Charter Communications, which provides cable TV, Internet, and telephone service in Harvard, announced this week an increase in the speed of its Charter High-Speed Internet Max residential service, which could be seen as at odds with an announcement made this month that that the company would file for debt restructuring under Chapter 11 of the federal bankruptcy law. That’s not the case, however, according to Charter’s director of government relations, Tom Cohan.
Cohan said Monday in a telephone interview that despite the company’s plan to file for debt protection, “Day-to-day operations are strong. There is still big consumer demand for what we sell. We’re continuing to invest in the company and equipment.” He cited as an example the increased Internet speed for customers in Massachusetts and Connecticut, which was to have taken effect this week at no additional cost to customers.
Charter will boost its Internet Max speed from 16 Mbps to 20 Mbps, making it “13 times faster than DSL service from the phone company and 350 times faster than dial-up,” according to a company press release.
Cohan said that Charter’s financial problem was “a large debt load”—$20 billion worth. He said the company has reached agreement with bondholders to restructure that debt, reducing it by $8 billion. In addition, he said, the agreement calls for investors to inject $3 billion more into the company.
“When people hear ‘bankruptcy’ they think ‘shut off the lights and lock the door,’” Cohan said, especially in this economy. But that’s not where Charter is, he asserted, pointing out that news stories about troubled companies are about businesses whose customer base is eroding. “We don’t have that problem,” he said. “In an economy like the one we’re in now, where people are cutting back and losing jobs, people are looking for ways to save money at home. Cable has always been healthy in tough times. People stay home and watch TV or use the Internet—services we sell.”
Cohan said that the company has until April 1 to file for Chapter 11 protection, which will allow the company to “operate as usual.” He expects Charter will be out from under Chapter 11 in this calendar year. Meanwhile, he said, “we’re paying our bills; we aren’t shutting down any systems; customers will see no differences in our service.”
