Time Warner Cable and Fox are now into their final day of negotiations before the agreement expires governing Fox-owned affiliate stations and cable networks.

One thing that the dispute has accomplished is increasing media attention on both companies and a spotlight on the business models of television programming and distribution.  It used to be so simple – television programming would air on broadcast television, enjoy massive audiences and the lucrative ad revenue that comes from having top-rated programming.  Cable networks couldn’t survive on the much smaller ad revenue they earn from their smaller audiences, so they charged cable operators a small fee for every subscriber who could watch their channels.

With the advent of TiVo and other digital video recorders, online viewing, and the audience erosion that comes from both, what worked for more than 50 years didn’t work so well anymore.  Time-shifting viewers no longer felt committed to watching live television, satisfied with being able to watch when they want and fast forward past the increasing amount of advertising television stations crammed into programming.  With broadband, viewers could download or stream their favorite programs online, often for free and with limited (if any) commercials.  Cable networks that used to be content running older syndicated programming, movies, and low budget documentaries and specials began creating their own original programming, often just as good as anything the networks produced.  Subscription fees charged programmers increased accordingly to help finance these shows.

Today, some cable networks are coming close to rivaling the viewership of broadcast networks’ lesser-watched programming.  If the economic downturn didn’t challenge the advertising industry, the ongoing loss of network television viewers would have accomplished the same thing – lower ad rates for ABC, CBS, NBC, and Fox.

At the heart of the debate is a new discussion about whether “free over the air television” is a sustainable business model.  Networks like Fox evidently don’t think so, which is why they seek payment from the pay television industry, be it cable, FiOS, U-verse, or satellite.  Since the majority of Americans now watch television through one of these services or through their broadband connection, there is plenty to be made from such payments.  Of course, those costs are passed on to you.

The result?  You are now paying for “free television.”

The hardball game between Fox and Time Warner Cable will be replayed often between the other networks and programmers and pay television companies.

Today’s video reports include another update from the business side of the story, several additional reports from impacted Fox stations, and basic education about what television antennas are all about.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Reporter Stelter on News Corp Time Warner Cable Talks 12-31-09.flv[/flv]

New York Times reporter Brian Stelter reports the two parties remain “pretty far apart” from an agreement in this report from Bloomberg News. (2 minutes)

[flv]http://www.phillipdampier.com/video/CNBC Time Warner Fox Dispute 12-31-09.flv[/flv]

CNBC discusses the business side of the Time Warner Cable-Fox dispute, and now Sen. John Kerry (D-Mass.) has put himself in the middle of the dispute as well. (1 minute)

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/KXAN Austin Cable dispute could turn off bowl games 12-31-09.flv[/flv]

In Austin, KXAN-TV reports Time Warner Cable has been telling Texas viewers they can watch most of the Fox Network programming on Hulu for free.  Some Austin residents are sick of hearing about the dispute and are abandoning Time Warner Cable for DirecTV.  “Football is everything in Texas,” say some who are watching the dispute with concern. (3 minutes)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/KDFW Dallas Watch FOX 4 without Time Warner 12-31-09.flv[/flv]

Some local Fox stations are teaching their viewers how to receive their stations if Time Warner Cable no longer carries them on their lineup.  KDFW-TV in Dallas went to Best Buy where they’re only too happy to sell antennas and digital converter boxes to Metroplex residents. (2 minutes)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WOFL Orlando Fox Orlando Affiliate Teaches Viewers About Antennas 12-30-09.flv[/flv]

WOFL-TV in Orlando spent part of the newscast teaching people what a TV antenna is.  For many under 30, television viewing has always been through cable or satellite, never over-the-air, so the concept of rabbit ears is a new one for some. (1 minute)

Lots more to watch below the page break.  Click the link below to continue!

… Continue Reading

A creative attempt by two Floridians to keep local Fox affiliates from being dropped on Bright House Networks by asking a judge for a temporary restraining order failed late Wednesday when the judge effectively tossed the case on jurisdictional grounds.

Circuit Judge Maura Smith in Orlando initially said she was referring the matter to federal court to determine which court had jurisdiction to issue a temporary restraining order.

“I wish I could make everybody happy,” said the Orange County Circuit Judge.

Orlando attorney John Morgan requested the court order Fox to keep WOFL-TV, Orlando’s Fox affiliate, on the Bright House Networks cable lineup, at least until after the Sugar Bowl.  Morgan filed the case on behalf of two local sports fans Thomas Moore, a fellow attorney and Richard Anderson, the city manager for Apopka, outside of Orlando.

Fox’s own counsel requested Smith send the case to federal court instead, and she agreed.  Later Wednesday, U.S. District Court Judge Gregory Presnell sent the case back to circuit court, where it was effectively tossed out.

The legal arguments were hardly a Perry Mason moment.  Morgan argued football fans would be harmed if the game wasn’t televised on Bright House Networks.  Fox’s attorney argued they could watch with an antenna or drive to a local bar or restaurant televising the game.  That brought a response from Morgan questioning where exactly someone would purchase rabbit ears, and that driving to a local establishment to watch the games could be risky because of increased drunk driving on New Year’s Day.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WESH Orlando Judge Denies Motion In Bright House Fox Dispute 12-31-09.flv[/flv]

WESH-TV in Orlando reports the judge tossed the case because it would have required her to rule over a private business matter.  (2 minutes)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WOFL Orlando Lawsuits Against Bright House and Fox 12-30-09.flv[/flv]

WOFL-TV in Orlando interviews the plaintiffs outside of court today about their case and goes over the dispute one more time with central Florida viewers. (5 minutes)

It's your fault our service doesn't work.

Central Floridians are angry and annoyed with a broadband provider that is more adept at randomly assigning blame than actually resolving serious service problems.  Bright House Networks customers in the Orlando area first noticed their Road Runner service began slowing down around December 23rd.  Web pages took minutes to render, if they finished at all.  Important e-mail was inaccessible at times for many accustomed to a much faster online experience than the bad old days of dial-up.

Problems worsened by Christmas Day, and despite complaints from across the entire region, Bright House technicians spent their time assigning blame elsewhere.  In a classic case of buck passing (Deluxe Goldman-Sachs Home Edition), the cable operator initially began blaming customers for the problems, claiming everything from virus infections to bad routers.

“The technician said he was certain it was either my router or my Windows XP had become hopelessly corrupted with viruses, and I might have to reformat my hard drive and start all over,” writes Stop the Cap! reader Kris.  “Two days before Christmas was the worst possible time for something like this to happen, and it was clear Bright House’s biggest priority was to get me off the phone as fast as they could.”

As customers abandoned all hope of using their broadband accounts on Christmas Day, calls continued to pour into Bright House customer support.  Even the media got involved, noting the cable company adopted a “mum’s the word” strategy on their website, saying nothing about the increasingly maddening service problems.

By then, company officials must have figured out blaming the customers wasn’t working too well, and they blamed Christmas instead.

“I was told heavy Christmas web traffic was responsible,” said Jed, a Stop the Cap! reader.  “They told me with everyone getting new computers and laptops and other electronics, it might be awhile before things got back to normal, perhaps even as late as next week when people returned to work.  Considering I was getting less than 56kbps service at this point, I wasn’t buying it.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WFTV Orlando Internet Outages Frustrate Bright House Customers 12-27-09.flv[/flv]

WFTV-TV in Orlando is credited for being among the first in the media to shine a spotlight on Bright House Networks’ failure to address their ongoing Internet service problems (2 minutes)

As the weekend wore on, enterprising customers learned it was probable a DNS server or other connection point further up the Internet was probably causing all of the trouble.  Yet that theory was repeatedly denied by Bright House, who was forced to begin issuing statements to the local press, still blaming others for broadband woes.

“Some Bright House Networks Road Runner Internet customers are experiencing intermittent problems accessing various websites,” Bright House spokesman Brian Craven wrote. “The issue is a result of off-network congestion. BHN engineers are working to resolve the issue.”

Customers were also on the receiving end of that old chestnut ‘the exaflood,’ the theory that the Internet is being crushes by a global traffic flood worthy of Noah’s Ark.  As comments piled up on Orlando media’s online message boards, customers traded the excuses coming from Bright House, wondering why the company couldn’t spend as much effort actually fixing the problems with Road Runner on Xanax.

Finally, several days later, company officials admitted the problems were coming from a lot closer to home — theirs, not yours. Brian “It’s Congestion” Craven was back with a revised statement:

“A hardware problem experienced by a Bright House Networks vendor caused some Bright House Networks customers to experience intermittent problems accessing some Internet websites. The issue was resolved at 11 p.m. Sunday. Bright House Networks Internet service was never down.  The situation only affected some customers’ ability to access certain Internet sites.”

Some websites like Google, for instance.

So it wasn’t your fault after all.  It was one of their “vendors.”  Customers pondered when they would be able to receive service credit for several days of useless broadband.

The answer?  Never… tough luck:

“Customer credits will not be given because at no time was Internet service down. It was a latency issue in which some customers experienced intermittent problems accessing certain websites. The issue was caused by a hardware problem experienced by a Bright House Networks vendor,” Craven added.

Customers began lighting the torches.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WOFL Orlando Bright House Outage 12-29-09.flv[/flv]

WOFL-TV in Orlando reports on growing customer rage over the lousy customer service being provided by Bright House Networks. (1 minute)

News accounts noted some customers disappointed by the company’s callous response were returning the favor by unceremoniously dumping their cable modems on the counter at the nearest Bright House cable store, canceling service.  For those brave enough to stay, lessons were learned. As one Web Worker Daily contributor lamented, the most effective way to get Bright House off their collective butts was to embarrass them in the media:

The biggest help [came] when the media started reporting the problem. A local TV station and the Orlando Sentinel both picked up the story. Within only a couple hours, the problem that supposedly didn’t even exist was magically solved, after having dragged on for at least a week.

The lesson I came away with was that fighting as a group is more powerful than going it alone — and even better is having a reporter or two in that group.

The Internet… interrupted: Bright House Networks’ holiday gift to you.  A week of buck passing, liberal use of the “excuse-o-matic” that blames others for their own problems, and a complete unwillingness to do the right thing by customers.  When a service doesn’t work properly, customers don’t want to hear a finger-pointing blame game.  They want the service fixed… fast, and receive credit for the inconvenience they experienced while trying to use your service.  Anyone aware of good customer relations already recognizes these are not unreasonable requests.

Too bad Bright House spent most of its time creatively not fixing its problems until the media got interested.  They should stay on the company’s case until it provides the credit customers deserve.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WFTV Orlando Bright House Not Taking Blame For Outage 12-28-09.flv[/flv]

WFTV-TV in Orlando reports on the inevitable customer blowback that happens when a service provider treats their customers with disregard.  [Apologies for the audio sync problem.] (2 minutes)

CableMax's "channel lineup" isn't exactly a piece of art

A few warning signs that your “cable company” may not be completely up front about their service:

• They don’t have a website.
• The programmers they carry never heard of them.
• No readily apparent cable franchise agreements seem to be available for inspection.
• The number of customers seem to range between 50 and “several thousand.”
• The channel lineup guide looks like it was done up with Microsoft Word and printed on a laser printer.
• Channels in your service package suddenly start to become “deauthorized” and then the entire lineup goes dark.
• Company officials either left town, won’t appear on camera to answer questions, or issue vague statements about refunds.

CableMax Communications, which claims to “maximize your cable experience,” instead maximized collection of subscriber fees and minimized their cable package down to nothing.  When it all fell apart a few days before Christmas, subscribers were out an installation fee and any payments they made for a full month of service.  Subscribers were charged $65 for installation and paid $24.95 for a package of 41 channels.

WNEM-TV in Saginaw, Michigan suggested the entire affair could have been a “scam,” interviewing one CableMax installer who claimed the service was quietly sending signals received from DISH Network, a satellite dish service, down the cable to paying subscribers.  If true, either the money to pay for multiple subscriptions to the satellite provider ran out, or DISH Network discovered the unauthorized distribution and cut off service.

If CableMax was reselling DISH Network programming, it would not be unprecedented.  In the 1980s and early 1990s, informal cable systems in the Caribbean maintained multiple subscriptions or hacked the satellite signals of satellite-delivered programming and resold it to subscribers, without bothering to pay the programmers involved.

One of the owners finally reached by phone by WNEM denied he was obtaining programming from DISH Network and promised refunds, claiming the system had approximately 50 subscribers, many who were late on their bills, and the entire enterprise ran out of money.

The village of Unionville, Michigan got itself caught in the middle when local residents approached the town hall to inquire about what happened to the village’s cable system.  A message on the village website states:

THE VILLAGE IS AWARE OF THE PROBLEMS WITH CABLE MAX AND ARE UNABLE TO RESOLVE THE PROBLEMS AT THIS TIME. THE VILLAGE OFFICE WILL TRY TO KEEP YOU INFORMED AS INFORMATION IS RECEIVED. WE ARE VERY SORRY FOR YOUR INCONVENIENCE.

CABLE-MAX
103 SOUTH WESTLAWN DR.
MIDLAND, MI. 48640

IF YOU NEED SERVICE CALL: 1-888-308-8782 (THIS NUMBER HAS BEEN DISCONNECTED)

That South Westlawn address appears to be in a residential area to the west of Midland, and is likely a residence.  We couldn’t find a cable programmer on their lineup that heard of the company or was authorized to cablecast its programming.  Although the state of Michigan does include the company on a generic cable complaint form, we could not locate any formal cable franchise agreements for CableMax Communications.  Further, the state government only had one contact e-mail address for the company – a Gmail account.

Although WNEM notes the Better Business Bureau has rated the company “F,” that rating appears to be based on a single complaint.

Very little additional information is known about CableMax Communications, and no active investigation was currently underway by Michigan authorities.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WNEM Saginaw Cable Provider Accused Of Defrauding Customers 12-30-09.flv[/flv]

WNEM-TV in Saginaw opened its 6pm newscast last night with this exclusive story about CableMax Communications. (3 minutes)

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WNEM Flint Cable Company Ripoff 12-31-09.flv[/flv]

Today, the station aired a follow-up report about the latest developments with the cable company that closed down operations, leaving cable customers without service. (1 minute)

Bright House Networks, which has had a close association with Time Warner Cable for years, launched its own version of a “roll over or get tough” campaign through its new Your Right to Watch website.  The launch of the site comes in response to Fox’s own critical ads warning Bright House subscribers access to Fox programming was about to go dark on the cable system unless the two parties reached agreement by December 31st.  Bright House Networks has been negotiating through Time Warner Cable, which is why Fox targeted both in its most recent ad campaign.

The website, stark in appearance, contains just a few sentences on its home page.

“During negotiations, some program providers threaten to take their channels off the cable system. Using this tactic only hurts TV viewers – causing confusion and concern — and is a no-win for everyone,” the site notes.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/Bright House Your Right to Watch Ad.flv[/flv]

Bright House Networks includes this video on their new ‘Your Right to Watch’ website.