The considerable annoyance among subscribers facing rate increases from Time Warner Cable notwithstanding, the Wall Street press is celebrating the company’s increased earnings power for 2010, with the stock now being rated as a “compelling bet” by Barron’s.

Despite producing “copious amounts of cash,” Time Warner Cable stock is rated underpriced, and set to move higher in the new year as the company improves its earnings with price increases for its 14.6 million subscribers nationwide.

Price increases could help to power a sharp recovery in Time Warner Cable’s earnings, which probably slumped 15% in 2009, to $1.1 billion, or $3.03 a share. This year, net income could rise 21%, to $1.3 billion, or $3.60 a share, due to higher revenue and improving operating margins. The company earned $1.2 billion, or $3.57 a share, in 2008, on revenue of $17 billion.

Subscriber growth has slowed at Time Warner and other cable concerns, mainly because of the housing recession. The company lost 84,000 basic-video subscribers in last year’s third quarter, reducing the total to just under 13 million, and analysts see basic subs dropping 2.5% this year, to around 12.5 million. Still, revenue rose 3.6% in the third quarter, to $4.5 billion, putting Time Warner Cable on track to generate $18 billion of revenue for the full year, and $19 billion in 2010. Analysts expect some recovery in advertising revenue, and additional growth from the further penetration of bundled residential high-speed data and digital phone products.

Barron’s points out Time Warner Cable’s capital spending has continued to decline dramatically, falling 13 percent in the third quarter.  The company had free cash flow of $465 million in the period.

Despite the company’s falling broadband costs, falling capital spending, and increasing prices, some Time Warner Cable executives still approve of taking earnings to an even higher level with Internet Overcharging schemes that would change the “pricing model” for broadband service.  Despite company claims such changes would save customers’ money, relentless price increases in many communities — even higher for those on Road Runner’s economy tiers, prove otherwise.

What is Time Warner Cable doing with all of the money?  Paying down some debt and returning cash to shareholders, perhaps via an ordinary dividend or share buyback, according to Barron’s.

What allows for a company to increase pricing on broadband service and subject customers to a potential Internet Overcharging scheme down the road?

“At a time when demand for broadband is going through the roof, Time Warner is the only game in town in a lot of its footprint,” says Craig Moffett, an analyst at Bernstein Research.