[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.
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    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.
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    \1\ The prepared statement of Ms. Mayo appears in the Appendix on 
page 60.
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    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.
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    \1\ The prepared statement of Mr. Patel appears in the Appendix on 
page 67.
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    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.
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    \1\ The prepared statement of Ms. Schneider appears in the Appendix 
on page 73.
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    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.
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    \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.]

                            A P P E N D I X

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