    [Senate Hearing 114-409]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 114-409

       CUSTOMER SERVICE AND BILLING PRACTICES IN THE CABLE AND SATELLITE
                              TELEVISION INDUSTRY

    =======================================================================

                                    HEARING

                                   before the

                    PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                                     of the

                                  COMMITTEE ON
                   HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   ----------

                                 JUNE 23, 2016

                                   ----------

            Available via the World Wide Web: http://www.fdsys.gov/

                           Printed for the use of the
            Committee on Homeland Security and Governmental Affairs

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                                            S. Hrg. 114-409

       CUSTOMER SERVICE AND BILLING PRACTICES IN THE CABLE AND SATELLITE
                              TELEVISION INDUSTRY

    =======================================================================

                                    HEARING

                                   before the

                    PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                                     of the

                                  COMMITTEE ON
                   HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JUNE 23, 2016

                                   __________

             Available via the World Wide Web: http://www.fdsys.gov

                           Printed for the use of the
            Committee on Homeland Security and Governmental Affairs

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                             U.S. GOVERNMENT PUBLISHING OFFICE

    21-423PDF                     WASHINGTON : 2016
    -----------------------------------------------------------------------
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            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                        RON JOHNSON, Wisconsin, Chairman
    JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
    ROB PORTMAN, Ohio                    CLAIRE McCASKILL, Missouri
    RAND PAUL, Kentucky                  JON TESTER, Montana
    JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
    MICHAEL B. ENZI, Wyoming             HEIDI HEITKAMP, North Dakota
    KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
    JONI ERNST, Iowa                     GARY C. PETERS, Michigan
    BEN SASSE, Nebraska

                      Christopher R. Hixon, Staff Director
                  Gabrielle A. Batkin, Minority Staff Director
               John P. Kilvington, Minority Deputy Staff Director
                         Laura W. Kilbride, Chief Clerk
                       Benjamin C. Grazda, Hearing Clerk

                    PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                           ROB PORTMAN, Ohio Chairman
    JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
    RAND PAUL, Kentucky                  JON TESTER, Montana
    JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
    KELLY AYOTTE, New Hampshire          HEIDI HEITKAMP, North Dakota
    BEN SASSE, Nebraska

                         Brian Callanan, Staff Director
            Margaret Daum, Minority Staff Director and Chief Counsel
                           Kelsey Stroud, Chief Clerk

                                C O N T E N T S

                                     ------
    Opening statements:
                                                                       Page
        Senator Portman..............................................     1
        Senator McCaskill............................................     4
        Senator Paul.................................................    22
        Senator Lankford.............................................    25
    Prepared statements:
        Senator Portman..............................................    41
        Senator McCaskill............................................    44

                                   WITNESSES
                            Thursday, June 23, 2016

    Tom Karinshak, Senior Vice President, Customer Service, Comcast
      Cable..........................................................     9
    John Keib, Former Executive Vice President and Chief Operating
      Officer, Residential Services, Time Warner Cable Inc...........    11
    Kathleen ``Kip'' Mayo, Executive Vice President, Customer
      Operations, Charter Communications, Inc........................    12
    Rasesh Patel, Senior Vice President, Product Management, AT&T
      Entertainment Group (DirecTV)..................................    14
    Kathleen Schneider, Senior Vice President, Operations, DISH
      Network, L.L.C.................................................    16

                         Alphabetical List of Witnesses

    Karinshak Tom:
        Testimony....................................................     9
        Prepared statement...........................................    49
    Keib, John:
        Testimony....................................................    11
        Prepared statement...........................................    57
    Mayo, Kathleen ``Kip'':
        Testimony....................................................    12
        Prepared statement...........................................    60
    Patel, Rasesh:
        Testimony....................................................    14
        Prepared statement...........................................    67
    Schneider, Kathleen:
        Testimony....................................................    16
        Prepared statement...........................................    73

                                    APPENDIX

    Charter bill referenced by Senator McCaskill.....................    48
    Staff Report.....................................................    85
    Minority Staff Report............................................   101
    Hearing Exhibits.................................................   163
    Letter regarding correction from Mr. Patel.......................   181
    Statement for the Record from the National Association of
      Telecommunications Officers and Advisors.......................   183
    Responses to post-hearing questions for the Record
        Mr. Karinshak................................................   185
        Ms. Mayo.....................................................   200
        Mr. Patel....................................................   205
        Ms. Schneider................................................   214

                      OVERSIGHT OF CUSTOMER SERVICE IN THE
                    CABLE AND SATELLITE TELEVISION INDUSTRY

                                  ----------

                            THURSDAY, JUNE 23, 2016

                                       U.S. Senate,
                  Permanent Subcommittee on Investigations,
                        of the Committee on Homeland Security
                                      and Governmental Affairs,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 10:05 a.m., in
    room SD-342, Dirksen Senate Office Building, Hon. Rob Portman,
    Chairman of the Subcommittee, presiding.
        Present: Senators Portman, Paul, Lankford, Ayotte,
    McCaskill, Tester, Baldwin, and Heitkamp.

                  OPENING STATEMENT OF SENATOR PORTMAN

        Senator Portman. The Committee will come to order.
        We are here today to discuss a topic that affects just
    about every American family and often frustrates all of us as
    American families, and that is our cable or satellite TV
    service. For over a year now, Senator McCaskill and I have
    undertaken an investigation of the cable and satellite
    television industry. As many of you know, Senator McCaskill has
    been interested in this issue for many years, from her role on
    the Commerce Committee. She will talk about that. We both have
    a keen interest in making sure cable and satellite companies do
    right by their subscribers.
        The Subcommittee has reviewed literally thousands of
    documents and interviewed countless witnesses to learn more
    about the consumer practices of the five largest pay-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 those companies' billing and
    customer service practices. Our joint report\1\ outlines
    troubling findings about the practices of two cable companies
    that have consistently failed to provide refunds to customers
    who they know they have overcharged, including thousands of
    people in my home State of Ohio. I will talk about those
    findings in a moment. The second is a report issued by Senator
    McCaskill\2\ on a number of issues of interest to consumers:
    how pay-TV companies disclose their prices, what these fees are
    for, and how they teach their employees to interact with and
    retain customers.
        And without objection, these reports will be made part of
    the record.
    ---------------------------------------------------------------------------
        \1\ The staff report appears in the Appendix on page 85.
        \2\ The report issued by Senator McCaskill appears in the Appendix
    on page 101.
    ---------------------------------------------------------------------------
        During the course of the Subcommittee's investigation, we
    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 often has a long
    list of charges on it. I have a bill here in front of me. It is
    a pretty complicated bill. A base charge for the TV package,
    maybe $10 extra per month for HBO, and 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 is inevitable that from time to time a
    customer will wind up getting charged for something by mistake.
    That happens. The same thing, by the way, happens in the
    grocery store checkout line sometimes. It has happened to me.
    Mistakes happen--and we understand that. What matters in life
    is how you own up to your mistakes and make things right. What
    we discovered is that some cable and satellite companies are
    better at doing that than others.
        All of the companies before us have ways of identifying
    overcharges to customers or preventing them from happening in
    the first place. But what happens when they find out they have
    been overcharging someone for equipment the customer does not
    actually have? The first thing to do, of course, is take it off
    the customer's bill going forward. All the companies before us
    know 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, their practice has been to just pocket the
    past overcharges.
        To understand the scale of this problem, we asked Time
    Warner Cable for specific numbers about overcharges in my home
    State of Ohio. Here is what we found: During the first 5 months
    of 2016, this year, Time Warner Cable overbilled up to 11,000
    customers in Ohio, and those overcharges totaled over $100,000.
    Time Warner Cable further estimates that, throughout last year
    alone, it overbilled 40,000 Ohio customers with 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 is a ripoff of Ohio consumers, and I will be
    asking the company today how they are going to fix it.
        Specifically, when Time Warner Cable discovered the
    overcharges, it only dealt with the problem prospectively. It
    took erroneous charges off customers' bills going forward, but
    did not provide any backward-looking refunds and did not even
    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
    its customers nationwide an estimated $2 million for equipment
    charges in 2016 and, even after discovering these billing
    errors, will fail to do the work required to provide a full
    refund. We will talk about that.
        Time Warner Cable has recently been acquired, as I said, by
    Charter Communications. So I am hopeful the new company will
    work quickly to fix this problem.
        But Charter has had problems of its own. Until August 2015,
    the company did not run any systematic audits to reconcile its
    billing records with equipment records. That means overcharged
    customers could not even receive a prospective correction of
    their bill unless they spotted the problem themselves and
    contacted Charter. Just recently, Charter began taking steps to
    identify equipment overcharges currently on its system. But
    even though it has identified overcharges and removed erroneous
    charges from future bills since August 2015, until today,
    Charter has not provided any refunds or notice of the problem
    to consumers--just like Time Warner Cable.
        It does not have to be this way. Our investigation revealed
    that Comcast, DirecTV, and DISH have had better practices.
    Comcast and DirecTV provide automatic refunds or credits to
    customers who have been overcharged by their billing systems,
    while DISH's billing system is designed and apparently has been
    successful in preventing any of these types of overcharges from
    occurring in the first place. So feasibility, in my view, is
    not a good excuse for failing to refund customers when they
    have been overcharged.
        We do have some good news to report today. As a result of
    our investigation, Charter and Time Warner Cable have taken
    steps to improve their practices. Time Warner performs a
    monthly audit to find overcharges. Going forward, the company
    will provide an automatic 1-month credit to all customers for
    each piece of overbilled equipment or service, and it will
    provide notice to overbilled customers so they can determine
    whether to request a credit or a refund. That is a good start.
    But it does not make all customers whole. Time Warner Cable has
    not yet committed to do anything for the 40,000 Ohio customers,
    for instance, who were overcharged last year. And we will get
    into that discussion later today.
        Charter has announced that starting today it will provide a

    1-year credit to all affected consumers. That, of course, goes
    further to make customers whole, but what would be better is
    simply to ensure that customers receive the full refunds that
    they are owed.
        Senator McCaskill's report shows that Americans are often
    unhappy with their cable and satellite service. Questionable
    customer service techniques and confusion surrounding billing
    practices have led consumers to feel mistreated. I support her
    effort to get to the bottom of these issues, and I believe that
    the best solution to the problem of poor customer service is
    more competition in the pay-TV industry. Regulations have their
    place, but what is really needed is for consumers to have a
    more options--more competition in the market. If you do not
    like your television service provider, you should be able to
    choose a different provider that suits your needs and suits
    your preferences, and Senator McCaskill and I are both
    interested in continuing to examine how the industry can be
    improved to create more choice for consumers.
        I want to thank Senator McCaskill for her hard work on
    this. She has always been a stalwart friend of consumers, as I
    said earlier. She and her staff have worked with us in a
    professional and productive way to make today possible.
        With that, I would like to turn to Senator McCaskill for
    her opening statement.

                 OPENING STATEMENT OF SENATOR MCCASKILL

        Senator McCaskill. Thank you, and I want to thank you,
    Chairman Portman, for allowing me to pursue, along with you and
    your 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
    pay-TV. As you indicated, we have 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 its retention
    representatives of allowing customers to cancel without an
    argument. So we can already claim some small victory as a
    result of these investigations and this hearing today. And I
    think this is an important area for us to continue to look at.
        It is amazing to me, when we began asking for input, the
    volume and passion of input we got from people about how they
    feel like they are mistreated by their pay-TV provider. And
    this morning, for the first time, our Nation's largest cable
    and satellite companies are testifying together before us about
    their customer service and billing practices. They are here
    because this Subcommittee has broad jurisdiction to investigate
    issues which affect the American people. I tried 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. And so I made a determination then that I was not
    going to give up and that we were going to stay on this, and I
    am really grateful, as I say, Chairman Portman, for your
    agreement to allow this investigation to go forward.
        The five companies here today provide video services to
    more than half of all American 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 have made some gains in the
    last year, paid TV providers remain among the most disliked
    industries in America. This year, a survey of consumers found
    that more than 20 percent of the people who had interacted with
    TV providers reported having a bad experience during the
    previous 6 months, the highest level of any industry.
        So how did I 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 was over 2 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 am
    paying $10 that I do not have to? '' And the person on the
    other end of the line kind of said, ``Yes, you are paying $10,
    and you do not have to pay it.'' And I said, ``Well, were you
    going to tell me this?'' And they said, ``Well, no. You have to
    call in and ask.'' That is exactly the kind of ``hide the
    ball'' that infuriates people.
        So if I had not called in and asked, that $10 could still
    be on my bill today based on the billing practices 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 have consumed a lot of
    information about this. So I decided 2 days ago I would take
    another spin, because now I know a lot. Now I know the
    difference between a customer service representative and a
    retention specialist. Now I know what to say and how to say it.
        So 2 days ago, I called one of my providers, and on my
    website, McCaskill.Senate.gov, people can listen to the
    recording of this conversation. And, in fairness, because I do
    not think this is necessarily one company versus another, I am
    not going to talk about which company it is, nor will the
    recording. And I am not going to read here nor on the recording
    will I give all my personal information that I was asked to
    give when I called. But here is how the conversation went, the
    first part of it, until they got me to that magic retention
    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 that was my husband's name.
    And she asked what my relationship was to the account holder,
    and I said it was my husband. And then the woman said, ``OK.
    And how can I help today?''
        I said, ``I would like to have you remove--there is a fee
    on
    here--I am not sure how it got on here--for a protection plan.
    I do not recall buying that or 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 are seeing a charge for
    the protection plan, and you would like to know what it is
    for.''
        I said, ``No. I would like to take it off.''
        ``Oh, you would like to take it off?''
        ``Yes.''
        ``All right. But you are aware that basically the
    protection plan covers equipment upgrades every 2 years, and if
    you lose your equipment, then we will replace it for you at no
    charge.''
        I said, ``Well, are you saying that the equipment I have in
    my house now is mine, or is it yours?''
        ``Well, it is ours, but basically if there are any issues--
    say, for example, spills or accidentally the cables get cut,
    then we will replace that for you.''
        I said, ``Well, yes, but let's just say if it is your
    equipment and something goes wrong with it, don't you have to
    fix it anyway if I am going to be able to get the service I am
    paying for since you own the equipment?''
        ``Well, let's say if the remote fails or stops working. The
    protection plan on the account will then fix that free of
    cost.''
        I said, ``Well, what would that cost if the remote quit
    working? It is your remote that you own. What would it cost to
    get it fixed if I did not have the protection plan?''
        The woman says, ``Well, information on that is actually
    done in our equipment department. So I would like to connect
    you there for more information.''
        I said, ``No, no, no, no.'' Because I knew better, right?
    ``No, no, no, no. I do not want to do that because if you do
    that, I have to wait and tell the story all over again. I just
    want to find out why I cannot get you to take off the $7.99 for
    the protection plan.''
        ``I am not saying I am not able to take it off. I am just
    letting you know the benefits you get with the protection
    plan.''
        ``I understand. I think I understand. I think, frankly,
    it's kind of a ripoff because you own all the equipment, and I
    think you have to fix the equipment since you own the
    equipment. And if you cannot fix the equipment, then I could
    not get the service, and then I would not pay for the service,
    and I would definitely go to another provider. So what I am
    asking is, will you just disconnect it? I do not want to pay
    the $7.99. I do not even know how it got on my bill. I think
    you just started putting it on my bill, and I was not paying
    close enough attention.''
        ``All right,'' she says. ``But if I actually have the
    protection plan taken off, there will be a $10 disconnection
    fee.''
        ``It would be a $10 disconnection fee for me to quit paying
    the $7.99 every month? ''
        ``That is correct.''
        ``And it is a one-time disconnection fee? ''
        ``Yes, it is one time.''
        ``And what am I paying for? ''
        ``Paying for?'' she says.
        ``Yes, what am I paying for? For you to just quit charging
    me for the service, I have to pay you $10? ''
        ``Well, no. Basically''----
        And then I say, ``I think what we ought to do probably, I
    think maybe now it is time for me to switch carriers. If you
    are going to charge me $10 to quit charging me for something I
    do not want anymore, I think it is time to switch carriers.''
        ``All right. Well, basically that is just the policy. So
    once I take off the protection plan charge, it will be
    automatically on your account.''
        ``OK. So what you are saying is if I want to cancel $7.99
    that you have been getting every month for the protection plan,
    you are going to charge me $10 to do that? You have no choice?
    ''
        ``I have no choice.''
        ``You cannot waive that? ''
        ``It is policy. That is correct.''
        ``Do you have discretion to give me a one-time credit of
    $10 to do away with that? ''
        ``I am really sorry.''
        ``I do not really think you want to lose me as a customer,
    do you, over $10? ''
        ``Well, we do value your business, but it is just the
    policy here. So once I take it off, then there will be the $10
    charge.''
        ``And there is nothing you can do about that? You do not
    have the option to waive? ''
        And she says, ``No, I do not.''
        So then, finally, I said, ``Well, who could waive the $10?
    ''
        She says, ``Well, I would have to give you to the retention
    specialist. And I am not really sure how it works in that
    department.''
        So then she switched me over to the retention specialist.
        Now, this is typical. And, more importantly, when she
    switched me to the retention specialist, I knew what to say. I
    knew to keep threatening that I was leaving, to keep
    threatening I was leaving, 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 not personal,
    it was longer than 15 minutes, and at the end of the call, I
    managed to get the $7.99 off. I was told by the retention
    specialist I never should have been charged the $10. And, by
    the way, I got so mad and ``escalated,'' as it is called in the
    business, that the retention specialist ended up giving me $10
    off a month for 12 months.
        Now, they were looking at a screen that told them all kinds
    of information about me, including the fact that I am a pretty
    good customer. My bill is pretty high.
        So I say this because I think this is what the industry
    maybe does not completely understand in terms of the anger. We
    found that customers are being charged a host of fees that are
    not included in advertising pricing, some of which are for
    programming that used to be included in a customer's video
    package.
        We also found that just as many customers have long
    believed some of these fees, like high definition (HD) and the
    digital video recorder (DVR) service fees, are not really a
    true reflection of the cost to the company of the service but,
    rather, are based on the revenue goals of the company and the
    price a customer is willing to stomach. In fact, some of these
    fees are charged to old customers while new customers get the
    same services free of charge. Existing customers may not be
    informed of this. And when they finally figure it out, they
    have to call and complain to get it taken off.
        We found that customers who called for help on their
    accounts face agents whose job it is not just to solve the
    customer problems but, in fact, to sell them additional
    services. At one cable company, even when the customer called
    in to ask about why their bill was going up, the company told
    them, ``[t]he price adjustment brings with it an opportunity to
    upsell customers.'' And these agents are compensated, in part,
    on their ability to sell you more.
        Then if the customer decide they want to cancel their
    service, they have to jump through more hoops. Although all the
    companies here today allow people to sign up for service or
    upgrade their service online, none of them provide customers an
    option to cancel service online without speaking to a company
    representative. And if they call, they have to speak to
    salespeople, like the one I spoke to this week, who are trained
    to prevent the customers from canceling and hopefully selling
    you more product. Even when customers say they do not 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
    service are often routed to the same agents and should be
    prepared to negotiate aggressively. We found evidence that
    these companies train their agents to question customers'
    decisions to drop channels and make offers in a ``top-down''
    fashion so the customer must repeatedly push and push and push
    to get the best deal.
        Finally, we found that two of the companies have failed to
    provide their customers with notice that they have been
    overcharged or refunded of past overcharges. As the Chairman
    pointed out, thousands of people in our States have been
    impacted by that. The numbers for Missouri, Time Warner
    overbilled 4,232 Missouri customers last year for a total of
    $44,152, and Charter estimates that it has annually overcharged
    approximately 5,897 Missouri customers a total of $494,000 each
    year.
        I want to acknowledge the cooperation we have received from
    all the companies represented before us today as well as
    acknowledge the commitments they have made during the process
    of this investigation to improve customer service.
    Unfortunately, our investigation suggests that there is a long
    way to go, as did my conversation with one of my providers just
    2 days ago.
        I thank the witnesses for their testimony and look forward
    to the opportunity to ask you questions.
        Senator Portman. Thank you, Senator McCaskill.
        We will now go to our panel of witnesses, and we appreciate
    you all being here.
        This morning we have with us Tom Karinshak. He is the
    Senior Vice President of Customer Service for Comcast where he
    oversees all call center operations and other customer service
    channels.
        We have with us John Keib. John is the former Executive
    Vice President and Chief Operating Officer (COO) of residential
    services for Time Warner Cable where he was in charge of
    customer service, service delivery, technical support,
    marketing, and sales.
        We have Kathleen Mayo with us, who is the Executive Vice
    President of Customer Operations at Charter Communications,
    where she is responsible for Charter's customer care
    organization.
        We have Rasesh Patel, who is the Senior Vice President of
    Product Management for AT&T Entertainment Group, where he is
    responsible for product strategy and development for DirecTV.
        We have Kathleen Schneider with us, who is Senior Vice
    President of operations for DISH Network, where she oversees
    customer service for all DISH and Sling TV subscribers
    nationwide and manages DISH's call centers and business process
    improvement operations.
        Again, we appreciate you all being with us this morning,
    and we look forward to your testimony. It is the custom of the
    Subcommittee to swear in our witnesses, so at this time I would
    ask you all to please stand and raise your right hand. Do you
    all swear that the testimony you are about to give before this
    Subcommittee will be the truth, the whole truth, and nothing
    but the truth, so help you, God?
        Mr. Karinshak. I do.
        Mr. Keib. I do.
        Ms. Mayo. I do.
        Mr. Patel. I do.
        Ms. Schneider. I do.
        Senator Portman. Thank you. Let the record reflect that
    each witness answered in the affirmative.
        All of your written statements will be made part of the
    record in their entirety. I would ask you to keep your oral
    testimony to 5 minutes today.
        Mr. Karinshak, we would like to hear from you first.

    TESTIMONY OF TOM KARINSHAK,\1\ SENIOR VICE PRESIDENT, CUSTOMER
                         SERVICE, COMCAST CABLE

        Mr. Karinshak. Thank you. Chairman Portman, Ranking Member
    McCaskill, and Members of the Subcommittee, my name is Tom
    Karinshak, and I am the Senior Vice President of customer
    service at Comcast Cable. Thank you for the opportunity to be
    here today, and I also want to thank your staff for the
    courtesies extended to us throughout this review.
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        \1\ The prepared statement of Mr. Karinshak appears in the Appendix
    on page 49.
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        I understand why we are here. Comcast and the industry as a
    whole have 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 have not always
    been simple to read, and the range of choices and prices we
    have offered have not always provided customers with the
    options they want. I am sorry about that history.
        At Comcast, we have committed to our customers that we will
    change it, and we are taking steps to do just that. I want to
    reaffirm that commitment to you all today and to outline some
    of the actions that we are taking.
        When I started this job, I made a decision to regularly
    spend time on the phones and in the stores with our employees
    and with our customers. That is the front line. That is the
    place where customer views about Comcast are shaped. When you
    contact us to get new service, you want to speak with someone
    who listens to what you say and who understands all of our
    product options. You want to know the full price, and you want
    time to change your mind if what you order is not exactly what
    you need.
        When you get bills from us, you want them to be easy to
    read, and you do not want to see surprises or changes that you
    do not understand. When you call with a question or a problem
    or to tell us we made a mistake, you want polite and responsive
    service. And you want the issue resolved the first time if at
    all possible. And if you move out of our service area or decide
    to choose 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 our front-line employees in a local store here in
    the D.C. area, and I took some calls directly from our
    customers, and I was heartened by what I experienced.
        I have submitted a longer statement for the record, and I
    will not repeat much of it here. But I do want to tell you just
    a few of the key components of our efforts to improve our
    customer service and to provide a better customer experience.
        First, we are investing in additional training and new
    technology for all of our employees. We are committed to
    ensuring that when our customers speak to Comcast
    representatives, they are speaking to representatives that have
    received comprehensive and consistent training.
        On the technology side, we have rolled out a new cloud-
    based platform that gives customer service representatives a
    better, holistic view of the customer's account history so that
    customers do not need to keep repeating the same information
    when talking to somebody new.
        Second, we are reassessing policies and fees and
    simplifying our bills to improve the overall customer
    experience. For example, we have eliminated change of service
    and other fees, and we now allow customers to return equipment
    free of charge through our partnership with the United Parcel
    Service (UPS). We offer all customers a 30-day money-back
    guarantee, and in response to the Subcommittee's concerns, we
    have reaffirmed in a policy statement sent to all of our
    retention specialists that we expect them to promptly
    facilitate a disconnect for a customer who is not interested in
    answering questions.
        Third, we are giving all customers better access to
    products and services that work best for them. We have listened
    to our customers and are developing new products that better
    suit their needs. For example, we recently developed a cutting-
    edge X1 platform which has completely enhanced and revamped our
    customers' entertainment experience. And we have expanded our
    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. Our compensation plan for front-line
    employees is now tied directly to the customer experience. In
    fact, the compensation for all company employees, including our
    company's 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 are creating more than 5,500 new customer
    service jobs over the next 3 years, including positions that we
    have already filled at our new call centers in Albuquerque, New
    Mexico, and in Tucson, Arizona.
        Having spent over 6 years in the Army myself, I am
    particularly proud of the fact that we are looking to fill many
    of these positions with our Nation's veterans and their
    families.
        We believe these and other steps we have taken to improve
    our customer experience are making a real difference.
        Thank you again for the opportunity to testify, and I am
    happy to answer any questions that you may have.
        Senator Portman. Thank you, Mr. Karinshak. Mr. Keib.

    TESTIMONY OF JOHN KEIB,\1\ FORMER EXECUTIVE VICE PRESIDENT AND
      CHIEF OPERATING OFFICER, RESIDENTIAL SERVICES, TIME WARNER
                               CABLE INC.

        Mr. Keib. Chairman Portman, Ranking Member McCaskill, other
    Members of the Subcommittee, good morning. My name is John
    Keib, and I am here today to testify on behalf of legacy Time
    Warner Cable. Thank you for the opportunity to participate in
    this hearing.
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        \1\ The prepared statement of Mr. Keib appears in the Appendix on
    page 57.
    ---------------------------------------------------------------------------
        As you know, Time Warner Cable recently merged with Charter
    Communications and Bright House Networks to form a new company.
    My role at Time Warner Cable ended when the parties completed
    these transactions; I am no longer employed by Time Warner
    Cable or Charter. As such, I am testifying today as a former
    Time Warner Cable executive, but also as a private citizen.
        My most recent position at Time Warner Cable was Executive
    Vice President and Chief Operating Officer for residential
    services. In this role, I led the service delivery, customer
    care, marketing, and sales operations for the company's
    residential service. To the extent that questions arise
    relating to the future of Time Warner Cable and Charter, I will
    defer to Charter's witness, Kip Mayo.
        Legacy Time Warner Cable serves approximately 15 million
    customers receiving video, Internet, or telephone services in
    29 States ranging from Maine to Hawaii. We employ thousands of
    customer service representatives and field technicians whom we
    train, first and foremost, to serve our customers.
        Let me begin by acknowledging that we are well aware of
    some of the issues that will be discussed by the Subcommittee
    today. Those of you who live in a Time Warner Cable area have
    probably seen our most recent ad campaign in which we
    acknowledge--indeed highlight--prior service challenges before
    explaining the steps we are taking as a company to address
    those historical shortcomings.
        That campaign is the culmination of efforts made, during my
    tenure at Time Warner Cable, to improve our customer service
    performance in order to provide the best customer experience
    possible. Beginning in 2013, under an internal strategy we
    called ``Winning on Service,'' Time Warner Cable embarked on an
    aggressive plan to improve its customer service and took
    several steps toward that goal. We invested heavily in our
    network. We made several technology augmentations for broadband
    and video. We also initiated an ambitious plan to reshape our
    customer service performance by investing in our greatest and
    most important asset--our employees. We sought to make service
    the differentiator and to become the best service provider not
    just within the telecom space, but within any industry.
        Our goal is to keep customers, and we accomplish that goal
    by keeping them happy. To do this, we train 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 our representatives to learn from the actual calls they
    handle. Our focus on customer service has made a difference, as
    more than four in five customers report they are satisfied with
    their interaction with Time Warner Cable. And our surveys
    suggest that our customers are becoming increasingly satisfied.
        We have made great strides in addressing customer issues
    more quickly and efficiently. We have done this by improving
    our phone service levels through enhanced training and better
    staffing, improving our product and service performance, and
    introducing appointment-based call-backs, which allow customers
    to schedule call-backs from Time Warner Cable at times that
    best work for them. As a result of these efforts, our total
    call volume is down. Over the past 3 years, the number of calls
    fielded by our customer service representatives decreased by 12
    million, which is a testament to better and more efficient
    customer service.
        One measure of this improved customer service is known as
    ``one-touch resolution''--or the percentage of calls that are
    managed by a single agent. Recent internal reports show that we
    achieve one-touch resolution in nearly 94 percent of the calls
    we handle.
        In addition, Time Warner Cable began offering industry 1-
    hour service and install windows, and in the first quarter of
    this year, our technicians were on time for these appointments
    99 percent of the time. We also significantly reduced by 1.6
    million the number of times a Time Warner Cable technician
    needed to visit a customer's home to handle a repair.
        Are we there yet? No. Making such changes at a company our
    size is no small feat, and the desired changes cannot all
    happen at once. Still, the evidence suggests that our efforts
    are starting to pay off. In the latest American Customer
    Satisfaction Report, Time Warner Cable was ranked the fourth-
    best Internet provider. That is up from the 13th position 2
    years previously.
        Although we did not have enough time to fully execute our
    plan, I am proud of the early results just as I am most proud
    of our technicians and customer service agents who together are
    pursuing a single mission of winning on service. Moreover, I am
    very confident that Charter holds the same core tenets about
    prioritizing customer service and will continue to improve the
    customer service experience.
        I look forward to answering any questions you have today
    about Time Warner Cable, and I would like to thank you for
    having me here today.
        Senator Portman. Thank you, Mr. Keib. Ms. Mayo.

         TESTIMONY OF KATHLEEN ``KIP'' MAYO,\1\ EXECUTIVE VICE
      PRESIDENT, CUSTOMER OPERATIONS, CHARTER COMMUNICATIONS, INC.

        Ms. Mayo. Thank you, Chairman Portman, Ranking Member
    McCaskill, and Members of the Subcommittee. I appreciate the
    opportunity to testify here today. My name is Kathleen Mayo,
    and I am Charter's executive vice president of customer
    operations.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. Mayo appears in the Appendix on
    page 60.
    ---------------------------------------------------------------------------
        I am here to talk about the significant progress we have
    made improving the customer experience at Charter since the
    company's 2009 bankruptcy and more especially since its change
    of leadership in 2012.
        As a result of its history, Charter's infrastructure was in
    serious need of capital investment. The company's financial
    situation meant that Charter had underinvested in repairs,
    which kept the product from performing reliably. At the same
    time, it had tried to cut costs by outsourcing thousands of
    customer service jobs overseas.
        Since Tom Rutledge became the Chief Executive Officer (CEO)
    in 2012 and brought in a new leadership team, we instituted a
    new playbook for success that included streamlining our video
    products, adding value to those products, and delivering the
    fastest minimum broadband speeds, all at highly competitive
    prices, with a focus on improving customer service.
        Our efforts over the last 3 or 4 years to improve customer
    service, have included insourcing customer and field service
    positions, which created thousands of American jobs. We have
    invested significantly in training our employees to be
    responsive to the needs of the customer.
        Since 2012, we have hired over 7,000 employees, a 40-
    percent increase, and the majority of those roles are customer-
    facing positions, many of which were brought back from
    overseas. To date, nearly 90 percent of our customer calls are
    handled onshore and in-house, and 95 percent of our in-home
    service visits are performed by Charter technicians rather than
    by third-party contractors.
        We are committed to locating our facilities in the
    communities we serve, most recently opening a $16 million
    state-of-the-art customer operations center in St. Ann,
    Missouri.
        As part of our transaction with Time Warner Cable, Charter
    expects to hire 20,000 American workers, many of whom will fill
    customer service jobs that are currently outsourced to call
    centers located in other countries. This approach has given us
    greater quality assurance in our representatives' interactions
    with customers. Our representatives engage in conversations
    with our customers to understand their unique needs in order to
    properly assist them. We do not follow canned scripts.
        To improve the customer experience, we also have taken
    steps to simplify our bill by eliminating common industry fees,
    and we have expanded self-service capabilities. As a result of
    these steps and the $7 billion we have invested in our network,
    customer service calls have declined 25 percent since 2013.
    When our customers do need assistance, we have been able to
    resolve their issue on the first call 80 percent of the time.
        Those high-quality customer interactions are growing our
    customer base. In a very competitive environment, we have added
    more than 1 million customer relationships since the beginning
    of 2012, growing our total customer base by 18 percent, despite
    having no early 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
    improved by 12 percent. We are pleased with our accomplishments
    to date and believe the results are beginning to show. But we
    also know that there is still much work to do in order to
    provide our customers with the excellence in service that they
    expect and that they deserve.
        To eliminate accidental overcharges for video equipment,
    Charter instituted checks and balances that create controls in
    our order entry systems to ensure we get each order right. Our
    recent audit of video equipment determined our billing was 99.4
    percent accurate. Out of 11 million boxes, we found
    approximately 63,000 boxes--less than 1 percent--where
    customers were overbilled.
        While 99.4 percent is a high accuracy rate, it remains
    unacceptable. No accuracy rate short of 100 percent is
    acceptable. As a result, we are reconciling every single
    account every single day to ensure our billing is accurate. We
    are in the process of notifying overcharged customers, and we
    are issuing them a 12-month credit.
        In conclusion, we have made significant investments to
    improve our network, we have streamlined our products, we have
    simplified our pricing, and we have insourced thousands of jobs
    to strengthen our American workforce. At Charter, we are
    continuing to work every day to improve and show our customers
    that we are committed to providing superior customer service.
        Thank you.
        Senator Portman. Thank you, Ms. Mayo. Mr. Patel.

     TESTIMONY OF RASESH PATEL,\1\ SENIOR VICE PRESIDENT, PRODUCT
             MANAGEMENT, AT&T ENTERTAINMENT GROUP (DIRECTV)

        Mr. Patel. Good morning, Chairman Portman, Ranking Member
    McCaskill, and Members of the Subcommittee. My name is Rasesh
    Patel, and I appreciate this opportunity to speak with you, on
    behalf of AT&T and DIRECTV, about our commitment to customer
    service. The hallmark of our brand has been to offer customers
    the very best entertainment experience through our technology,
    unique content offerings, and good customer service, and we are
    proud of that heritage. But we need to get better, and we are
    working hard to do so.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Patel appears in the Appendix on
    page 67.
    ---------------------------------------------------------------------------
        To that end, we need to complement our great product. I
    think we have a phenomenal product that offers customers the
    first digital experience, Sunday Ticket, first to go to HD. But
    sometimes that great product is not complemented with great
    customer experience, and it frustrates our customers. And so to
    that end, in 2012, I started a group that focused on being
    champions for the customer inside the organization, reporting
    directly to the CEO. And our goal was not just customer
    service. Our goal was to relook at the entire business through
    the customer's eyes, to conduct a significant amount of
    analysis on what exactly customers are going through, and to be
    the internal voice of the customer in the organization so that
    as decisions are being made and as policies are being set, the
    voice of the customer is represented, and to be a champion for
    the change and really see improvements all the way through. To
    that end, we have made a lot of progress, but we have a long
    way to go.
        And so this is a very personal issue for me. I asked our
    CEO to really lead this organization, so I am glad to be here
    today.
        Our commitment to serving customers and giving them more
    value and choices has never been stronger. We recently
    announced in March plans to launch over-the-top services that
    will provide customers flexibility and increase choices in
    lower-cost offerings to customers. It will essentially allow
    them to enjoy our content distributed over the Internet in a
    much more simple business model and offering.
        DirecTV has ranked higher in customer satisfaction than
    cable for 16 years in a row, but we recognize that we need to
    raise the bar in this ever-evolving competitive landscape,
    given rising content costs. If customers are going to pay more
    for the service, they can, should, and will expect more. We
    believe service is an essential component of our success and we
    have, accordingly, devoted and will continue to devote
    significant resources toward our goal of delivering a 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 noted Mr.
    Chairman, I am currently Senior Vice President of Product
    Management, but from 2012 until AT&T's 2015 acquisition of
    DirecTV, I served as Senior Vice President of Customer
    Experience. In that role, I led DirecTV's proactive,
    enterprise-wide, customer-centric effort to improve the
    experience across all customer touch points.
        The initiative began with a comprehensive evaluation of all
    our policies and practices. We conducted detailed research on
    exactly what the customer was going through, and we have shared
    much of that research with the Subcommittee. We did an analysis
    on operational data in order to really prioritize our efforts
    to what was most important to customers.
        We have invested hundreds of millions of dollars in that
    customer experience initiative, which has produced real results
    for our customers. We have eliminated 18 million phone calls
    per year to our call centers over the last 3 years, which
    demonstrates customers are experiencing fewer issues. We have
    reduced over 300,000 service truck rolls per year, which I also
    look at as 300,000 fewer times someone has to take a day off of
    work in order to meet a service technician.
        We have reduced complaints to our Complaint Resolution
    Center by 44 percent, and we introduced a new simplified bill
    that clearly showed customers what the full retail price of
    their services was, what the discount amount was, and was very
    transparent every month about communicating when that discount
    expires.
        We made it a point on page 1 of that bill to proactively
    identify anything that has changed from the previous month so
    customers do not have to hunt for that information.
        DirecTV also maintains a dedicated team to proactively
    identify and address billing errors, and it is a continually
    learning process. If we find an issue that becomes part of a
    continuously monitoring inquiry, we will look for that problem
    going forward. It is our policy to proactively address billing
    errors, to notify customers that we made an error, and to
    reimburse affected customers. And we even do so if that person
    is no longer a customer with us. We will go back and credit
    their account.
        But we are not done yet. We have plenty of room for
    improvement, and in that regard, AT&T and DirecTV will spend
    more than $1 billion toward enhancing the customer experience
    from 2016 to 2017. While we do take pride in the progress that
    we have made over the past 3 years, we know that customer
    satisfaction is a never-ending journey, and we can, should, and
    need to do better.
        In that regard, I sincerely welcome the Committee's input.
    Through this process, I have run across a couple of things that
    I myself have discovered that will drive change in our
    organization. And we are confident that as a combined company
    we will further enhance our ability to provide our customers
    with the very best products and services that they deserve.
        So I thank you for the opportunity to appear here today,
    and I look forward to answering your questions.
        Senator Portman. Thank you, Mr. Patel. Ms. Schneider.

      TESTIMONY OF KATHLEEN SCHNEIDER,\1\ SENIOR VICE PRESIDENT,
                    OPERATIONS, DISH NETWORK, L.L.C.

        Ms. Schneider. Chairman Portman, Ranking Member McCaskill,
    and Members of the Subcommittee, my name is Kathy Schneider,
    and I am the Senior Vice President of operations for DISH
    Network.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. Schneider appears in the Appendix
    on page 73.
    ---------------------------------------------------------------------------
        In the 1980s, DISH's three founders decided that consumers
    should have an affordable alternative to cable. We launched our
    service in 1996 and were successful in reinventing television
    distribution and providing meaningful competition within the
    pay-TV industry. DISH is now the Nation's fourth-largest pay-TV
    provider with about 14 million subscribers. We have 18,000
    employees, plus relationships with over 6,000 independent
    retailers, most of which are small businesses providing
    community storefront operations for our customers. There are
    146 of these retailers in Ohio and 167 in Missouri.
        We are proud that DISH is the only provider of local
    broadcast channels in all 210 U.S. media markets, ensuring that
    even the most rural customers receive the same high-quality
    television as customers in more urban areas.
        For DISH's customer service, the issues we will discuss in
    this hearing are complex, but here is 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 experience and making our customers happy.
    Happy customers understand and see the value of our products
    and services, understand our bills, receive a seamless
    installation of reliable products, and receive 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 sure we satisfy these
    customer expectations. And we have received some outside
    recognition for these efforts, including an A-plus rating from
    the Better Business Bureau (BBB), J.D. Power awards for
    customer satisfaction for 4 years running, and a top ranking in
    several categories by the American Customer Satisfaction Index,
    including Lowest Customer Complaints.
        We diligently track the latest customer pain points and
    adjust our policies, procedures, training materials, and
    subscriber offerings. We make sure our agents have the
    necessary tools to match each customer with the best
    programming, technology, and value for that customer's needs.
        When a call comes in, our policy is to resolve, prevent,
    and promote. First, resolve the customer's issue, then 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 demand for TV anywhere, anytime.
    That is what is behind our award-winning set-top box, the
    Hopper, and also Sling TV, our groundbreaking live TV Internet
    streaming service.
        We are in a highly competitive business with major up-front
    costs involved in acquiring each customer to the tune of $800
    per subscriber at DISH. It takes us 4 years of having the
    customer for us to recoup those costs, and vying for our
    customers are often two to three other cable, telco, or
    satellite companies. Usually, one or more of those competitors
    is a company that, unlike DISH, can bundle its TV offerings
    with broadband and phone service. DISH's way of beating the
    bundle has to be keeping our customers satisfied with the
    quality of our service and value of what we are giving them.
        Unfortunately, DISH cannot alone address two of the biggest
    overall customer complaints that we face: one, the high price
    of programming; and, two, the inability for our customers to
    select which channels they receive. The content industry needs
    to be a part of that conversation.
        The main source of rising pay television rates is the
    skyrocketing costs of acquiring programming content, mostly due
    to the broadcasters' ever-growing demands for retransmission
    consent fees. Programmers have inflicted huge price increases
    leading to scores of channel blackouts when they withhold their
    signals and put consumers in the middle of their negotiations
    with us.
        DISH and other pay-TV companies have called on Congress and
    the Federal Communications Commission (FCC) to update the
    outdated laws that govern how TV distributors negotiate for
    content with broadcasters. Reform would go a long way in
    stopping blackouts, addressing the anti-consumer effects of
    forced channel bundling, and moderating pay-TV prices and
    perhaps even lowering them.
        I will end with this: While DISH is proud of its customer
    service and billing practices, we are also committed to
    continued improvement and constantly ask ourselves what can we
    do better. We are not perfect. We make mistakes. But we do our
    best to fix the mistakes that happen and learn from them. We
    welcome the advice of the Subcommittee on ways that the overall
    service experience can be made better for our subscribers.
        Thank you, and I look forward to your questions.
        Senator Portman. Thank you, Ms. Schneider. I appreciate it.
        We are going to have the opportunity to ask questions from
    the panel. We have a 7-minute initial round of questions, and
    then we will do 5 minutes for the second round. Because we have
    a number of Members here, I am going to keep my initial
    questions shorter than that because I will be here until the
    end.
        Let me start, if I could, by saying that I really
    appreciate the testimony. We learned a lot, including on some
    issues that we may be following up on, as I said earlier, in
    terms of competition and ensuring that people have choices. But
    let me zero in on this issue of not providing refunds to
    customers.
        Mr. Keib, I appreciate your being here. I know you are here
    really in your capacity as a private sector individual now, not
    with any particular company but as a private citizen. And yet
    you were in charge during this time period that we looked into,
    which was before Warner Cable had merged with Charter, and even
    going forward, some of the Time Warner practices that do not
    provide customers to get a full refund for charges they should
    not have incurred, particularly with regard to equipment.
        So I guess my question to you would be, when you look at
    the data, 40,000 Ohio customers in 2015 were charged 430,000
    bucks they should not have been charged, they are getting no
    refund for that. Even the first 5 months of this year, 11,000
    Ohio customers are being overbilled over 100,000 bucks.
    Mistakes happen. We talked about that. And I mentioned, the
    checkout counter at the grocery store example of that where
    sometimes they make a mistake, but then they correct it. And
    they do not say, ``We are going to charge you less next time
    you come in.'' They say, ``We are going to make you good.''
        So it seems to me that the company could have looked into
    these overcharges, as other companies represented here have,
    and determined, how long the customer had been billed for these
    charges and simply to provide them a refund for that. Do you
    agree with that?
        Mr. Keib. I think I agree with that. But I would, if given
    the opportunity, like to give a quick overview of the situation
    that we are discussing and how we handle credits and refunds.
        Senator Portman. Yes, quickly, if you would.
        Mr. Keib. Sure. Well, first of all, I would like to bring
    up something that did not come up, I think, when we started,
    which is that we are actually undercharging customers
    significantly more than we are overcharging them. At least that
    is what we found and submitted as part of our revenue assurance
    program. And I do think that is noteworthy in the context of
    this discussion.
        Second, as a company, we provide over $150 million in
    credits a year to customers, and a lot of those credits are
    done in real time with our customer service agents, and many of
    them are done when we know the origination of the actual air
    date. And when we can quantify the exact customers impacted, we
    absolutely do provide notice, and we do provide the exact
    amount of what the actual credit is going to be.
        Several years ago, we built out something we called a
    revenue assurance program, and this revenue assurance program,
    as I think you may have mentioned, was really designed to find
    these kind of issues. And over time we found these issues, and
    what the revenue assurance program found as it looks to tie out
    whether our equipment is being charged properly on the accounts
    is that of the 37 million pieces of equipment that we have
    active on our network, a very small fraction were being
    improperly billed.
        And on top of that, if you bring it down to the customer
    level, it was about, I think, 0.07 percent of customers with
    video equipment had an issue and 0.03 percent of our modems.
        So what I said earlier about winning on service, we take it
    very seriously. And it does not really matter if it is 10,000
    out of 2.5 million customers. That 10,000 or 11,000 is what we
    have to get right.
        Senator Portman. Let me interrupt you, if I could, just for
    a second. We are talking about 40,000 customers in Ohio alone
    in 2015 who were overcharged.
        Mr. Keib. I apologize.
        Senator Portman. Forty thousand in Ohio alone, so you are
    talking about many more thousands of that in other States
    represented around this panel. And it is easy to say, well, we
    undercharged some people, we overcharged others, it all kind of
    nets out. Not for those 40,000 families. Not for the family
    that is getting overcharged. I mean, you should not undercharge
    either. You should have business practices that take care of
    that. I am not suggesting that there is any benefit to
    undercharging or overcharging. What I am suggesting is that if
    you are overcharged and you find out about it, you ought to
    make them good. And that is what other businesses do. I used
    the example of the checkout counter, but it is true in other
    businesses that you and I deal with every day.
        So my question to you is really simple: Shouldn't you have,
    having identified those people, simply provided them--and,
    still, you are not doing it because what you are saying is you
    are going to give them a month credit where it could be years
    of having equipment that they were overcharged for? Isn't that
    accurate?
        Mr. Keib. It is not accurate to say that they have been
    overcharged for years, and I will just----
        Senator Portman. How do you know that?
        Mr. Keib. If I could just take time to explain that in the
    revenue assurance program, we are looking for mismatches of
    pieces of equipment, and what we are trying to figure out is
    whether the service charge on that piece of equipment ties to
    the actual equipment. Because of the amount of volume of
    equipment we are turning over right now, whether we are
    upgrading our modems, upgrading our set-top equipment, or
    actually going all digital and have been launching DTAs, there
    is a lot of transactional volume. And what I am told and what I
    have learned through the revenue assurance process is that the
    mismatch is being driven when a customer is, during this
    transition window, putting equipment on account and taking it
    off the account and matching that up to the actual service
    charge.
        So what we are doing is proactively every month running a
    report to find those discrepancies, and that is why I say based
    on what I have heard from our team is that I would venture to
    say that the majority of those are more recent and within the
    actual 30-to 45-day span.
        Senator Portman. OK. A majority are more recent, but you do
    not know that it has not been years. You are now doing this
    monthly analysis, which is a step forward, as I said, and I do
    think this hearing has created some improvements in customer
    service both for you and for Charter, and based on what others
    have said, it sounds like all of you have looked at your
    processes and come up with some new suggestions. So that is
    positive.
        But, still, you are not providing people the money that
    they are owed even though you know that they deserve a refund.
    We will get back into this with more specificity. I want to
    move 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. But I would hope that even though you have made
    an announcement today you are going to provide customers some
    relief, that you just simply do what you now have the data to
    be able to do, which is to tell the people I represent and
    people that are represented by people on this panel, look, if
    you get overcharged, you are going to get a refund for it, just
    as you would in other businesses.
        With that, I will turn to my colleague Senator McCaskill
    and then to other colleagues here. Again, I am cutting my time
    short with the hope that we can get everybody's questions in.
        Senator McCaskill. He is saying that because he is trying
    to send me a signal that I cannot go over. He knows me really
    well. He know that I am going to get carried away.
        It appears to me from a distance that the business model
    that has grown up in pay-TV is, figure out a way to make the
    entry price as low as possible, figure out how to roll people
    off that entry price as quickly as you can, and then deal with
    their anger once they realize the price has gone up. And, by
    the way, if they call to cancel, make sure you train your
    customer service people really well in how you deal with
    somebody who is angry, and the angrier they get, the more
    likely they are to get something from you; or depending on who
    they get, how skilled the retention agent is in holding on to
    them and handing them goodies, sometimes temporarily, to calm
    them down and hope that you can hold on to them longer.
        Now, there are so many things about this business model
    that are asking for customers to be upset. Do any of you in
    your advertisements to try to get customers put the same size
    pricing on what they are going to pay after the promotion as
    you do for the promotional price? Do any of you do that?
        [No response.]
        So all of you do the promotional price, and then there is
    fine print. In fact, many of you do not even put what the price
    is going to be after the promotional price, correct? Is that
    correct? Yes? Does anybody disagree with that?
        [No response.]
        So the promotional price and transparency is the beginning
    of the journey that America has with their pay-TV providers.
        Let me ask about HD and other fees. Ms. Schneider, does
    DISH currently charge customers an HD fee?
        Ms. Schneider. So for new customers, we no longer charge HD
    fees.
        Senator McCaskill. So you do not charge HD fees for new
    customers. What about old customers?
        Ms. Schneider. So we have a small number of customers who,
    when they came into DISH, they had sort of different pricing
    arrangements. So for customers today, we include HD fees in the
    receiver fees that they are paying for new Hopper equipment, so
    it is included there. For the subset of customers in earlier
    days of HD, we did not have that fee included in the receiver
    fees. So they are having lower receiver fees and then paying
    that HD fee as an offset.
        Senator McCaskill. OK. So I guess what I am saying is, DISH
    no longer charges new customers HD, but you charge old
    customers HD, correct?
        Ms. Schneider. Well, in essence, we are charging both. They
    are just kind of in different----
        Senator McCaskill. But isn't it true if someone calls in
    and asks to have their HD fee waived, they get it waived?
        Ms. Schneider. If they call in, yes, we will waive it.
        Senator McCaskill. OK. So, once again, hide the ball. So if
    I am smart enough to know to call DISH, if I have an HD fee on
    my bill, if I am smart enough to call and ask for it to come
    off, you are going to take it off, aren't you?
        Ms. Schneider. Agents will do that for longer-term
    customers. These are long-term customers for us, and so----
        Senator McCaskill. So how long do you have to be a customer
    before you have the magic knock to get the fee taken off?
        Ms. Schneider. I do not know that there is a specific time
    that we have there. It is----
        Senator McCaskill. See, this is exactly what I am talking
    about. Nobody knows how to get the best price from you guys.
    Nobody knows. There is a secret sauce somewhere, and I think it
    has to do with being really mad, which is really bizarre to me.
        All right. Let us go on to Mr. Patel. You all charge now an
    advanced receiver service fee, right?
        Mr. Patel. That is correct.
        Senator McCaskill. So you took the HD thing off the bill,
    and then you put a brand-new thing on the bill. Now, how many
    of your customers do you 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 tried to do is simplify
    the number of decisions a customer had to make, and we got it
    down to three, which was you pick your programming package, and
    the level of programming you pick dictates how much you are
    going to pay for the programming package. The second choice is,
    do you want basic services or advanced services? Basic services
    provide a good HD experience but do not include DVR, On Demand,
    and other things.
        Senator McCaskill. OK.
        Mr. Patel. That is what that advanced service fee is. It
    provides the more advanced services. Then it is $7 per room.
        As a part of the customer experience effort, we found that
    the number of choices customers had to make was extremely
    complex and wanted----
        Senator McCaskill. OK, so you wanted to lower the number of
    choices they make, but isn't it true that not all customers are
    charged the same advanced receiver service (ARS) fee in your
    company?
        Mr. Patel. That is correct.
        Senator McCaskill. And so how do I know whether I get a
    lower ARS fee? Do I have to call and ask you? If I call and ask
    you, will you lower my ARS fee?
        Mr. Patel. No, and it is----
        Senator McCaskill. No?
        Mr. Patel. It is kind of an apples-and-oranges comparison,
    and let me explain why.
        Senator McCaskill. Quickly, if you would.
        Mr. Patel. I will. So when the ARS fee was originally
    introduced, it was at a slightly higher price, and we have
    lowered it. But----
        Senator McCaskill. Did you lower it for everybody?
        Mr. Patel. But the customers who came on board with the
    higher price received their first room's equipment for free.
    There are other components of their offer that were different,
    and so the challenge is that it is a very competitive
    marketplace, and the offers from a marketing perspective change
    very quickly.
        Senator McCaskill. I understand that, believe me, and
    customers understand that. It is like shifting sand.
        OK. Let me talk about the secret rates offered by retention
    agents. In this investigation, we determined that there are
    actually rates that retention agents are authorized to give
    their customers that are never advertised. Does anybody
    disagree with that statement?
        [No response.]
        So that is what is really frustrating. Let me talk
    specifically about Time Warner. To handle customers that want
    to lower the cost of the service, Time Warner provided its
    agents with a chart that showed them how much to lower the
    price of a package each time someone objected. So the 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. And then we found out, when we interviewed you, that
    if they asked, they would tell the price they just offered was
    the lowest price available at that time even though there was a
    lower price on the chart that they could still offer. And when
    we asked you about that, you said, ``Well, at that moment that
    was the lowest price that agent could offer.''
        That is the kind of stuff that is driving people through
    the wall. Is it fair for customers to not be able to determine
    when they have reached the lowest price? How does a customer
    know when they have gotten the best deal? You can listen to my
    call. I kept getting mad, and I eventually got 120 bucks back,
    plus I got rid of the $7.99. I never would have known to do
    that if we had not done this investigation.
        So will you all make a commitment today to advertise the
    lowest price available? Any of you?
        [No response.]
        Will you publish it on your website, the lowest price
    available for your services? Any of you?
        [No response.]
        I will have more questions the next round.
        Senator Portman. Thank you, Senator McCaskill. Senator
    Paul.

                   OPENING STATEMENT OF SENATOR PAUL

        Senator Paul. One thing that is interesting about pricing
    is that if you go to a car dealer and you say, ``What is the
    lowest price you will give me on the car?'' nobody in their
    right mind is going to publish that. So the question is: Is
    there competition or not? It looks like there are a lot of
    choices and you can choose, and they have various ways of
    presenting themselves to try to entice you. But that is the
    marketplace. It is buyer beware, and as long as you have
    choices, if you do not like one of the choices, you do not like
    their service, you simply in America choose another server.
        I think, though, that we need to put this particular
    problem or this particular hearing in sort of a context, the
    context of what kind of problems we have in our country. We
    have a $19 trillion debt. We have an anemic economy that is
    growing at a point and a half. Millions of people are not
    getting jobs because we are not growing at a historic rate.
        We have a $7 trillion shortfall in Social Security and a
    435 trillion shortfall in Medicare. But I do not think Congress
    is having hearings on any of these. I propose we ought to have
    a full permanent hearing on Social Security that meets all of
    the time just to address Social Security. I have been here 6
    years, and there has not been one bill to the floor of the
    Senate to address the entitlement problem, the looming
    entitlement problem that we all acknowledge is there. So I
    think we do have important problems that we do need to face as
    a country.
        We are asked today to look at the tactics of television
    providers to see if they are unfair, their bills are too
    complex. We have pointed to low customer satisfaction surveys.
    Well, one thing is very clear, though. Television providers'
    customer satisfaction still exceeds that of Congress. So I am
    not sure really if there is enough wisdom in Congress that we
    can impart to people who actually have a higher approval rating
    than we do.
        If we were to examine, though, organizations that fail the
    transparency test, we might want to start with government. The
    Pentagon has never been audited. It is enormous, it is this
    behemoth. And we have to have defense, but certainly we should
    audit it. They have told us they are too big to be audited, and
    we just say, ``Oh, well.'' That has been going on for over a
    decade.
        The Federal Reserve, completely unaudited. We cannot get an
    audit through. We have had very little cooperation in the
    Senate from people saying, ``Yes, we need transparency in
    government. I mean, sure, this is an important problem, and it
    is frustrating. I have been there. I have been on the phone
    with people. In our household, we get frustrated calling
    consumer reps. But at the same time, we have big problems as a
    country. We have to figure out what are we going to do with the
    Fed, the Pentagon, the Consumer Financial Protection Bureau
    (CFPB), and really Congress. Congress uses bills that are
    hundreds if not thousands of pages long, filled with wonky,
    technical jargon that is unapproachable to the average reader.
    Congress uses high-pressure situations to get people to accept
    bills they do not like. Few members actually read the bills
    before they agree to them. And, so I think maybe Congress might
    be one of our first items.
        Unfortunately, when you look at your government, you are
    unhappy with your government, you cannot 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 a choice.
        The satellite and cable industry in my State has a $4.7
    billion impact on Kentucky. I think in the midst of unhappiness
    about things not being perfect--and nothing is ever perfect. We
    realize you have a choice, but we should not lose sight of the
    fact of what the television industry does for our States as far
    as jobs and occupations and money for each of our States.
        Maybe we should be asking, How can we help them grow their
    business? The only way they grow their business is by having
    better consumer service, but maybe there are obstacles such as
    taxes or regulations that add costs to your bill, too.
        I know that when I look at my phone bill, I see a lot of
    government stuff on there, and so maybe there are ways that we
    could make the bills less by actually removing government
    obstacles.
        The fact is that the market for television content has
    evolved quite rapidly through its own technological advancement
    and expanding consumer choices. Milton Friedman once argued
    that the essence of an effective television industry, an
    effective telephone industry, an effective computer industry,
    or an effective mail delivery industry, you name it, is
    competition. If there is an argument that there is not
    competition, then these can be really serious problems. As long
    as there is competition--and there appears to be vibrant
    competition--you have a choice.
        I have a choice in Bowling Green of two cable companies. I
    have 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 are now more subscriptions that you
    can get without a contract because it is becoming very
    competitive. We have one big cable company that was bankrupt.
    Apparently, there is not a huge amount, they are struggling to
    make enough profit.
        But, anyway, I think it has even come to the point now that
    we have simpler billing as a marketing tool. Some of the
    different companies here are actually marketing that they have
    simpler bills to try to get business away from their
    competitors who may not be doing as good a job.
        So, I do not know, I just think we need to put this hearing
    in perspective and not get too carried away. I have the same
    frustrations--I mean, everybody does in the modern world--of
    trying to call and get through to these companies. But we have
    to realize, first, do no harm. Do we want to get involved with
    an industry and do it to such an extent that ultimately we
    screw up something that is actually working very well in many
    instances and acknowledge that, look, we have hundreds and
    hundreds of choices of channels, maybe the house is not on
    fire. Maybe things can get better and will get better through
    competition. But I for one want to make sure we do not go too
    far in one direction.
        Thank you.
        Senator Portman. Thank you, Mr. Paul. And as I said at the
    outset, competition is something we are looking into because at
    least in my home State of Ohio, we do not have the kind of
    competition I would like to see. I have some numbers here
    indicating how there is a 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 even
    raised some things that could be done in terms of providing a
    more level playing field so there is more real competition. And
    I agree with you. That is how you ultimately get better
    service. Senator Lankford.

                 OPENING STATEMENT OF SENATOR LANKFORD

        Senator Lankford. Thank you, Mr. Chairman. Thanks for
    hosting this hearing and the conversation that is here, but as
    Senator Paul has mentioned as well, there is a context of this.
    As I read through the notes and as we received this early this
    morning and late last night, one of my first thoughts on the
    section on not getting an answer the first time that you make a
    call in customer service, I wondered how many times that our
    constituent service folks on our staff have tried to call the
    U.S. Department of Veterans Affairs (VA) or Social Security or
    multiple other agencies and we will work for months to get an
    answer to a question that should be a straightforward issue. So
    there is a great deal within government right now that lacks in
    customer service as well, and I think that deserves a very
    public acknowledgment that all of us have a very long way to
    go, and dealing with cable customer service is the pot calling
    the kettle black as we work through this process.
        Saying all 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 they
    called their cable provider so many times and got non-answers
    that they eventually called their Senator, who we called
    someone that we knew, and they eventually got attention. And it
    was the oddest thing for me to think, Why does it take
    literally an act of someone in Congress to try to get attention
    on someone who has a billing problem, especially for senior
    adults that call our office?
        Now, in the training--and one of the issues that I have is
    in the training, and I understand there is a lot of selling and
    there is a lot of work toward profit. Saying that the people
    that are on the phone want to actually sell you a program is
    not shocking to me. It is much akin to saying I am shocked
    there is gambling in Casablanca, that there are people that are
    in a for-profit business are trying to actually stay in
    business and sell a product.
        I do have a concern often when we deal with people that are
    senior adults that do not understand the billing. So the
    request that I would have is whatever customer service upgrades
    that you have made--and all of you have made comments about
    increased training and capabilities--would you please make sure
    that you are paying attention to the fact that there are senior
    adults that are calling that have no idea about this billing
    practice and have no idea of all these packages, and they are
    being taken advantage of? And that is something intolerable in
    this process.
        Let me ask a couple of things, though. In the billing as it
    comes out itself, somebody give me a guess. In the typical
    customer paying for cable services, what percentage of that is
    State, local, and Federal taxes that they are also paying when
    they pay that monthly bill? Can somebody give me a guess?
        I see lots of thinking. Pen and paper is coming out.
        Mr. Keib. I could say that at a minimum we charge what is
    called a franchise fee, which is around 5 percent, at a
    minimum. And then there are other taxes and fees on top of
    that. The reason why it might be a little bit difficult to give
    you those exact numbers, it varies by State sometimes.
        Senator Lankford. Sure it does. Right.
        Mr. Keib. So on an average $100 bill, I think 5 percent is
    a minimum number. And then I think you could work off of that
    number, depending on the market for fees and passthrough fees
    and things like that.
        Senator Lankford. Does anybody have a different number
    besides 5 percent there?
        Ms. Mayo. I would guess at least 10 percent.
        Senator Lankford. OK, at least 10 percent being State,
    local, and Federal taxes, some sort of fee that is attached to
    it.
        I want to talk about an ongoing challenge that we have with
    packaging, and then I also want to get to streaming, and so we
    are going to have a conversation coming about some of the
    streaming services that I know you all are also experimenting
    with a great deal right now.
        The cost of the actual content that is coming to you, there
    is an ongoing conversation about that as well, because as
    everyone complains about their cable bill, what I hear back
    typically from cable providers is, ``Do you have any idea how
    much it costs for XYZ content coming in?'' Where does that fit
    into the typical billing practice? And as you all are actually
    trying to forecast, let us say, 5 years from now when you talk
    about hardware, when you talk about fiber being put in the
    ground, and you talk about content, where does that rank? When
    you do your own strengths, weaknesses, opportunities, and
    threat (SWOT) analysis and you are looking at the threats,
    where does content fit into that?
        Mr. Patel. I will take that, Senator.
        Senator Lankford. Yes, sir.
        Mr. Patel. Content costs rising is a really significant
    issue, and I do not think consumers truly understand the
    dynamic that is in place. We talked a lot about pricing,
    billing, and fees. But, for us, for 8 out of the last 11 years,
    the cost of the content has actually exceeded the pricing that
    we have passed on to the consumer. And so we are in a difficult
    position. It is a very challenging thing to do to pass on
    pricing to a consumer. No matter how you notify it, it is going
    to be something that causes a negative reaction from customers.
        From 2005 to 2015, content costs grew 95 percent, and to
    put that into perspective, it is growing at three times the
    rate of any other goods or services. And so I think it is an
    issue. I think it is exacerbated by the fact that the
    agreements require you to carry a lot of channels that
    consumers do not have demand for. And both of those things I
    think create pressure and create sort of a structure that is
    not in the best interest of the consumer.
        Senator Lankford. So going back to Senator Paul's
    conversation--and Senator Portman and Senator McCaskill have
    all raised this issue about competition--the ongoing
    conversation in the country right now is about just streaming
    content rather than actually buying from cable or buying from
    other satellite providers. You all are doing both, where you
    are actually streaming content as a separate service with
    Sling--is that correct?--and then also through satellite. So
    tell me about modeling for that and trying to work through
    providing competition in that area for another completely
    different delivery device, because the key thing for me is can
    people get content that they choose to get in the medium that
    they choose to get it in, so if they are ticked off about the
    latest $3 to $6 fee per room that they have to pay for, they
    have some other option to be able to go to.
        Ms. Schneider. Yes, so Sling is our over-the-top product
    that we have for streaming. Sling is a bit more modular in
    terms of what we can do to provide content. So where we have a
    bit more bundling with our traditional product, Sling is a bit
    more modular in that customers have more choice in terms of
    having a basic package that is really affordable and then
    adding, slimmer packages to it so it gives them more choice
    along those lines. Does that answer your question?
        Senator Lankford. It starts that. This is a longer
    conversation that we can have that we do not have time for
    right now. I do have to tell you I, along with every other
    American, get incredibly frustrated. Senator McCaskill did a
    great job of outlining a basic call on customer care. All of us
    get ticked off at that, not only the length of time but the
    frustration with it. But I am especially 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 have had, even seniors that have called me
    saying, ``I cannot even disconnect my service or get an
    answer,'' and they just want to say no, but they are so
    incredibly kind and nice, they cannot seem to turn things off.
    And so that has to be addressed in the days ahead and should be
    addressed in a way that actually honors the people that have
    been a part of that service and paying customers all along. So
    thank you.
        Senator Portman. Senator Baldwin.
        Senator Baldwin. Thank you.
        I wanted to start based on Senator Lankford's last comment.
    We certainly hear from our constituents with enormous
    frustrations, but almost all of us, I assume, have had our own
    frustrating experience. We are not strangers to this.
        I am actually curious about your own experiences with your
    own companies, and I wonder if you get pay-TV from the company
    that you are with now or formerly were with. Why don't you go
    across and let me know?
        Mr. Karinshak. Yes, Senator, I do.
        Senator Baldwin. John.
        Mr. Keib. Yes.
        Senator Baldwin. Sorry. That was way too informal. Mr.
    Keib. Ms. Mayo.
        Ms. Mayo. Senator, I subscribe to Comcast service.
        Senator Baldwin. OK.
        Mr. Patel. Yes, I do.
        Ms. Schneider. I am a DISH customer.
        Senator Baldwin. OK. Do you call the same service number
    that any of us or our constituents would if there is, to
    initiate the service or to deal with problems? Or as current or
    former team members, do you have an inside number, a colleague
    or somebody who takes care of that for you? Why don't you go
    ahead, Mr. Karinshak?
        Mr. Karinshak. Yes, Senator, I have it as a normal paying
    customer, and myself and my team will also do calls into our
    system as well as normal customers.
        Senator Baldwin. Yes, I was impressed in your testimony
    that you talk about you are sort of engaging in the different
    aspects of the business and sort of trying to figure out what
    the customer experience is. If you had an outage, you would
    just go through the 800 number, or would you have, an inside
    way of fixing it?
        Mr. Karinshak. So I could go through the 800 number. I also
    use my account app, so I do some things online as well to be
    able to see the outage, when it would be cleared, but would
    experience it calling in as a customer.
        Senator Baldwin. OK.
        Mr. Karinshak. And I take calls from customers directly,
    too.
        Senator Baldwin. OK. What about you, Mr. Keib?
        Mr. Keib. All of our employees within Time Warner Cable, if
    they are in our footprint, have Time Warner or used to have
    Time Warner. And in terms of service, at the individual account
    level, either mine or my family or any relative that asks for
    help, I would go through the normal channels. If there is an
    outage that is, statewide or something that happens on a large
    scale and it impacts me, I would make sure that we are on top
    of it but not really out of a self-serving, purpose.
        Senator Baldwin. How about you, Ms. Mayo?
        Ms. Mayo. I am sorry, Senator. I am a little bit abnormal.
    I do not live on footprint for Charter service, so I actually
    subscribe to two different cable operators. One is Comcast and
    the other one is Cablevision.
        Senator Baldwin. OK.
        Ms. Mayo. So I use their services. I call their lines. I
    get support just like any other customer.
        Senator Baldwin. OK. Mr. Patel?
        Mr. Patel. I have DirecTV service and generally will use
    the 800 number, the same 800 number our customers use, or our
    online tools. Like Tom, we also have access to being able to
    listen to calls, and so we will do that quite frequently to get
    a pulse of how the customer is being serviced.
        Ms. Schneider. So the same. If I have an issue, I would
    call in to 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 trouble-shoot those things ourselves. So
    there is probably a lot more self-service with the folks up on
    the panel than other customers.
        Senator Baldwin. Well, back to the original point. I hear
    continuously from Wisconsin residents sharing their frustration
    with pay-TV, satellite and cable. One consistent complaint that
    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.
        I also 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 explained that he was
    given a 2-year monthly rate for TV and phone by AT&T, but after
    a year his bill increased by more than $80 without his consent.
    This additional $80 gave him no added service, and, in fact, at
    that point three channels and music stations were removed. He
    said that AT&T told him that he would have to pay for computer
    service in order to get his channels back and ultimately hung
    up on him. My constituent also explained similar billing issues
    with both Time Warner and DISH.
        He ended his letter with this plea, and I quote: ``Senator
    Baldwin, I hear these complaints from everyone. What can you
    and the Senate do to make all providers sign a contract so that
    they can be held to their words and finally remove all their
    false marketing?''
        Now, this is just a sample of what I hear regularly, but 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 is going to happen in this 2-year promotion where the
    price goes up after the first year, in light of these concerns
    that we hear over and over again, I would like to hear from the
    entire panel what more are you doing to ensure that your
    companies are not promoting misleading pricing information? And
    what are you doing to grapple with these pervasive billing
    issues? Why don't we go across the panel once again?
        Mr. Karinshak. Senator, it is very important to make sure
    the customers understand exactly what they are getting. We do
    offer a wide array of products and a wide array of pricing, and
    so we have done some additional things from a disclosure
    perspective to help with that.
        First, whether you order our 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 nonrecurring charges. We also follow that up with
    an email that we send to the customer at their preferred email
    address detailing exactly the order and what is next as well,
    for example, things like the technician coming to their house.
        We also partner with a company called SundaySky to deliver
    a video that is a personalized tutorial for any changes they
    make to their package or for a new customer. And we also back
    it up with our 30-day money-back guarantee as well.
        Senator Baldwin. Thank you.
        Mr. Keib. Yes, I will 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. So, for
    example, if the full rate was, say, $129, there would be a
    minus sign listing clearly what the actual discount amount was,
    let us say it was $40 or $20, and then it comes to a summary
    price of what that actual bill is so that that customer in any
    given month would be notified that there is actually a higher
    rate there and that this is a promotion of X dollars. And then
    when we come up on that window at that time, be it 12 months or
    whatever the expiration of that window is for that core
    service, they would see that actual discount go away. Or if it
    was a 2-year roll, as someone alluded to earlier, they would
    see it get reduced.
        Senator Baldwin. Ms. Mayo.
        Ms. Mayo. That is a good point, and that was part of
    changes that Charter made recently in an effort to be more
    transparent about billing to show the full charge and then the
    discount that the customer is getting. So I agree with John,
    also with Tom. If you are dealing with a customer service rep
    on the phone, a sales rep, and you place your order, the sales
    rep will recap exactly what you should expect on your bill for
    and exactly any charges that you would see on your bill the
    first time. We also send an email to the customer confirming
    the bill. We are working on improving that with more
    information, but we have the core infrastructure set up.
        If you go into a Charter store, you obviously get
    confirmation of what your order is. If you have a direct
    conservation with a sales rep, you are getting confirmation of
    what your order is. But on our website, you will get an email,
    and with that, too, we are improving the content associated
    with the confirmation that comes from the website.
        Senator Baldwin. Mr. Patel.
        Mr. Patel. We try to disclose the terms at multiple touch
    points on the initial sales call, we have implemented 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 is historically all the generic terms
    were disclosed and the customers were kind of losing attention.
    And so communicating the fewer things that were more relevant
    to the customer was important.
        No. 2, we record all of our sales calls in our direct sales
    call centers. And so if a customer ever says, ``I was told
    something else,'' we make it a point to be able to pull that
    record and hold agents accountable. Agents are essentially
    given two opportunities to not make a mistake when it comes to
    the terms and agreements with the offer. If they do that twice,
    the consequence is they would lose their job. And so we try to
    hold the agents accountable. We have disclosures online,
    including a place where we spell out over the course of 2 years
    how your prices change. We send an email confirmation. We have
    a written customer agreement.
        And then the last thing, and I think probably the most
    prominent, is 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 are in Month 1 of 12 of that discount. And it changes
    every month, providing a constant awareness for consumers that
    I have 2 more months left for this discount. When the bill
    does, in fact, change, we spell it out for customers on the
    front page.
        And so, we have tried to do as much as we can to disclose
    this to customers and to also drive accountability and controls
    in the organization if and when mistakes are made.
        Ms. Schneider. So I think DISH might be a little bit
    different in that we have an option for a 2-year price lock, so
    customers have a 2-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, if they stay with us beyond that 2-year price lock, they
    will likely experience some price changes, so whatever the
    then-current pricing is. And so we follow form, kind of similar
    to what other panelists talked about with respect to during the
    sales call, we do all of the disclosures, customers get an
    email that outlines all of the things that they need to
    understand, including pricing terms with their new service. We
    do something with our new customers where we do--either if they
    call in before 10 days or they--either they contact us within
    10 days, or if they do not, we will outbound them and walk them
    through all of the things that they need to know as a new
    customer with DISH, including anything with pricing,
    installation, other things. We never want anybody to be
    surprised by anything that happens on their bill, and we also
    do the bill statement messages and things along those lines
    that other panelists talked about.
        So we really do try to make an effort to make sure people
    understand the terms of their new agreement with us and that
    they do not have any surprises.
        Senator Baldwin. Thank you.
        Senator Portman. OK. I would like to get back to some of
    the questions that we were talking about earlier that have to
    do with people getting overcharged and then companies knowing
    that they are being overcharged and not getting the refunds.
        First of all, with regard to the bills, I have a copy of a
    bill here. It happens to be from Ohio. It happens to be a bill
    that has over a dozen line items in it. One of the responses
    that we have gotten from companies is that people ought to look
    at their bills, so if you are being overcharged, you ought to
    be able to find that.
        First of all, I think it is very difficult to discover that
    you are being overcharged if you do not know what the equipment
    is, you do not know what the correlation is between the charge
    and the equipment. But, second, look at one of these bills. It
    is pretty darn complicated. And part of what I guess I would
    ask you, Mr.
    Keib--and I appreciated your answer earlier that you thought
    that, Time Warner could have done better in terms of allowing,
    say, these 40,000 Ohioans who 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 new company, is, I guess, going to implement
    that there be a 1-month credit regardless of how far back it
    goes. We talked earlier about whether you would know how far
    back it went.
        I guess one question I would have for you, and to Ms. Mayo
    as well, is: Why not at least notify the customer, say, ``Hey,
    look, we have overbilled you, we have overcharged you. Look at
    your bill. Tell us how long that has been''--if you cannot find
    out for them, at least give them the information, the
    notification to be able to find it themselves. Have you thought
    about that, implementing that kind of a notice procedure?
        Mr. Keib. Yes, and as I mentioned earlier, I think that we
    do--as I said, when we define the number of customers
    impacted--and it is not a dynamic number or constantly
    changing, like the equipment example we discussed earlier. We
    do provide notice that we overcharged and for how much.
        The example relating to equipment, because of the
    transactional nature and the volume of equipment that is moving
    in or out, it is a little bit 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 is a natural progression of any revenue assurance
    program, and I think that in hindsight we should notify
    customers if they were being overcharged. And as for what we do
    going forward, I would kick that to Kip because ultimately I
    think it falls in her decisionmaking.
        Senator Portman. Yes, well, I think what you just said is
    significant. You think that customers should be notified, and
    with regard to the equipment particularly, which you say is
    more complicated. And I know you are no longer in a position to
    implement that, but, Ms. Mayo, you are. So we have kicked it to
    you. Maybe two questions for you. One is do you agree with Mr.
    Keib that one of the things you ought to be doing now is at
    least notifying these customers so that they know they have
    been overcharged? Again, 40,000 customers last year, over
    11,000 customer, just in Ohio, and this is an issue that I know
    you are attempting to address today with your own proposal.
    Yours today, as I understand it, is that you will give a 1-year
    credit to customers who have been overcharged. For Time Warner
    legacy customers, I understand it is 1 month.
        And so my second question to you is: Now that you are 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 would like to see is going back
    and giving them their full refund, which, again, is what other
    companies have managed to do. You now have this ability, as I
    understand it, through your new audit program to be able to
    understand what happened. But if you could talk about that
    discrepancy and talk about what the possibility would be of
    actually providing a real refund to make everybody whole, and
    then also talk about, if you could, this notion of
    notification?
        Ms. Mayo. Sure. So I want to be very clear that producing
    an accurate bill is our responsibility. It is not the
    customer's responsibility to find a mistake. It is our
    responsibility to produce an accurate bill. And at Charter, as
    I said in my opening statement, even though we had a 99.4
    percent accuracy rate, which seems high, it is not high enough.
    And we do believe that 100 percent accuracy is the only
    acceptable solution.
        So after this was discovered, we were able to put in place
    a daily reconciliation process that we are running every single
    day and looking at every single customer's account and looking
    at the box charges on the account and the number of boxes. And
    on any given day if the box charges exceed the boxes, we will
    remove the excess box charge. This will assure 100 percent
    accuracy in charging set-top boxes. We are going to implement
    the exact same thing at Time Warner Cable.
        Now, as you know, we closed on Time Warner Cable just about
    5 weeks ago, so I am still getting my arms around it. I am
    still trying to understand the billing systems and how they
    work, because we all operate our billing systems differently.
    But the programmers are already working on the design of that
    reporting. It is a little bit more complicated for Time Warner
    Cable because of the way they package their services. Some of
    their packages include a free set-top box, and so, in some
    instances it is not a billing error that there is no charge
    there because it is embedded in the service price.
        So we have already identified 11 exceptions that have to be
    configured into this reporting. I am probably going to need
    about 60 days to get it in motion. But we will do that, and
    then we will have 100 percent accuracy not just with Charter
    and Time Warner Cable but Bright House as well.
        Relative to notification of customers, I agree with you, I
    think we should notify customers. There is no question about
    that. And as you had mentioned, Senator, we will be notifying
    our customers and giving them a 12-month credit for any
    overcharges discovered through our reconciliation.
        Senator Portman. You talked about 100 percent accuracy.
    Just quickly, with regard to, again, your legacy customers
    coming in, my understanding is Time Warner, with regard to its
    correction of billing errors, aims for 80 percent, has in the
    past, understanding they are now part of your organization. Is
    that accurate?
        Mr. Keib. I would like to address that. I do not think the
    aim is 80 percent. I think that the aim is to try to get to 100
    percent. In the billing system that we have or we use in Ohio,
    the fix that we put on that account does not necessarily
    correctly impact customers that are in pending status. And what
    that would mean is that they have ordered service, but they
    have not been installed yet. So one of the reasons we have that
    breakage is that when we apply that fix, it is not sticking on
    customers who have yet to be formally installed.
        So, again, in terms of process improvement, there is an
    opportunity to do that, but I do not think it is that we are
    aiming for 80. I think that is what we are getting based on the
    way our system is set up in the last several months.
        Senator Portman. So you are only able to correct 80 percent
    based on your system. We have also learned that Time Warner
    Cable uses computer software that is known as Macro that
    routinely has failed. Is it true that in some months it has
    been so difficult to fix the error that Time Warner Cable
    simply does not correct any bills for that month?
        Mr. Keib. If we are talking about the equipment charge,
    what I can say based on my familiarity with this is that if
    there was a
    20-percent breakage that you referenced earlier that did not--
    where the, quote-unquote, Macro did not take effect, that the
    next time we run that report again, it would indeed capture
    that breakage and try to fix it. That fix would happen the next
    month.
        Senator Portman. OK. From our investigation, we learned
    that in May of this year, 2016, you did not make corrections
    for that month because of the computer software issues. And you
    are saying you will go back and later fix that in this month
    and succeeding months?
        Mr. Keib. I want to be very clear that I am talking about
    the process, and the following month, if it did not fix that,
    we will rerun the same fix. And I would have to verify for you
    that the very specific customers that you are referring to fall
    into that bucket to make sure I am being accurate.
        Senator Portman. OK. Again, my concern is what Charter is
    going to do going forward and making sure these customers are
    both notified and made whole. And I appreciate again that we
    have made improvements, and based on today's announcements that
    you have made in the context of this investigation, that you
    are going to provide some credits. But I hope going forward
    that you will also provide that information so the customers
    can understand what the issue is and make them whole. Senator
    McCaskill.
        Senator McCaskill. Thank you, Mr. Chairman. I am
    disappointed that Senator Paul left because I want to welcome
    him to oversight. I have spent hundreds of hours in this
    Committee room doing oversight of government, of every part of
    government. I welcome him to the oversight of our military
    contracting acquisition process. I have spent hours and hours
    and hours in many hearings, not only on acquisition there and
    oversight there, but policy and procedures throughout our
    government. So I am an oversight kid, and I think if we are
    going to stop doing oversight because we are unpopular, we
    might as well put a sign on the door that says, ``Gone
    Fishing,'' because I cannot think of anything we would be doing
    oversight on that is, not more popular than us. I mean, we are
    the least popular right now. But that does not 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 are treated.
        And so I am not about to apologize for caring about
    oversight in this area because it is what I have heard from the
    people I represent. And I am all in on oversight of government,
    and believe me, when somebody calls with a VA complaint or
    somebody calls with a Social Security complaint or somebody
    calls with a cable TV complaint, I am on it. And I am not going
    to apologize for it, and I hope to see more of Senator Paul
    here. Frankly, at most of these hearings, we do not have very
    many people sitting out there. It is pretty dry stuff. It is in
    the weeds. And I welcome his attendance at many of those
    hearings in the future.
        I want to talk a little bit about the fees and taxes. I
    have a couple of Charter bills in front of me, one more recent
    than the other, and I just want to make sure I put this in the
    record,\1\ Ms. Mayo, because one bill, the total for TV
    services, for Charter cable services, is $158.98. And there is
    a sales tax of $1.25, and there is a franchise fee of $8.69.
    And then there is an FCC administration fee of 9 cents. So I
    have added those up, and that is $10.03 on a bill of $158.98.
    ---------------------------------------------------------------------------
        \1\ The bill referenced by Senator McCaskill appears in the
    Appendix on page 48.
    ---------------------------------------------------------------------------
        On another bill I am looking at, the bill was $54.99 for
    TV, $39.98 for Internet, and the taxes, fees, and charges were
    $2.28.
        But there is one item under taxes, fees, and charges that I
    want to spend some time on now, and that is, the broadcast TV
    surcharge of $5. That is the biggest item under taxes, fees,
    and charges.
        Now, if I get this bill and I am somebody who is not really
    educated, I am going, ``I cannot believe the government is
    charging me $5 extra for broadcast TV surcharge, because it is
    right 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 are getting Regional Sport Network (RSN) charges.
        Now, what I want to make sure I understand here is that
    this has been a decision, I believe by all of you--raise your
    hand if you did not--that you would take--OK, DISH did not. You
    did not put any RSN or broadcast surcharge fees in. OK. So DISH
    decided not to do this, but the rest of you decided that you
    were going to take something that was in the basic programming
    fee for buying your service, and you were going to put it in
    another place on the bill and call it something else.
        I would ask you, can you tell me why all of you decided--
    isn't it true that all of these were previously in your video
    charges? Mr. Karinshak.
        Mr. Karinshak. Yes, Senator.
        Senator McCaskill. And Mr. Keib.
        Mr. Keib. Yes.
        Senator McCaskill. And Ms. Mayo.
        Ms. Mayo. Yes.
        Senator McCaskill. And Mr. Patel.
        Mr. Patel. Yes.
        Senator McCaskill. So all of these were in your video
    charges. And then I believe--I do not know, was it 2 years
    ago--you just decided, ``We will put those down there with the
    taxes and the surcharges.'' And some of them started out for
    Regional Sports Networks, $1.39 a month, and now they are up to
    as high as $5 or $6 a month.
        Did you inform your customers that you were taking
    something out of what they were normally paying for in their
    video package and giving it a special line item? And can
    somebody give me a good excuse as to why that happened? And
    what is going to keep that from being the future billing model?
        Mr. Patel. Yes, Senator, I would like to explain our
    decision process. We are a nationally priced product, and so
    because we have a national service, broadcast channels are
    available nationally, and we include those in our package.
        Regional pricing, regional sports, however, vary
    significantly market to market. Essentially what has 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 L.A. and the Dodgers as an example, and they will pay
    an outrageous amount for those rights, create a new channel,
    and effectively try to force-carry that channel in a market.
        And so for us, the choice on Regional Sports resulted from
    being 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 in a market like St. Louis where the costs are
    one-third to one-fourth of what the New York costs are. What we
    did not want to do was to essentially pass on all of the costs
    to all consumers. To us, carving out RSNs was a way to
    essentially put the costs where the content was available and
    where the customers were benefiting. And as we did that, in a
    third of the country, we do not charge RSNs because the rates
    for RSNs have not--these deals have not been struck--and they
    have not escalated. So that is included in our base packaging.
    But in markets where rates are four times what they were a few
    years ago and there are significant charges, we did not want to
    levy those on customers who do not benefit from the
    programming.
        To put the fee in context, in all of our markets, the RSN
    fee is less than 50 percent of our underlying cost for RSN in
    that market. And so that was our decision process because we
    are nationally priced product. We did not do that for broadcast
    fees because broadcast channels are available nationally.
        Senator McCaskill. Don't they belong up above, though?
    Don't they belong with your part of the bill? Aren't they, in
    fact, programming costs? They are not taxes. They are not
    something that you--I mean, this is something that is part--I
    mean, 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. Yes, I think in our bill it was in other
    charges, but that is a fair observation, and maybe that is
    something we will go back----
        Senator McCaskill. Why did the rest of you put this down
    with taxes as opposed to putting it up with your programming
    costs?
        Ms. Mayo. Senator, we did put the broadcast surcharge in
    the charges and fees section. We do not charge an RSN at
    Charter. And we did that not to try to make it look like it was
    a government-issued fee or charge, but it is nondiscretionary.
    If we put it in the video section, the concern was the customer
    would then be calling and saying, ``I do not want that. I would
    rather not have that.''
        Senator McCaskill. Well, HBO is in that section, and they
    do not have to have that.
        Ms. Mayo. No, they could remove the HBO product but not the
    broadcast basic product.
        Senator McCaskill. Then maybe you should create a whole
    category, nondiscretionary extra programming, and maybe then
    people would begin getting angry about the amount of money that
    is being thrown around in sports right now that is 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
    is another component of this.
        What about for Comcast? Why does that fee go down in a
    section that makes customers think it is a tax?
        Mr. Karinshak. Senator, we agree with you around the
    importance of the disclosure. We did notice our customers, and
    we do not include it in the area with taxes or any government-
    mandated fees or surcharges.
        Senator McCaskill. That is terrific. I will just have one
    other question, and then I have a bunch for the record.
        I know that you all in the past, Mr. Karinshak, have
    reviewed complaint data to determine the percentage of
    customers who stated that a Comcast representative quoted them
    the wrong price. In some cases this was as high as 30 percent
    for certain complaint types. Did you take on an analysis to
    determine whether the customer was right in connection with
    that?
        Mr. Karinshak. Senator, we do look at our complaints data,
    and we still have the opportunity to improve our disclosures
    for some of the things I had referenced before around
    implementing the order summary at the end of every point-of-
    sale interaction, for being able to go through and send the
    email, as well as on the video bill, and reinforcing the 30-day
    money-back guarantee. That was one input that we looked at in
    ultimately making those changes.
        Senator McCaskill. No one has had a chance to address this.
    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? Mr.
    Patel.
        Mr. Patel. I can answer that.
        Senator McCaskill. That would be a good one for you to
    take.
        Mr. Patel. We do not charge for removal of any services
    other than warranty service, and the reason that that is in
    place is essentially to prevent gaming. A lot of times when 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 2 years. What we were trying to prevent is a
    consumer getting that benefit and then the very next month
    removing the service. And so that is the only service through
    which--
        Senator McCaskill. And that was a problem? Somebody would
    get an equipment upgrade and then the next month quit?
        Mr. Patel. Yes, you know, so one of the--I mean----
        Senator McCaskill. That makes no sense.
        Mr. Patel. Well, no. What we----
        Senator McCaskill. Why would you go through the trouble of
    dealing with you guys to get an equipment upgrade, get somebody
    out there to change your box or whatever, and then quit the
    next month. That is not logical.
        Mr. Patel. No. The point is the equipment upgrades. As you
    transition from standard service to HD or now HD to ultra-HD,
    customers normally would have to pay for that equipment
    upgrade. And one of the benefits of the protection plan is that
    in up to four rooms within your home you are able to get that
    equipment upgrade free every 2 years. The thing that we were
    trying to solve is the very one that you mentioned, which is,
    before, if an existing customer wanted to upgrade, they had to
    call their provider, haggle, maybe threaten to leave, and maybe
    then they would get that upgrade as a complimentary service. So
    we made this a part of our protection plan program where every
    2 years you can refresh your experience in up to four rooms----
        Senator McCaskill. I am just telling you, I----
        Mr. Patel. And, you know, it just----
        Senator McCaskill. I am not aware of that, and you are one
    of my providers, and I have never heard that I get free
    upgrades every 2 years. And I did not get any of that
    information when I tried to change that. So I think there is 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?
        Ms. Mayo. Senator, if I can, we do not charge any kind of
    change-of-service fee for upgrades or downgrades at Charter.
    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 any day. Those are
    fees that we are not enamored with and we do not use.
        Senator McCaskill. Anybody else want to talk about--I think
    DISH charges to get rid of the protection also. You guys
    charge.
        Ms. Schneider. It is true. We have a $3 removal fee, and it
    is a very similar situation to the one that Rasesh just
    described where if the customer--so what we normally charge
    somebody for a truck roll is $95. If a customer is on the
    protection plan, they pay a greatly reduced rate for that. So
    they will pay $10. The protection plan is unique for us because
    you can add it the day that you need it, right? So if you call
    us and you have an issue and you require a truck roll, you can
    add the protection plan. It is $8. And what we ask folks to do
    is keep it for 6 months.
        Senator McCaskill. I see. That makes sense. I just wanted
    to say for the record that your regulatory--your RSN fees are
    put in other charges and credits, which include other charges
    like regulatory recovery fees. So I am not sure it is really
    clear that that is something you guys are charging for that.
        ``Inside the Box,'' I recommend it. It is on the website,
    McCaskill.Senate.gov. I recommend the Subcommittee joint report
    to anybody who buys pay-TV. You will 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 patience with me. He is very
    patient with me. We are good cop/bad cop, and he is definitely
    the good cop. [Laughter.]
        Senator Portman. Well, again, it has been very productive
    over the last year during this investigation, and I think we
    have seen here today, one, some practices that you have
    specifically undertaken which are going to help improve the
    customer experience and customer service. I do not think it
    goes far enough, as we talked about, in terms of providing
    actual refunds to customers who have been overbilled. I
    understand some have been underbilled, some have been
    overbilled, but that does not help the family that has been
    overbilled, and it is not fair.
        With regard to your testimony generally, though, it sounds
    like there are also some other customer service policy changes
    you all are considering based on this hearing and our
    investigation, and that is appreciated.
        On the RSN fee, I would just say this is, again, for people
    who are not familiar with, it is the Regional Sports Network
    fee that you are charging. You choose to put it on the bill
    separately. You could put Cable News Network (CNN) on the bill
    separately 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 is a government fee, and I would again
    hold up this bill from Ohio, which is, the bill that I get, my
    wife, Jane, and I get, and it says, ``taxes, fees, and
    surcharges,'' and it has franchise fees, State sales taxes, FCC
    regulatory fee, FCC regulatory fee voice, Universal Service
    Fund, regulatory recovery fee, Ohio TRS recovery fee, and then
    it has broadcast TV and sports programming, which is where the
    RSN is. And I do not think that is the right place for it
    because then people view that that that is a mandatory
    government fee like the other ones.
        So I would ask you, Ms. Mayo, are you aware of that? And
    with regard to your legacy Time Warner customers, I understand
    you do not charge it separately, but with regard to your new
    customers you are now taking on, do you plan to keep this in
    the category of fees and other government charges or to have
    this in a more, I think, honest display where it is either by
    itself or with other fees?
        Ms. Mayo. So I am aware of it now, and, yes, our intention
    is to overlay Charter's business practices with Time Warner
    Cable, and we do not charge an RSN fee, so hopefully that will
    be something that will be removed entirely from the bill.
        Senator Portman. Well, again, 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, and I appreciate the fact that everybody has
    been very candid today in talking about this.
        Let me also mention, because Senator McCaskill mentioned
    it, that with regard to the oversight responsibilities here, to
    the earlier comments made, this Subcommittee has done
    significant oversight of exactly what Senator Paul was talking
    about--in other words, looking at government, looking at our
    economy, which is, disappointingly weak, looking at government
    spending. Specifically, we have had a series of investigations
    and hearings on issues like tax reform, which goes directly to
    economic growth. We have had hearings on the Affordable Care
    Act (ACA) and a lot of the waste and taxpayer loss specifically
    that relates to the co-ops, and we have done some great work on
    that.
        We have also, though, looked into other issues like labor
    trafficking and the Health and Human Services (HHS) and how
    they allowed kids to get into the hands of traffickers,
    certainly government oversight there.
        Next month, we will be combating--looking at ways to combat
    Islamic State of Iraq and Syria (ISIS) propaganda and, again,
    looking at our government response to that. For those of you
    following what we do, that will be something we will be looking
    at next week, certainly a topical issue and one that everybody
    is very concerned about: How do you stop this ISIS propaganda
    from taking more and more of our impressionable young people
    who feel alienated and radicalizing them.
        Then we are also going to look at this opioid abuse issue,
    which is at epidemic levels. This is the heroin and
    prescription drug epidemic around the country and some specific
    issues that we think this Subcommittee can provide some
    additional insights on. So we have done tough, significant,
    important oversight, and we will continue to.
        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 again for her work on
    this issue over the years. This is not, as you can tell, her
    first time dealing with this issue. I am not on the Commerce
    Committee, but she has done a lot of work on this issue and
    focusing on consumers there. And as we move forward, again, we
    are going to continue to look at the industry and look at this
    issue of consumer choice and competition. I do think ultimately
    that is the answer, is to give people a range of choices. We
    have talked today about there is competition, but there are
    also some concerns about having more competition.
        I think innovation is going to be allowed to flourish and
    new products are going to come to market, and consumers are
    going to be better off when there is competition. So we will be
    looking at some of those barriers to that. And we will also be
    looking at other issues that might have come up today.
        I will have some additional questions for the record.
        I appreciate the prompt responses you have given us to
    previous questions. And specifically to the companies who are
    here today, I thank you for your willingness to cooperate with
    us in this investigation and, again, what I think has been a
    positive hearing to have an honest airing of some of the
    concerns on the consumer side.
        The hearing record will remain open for 15 days for any
    additional comments or questions by any of the Subcommittee
    members, and with that, this hearing is adjourned.
        [Whereupon, at 12:03 p.m., the Subcommittee was adjourned.]

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