looking of pieces ofs equipment and what we're trying to figure out is whether the piece ofharge on that equipment ties to the actual equipment. because of the amount of volume of equipment we're turning over right now whether we're upgrading modems, upgrading our actuallyquipment or going all digital and have been launching d.t.a.'s, there's a transactional volume and what i'm told and what i've learned through the revenue that it isrocess is a mismatch is being driven when a customer is during this puttingon window equipment on account and taking off the account and matching that up to the service charge so what we're doing is proactively every month running a report to find the discrepancies and that's why i say based on what team is thatom our
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i would -- i would venture to say that majority of those are within the and actual 30 to 45-day span. majority are the more recent but you don't know that it hasn't been years. monthlyow doing this analysis which is a step forward, as i said, and i think this hearing has created improvements in customer service for you and for charter and based on what likeone has said, it looks you've look at processes and come up with suggestions and positive but you're still not providing people the money they're owed. to ms. mayo with my next round of questions because she is now at charter and charter is going to be responsible going forward for what time warner's and charter's customer service procedures are that, even hope though you've made an announcement today you're going to provide customers some you just simply do
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what you now have the data to be able to do which is to tell the represent and those on the panel, look, if you get overcharged, you'll get a refund for it. mccaskillto senator and other colleagues. i'm cutting my time short with the hope we can get everyone's in.tions sen. mccaskill: he's saying that to send me a signal not to go over. , i'm going to get carried away. it appears to me from a distance business model that has grown up in paid-tv is figure out a way to make the entry possible, figure out how to roll people off that as yourice as quickly can and then deal with their anger once they realize the price has gone up and by the call to cancel, make sure you train your customer service people really deal withw you somebody who's angry and the angrier they get, the more to get something from you or depending on who they get, how skilled the at holding ont is
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to them and handing them goodies, sometimes temporarily, down and hope you can hold on to them longer. so many things about this business model that are asking for customers to be upset. in yourf you advertisement to try to get customers put the same size on what they're going to pay after the promotion as you price?the promotional do any of you do that? so all of you do the promotional then there's fine print. in fact, many of you don't even going tothe price is be after the promotional price, correct? is that correct? yes? does anybody disagree with that? so the promotional price and is the beginning of the journey that america has with their paid-tv providers. ask about h.d. and other fees. miss schneider, does dish anrently charge customers h.d. fee?
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newschneider: for customers, we don't charge h.d. fees. sen. mccaskill: what about old customers? ms. schneider: we have a small whenr of customers who they came into dish, they had a different pricing arrangement. h.d.mers today, we include fees in the receiver fees that they're paying for a new hopper equipment. there. included for the subset of customers in earlier days of h.d., we did not have that fee included in their havingr fees so they're lower receiver fees and paying the h.d. fee as an offset. sen. mccaskill: i guess what i'm is dish no longer charges new customers h.d. but you h.d., old customers correct? ms. schneider: in essence, we're charging both. callsccaskill: if someone in and asks to get the h.d. fee get it waived? ms. schneider: if they call in, yes, we've waive it. sen. mccaskill: once again, hide the ball. if i'm smart enough to know to call dish and i have an h.d. fee my bill, i call and ask for
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it to come off, you'll take it you?won't ms. schneider: agents will do customers.ng term sen. mccaskill: how long do you have to be a customer before you have the magic to get the fee off? ms. schneider: i don't know if there's a specific. sen. mccaskill: this is what i'm talking about. nobody knows how to get the best nobodyrom you guys, knows. there's a secret sauce somewhere and i think it has to do with which islly mad bizarre to me. let's go on to mr. patel. an advancerge now receiver service fee, right? mr. patel: that's correct. took theskill: you h.d. thing off the bill and then put a brand new thing on the bill. how many of your customers do think have any idea what the advanced receiver service fee is for? mr. patel: yes, senator, our intention was to really simplify the sales process and what we simplify thes number of decisions a customer had to make and we got it down to three which was you pick your
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programming package and the level of programming you pick dictates how much you're going to pay for the programming package. the second choice is, do you services orly basiced services and service provides a good h.d. experience but doesn't include on demand. the advanced service provides $7anced services and it's per room so as a part of the customer experience effort, we found that the number of choices had to make was extremely -- sen. mccaskill: you wanted to they the number of choices make but isn't it true that not all customers are charged the your company? mr. patel: that's correct. sen. mccaskill: how do i know ars fee? get a lower if i call and ask you, will you lower my ars fee? mr. patel: no. sen. mccaskill: no? mr. patel: it's an apples and oranges comparison and let me explain why. sen. mccaskill: quickly. mr. patel: i will. originallys fee was
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introduced, it was at a slightly higher price and we've lowered it. lower itskill: did you for everybody? mr. patel: but the customers who came on board with the higher their firsted room's equipment for free so there's other components of offer that were different is, it's achallenge very competitive marketplace and marketing from a perspective change very quickly. sen. mccaskill: i understand and customersme, understand that. it's like shifting sand. let me talk about the secret by retention agents in this investigation, we determined that there are actually rates that retention agents are authorized to give neverers that are advertised. does anybody disagree with that statement? so that's what's really frustrating. talk specifically about time warner. to handle customers that want to
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lower the cost of the service, time warner provided its agents thema chart that showed how much to lower the price of the package each time someone objected. people actually had a script. now if they get mad the first time, you can go down this much. if they get mad again, you can go down this much. found out when we interviewed you that if they ask, they would tell the price the lowestffered was price available at that time even though there was a lower chart that they could still offer. and when we asked you about well, at that, moment that was the lowest price that agent could offer. the kind of stuff that's driving people through the wall. for customers to not be able to determine when they have reached the lowest price? a customer know when they've gotten the best deal? to my call, i kept getting mad and i $120 back plus i
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got rid of the $7.99. i never would have known to do hadn't done that investigation. will you all make a commitment today to advertise the lowest price available? any of you? will you publish it on your lowest price available for your services? any of you? questions the next round. sen. portman: senator paul? that's paul: one thing interesting about pricing is that if you go to a car dealer and say what's the lowest price can give me on the car, nobody in their right mind will publish that. the question is is there not.tition or you can choose and that's the marketplace. and if youbeware don't like one of the choices, you simply choose another server. i think, though, that we need to put this particularly problem or particularly hearing in
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sort of context. the context of what kind of we have in our country. anhave a $19 trillion debt, anemic academy growing at a point and a half. areion dollars of people not getting jobs. shortfall$7 trillion in social security and a $35 trillion shortfall in medicare. i don't think congress is having hearings on any of these. apropose we ought to have full permanent hearing on social security that needs all of the time to address social security. been here six years and there's not been one bill to the floor of the senate to address entitlement program that we all acknowledge is there so i think we do have important to face that we do need as a country. we're asked today to look at, though, the tactics of providers to see if they're unfair, the bills are too complex. are pointed to low customer satisfaction surveys.
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one thing's very clear, though, television providers, customer still exceeds that of congress. so i'm not sure really if wisdom inough congress that we can impart to people who actually have a than wepproval rating do. if we are to examine, though, thenizations that fail transparency test, we might want to start with government. pentagon has never been audited. and we have to have defense but certainly we -- audit it. they've told us they're too big and we say, oh, well. that's been going on over a decade. the federal reserve, completely unaudited. we've had very little cooperation in the senate saying need transparency in the government. yes, we get frustrated calling
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consumer reps but at the same time we have big problems as a country, what do we do with the fed, the pentagon, the consumer protection bureau and congress. congress uses bills that are not thousands of pages long filled with wonky technical jargon that is to the average reader. congress uses high-pressure touations to get people accept bills they don't like. few members read the bills before they agree to them. and so i think maybe congress items.e one of our first unfortunately, you know, when you look at your government and you're unhappy with your you can't change your legislative provider. a lot of people probably would if they could. but when it comes to television or cable or satellite, you have choice. the satellite and cable industry in my state has a $4.7 billion on kentucky. i think in the midst of unhappiness about things not ever perfect and nothing's perfect, we realize you have a choice but we shouldn't lose
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the fact of what the television industry does for our states as far as jobs and and money for each of our states. maybe we should be asking how their help them grow business. the only way to grow their business is by having better consumer service but maybe there's obstacles such as taxes or regulations that add cost to your bill, too. i look at my phone bill, i see a lot of government stuff on there. couldthere are ways we make the bills less by actually removing government obstacles. the market forat television content has evolved rapidly through its own technological advancement and expanding consumer choices. milton friedman once argued that the effective television industry or computer industry or mail delivery it, isy, you name competition. if there's an argument there's not competition, these can be serious problems. as long as there's competition, you have a choice. in bowlingoice
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green, two cable companies. i've got two satellite companies. i can stream things. i have to have my son help me with that but i can stream things, as well. there is competition. there's now more subscriptions you can get without a contract because it's becoming very competitive. we have one big cable company that was bankrupt. hugeently there is not a amount -- they're struggling to make enough profit. but i think it's even come to the point now that we have simpler billing as a marketing tool. some of the different companies here are marketing that they to try to getills business away from competitors who may not be doing as good a job. think we need to put this hearing in perspective and not get too carried away. frustrations.e everybody does in the modern world of trying to call and get through to these companies but have to realize first do no harm. do we want to get involved with industry and do it to such an screw that ultimately we up something that's working very well in many instances and have hundredst we
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and hundreds of choices of channels. maybe the house is not on fire. maybe things can get better and will get better through for one, wantt i, to make sure we don't go too far in one direction. thank you. sen. portman: thank you, mr. paul. as i said at the outset, competition is something we're looking into because at least in ohio, we don't have the kind of competition i'd like to see. got some numbers here indicating how there is lack of competition now but on the other hand we heard from some of you about how competitive forces have been helpful and some of you have raised some things that can be done in terms of providing a more level playing is more reale competition and i agree with you. that's how you ultimately get better service. langford? senator langford: thanks for hosting this hearing and the conversation that's here but as mentioned,l has
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there's a context to this. as i read through the notes and as we received this early this night, one late last of my first thoughts on the section on not getting an answer make ast time that you call, in customer service, i ourered how many times that constituents service folks and our staff have tried to call security oral multiple other agencies and we get anrk for months to answer to a question that should be a straightforward issue. a great deal within government right now that lacks in customer service, as well. think that deserves a very public acknowledgment that all have a very long way to go in dealing with cable customer is the pot calling the kettle black as we work through this process. that, i have also had people call my office that have been incredibly frustrated by not getting attention with their cable provider. and they reached a point where
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called their cable provider so many times and got nonanswers they eventually called their senator who we called someone that we knew and they got attention. and it was the oddest thing for it takeink why does literally an act of someone in congress to try to get attention who has a billing problem, especially for senior our office.call now, in the training -- one of the issues that i have is in the understandd i there's a lot of selling and there's a lot of work towards profit. that areat the people on the phone want to actually sell you a program is not shocking to me. it's much akin to saying i'm shocked there's gambling in casablanca, that there are people in a for-profit business trying to actually stay in product.and sell a i do have a concern often when we deal with senior adults that the billing sond the request that i would have is
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customer service upgrades you've made and all of aboutve made comments increased training and capabilities, would you please make sure you're paying attention to the fact that there are senior adults that are calling that have no idea about and haveing practice no idea about these packages and they're being taken advantage of. and that is something intolerable in this process. me ask you a couple of things, though. in the billing as it comes out a guesssomebody give me in the typical customer paying for cable services, what state,age of that is local and federal taxes that they're also paying when they pay that monthly bill. can someone give me a guess? i see lots of thinking. pen and paper coming out.
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>> i could say at a minimum we franchiset's called a fee which is around 5%, at a minimum. and there's other taxes fees on top of that. the reason why it might be a little bit difficult to give you variesxact numbers, it by state sometimes. average $100 bill, i think 5% is a minimum number and off of thatrk number depending on the market for fees and pass-through fees things like that. senator lankford: anyone have a number?t >> i would guess at least 10%. lankford: state and local, federal taxes, a fee attached to it. i want to talk to a challenge with packaging and then to streaming. have a conversation about streaming services and i know y'all are experimenting with it now.at deal the cost of the actual content that's coming to you, there's an ongoing conversation about that,
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well, because as everyone complains about their cable bill, what i hear back typically is do you providers have any idea how much it costs in.x, y, z content coming where does that fit into the typical billing practice? forecast trying to five years from now, when you talk about hardware, when you fiber being put in the ground and you talk about content, where does that rank? do your analysis and you're looking at the threads, where does content fit into that? >> i'll take that, senator. mr. patel: the content costs rising is a significant issue. i do not think consumers understand the dynamic in place. we talk about billing and fees, but a out of the last 11 years, the cost of the content has exceeded the pricing that we passed on to the consumers. we are in a difficult position.
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it is a challenging thing to do to price -- caps on pricing to a consumer. no matter how you identify it, it will be something that causes a negative reaction for customers. 2005-2015, a group -- they grew over 100%. it is going three times the rate of any other goods or services. it is an issue. by i think it is exasperated the fact that agreements make you carry channels that the consumers do not have demand for and both of those things can create pressure and a structure that is not the best interest of the consumer. they have all raised the issue of competition. the ongoing conversation in the country is streaming content.
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rather than actually purchasing from cable or providers, so you are doing both. streaming content as a separate service with sling, is that correct? and through satellite. so, tell me about modeling for that and work through providing competition in that area for another completely different delivery device. the key thing for me, can people get content they choose to get in the medium they choose to get it in. so if they're ticked off about the latest $3-$6 fee per room for, theyhave to pay have another option to go to. >> the sling is our over the top product we have for streaming. it is a bit more modular in terms of what we can do to provide content, so where we have more bundling with our traditional product, sling is more modular. intomers have more choice terms of having a basic package
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that is affordable and then adding you know, slimmer packages to it. ms. schneider: it gives them more choice along those lines and so does that answer your question? it starts that. sen. lankford: this is a longer conversation we can have that we don't have time for right now. i have to tell you, i along with every other american gets incredibly frustrated. senator mccaskill did a good job of outlining a basic call on customer care. all of us get ticked off, but -- not only the length of time, but i'm concerned about senior adults in my state. and the potential for them to be taken advantage of in this process based on the complication, but also the difficulty they've had even seniors who have called me saying i can't even disconnect my service or get an answer and they just want to say, no, but they are so incredibly kind and nice they can't seem to turn things off. and so that has to be addressed in the days ahead and it should be addressed in a way that
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honors the people that have been part of that and paying customers all along. thank you. baldwin:.ortman: sen. sen. baldwin: thank you. i wanted to start based on the senators last comment. we hear from constituents with enormous frustrations, but almost all of us have had our own frustrating experience. we're not strangers to this. i actually curious about your am own experiences with your own companies. and i wonder if you get paid tv from the company you're with now or formerly were with? let's go across and let me know. >> yes, senator i do. sen. baldwin: john?
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that was way too informal. >> senator, i subscribe to comcast service. >> ok. >> yes, i do. >> i'm a dish customer. sen. baldwin: ok. do you call the same service number that any of us or our constituents to initiate the service or deal with problems or as current or former team members do you have an inside , number, colleague or somebody who tas care of that for you? why don't you go ahead. mr. karinshak: yes senator, i , have it as a normal paying customer. myself and my team will also do calls into the system as well as normal customers. sen. baldwin: i was impressed with your testimony you engaging in the different aspects of the business and sort of trying to figure out what the customer experiences. if you had an outage, you would go throughout 800 number or would you have an inside way of fixing it?
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mr. karinshak: so, i could go through the 800 number. i also use my account app i do things online as well. would experience calling in as a customer. i take calls from customers directly, too. sen. baldwin: ok. what about you? >> all of our employees time warner cable if they're in our , footprint have time warner or used to have time warner. mr. keib: in terms of service, if the individual account level, mine or my family or any relative that asks for help i , -- help, i would go through the normal channels. if there is an outage that is, you know, state-wide or something happens on large scale and impacts me i would make sure that we're on top of it. but not really out of a self-serving purpose. sen. baldwin: how about you, ms. mayo? senator i'mam sorry
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, abnormal. i don't live on footprint for charter service. i actually subscribe to two different operators, comcast and cable vision. i use their services, i call their lines. i get support just like any other customer. sen. baldwin: mr. patel? mr. patel: i as well have direct tv service and you know, generally we'll use the 800 number our customers use or online tools. and like tom, we also have access to being able to listen to calls and so will do that quite frequently to get a pulse of how the customers are being serviced. ms. schneider: so, the same. if i have an issue i would call into our service as well. and i think a lot of us probably have the advantage of knowing if we have technical issues we know how to fix that ourselves. there are more self service than other customers. sen. baldwin: back to the original point. i hear continuously from wisconsin residents sharing
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their frustration with paid tv, satellite and cable. one consistent complaint i have heard over the years is that tv providers will not let customers purchase their converter box and instead customers are forced to rent it, which costs them much more money over time. also, i want to share a story from one constituent which has already been -- the issue has already been referenced in our hearing thus far, but the constituent complained that he was given a two-month rate, but after a year his bill increased by more than $80. this additional $80 gave him no fact,service, and in three channels and music stations were removed. he said that at&t told him he would have to pay for computer service in order to get his channels back.
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and ultimately hung up on him. my constituents also explains similar issues with dish and direct tv. -- with time warner and dish. says, what can you and the senate do to make all providers sign a contract so they can be held to their words and finally remove all their false marketing? this is just a sample of what i hear from regularly. in light of senator mccaskill's earlier question about how big is the price for the promotion versus how are you adequately explaining or are you adequately explaining to the customer what's going to happen ipn this -- happen in this two-year promotion where the price goes up after the first year. in light of the concerns we hear over and over again.
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i'd like to hear from the entire panel, what more are you doing to ensure that your companies aren't promoting misleading pricing information and what are you doing to grapple with these pervasive billing issues. why don't we go across the panel again. senator it is , very important to make sure the customers understand exactly what they're getting. we do offer a wide array of products and pricing. and so we have done additional things from a disclosure perspective to help with that. first, whether you order service online or with one of our employees, they are required to go through a full summary at the end of that interaction detailing all of your monthly recurring and non-recurring charges. we also follow that up with an e-mail, that we send to the customer at their preferred e-mail address detailing the order and what's next as well.
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we also partner with a company called sunday sky that delivers a beer it -- that delivers a video for a new customer. and we back it up with our 30 day moneyback guarantee, as well. sen. baldwin: thank you. mr. keib: yeah, i'll try not to be redundant with anything that tom mentioned. but what i would say is i think the most important thing is what the customer actually sees on the bill. and making sure that what we are charging for is clear. and i would say one of the more recent things we did was try to show the promotional discount in relation to the full rate. for example, if the full rate was $129, there would be a minus sign and then it comes to the summary price of what the actual bill is. so that that customer in any given month would be notified there is a higher rate and this
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is a promotion of x dollars. when we come up to that window for that time, they would see that actual discount go away. or they would see it get reduced. sen. baldwin: ms. mayo. ms. mayo: that is a good point. those changes that have been made recently in an effort to be more transparent about billing to show the full charge and the discount the customer is getting. i agree with john, also, with tom, we, if you're dealing with a customer service rep, on the phone, a sales rep, and place your order, the sales rep will recap what you should see on the bill, any charges you will see for the first time. and we send an e-mail confirming the bill and the appointment. we're working on improving that with more information. but we have the core infrastructure set up.
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if you go into our charter store you obviously get confirmation of what your order is. if you have a direct sales rep you get confirmation. but we are also getting confirmation on the website. sen. baldwin: mr. patel? to disclosee try terms at multiple touch points . on the initial call we implement a tool that essentially tells the customer and the agent what the required call components are relative to what the customer , ordered. what we found was, historically all of the generic terms were disclosed and the customer was losing attention. so getting what was relevant to the customer wasn't important. and we record all of our sales calls in our direct sales call centers. if a customer says i was told something else we make it a , point to pull back that record and hold agents accountable.
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given toe essentially opportunities to not make a mistake when it comes to the terms and agreements with that offer. if they do that twice, the consequence is that they would lose their job. we try to hold the agents accountable, we have disclosures online, including a place where we spell out over the course of two years how your prices change. we send an e-mail confirmation, we have a written customer agreement. and then the last thing, probably the most prominent, on the bill we made changes so that , from the initial bill you know exactly what the full price of the product is. what the discount amount is and we even show you that you're in month one of 12 of that discount. it changes every month. it's constant awareness for consumers that i've got two more , months left for this discount. when the bill does in fact change we spell it out for , customers on the front page. so we've tried to do as much as we can to disclose this to
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customers and also drive accountability and controls in the organization if and when mistakes are made. that --dwin: so i think ms. schneider: so i think that dish might be a little bit different in that we have an option for a two year price lock. so customers have a two year commitment to us and we can align pricing and do a price lock for them during the entire term of their contract with us. initial contract. but in addition to that, so if they stay with us beyond that two year price lock, they'll likely experience you know price , changes to whatever the then kind of current pricing is. and so we follow form to similar to what other panelists talked about with respect to during the sales call, we do all of the disclosures, customers get an e-mail that outlines all of the things they need to understand, including pricing terms with
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their new service. we do something with our new customers where we do either if they call in before 10 days or, either they contact us within 10 days if they don't we'll out , bound them and walk them through the things they need to know as a new customer with dish, including anything with pricing, and installation. we never want anybody to be surprised about what happens on their bill. we also do bill statement messages and other things along the lines that the panelists mentioned. so we really try to make an effort to make sure people understand the terms of their new agreement with us and they don't have any surprises. sen. baldwin: thank you. ok, i wouldtman: like to get back to some of the questions we were talking about earlier. it have to do with people getting overcharged and
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companies knowing that they are overcharging and not giving refunds. i have a copy oaf af a bill here, from ohio, and it has over a dozen line items in it. one of the responses we've gotten from companies is people ought to look at their bills. so if you're being overcharged , you ought to be able to find that. first of all, i think it is very difficult to discover you're being overcharged. you don't know what the equipment is, you don't know what the correlation is. look at one of these bills. it's pretty darn complicated. and part of it i guess, i would ask you that you thought that , time warner could have done better in terms of allowing 40,000 ohioans in 2015 were overcharged. could have done a better job at dealing with that. you have come up today as i understand with a new policy proposal that charter, being the
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new company, is i guess going to implement, that there would be a one month credit regardless of how far back it goes. about howked earlier far back it went. why not at least notify the customers, say we've overbilled you, overcharged you, look at your bill, tell us, you know, how long that's been. if you can't find out for them. at least give them the information and notification to be able to find it themselves. have you thought about that, implementing that kind of notice procedure? >> yes, as i mentioned earlier. i think we do as i said when we define the number of customers impacted, and it is not a dynamic number or constantly changing. mr. keib: we provide notice that we overcharge and for how much. the example relating to
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equipment, because of the transactional nature and volume of equipment that's moving in or out, it is harder to determine. in our billing system and the way we run it to figure out the exact origin date of when those customers were impacted. but to your core question, as to should we notify or not, i think that's a natural progression of any revenue assurance program. and i think in hindsight we should notify customers if they're being overcharged. and going forward i would kick , that to kip because ultimately i think it falls in her decision making. chairman portman: what you said is significant. you think customers should be notified with regard to the equipment, particularly which you say is more complicated. i know you're no longer in a position to implement that. ms. mayo you are. do you agree you ought to be notifying the customers so they know they've been over charged. again 40,000 customers last
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year just in ohio. , you know, and this is an issue that i know you're attempting to address today with your own proposal. yours today as i understand it is you'll give a one year credit to customers that have been over charged. for legacy customers, it's one month. my second question to you is, now that you're in charge of both, the time warner legacy customers as well as your traditional charter customers why wouldn't you have the same , policy? why would it be a month for one and a year for the other? of course the policy i'd like to see is going back and giving them their full refund show less -- full refund, which, again, is what other companies have managed to do. you have this ability as i understand it through your new audit program to be able to understand what happened. if you could talk about the discrepancy and what the possibility would be of providing a real refund and talk
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about, if you could, the notion of notification. ms. mayo: i want to be very clear that producing an accurate bill is our responsibility. and at charter, as i said my opening statements, even though we had a 99.4% accuracy rate which seems high, it's not high , enough. we do believe that 100% accuracy is the only acceptable solution. so through this discovery we were able to put in place a daily reconciliation we're running every day and looking at every single customer's account and looking at the box charges on the account and the number of boxes. if on any given day if the box charges exceeds the boxes, we'll remove the excess charge. this will assure 100% accuracy. we're going to implement the exact same thing at time warner cable. as you know we closed on time warner cable about five weeks ago. so, i am still getting my arms
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around it. i'm still trying to understand the billing system and how they work. we all operate differently. the programmers are already working on the design of that reporting. it's a little bit more complicated for time warner cable because of the way they package their services and some packages include a free set top box. and so it is sort of, it is not a billing error there. it is embedded in the service price. so we have already identified 11 exceptions that have to be configured into the reporting. i'm going to need about 60 days to get it in motion. but we will do that. then we will have 100% accuracy, not just with charter and time warner cable, but with bright house as well. and i agree, i think we should notify customers. and the information center will be notifying our customers and giving them a 12 month credits through our reconciliation. chairman portman: you talk about 100% accuracy, quickly with regard to your legacy customers
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coming in. my understanding is time warner with regard to its correction of billing errors, aims for 80%. it has in the past. i understand that now they are part of your organization. is that accurate? >> i would like to address that. i do not think that the aim is 80%. i think the aim is to try to get to 100%. mr. keib: in the billing system that we have or we use in ohio, the fix we put on that account has, does not necessarily correctly impact customers that are in pending status. what that means is that, they have ordered service but haven't been installed yet. one of the reasons we have that breakage is that when we apply that fix, it is not sticking on customers that have yet to be formally installed. so again, in terms of improvement, there is an opportunity to do that, but that's, i don't think it's we're aiming for 80. that's what we're getting based on the way our system is set up in the last several months.
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chairman portman: so you are , only able to correct 80% based on your system. we've also learned time warner cable uses computer software that routinely has failed, is it true in some months it's been so difficult to fix the error time warner cable simply doesn't correct any bills for that month? mr. keib: if we're talking about the equipment charge, what i can say based on my familiarity with this is that, if there was a 20% breakage you referenced earlier where the mackioro did not take -- where the macro did not take effect, the next time we would run it, it would capture the breakage and try to fix it. that fix would happen the next month. chairman portman: from my investigation i learned that in , may of this year, 2016, you didn't make corrections for that month because of the computer software issues. and you're saying you will go back and later fix that in this month? mr. keib: i want to be clear i'm talking about the process.
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and the following months, if it doesn't fix that we'll rerun the same fix and i would have to verify for you the very specific customers you are referring fall into that bucket to make sure i'm being accurate. chairman portman: again, my concern is what charter is going to do going forward and making sure the customers are notified and made whole. and i appreciate again, that we , have made improvements based on today's announcements you've made in the context of this investigation, that you will provide some credits. but i hope going forward you'll also provide that information to the customers so they can understand what the issue is and make them whole. senator mccaskill. sen. mccaskill: thank you, mr. chairman. i'm disappointed that senator paul left. i want to welcome him to oversight. i've spent hundreds of hours in this committee room doing oversight of government. of every part of government. i welcome him to the oversight
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of our military contract acquisition process. i have spent hours and hours and hours in many, many hearings not only on acquisition there and oversight there, but policy and procedures throughout our government. so i'm an oversight kid. and i think if we're going to stop doing oversight because we are unpopular, we might as well put a sign on the door that says gone fishing. , i can't think of anything we'd be doing oversight on that is, you know, not more popular than us. we're the least popular right now. but that doesn't change our obligation to address things our constituents care about. and i think you guys know constituents really care about their tv. and they care about how they're treated and so i'm not about to apologize for caring about oversight in this area.
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because it's what i heard from the people i represent. and i am all in on oversight of government, believe me when somebody calls with a va complaint or social security complaint or a cable tv complaint, i'm on it. i'm not going to apologize for it. i hope to see more of senator paul here. frankly, most of these hearings we don't have very many people sitting out there. it's dry stuff. it's in the weeds. and i welcome his attendance as -- that many of those hearings those hearings in the future. i want to talk about the fees and taxes. i've got a couple of charter bills in front of me. one more recent than the other. and i want to make sure i put this in the record, ms. mayo. one bill, the total for tv services for charter cable , services is $158.98. there's a sales tax of $1.25. and there's franchise fee of $8.69. and then there's an
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administration fee of $0.09. i've added those up and that is $10.03 on a bill of $158.98. another bill i'm looking at, the bill was $54.99 for tv. $39.98 for internet. and the taxes, fee and charges were $2.28. but there is one item under taxes, fees and charges i want to spend some time on now. and that is the broadcast tv surcharge of $5. that's the biggest item under taxes fee and charges. now, if i get this bill and i am somebody that is not very educated, i am going to say, i
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cannot believe the government is charging me $5 extra for broadcast tv surcharge because it's there with taxes. and then fast forward and just a few years ago what was introduced is now not only are , we getting broadcast tv charges but now we're getting , rsn charges. now what i want to make sure i understand here, this has been a decision by all of you, raise your hand if you did not -- you did not. you do not put any rsn or broadcast fees. ish decided not d to do this. but the rest of you decided that he would say something that was in your feed, the basic programming fee for buying your service and you were going to put it in oofrthanother place on the bill and call it something else. and i would ask you why, can you tell me why all of you decided,
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isn't it true all of these were previously in your video charges? mr. karinshak: yes. mr. keib: yes. mr. keib: yes. ms. mayo: yes. yes.atel: sen. mccaskill: all of these were in your video charges and then i believe, i don't know, two years ago, you began to decide we'll put those down there with the tax and surcharges. and some of them started out for a regional sports network, $1.39 a month and they're up to as high as $5, $6 a month. did you inform your customersout -- your customers that he would be taking something out of what they were normally paying for and giving it especially line lineving it a special item. can somebody give me a good excuse as to why that you to keepnd was going that from being the future billing model.
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mr. patel: i would like to explain our process. we're a nationally priced product. because we have a national service, broadcast channels are available nationally and we include those in our package. regional sports, however, varies significantly market to market. and essentially what's been happening is in the particular market, a content company may decide to buy the content rights for a sporting team. and i will use la and the dodgers as an example. they'll pay an outrageous amount for those rights, create a new channel, and effectively try to, you know, force carry that channel in a market. and so for us the choice on , regional sports became in a market like new york where you have lots of teams and consumers in new york get access to all of those regional channels versus a market in st. louis where the cost is one third of what the new york costs are, what we do
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know what to do with pass on all of the cost to all consumers. this was a way to are,he costs where they where the content was available and where the customers were benefitting. and as we did that, in a third of the country, we don't charge because the rates for haven't been struck and haven't escalated. so that's included in our base packaging. but many markets where they were 4x and there are significant charges, we didn't want to levy those on customers that don't benefit to put the fee in -- do not benefit. to put this the in context in , all of our markets the fee is less than 50% of our underlying costs for our market. we didn't do that for broadcast fees because broadcast channels are available nationally. don't theyill: belong up above? don't they belong with your part of the bill? aren't they, in fact,
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programming costs? they are not taxes. they are not something that, this is something that's part of, why are they being put in this category to give the consumer the impression that this is something the government is doing to them. mr. patel: i think on our bill it is under other charges. that is a very assessment. that is something we will go through. sen. mccaskill: so why did some of you put it with taxes? >> senator, so we did put the broadcast surcharge in the charges and fees section. ms. mayo: we do not charge rsn at charter. we did that not to try to make it a government issue fee or charge, but it's nondiscretionary. we did not -- if we put it in the video section, the concern that the customer would be calling and saying i don't want that, i'd rather not have that.
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sen. mccaskill: hbo is in that section. remove hbo,ey can but not the basic product. sen. mccaskill: maybe you should remove the whole category. nondiscretionary extra programming. then people would begin getting angry about the amount of money that's being thrown around in sports right now that's causing these prices to go so high, which is the subject of hopefully another look at what you all are going through in terms of shifting sands in terms of your programming costs. i get that's another component of this. what about for comcast? why does that fee go down in a section that makes customers think it's a tax. mr. keib: senator, we agree with you around the importance of the disclosure. we did notice our customers and do not include it -- mr. karinshak: we do not include
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it in the area of taxes or any government mandated fees or surcharges. sen. mccaskill: that is terrific. i have another question and then a bunch for the record. i know that you all in the past have reviewed complaint data to determine the percentage of customers who stated that a quoted representative them the wrong price, sometimes as high as 30% for certain complaint types. did you take on an analysis to determine whether the customer was right in connection with that? >> senator, we do look at our complaints data and saw the opportunity to improve our disclosures for some of the things i referenced before around implementing the order summary for every point of sale, being able to send the e-mail as well as the video bill and reinforcing the 30-day money-back guarantee. that was one input we looked at and ultimately making those changes. sen. mccaskill: no one has had a
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chance to address, does anybody want to address before i close, and i will have a bunch of questions for the record. does anybody want to address the practice of charging someone to remove an optional product from your bill? i can answer that. we do not charge for removal of any services other than warranty service. the reason that that's in place is essentially to prevent gaming. a lot of times a consumer requires free services or a free upgrade, which is a part of our protection plan program. they can get an equipment upgrade every two years. we were trying to prevent a consumer getting that benefit and then the very next month removing the service. so that's the only service through which --
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sen. mccaskill: that was a problem? somebody would get an equipment upgrade and quit? that makes no sense. why would you go through the trouble of dealing with you guys to get an equipment upgrade and then quit the next month? that's not logical. mr. patel: the point is the equipment upgrade are, as you transition from standard service to hd, customers normally would have to pay for that equipment upgrade. one of the benefits of the plan is that in up to four rooms in your home, you're able to get that equipment upgrade free every two years. i think what we were trying to solve is what you mentioned. before if an existing customer , wanted to upgrade, they had to call their provider, haggle and threaten to leave and maybe then would get that upgrade as a complimentary service. and so we made this a part of our program where every two years you can refresh your experience in up to four rooms. sen. mccaskill: i'm not aware of
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that. you're one of my providers. i have never heard that i get free upgrades every two years. it is -- i didn't get any of that information when i tried to change that. so i think there's a disconnect between what you believe is going on in the field and what is actually going on in the field. anybody else want to give me a reason why you charge someone to quit paying you something? >> senator, if i can? ms. mayo: so we don't charge any kind of change of service fee for upgrades or downgrades. and we do not charge any kind of early termination fee. so we know that we have to win our customers business every single day because they could walk out the door. those are fees that we're not e use.red with and we do not
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sen. mccaskill: i think dish charges to get rid of the protection also. you guys charge? ms. schneider: it is true. we have a $30 removal fee. it's a very similar situation to the one that was just described where if a customer, so what we normally charge somebody is $95. if a customer is on the protection plan, they pay a greatly reduced rate for that. so they pay $10. if you add the protection, you can add it the day you need it. so if you call and you have an issue, and you require a truck roll, you can add the plan and all that what we ask folks to do is keep it for six months. sen. mccaskill: i see. that makes sense. i just wanted to say for the record that your regulatory fees fees are put-- rsn in other charges and credits, which include other charges like regulatory recovery fees. so i'm not sure it's really clear that's something you guys are charging for that. inside the box i recommended.
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it's on the website. i recommend the committee joint report to all of anybody who buys pay-tv. you'll learn a lot. and i want to thank all of you for cooperating in the investigation. i really want to thank the chairman for his patients with me. cop.e good cop, bad he is definitely the good cop. [laughter] chairman portman: again, it has been very productive over the last year doing this investigation. i think we have seen here today some practices that you specifically will undertake in , which you're going to improve the customer experience and customer service. i don't think it goes far enough in terms of providing actual refunds to customers who have been overbilled. i understand some have been underbilled and some have been overbilled. that doesn't help a family that's been overbilled. it is not fair. with regard to your testimony, there's also some other customer service policy changes you all are considering based on this
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hearing and our investigation. that's appreciated. on the rsn fee, this is for people who are not familiar with this, this is a regional sports network fee that you're charging. cnn on the bill separately, it's -- if you wanted to. but my concern about it is that it does appear in some bills with some of the companies in a place where it looks like it's a government fee. i would hold up this bill from ohio, which is the bill that it i get. my wife and i get. taxes, fees and surcharges. it has franchise fees, state sales taxes, regulatory fee, universal service fund, recovery fee, and then it has broadcast tv and sports programming, which is where the rsn it. -- is. and i do not think that is the right place for it, because people view it as a mandatory government the -- fee.
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so i would ask, are you aware of that? and with regard to your legacy time warner customers, understand you don't charge it separately, but with regard to your new customers, do you plan to keep this in the category of fees and other government charges or to have this in a more honest display where it's either by itself or other fees? ms. mayo: i aware of it now. am and yes, our attention is to -- are in tension -- our intention is to overlay with time warner cable. we don't charge an rsn fee so hopefully that's something that will be removed entire isly from -- entirely from the bill. chairman portman: i appreciate the fact that we have been able to talk about some of these very specific issues that i hear from my constituents about and you hear from your customers about. i appreciate the fact everybody has been very candid today in talking about this. let me also mention that with regard to the oversight responsibilities here to the
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earlier comments made, this subcommittee has done a significant oversight of exactly what senator paul was talking about. in other words, looking at government and looking at our economy, which is disappointingly weak. looking at government spending. specifically we have had a series of hearings on issues like tax reform. which goes directly to economic growth. we have had hearings on the affordable care act and. paperof the waste and tax -- taxpayer loss. and we have done some great work on that. we have also looked into other issues like labor trafficking and hhs and how they allowed kids to get into the hands of traffickers. government oversight there. next month we will be combatting -- looking at the ways to combat isis propaganda and locking at -- looking at our government response to that, so those of you who follow what we do, that
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will be something we'll be looking at next week. certainly a topical issue and one that everybody is concerned about is how do you stop this isis propaganda from taking more and more of our impressionable young people and radicalizing them. and we will also look at the opiate abuse issue. this is the prescription drug epidemic across the country and issues we think that the subcommittee can provide additional insight on. we have done tough, significant, important oversight and will continue to. and again, i appreciate the witnesses coming here today and the fact that this process, not just the hearing today, but the investigation has improved some of your individual practices as it relates to the people that we represent. i want to thank senator mccaskill for her work. this is not her first time dealing with this issue. i'm not on the commerce committee, but she's done a lot of work on this issue and focusing on consumers there. as we move forward, we're going to continue to look at the industry and look at this issue of consumer choice and kpe
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--competition. ultimately, that is the answer, to give people a range of choices. we talked about the risk of competition but there's also , concerns about having more competition. i think innovation is going to be allowed to flourish and new products will come to market. so we'll be looking at some of those barriers to that. and we'll also be looking at other issues that might have come up today. i'll have some additional questions for the record. i appreciate the prompt responses you have given us to previous questions and specifically to the companies here today. i thank you for your willingness to cooperate with us in this investigation. again, what i think has been a positive hearing to have an honest hearing of some of the concerns on the consumer side. the hearing will remain open for 15 days for additional comments or questions by any of the members. and with that, this hearing is adjourned.
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[chatter]
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>> on american history tv on c-span3, tonight at 8:00 p.m. eastern on lectures in history -- >> by the end of the 1880's, you
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have a dramatic upsurge, at tremendous surge -- a tremendous surge in veterans organizations, membership in organizations, and in the statutes that they create. university of georgia professor scott nesbitt discusses the ongoing debate on memorials and monuments and how many were the result of campaigns by southern women during the reconstruction era and into the late 19th century. sunday morning at 10:00 on road to the white house rewind. said,1976, mr. carter trust me. and a lot of people did. and now many of those people are out of work. biggestrnative to the -- in history. it reagan -- >>

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