Cable television

How Spectrum’s Digital Conversion Affects Cable TV Consumers

Charter Communications has a tough job ahead as it distributes more than 4 million control boxes this year to accommodate the cable TV company’s move to an all-digital system.

What this means for the typical cable customer: Plugging a coaxial cable into the back of the TV won’t work. A box, or other digital adapter, will be needed to watch most of your favorite shows.

On March 27, all coax-connected TVs in the local Spectrum service area will turn off. The picture will be interrupted forever if your connection has a simple coaxial cable plugged into the TV’s cable socket.

“We’re going to go all-digital, which you think modern businesses would have already done.” said Tom Rutledge, managing director of Charter Communication, Spectrum’s parent company, during a recent presentation to Wall Street analysts at The Breakers, a luxury resort in Palm Springs, Florida. “We need to deploy 4.4 million set-top boxes this year to free up spectrum to take advantage of our network capacity.”

Spectrum’s transition to digital will limit piracy by jamming the signal while allowing the company to market a host of potentially expensive new services. Monthly bills could increase as the Spectrum offers more on-demand, high-definition content, and as-yet-unspecified “new features.” Switching to an all-digital signal also frees up more bandwidth for faster internet speeds.

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At Binghamton headquarters, there was a rush on digital adapters. A temporary tent enclosure was erected, staff directed traffic, and employees handed out coffee and snacks to keep customers busy during the business rush at its Plaza Drive location.

When analog systems go dark in late March, expect another rush at customer service centers in Binghamton, Elmira, Corning, Hornell, Norwich and Oneonta. Secondary digital units are generally more compact than the main primary television set.

Promises of more and better services have done nothing to appease some disgruntled customers, who see the transition as another cash grab on a service whose prices have steadily climbed. They have little interest in seeing the company’s “future innovation path” which Rutledge says will come with the all-digital network. The reactions on Facebook were swift and largely furious.

“Planning to ditch them completely,” wrote Hillcrest’s Lori Kropp, upset that she was forced to outfit every TV in her house with control boxes.

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Spectrum offers digital adapters free for one to five years depending on service category. After the free period ends, each box will cost $11.75 per month for old Time Warner customers, or $6.99 for those on the new Spectrum pricing plans.

There is a workaround, but most only work with Spectrum Internet Service. Spectrum-enabled devices such as Roku or Xbox One, or a TV that supports cable cards will allow you to skip the setup.

Not everyone is unhappy with the change.

“We added two boxes to keep cable TV in the bedrooms,” said Keith Haywood of Endicott. “Wish I had added them sooner. It’s a big improvement over the basic TV we had on these TVs before. I don’t like the cost, but nothing compares to what we’re getting .”

In fact, Binghamton and the rest of upstate New York are at the end of the digital transition. In major metropolitan areas such as Los Angeles, the shift began as early as 2010. By 2019, all of Charter Communications’ 16.5 million cable customers will be on an all-digital network, according to the company’s schedule.

“The traditional cable television industry is dying,” said Jeff Kagan, a telecommunications industry analyst. “They are transforming their business into tomorrow.”

Whether a modernized network will be enough to stem the tide of Spectrum defectors is unclear. After six successive quarters of losing customers – a total of 294,000 TV subscribers – the company added 2,000 customers to its rosters in the last quarter of 2017.

“Digital is always much more efficient because you can compress the digital signal,” Kagan said. “You send exactly what you need. You can extract a lot more signal from the digital network.”

Rutledge said the full digital transition will enable Charter Communications to achieve “the kind of performance we expect from the assets we have brought together”.

In Binghamton’s service territory, there is also lingering resentment over a broadcasting rights dispute that stripped the Binghamton Fox affiliate from the Spectrum network. Now in its second month, a war of words has broken out between the two with little indication that a settlement is in sight.

There is no doubt that the digital switchover, together with the protracted dispute over retransmission rights, as with any change in spectrum policy, is sparking discussions among customers about switching to other options – satellite television such as Dish or Direct TV, or cut the cord entirely.

“I got rid of them,” Binghamton’s Brian Spear said. “I went to the satellite.”

One thing is certain, analysts say the digital transition is unlikely to lead to bill reductions for Charter Communications’ $42 billion customer.

“I wouldn’t expect that to be a savings for customers,” Kagan said. “Customers will pay more in the end.”

Follow Jeff Platsky on Twitter @JeffPlatsky