Time Warner Cable exec ousted over poor service

Roger Keating, Time Warner Cable's top executive in Southern California, was in charge of combining the TV and Internet access operations and the much larger properties it acquired from Comcast and bankrupt Adelphia Communications.
By James S. Granelli
Times Staff Writer

March 16, 2007

Time Warner Cable Inc. forced out its chief cable guy in Southern California on Wednesday, but you may not want to throw that help number away just yet.

Roger Keating, head of Time Warner's regional office since 2003, was done in by an avalanche of complaints about Internet and e-mail outages, TV channel lineup changes and pressure to sign up for digital service. Customers were most annoyed by maddeningly long — and sometimes futile — waits to reach a human by phone.

Keating and his bosses "agreed it was a good time" for him to exit, according to a memo to top managers from Chief Operating Officer Landel Hobbs. Keating will be replaced by two Time Warner executives who Hobbs said had "a different set of leadership skills."

They have a tall order ahead in repairing strained relations with customers and winning back the more than 10,000 people who have canceled their subscriptions since October.

"I've given up calling them," said John Toal of Culver City, who owns a photo business that went 10 days without Internet service last month. "I can't stand staying on hold for an hour and a half."

Once a small player in Southern California, Time Warner Cable ran into big trouble when it began integrating its TV and Internet service operations with properties it acquired last summer from Comcast Corp. and bankrupt Adelphia Communications Inc.

After teaming up with Comcast to buy Adelphia's assets and then swapping some with Comcast, Time Warner Cable, which is a subsidiary of New York-based media conglomerate Time Warner Inc., became the leading cable provider in the greater Los Angeles metropolitan area with 1.9 million customers.

Keating was in charge of combining technologies, billing systems, computer servers, programming and Internet and e-mail services.

"It has not gone smoothly," said Aryeh Bourkoff, an analyst with UBS Securities.

Some would say that is putting it lightly. Often-furious subscribers overwhelmed Time Warner's five local call centers and swamped city halls throughout the region.

"Their systems got overloaded and people were not able to get through to the company, and we got a lot of complaints," said Marc Jaffee, executive director of a cable authority for Huntington Beach, Fountain Valley, Westminster and Stanton.

Complaints about cable service in Los Angeles nearly trebled since October to 1,732 from the same period a year earlier, according to figures compiled by the city. Oxnard, Moreno Valley and other cities reported similar huge jumps.

Despite stories of marathon sessions on hold, the average wait time, which hit a high of nine minutes late last year, is now down to five minutes for many billing and technical calls, said Eric Burton, who oversees the company's five customer call centers in Southern California. His aim is to reduce the wait to the early-2006 average of 30 seconds.

Time Warner has made "significant progress," Burton said. The centers, which receive about 1.7 million calls a month, are staffed with 1,650 representatives, and Burton said an additional 250 would be on board in the next month.

"We are absolutely not where we want to be," he said. "But we do feel comfortable that the quality is at a level that we can build on."

The turnaround, though, might not be swift. Company executives have said that they don't expect to stem the loss of subscribers and start rebuilding the customer base until the second half of the year.

Working on that will be Barry Rosenblum, an executive vice president based in New York, who will replace Keating and work out of New York and Los Angeles. Stephen Pagano, former head of Time Warner Cable's Albany, N.Y., division, will move to Los Angeles to handle day-to-day operations.

With its expansion last year, "people got very excited about the growth potential for Time Warner," said Richard Greenfield, an analyst at Pali Research. "But they overestimated how easy it was going to be."

Getting it right is particularly significant in Los Angeles.

"L.A. is a very important market for Time Warner Cable," UBS' Bourkoff said.

The merits of the Comcast and Adelphia deal "will be largely determined by the company's success in L.A.," Bourkoff added. "If Time Warner is going to try to do more deals and pursue consolidation in the cable industry, the precursor is whether the integration is successful — and the L.A. market is key to that success."

As Time Warner has lost subscribers, rival DirecTV Group Inc., a satellite TV provider, has gained. It saw Los Angeles-area subscriptions rise 10% in the last three months of last year.

"To see that kind of a spike, it was clear we were attracting a lot of agitated Time Warner customers," said Robert Mercer, a spokesman for El Segundo-based DirecTV. "We also knew that because we were getting feedback at our call centers."

For Charles Golvin, who lives near Century City, the answer to his Time Warner problems is AT&T Inc., which is upgrading its network to sell TV and Internet service.

"I'd be very likely to switch because of these experiences with Time Warner customer care," said Golvin, who happens to be a telecommunications industry analyst at Forrester Research Inc.

It could be a year or more before AT&T rolls out that service in his area, giving Time Warner time to repair its reputation and win back customers.

One who needs winning is Travis Arnold of Hermosa Beach, who said he was told he would have to wait five days for service after the cable connection crashed while he and his father were watching a boxing match in February.

After hours on the phone and a fruitless visit to a Time Warner office, Arnold snagged a company worker whose truck he spotted and pleaded for help. The worker found mislabeled connections in a neighborhood junction box.

Jonas M. Grant of Studio City said he had called repeatedly since mid-December to complain about being double-billed and still had not received a refund.

"Time Warner call centers have wait times of 20 to 30 minutes, even during the Super Bowl, when I figured no one would be on the line," he said. "And even at 2 a.m."