What’s next for Time Warner Cable customers in Charter deal?

Charter Communications on Wednesday officially acquired Time Warner Cable, Charlotte dominant’s cable provider, but customers won’t see big changes right away, officials said.

In coming months, however, Stamford, Conn.-based Charter said it will introduce its Spectrum brand products and what it called customer-friendly policies such as no modem lease fees.

One change that many customers may welcome: Charter said Wednesday that it would eventually retire the Time Warner Cable name. Time Warner Cable has consistently posted lower customer-satisfaction ratings than Charter among cable subscribers.

Charlotte’s uptown arena, the home of the Hornets NBA team, bears the Time Warner Cable moniker, and that will remain “for now,” said Charter spokesman Justin Venech. The Hornets haven’t had any dialogue to date with Charter, “but we anticipate discussions in the near future,” said Pete Guelli, the Hornets’ chief sales and marketing officer.

The team didn’t disclose the length or cost of the naming-rights deal when it was announced in 2008. Industry sources indicated that such naming rights deals typically are for 20 to 25 years.

Charter is completing its $55.1 billion purchase of Time Warner Cable about a year after the deal was announced. The purchase received the final regulatory approvals it needed this month.

The acquisition caps a turbulent period for New York-based Time Warner Cable that included a planned sale to Comcast that fell apart in April 2015 after government opposition.

Charter on Wednesday also closed its purchase of cable provider Bright House Networks. The takeover of the two companies makes Charter the nation’s second-largest cable provider with more than 25 million customers in 41 states.

Charter will contact customers directly to let them know when they will start to see the company’s Spectrum brand, product enhancements and new packages, said Venech, the Charter spokesman. Time Warner Cable says it has 480,000 customers in the Charlotte market.

“While we believe customers will see our packages as more compelling and a better value, if a (Time Warner Cable) or (Bright House Networks) customer likes the package they are currently in, they will be able to stay in that package,” he said.

In Charlotte, Time Warner Cable already has an all-digital network and has rolled out faster Internet speeds at a time when competition is increasing with broadband providers such as AT&T and Google Fiber.

Customer satisfaction

The cable and broadband provider industry generally performs poorly in customer satisfaction surveys, but Charter has fared better than Time Warner Cable in terms of TV service.

In the latest rankings by the American Customer Satisfaction Index in 2015, Charter received a 63 on a 100-point scale in the subscription TV category, better than Time Warner Cable’s score of 51, the lowest of any company in the index. In terms of Internet service, however, Time Warner Cable received a 58, topping Charter’s 57 score.

“It’s not surprising Charter wants to rebrand Time Warner Cable,” David VanAmburg, ACSI’s managing director, told Bloomberg News. “Charter has scored better than Time Warner Cable in recent years, so it could bode well for Time Warner Cable customers. But the data suggests leaps-and-bounds improvement could be difficult.”

On average, TV and Internet service providers received a score of 63 – the worst among 43 industries covered by the index. The scores are based on surveys of 14,176 customers.

“Nobody in the cable industry performs particularly well,” VanAmburg said.

Potential employment impact

Time Warner Cable is a major employer in Charlotte, with about 3,100 workers in administrative, customer service and other roles.

An unspecified number of finance functions could be relocated from Charlotte to St. Louis, Denver and Stamford, Time Warner management has told employees. But Charter has said it plans to bring “thousands” of Time Warner Cable call center jobs back to the U.S. from overseas, a potential plus for the city.

Outgoing Time Warner Cable CEO Rob Marcus has told the Observer that he expects the combined company to keep a “significant presence” in Charlotte and that it could add jobs in the city over time.

Over the past four years, Charter has added 7,000 jobs, mostly in customer-related positions, Venech said.

“Charter will be adding an additional 20,000 jobs going forward,” he said, without disclosing locations for the growth. “That is in addition to the combined workforce of over 90,000 employees today.”

The combined company will be led by Charter CEO Tom Rutledge. Time Warner Cable shareholders are receiving a combination of Charter stock and cash in the deal; Time Warner Cable shares stopped trading on Wednesday.

Bloomberg News contributed.

This story was originally published May 18, 2016 at 10:47 AM with the headline "What’s next for Time Warner Cable customers in Charter deal?."