Thursday, June 21, 2018
Business

Could Bright House Networks customers have problems similar to Frontier's during Charter merger?

TAMPA — Bob Bazata's landline phone hasn't been working since Frontier Communications took over Verizon's assets in Florida on April 1. He plans to switch to Bright House Networks.

He recently asked a Bright House employee about that company's expected merger with Charter Communications in the coming weeks. Bazata said he was told the transition would be seamless.

It's something he's heard before — from Frontier.

"I sure hope they've learned from the Frontier debacle," said Bazata, 68, of New Port Richey.

With regulatory approval of Charter's $67 billion merger with Bright House and Time Warner Cable expected soon, Bright House customers throughout the region can't help but wonder if they too might face lengthy TV, Internet and phone outages suffered by hundreds of upset Frontier customers.

Bright House is Tampa Bay's biggest Internet and TV provider. So if Charter's merger brings some of the same complaints about Frontier — week-long outages, abysmal customer service, clueless tech support — the transition could prove even more disruptive than Frontier's.

So will it?

• • •

Charter tells customers not to worry. It expects no serious problems.

But some in the industry question that optimism and say transitions are never entirely free of challenges.

Previous coverage: Can Frontier Communications get over its fumbling takeover of Verizon?

"It's like planning the D-Day invasion," said Andrew Corn, chief of EBS Networks of Tarpon Springs, which manages information technology for companies. "No matter how much planning you do, you know you are going to lose some soldiers on the beach. That doesn't stop you from landing on the beach. (Telecoms) know that some customers will have problems" and work to minimize them.

A Charter spokesman said customers will see few major issues, saying the company offered a good product and superior service.

"Everything will continue the same," Charter spokesman Justin Venich said. "What we are going to be doing is basically do the integration of the companies in a way to minimize the disruption to the customer."

But his assurances are remarkably similar to those made by Frontier before it acquired Verizon's assets in Florida, Texas and California and may ring hollow to some skeptical customers:

•Charter said it will retain Bright House employees, including technicians and customer service representatives, which helps ensure smooth sailing for the transition.

Frontier did that.

•The pace of integrating the Bright House network into Charter will be gradual, thus minimizing problems.

Frontier said that, too.

•The transfer of customer data from one system to the other will happen behind the scenes in a way that will be invisible to customers.

Frontier: Ditto.

•Charter management is experienced with these sorts of transitions and has been successful in the past.

Mike Flynn, Frontier's regional president, said this days before Frontier's takeover of Verizon assets: "We're doing everything we can within our power … from the experience we've gleaned from every conversion we have done to make the next one better. So I'd just say we're pretty experienced at it."

Venich declined comment on Frontier's issues, so he could not identify specific differences in what Charter is going to do — or differences in the two networks — that will make the Charter transition better than Frontier's.

Previous coverage: Bright House Networks is aggressively courting Frontier's Tampa Bay customers

Charter has acquired a dozen smaller providers since 1999, and the Tampa Bay Times could find no reports of major outages or problems reported by major media outlets.

That doesn't mean Charter has not had some issues with outages.

In August 2014, some Charter customers nationwide suffered either Internet outages or problems with their service, such as a slowdown of Internet speed. The outage appears to have been resolved within several hours.

The company, which has consistently ranked low in surveys of customer satisfaction, did not report what triggered the problems.

And it is important to note that in telecommunications, relatively brief service outages are an unfortunate fact of life.

• • •

Charter does note one significant difference between the two mergers.

Bright House will merge 100 percent of its business with Charter. Frontier acquired Verizon's landline phone, TV and Internet assets. But Verizon kept a big chuck of its business — mobile phone service.

"When we acquire Bright House, we acquire all of Bright House," said Venich. "For us, ultimately we are going to have a corporate organization that is centralized" with regional operations groups that will include large numbers of Bright House staff.

The same was true of Frontier. And with Charter officials reluctant to discuss specifics, it is hard to understand how Charter acquiring all of Bright House, and not just a part of the company, would impact the transition.

Previous coverage: Frontier Communications' latest problem is the no-show technician

It is certainly true that Charter has acquired more smaller cable companies through the last 20 years than Frontier, which would tend to support the idea Charter has more experience in confronting and handling any transition issues.

Charter plans to connect all Bright House customers to fiber optic lines to provide digital coverage, something the company says it had done repeatedly with its own system without major outages or other problems for customers.

"Look, mergers have been going on for decades," said telecom analyst Jeff Kagan. "And when acquisitions occur, typically they are invisible to the customer. But problems can occur. I didn't expect Frontier to have major issues."

He said the complexity of fiber optic and phone networks ensures there are no guarantees that the next merger or acquisition won't crash.

"You don't know when," Kagan said. "It can be a bit like Russian roulette."

The Charter merger with Bright House and Time Warner Cable certainly far exceeds the scale of Frontier's takeover of Verizon.

Frontier acquired 3.7 million phone connections, and 3.4 million Internet and TV connections from Verizon. The company has not said how many customers those numbers represent. One customer might have a one connection each for phone, TV and Internet. Another may get just phone service.

Frontier has said it added 535,000 customers in the Tampa Bay area and central Florida.

Charter, meantime, is expected to acquire 23.9 million customers nationally. Of those, 2.5 million are Bright House customers. Bright House, which operates in five states, does not break out customer numbers in Tampa Bay. (TWC does not serve Tampa Bay.)

The Charter merger awaits final approval from the Federal Communications Commission and California regulators. Those are expected within weeks.

Once the approvals are in hand, the merger will follow within a few days, Venich said.

• • •

Sometimes you don't know what you're missing until it's gone.

And that proved the case with some Tampa Bay businesses and Frontier customers who found themselves without phones, or worse for many, without a working Internet connection.

In some cases, they went without for a week or more, a potentially disastrous situation for firms that may rely on the Internet for customer orders or communication with clients.

Previous coverage: Frontier Communications won't release customers from contracts for service

So Frontier served as something of a wake-up call for some business people who realized they needed a Plan B.

Nancy Watkins, a certified public accountant in Tampa's Hyde Park neighborhood who has served as a treasurer for numerous political campaigns, said she handles political accounts that often require mandatory reporting within 24 hours.

After Frontier took over Verizon's assets, Watkins lost her Internet connection. "We called Frontier on April 1," she said. "They told us they could have us back up by the 14th. As you can imagine, that was not acceptable."

So the Information Technology specialist her CPA firm worked with got Bright House to connect the office that same day. From here on out, Watkins said, the company would have a back-up connection.

"I think Frontier has demonstrated it's foolish not to have that backup," Watkins said. "It's our insurance policy."

Martin Callery is vice president of the Charter Group of Companies, a Tampa-based firm that works in real estate, construction and the hospitality industry. He said the company gets most of its Internet service from a Bright House customer. He said Frontier's experience has led the firm to make sure it has Internet backup when Charter takes over by using mobile phone hot spots. (Callery's company is unrelated to Charter Communications.)

"Frontier was a wake-up call for a lot of people," he said. "It was for us. Day in and day out, you become absolutely reliant on these services. When something goes down, you can lose thousands of dollars an hour. So we're a little worried."

Those in the fiber optic industry caution that these networks are extraordinarily complex, and while Charter acquires the network whole, that doesn't mean the transfer of service is necessarily automatic.

"They're bound to have some issues," said Hunter Newby, CEO of Allied Fiber, a New York company that builds and operates fiber optic networks. "There's some risk to it. But listen, if they've done their due diligence and studied the network they're acquiring, then they know how it works, they know how it runs ... They ask all the right questions to mitigate the risk."

But he added, "Does that mean nothing will blow up? No."

Times researcher John Martin contributed to this report. Contact William R. Levesque at [email protected] Follow @Times_Levesque.

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