Despite efforts to improve their reputation, cable companies are hated so much the industry now scores lower than any other according to the American Customer Satisfaction Index (ACSI).

The only reason the industry’s average score or 68 out of 100 ticked higher are some new competitors, especially Verizon’s FiOS fiber optic network, which scores higher than any other provider.

The cable companies you grew up with still stink, ACSI reports, with Comcast (63) and Time Warner Cable (60) near the bottom of the barrel.

At fault for the dreadful ratings are constant rate increases and poor customer service. As a whole, consumers reported highest satisfaction with fiber optic providers, closely followed by satellite television services. Cable television scored the worst. Despite the poor ratings, every cable operator measured except Time Warner Cable managed to gain a slight increase in more satisfied customers. Time Warner Cable’s score for television service dropped five percent.

Customers are even less happy with broadband service. Verizon FiOS again scored the highest with a 71% approval rating. Time Warner Cable (63) and Comcast (62) scored the lowest. Customers complained about overpriced service plans, speed and reliability issues. Customers were unhappy with their plan options as well, including the fact many providers now place arbitrary usage limits on their access.

The best word to describe customer feelings about their broadband options: frustration, according to ACSI chair Claes Fornell. “In a market even less competitive than subscription TV, there is little incentive for companies to improve.”

Other stories of interest:

1. Consumer Reports Rates Your Broadband Provider: Fiber Great, Cable/DSL Meh, Satellite Sucks
2. Verizon’s Anti-Aggression Treaty With Big Cable May Be the End of FiOS
3. A Look at Broadband Numbers in the United States: DSL Hurting Phone Companies
4. HissyFitWatch: Frontier and Comcast Battle Over Billboards in Ft. Wayne, Ind.
5. Competition Breather: Verizon FiOS Rate Hikes Ease Pressure on Cablevision, TWC

Satellite television provider Dish Network today offered $25.5 billion for Sprint Nextel Corp., in an unsolicited bid that surprised the wireless industry.

The bid, announced by CEO Charles Ergen, is $5.5 billion higher than that offered by Japan’s Softbank, which already had a pending deal to take a 70 percent stake in the third largest wireless carrier.

The bidding may not yet be over if Softbank decides to counter with a higher offer or if other bidders emerge in the coming weeks.

Ergen has signaled his interest in entering wireless markets to compensate for slowing earnings in the satellite television business.

“He is trying to transform his own business,” Vijay Jayant, an analyst at International Strategy & Investment Group in New York told Bloomberg News. “He’s trying to reinvent himself, moving from satellite to wireless.”

Ergen’s vision would include a bundled package of satellite television, broadband wireless Internet and cellular telephone service. Providing suitable wireless broadband Internet in rural areas may be the biggest challenge because of Sprint’s more limited network coverage, but a marketing deal combining satellite television from Dish and Sprint cell phone service would be easier to carry out.

Ergen’s offer includes $8.2 billion in stock and $17.3 billion in cash. Ergen’s company has stockpiled at least $10 billion from selling bonds over the last year. He intends to borrow the rest.

Ergen earlier had attempted to disrupt a deal that would have consolidated Clearwire into Sprint. Ergen offered $3.30 a share for Clearwire, 33 cents higher than the $2.97 per share offer from Sprint. Ergen also reportedly approached both MetroPCS and Deutsche Telekom’s T-Mobile USA looking for a deal to no avail.

Some analysts question whether Ergen has enough experience to manage a major wireless company with only his past involvement selling satellite TV subscriptions. But he arrives with more than just cash and stock options. Ergen has acquired mobile spectrum from bankrupt TerreStar Networks and DBSD North America. Ergen says he has no interest in building his own wireless network, but a combined Sprint/Dish could manage the spectrum through Sprint’s existing operations.

Ergen told Bloomberg News combining the spectrum Dish owns with the spectrum owned by Sprint and Clearwire would assure Americans of a robust wireless data platform that will not have capacity constraints or require individual device fees. That is in keeping with Sprint’s existing marketing as a provider of truly unlimited wireless data plans.

Several Wall Street analysts told CNBC and Bloomberg News the deal with Softbank may be more ideal for shareholders and consumers, because it would strengthen Sprint’s leverage with equipment manufacturers to offer cheaper and more robust devices.

Consumer advocates have mixed feelings. Dish has no prior association to the wireless industry so the deal does not represent direct, competitive consolidation. It also would boost Sprint as a more formidable competitor to AT&T and Verizon Wireless. But it could also further orphan T-Mobile USA.

“Right now, we have two giants and two also-rans, and now you’re getting potentially three giants dividing up the American market place, with T-Mobile lagging far behind,” Susan Crawford told the New York Times.

Bloomberg News explores what Dish sees in Sprint that is worth a bid of $25.5 billion to acquire the country’s third largest mobile company.  (2 minutes)

http://www.phillipdampier.com/video/Bloomberg Dish Bids 25-5 Billion for Sprint to Challenge Softbank 4-15-13.flv

Bloomberg says Dish has been stockpiling $10 billion in cash for new acquisitions to transform its business away from a satellite TV-only company.  (2 minutes)

http://www.phillipdampier.com/video/Bloomberg All Things Are on the Table for Sprint 4-15-13.flv

Christopher Marangi, of Gabelli Asset Fund talks with Bloomberg’s Erik Schatzker about Dish Network’s unsolicited $25.5 billion offer for Sprint and what options are available to Sprint with the offers it has on the table. (2 minutes)

http://www.phillipdampier.com/video/Bloomberg Dish Bid for Sprint Lacks Capital Chaplin Says 4-15-13.flv

Jonathan Chaplin, an analyst with New Street Research LLP, thinks Softbank’s original offer is superior to the one from Dish.  (6 minutes)

http://www.phillipdampier.com/video/Bloomberg Bidding for Sprint Is Not Over Fritzshe 4-15-13.flv

Jennifer Fritzsche, Managing Director of Equity Research at Wells Fargo Securities, discusses the likelihood of other players making bids. (2 minutes)

http://www.phillipdampier.com/video/Bloomberg What Did Dish CEO Ergen Say About Sprint Bid 4-15-13.flv

A Bloomberg News reporter interviewed Charlie Ergen about why he wants to enter the wireless business.  Ergen’s vision includes no nickel and diming customers with monthly device fees and usage charges. (4 minutes)

Other stories of interest:

1. Dish Network Wants to Convert Satellite Frequencies to Add Voice, Broadband Services
2. Dish Network Planning Nationwide 5Mbps Satellite Broadband Service
3. Emboldened Sprint Seeks Controlling Interest in Clearwire; Will Pay $100 Million for Co-Founder’s Stake
4. Wall Street Goes for Another Round of Sprint-Bashing: Why Are They Still in Business?
5. Wall Street Wants Two Wireless Carriers for Americans: AT&T and Verizon

The Federal Communications Commission has opened the door for Time Warner Cable to raise basic cable rates in several parts of Ohio and California after ruling the company faces effective competition from Dish Networks and DirecTV.

Under FCC rules cable rates for the broadcast basic tier, which includes local television stations and a handful of basic cable networks, remain regulated by the government until a cable operator can prove at least 50 percent of their service area is covered by a competing provider and 15 percent of its would-be customers are signed up with a competitor.

Cable companies have requested rate deregulation in countless communities as satellite and television service from phone companies penetrates their markets. Once rates are deregulated, cable operators can raise them to whatever price they believe the marketplace will bear.

In several affected communities, Time Warner Cable’s service is so uncompelling, almost half of the households have signed up for satellite service instead.

The communities affected in Ohio:

• City of Bellefontaine
• Howard Township
• Village of Huntsville
• Village of Lakeview
• McArthur Township
• North Bloomfield Township
• Village of Russells Point
• Stokes Township
• Washington Township
• Village of Zanesville

In California:

• Bradford

Other stories of interest:

1. Time Warner Cable Hiking Rates: Basic Cable Up 8.2% – $72.50/Month in Southern California
2. Time Warner Raising Rates in the Carolinas: $90.49 for Digital Cable, $167.89 Triple Play
3. Time Warner Cable Messes Up Bills for 15,000 Ohio Customers: One Woman Fights Back
4. Time Warner Cable Lite: Stripped Down Basic Cable Package Tests in NYC, NE Ohio
5. Northeast Ohio Deals With Time Warner Cable Pixel Problem

CNET was forced to withdraw a planned award for Dish Network’s ad-skipping “Hopper” DVR because the website’s owner, CBS, is suing the satellite dish company over the device.

The rift has led to questions about the editorial independence at CNET, and as of this afternoon, a senior writer has quit over the controversy.

Greg Sandoval, who formerly reported for the Washington Post and Los Angeles Times resigned in protest less than one hour after reports surfaced CNET was ordered to disqualify Dish Network from consideration at the Best of C.E.S. Awards in Las Vegas last Thursday.

The well-advertised Dish Hopper DVR allows viewers to seamlessly skip past advertising on recorded major network primetime programming. CNET disclosed that regardless of the product’s merits, it could not be considered at the awards event because the website’s owner was actively engaged in litigation that argues the device violates U.S. copyright laws.

“We are saddened that CNET’s staff is being denied its editorial independence because of CBS’s heavy-handed tactics,” said Dish Network CEO Joseph P. Clayton. “This action has nothing to do with the merits of our new product. Hopper with Sling is all about consumer choice and control over the TV experience. That CBS, which owns CNET.com, would censor that message is insulting to consumers.”

The Verge website turned up the temperature in CNET’s offices when it reported the Dish Hopper was banned from consideration only after it became apparent it was going to win an award:

Before the winner was unveiled, CBS Interactive News senior-vice president and General Manager Mark Larkin informed CNET’s staff that the Hopper could not take the top award. The Hopper would have to be removed from consideration, and the editorial team had to re-vote and pick a new winner from the remaining choices. Sources say that Larkin was distraught while delivering the news — at one point in tears — as he told the team that he had fought CBS executives who had made the decision.

The Verge added there was clear evidence of a growing influence on the editorial decisions at the digital news subsidiaries owned by CBS, all designed to protect the parent company.

Sandoval left almost immediately after The Verge went public with its report.

CBS released a statement earlier this afternoon:

CBS has nothing but the highest regard for the editors and writers at CNET, and has managed that business with respect as part of its CBS Interactive division since it was acquired in 2008. This has been an isolated and unique incident in which a product that has been challenged as illegal, was removed from consideration for an award. The product in question is not only the subject of a lawsuit between Dish and CBS, but between Dish and nearly every other major media company as well. CBS has been consistent on this situation from the beginning, and, in terms of covering actual news, CNET maintains 100% editorial independence, and always will. We look forward to the site building on its reputation of good journalism in the years to come.

Other stories of interest:

1. Free Press Opposing Comcast-NBC Merger With Planned Ad Buy Noting Comcast’s “Worst Company in America” Award
2. AT&T “Wins” Consumerist’s Third-Worst Company in America Award
3. Happy Independence Day!
4. Dish Network Planning Nationwide 5Mbps Satellite Broadband Service
5. Dish Network Buys Denver-Based Liberty-Bell Phone Company: Start of a New Trend?

Dish Network is planning to introduce 5Mbps nationwide satellite broadband service after its partner company EchoStar successfully launched the satellite that will host the new service.

Bloomberg News reports Dish will introduce the service in late September or October this year and intends to market it in areas where DSL or cable broadband has been spotty or unavailable.

Dish’s broadband service will use its new EchoStar 17 satellite launched in July. The satellite can technically support download speeds up to 15Mbps, but Dish wants to start with slower speeds to maximize the number of potential customers the satellite can accommodate, which the company estimates can be as high as two million.

With an estimated 8-10 million Americans currently bypassed by broadband, Dish may have little trouble establishing a substantial customer base, if the service works as advertised. Past satellite broadband ventures have traditionally offered slow speeds and draconian “fair usage policies” which strictly limit how much customers can use the service.  The services are not cheap either.

EchoStar’s vice president of investor relations Deepak Dutt said the newest generation of satellite broadband services offer much faster service and higher capacity by an order of magnitude. But average usage per subscriber has also risen, providing a challenge for satellite broadband providers that may lack the capacity to sustain high bandwidth content, especially streaming video.

Dish already offers up to 12Mbps satellite broadband through a marketing partnership with Carlsbad, Calif.-based ViaSat, Inc. But ViaSat’s service is limited to certain geographic regions in the United States. Dish insiders say their service with EchoStar will compliment, not replace their deal with ViaSat, and will expand coverage nationwide.

The combination of broadband and satellite television may make it possible for Dish to sell new bundled packages that can compete with phone and cable companies. Dish also claims to be waiting for Federal Communications Commission approval to use its wireless spectrum to offer mobile Internet and phone service, which could also be included in a future bundled offer.

Other stories of interest:

1. Dish Network Wants to Convert Satellite Frequencies to Add Voice, Broadband Services
2. EchoStar Buys Hughes Satellite; Acquires Satellite ‘Fraudband’ Service Rural Americans Loathe
3. Dish Network Buys Denver-Based Liberty-Bell Phone Company: Start of a New Trend?
4. DISH Network Plunders Checking Account of Ky. Tornado Victim Who Lost Everything
5. Satellite Revolt: ViaSat’s WildBlue Customers Upset Over “Bait & Switch Upgrade”

A Short History of Wireless Cable

Spectrum offered Chicago competition to larger ON-TV, selling commercial-free movies and sports on scrambled UHF channel 66 (today WGBO-TV).

Long before many Americans had access to cable television, watching premium commercial-free entertainment in the 1970s was only possible in a handful of large cities, where television stations gave up a significant chunk of their broadcast day to services like ON-TV, Spectrum, SelecTV, Prism, Starcase, Preview, VEU, and SuperTV. For around $20 a month, subscribers received a decoder box to watch the encrypted UHF broadcast programming, which consisted of sports, popular movies and adult entertainment. The channels were relatively expensive to receive, suffered from the same reception problems other UHF stations often had in large metropolitan areas, and were frequently pirated by non-paying customers with modified decoder boxes.

With the spread of cable television into large cities, the single channel over-the-air services were doomed, and between 1983-1985,virtually all of their operations closed down, converting to all-free-viewing, usually as an independent or ethnic language television outlet.

But the desire for competition for cable television persisted, and in the mid-1980s the Federal Communications Commission allocated two blocks of frequencies for entertainment video delivery. The FCC earlier allocated part of this channel space to Instructional Television Fixed Services (ITFS) for programming from schools, hospitals, and religious groups, which could use the capacity to transmit programming to different buildings and potentially to viewers at home with the necessary equipment.

Home Box Office got its start broadcasting on microwave frequencies before moving to satellite.

In practice, ITFS channels allocated during the 1970s were underutilized, because running such an operation was often beyond the budgets and technical expertise of many educational institutions. Premium movie entertainment once again drove the technology forward. After signing off at the end of the school day, Home Box Office, Showtime, and The Movie Channel signed on, using microwave technology to distribute their services to area cable systems and some subscribers. As those premium services migrated to satellite distribution beginning in 1975, reallocation for a new kind of “wireless cable TV” became a reality.

Wireless cable (technically known as “multichannel multipoint distribution service”) began in earnest in the late 1980s and early 1990s, with a package of around 32 channels — typically over the air stations, popular cable networks, and one or two premium movie channels. Some operations in smaller cities sought to beam just a channel or two of premium movies or adult entertainment to paying subscribers, the latter at a substantial price premium. Installation costs paid by providers were more affordable than traditional cable television — around $350 for wireless vs. $1,000 for cable television. That made wireless attractive in rural areas where installation costs for cable television could run even higher.

However, it was not too long before wireless cable operators ran into problems with their business models. Obtaining affordable programming was always difficult. Some cable networks, then-owned by large cable systems, either refused to do business with their wireless competitors or charged discriminatory rates to carry their networks. By the time legislative relief arrived, the wireless industry realized they now had a capacity problem. As cable television systems were being upgraded in the 1990s, the number of channels cable customers received quickly grew to 60 or more (with many more to come with the advent of “digital cable”). Wireless cable was stuck with just 32 channels and a then-analog platform. Satellite television was also becoming a larger competitive threat in rural areas, with DirecTV and Dish delivering hundreds of channels.

American Telecasting gave up its wireless cable ventures, under such names as People’s Wireless TV and SuperView in 1997, selling out to companies including Sprint and BellSouth (today AT&T). BellSouth pulled the plug on the services in February, 2001.

Wireless providers simply could not compete with their smaller packages, and most closed down or sold their operations, often to phone companies. The few remaining systems, mostly in rural areas, have typically combined their wireless frequencies with satellite provider partners to deliver television, slow broadband, and IP-based telephone service.

Rebooting Wireless Cable for the 21st Century

By the early-2000′s the Federal Communications Commission proposed a new allocation for a “Multichannel Video and Data Distribution Service” (MVDDS). Designed to share the 12.2-12.7GHz band with Direct Broadcast Satellite (DBS) services DirecTV and Dish, MVDDS was partly envisioned as a potential way to deliver local stations to satellite subscribers over ground-based transmitters. But things have evolved well beyond that concept, especially after both satellite providers began using “spot beams” to deliver local stations to different regions from their existing fleet of orbiting satellites.

MVDDS was ultimately opened up to be either a competing cable television-like service or for wireless broadband, or both. Michael Powell, then-chairman of the FCC during the first term of George W. Bush, said the technology was free to develop as providers saw fit:

What is MVDDS? The short answer is that we do not know.  Its name, Multichannel Video Distribution and Data Service, seems to suggest everything is possible – and perhaps it is.

But the service rules the Commission has adopted do not require MVDDS to provide any particular kind of service – it could be a multichannel video, or data, or digital radio service, or any other permutation on spectrum use.

The Commission was once in the business of requiring spectrum holders to provide a certain type of service.  That approach failed because government is a very bad predictor of technology and markets – both of which move a lot faster than government.  Over the past decade or so, the Commission has adopted more flexible service rules that bound a service based largely on interference limitations and its allocation (fixed or mobile, terrestrial or satellite).  In this Order, we follow that flexible model for MVDDS.

In 2004 and 2005, licenses to operate MVDDS services were opened up for auction, and a handful of companies won the bulk of them: MDS America, which built a 700-channel wireless cable system in the United Arab Emirates, DTV Norwich, an affiliate of cable operator Cablevision, and South.com, which is really satellite provider Dish Network. Another significant winner was Mr. Bruce E. Fox, who wants to partner with other providers to finance and operate MVDDS services.

Cablevision and Fox are the two most active license recipients at the moment.

A Look at Today’s MVDDS Wireless Players

Fox launched Go Long Wireless in Baltimore as a demonstration project. Go Long transmits its signal from the roof of the World Trade Center at the Baltimore Inner Harbor to the Emerging Technology Center, a business incubator site a few miles away. Fox believes the technology is especially suited to multi-dwelling units like apartment complexes and condos. He plans to work with other service providers who will market and bill the service under their own brand names. Fox does not seem to be interested in challenging the marketplace status quo. He does not believe in using MVDDS to provide television service, for example. In Fox’s view, the real money is in broadband and Voice over IP telephone service.

Cablevision’s involvement is more direct-to-consumer. Its Clearband service– now operating under the new brand ‘OMGFAST‘ — is now selling up to 50/3Mbps wireless broadband service in the Deerfield Beach, Fla. area. The company has had nothing to say about whether this service is slated to expand, and if it does, Cablevision will not be permitted to operate it in areas where they already provide cable service, due to the FCC’s cross-ownership rules.

OMGFAST originally bundled voice service in its broadband packages, which it sold at different price points: 12Mbps for $39.95 a month, 25Mbps for $59.95 a month, and 50Mbps at $79.95. The company also tested a 50Mbps promotion priced at $29.95 a month for three months, $59.95 ongoing. Today it offers a better deal: $29.95 a month for 50Mbps service as an ongoing rate. (Expect to pay $10 a month more for mandatory equipment rental, and $14.95 a month if you also want voice service.)

Here is a promotional video explaining how Clearband (now OMGFAST) wireless broadband works. (3 minutes)

MVDDS currently delivers broadband with similar constraints cable systems operate under — namely, download speeds are much faster than upload speeds. That is because upstream bandwidth relies on another transmission technology, often WiMAX, in the 3.65 GHz or 5 GHz bands.

The wireless technology is also very “line of sight,” meaning the tower must be within six miles of the subscriber and not blocked by any obstructions. Hills, buildings, even heavy foliage can all block MVDDS signals the same way satellite signals can be blocked (they share the same frequencies).

Most customers end up with an antenna that very much resembles a traditional satellite dish from DirecTV or Dish, mounted on a roof. To maximize available bandwidth, MVDDS uses a configuration similar to cellular systems, with up to 900Mbps of total bandwidth available to each 90-degree narrow beam sector.

Cablevision has MVDDS licenses to serve most large cities in the United States.

The question is, how will license holders ultimately use the technology. Although originally proposed as a competitor to traditional cable or satellite TV, deregulation has left the fate of MVDDS in the hands of the operators.

Some are considering not selling the service to consumers at all, but rather making a market out of providing backhaul connectivity for cell towers. Dish may be interested in using its licenses to offer customers a triple play package of broadband and phone service with its satellite TV package. Nobody seems particularly interested in providing television service over MVDDS, primarily because programmers’ demands for higher carriage payments would cut into revenue.

Even Cablevision isn’t completely sure what it wants to do. Although it currently is trialing broadband and phone service in Florida, the company earlier petitioned the FCC for increased power to establish a more suitable wireless backhaul service it can sell to mobile phone companies.

For the moment, reviews seem relatively positive for the Florida market test. Of course, as more customers pile on a wireless service, the less speed becomes available to each customer. OMGFAST does not appear to be currently concerned, noting it has no usage caps on its service.

Want to know which provider may be coming to your area? See below the jump for a list of the top-three bid winners and the cities they are now licensed to serve, in order of market size.

… Continue Reading

Other stories of interest:

1. Dish Network Wants to Convert Satellite Frequencies to Add Voice, Broadband Services
2. Comcast Offers $300 Rebate for Comcast Cable + Verizon Wireless Service in Pacific Northwest
3. Wall Street Wants Two Wireless Carriers for Americans: AT&T and Verizon
4. EchoStar Buys Hughes Satellite; Acquires Satellite ‘Fraudband’ Service Rural Americans Loathe
5. Special Report: AT&T and Verizon’s Deteriorating Legacy Landline Networks

Customers sitting down to watch the local news in Louisville, Ky. on Time Warner Cable (formerly Insight) now get to see stories about ongoing bankruptcy woes at Eastman Kodak, house fires in Irondequoit, road work in Greece, and Scott Hetsko’s local forecast… for Rochester, N.Y.

WLKY in Louisville is no longer seen on former Insight cable systems (now owned by Time Warner Cable). In its place, Louisville viewers are watching WROC-TV in Rochester, N.Y.  Here is why. (3 minutes)

No, it is not some weird sunspot reception and nobody transported you from Kentucky to western New York while you were sleeping. It’s simply another epic battle waged in:

RETRANSMISSION CARRIAGE CONSENT WARS: 2012

“Not getting the channels you are paying for does not necessarily entitle you to a refund, but does require you to pay more when a deal is eventually struck.”

WESH-TV in Daytona Beach/Orlando, Fla. is one of the Hearst-owned stations affected in the dispute with Insight/Time Warner Cable/Bright House Networks.

These skirmishes used to be commonplace around the end of the year, when carriage agreements between cable, satellite, and telephone companies with cable networks and local stations came up for renewal. When the programmer passed a figure written on a folded up piece of paper across the table to your pay television provider, the shock and awe of that number, occasionally 100-300 percent more than the year before, was the opening shot in a battle that now increasingly leads to favorite local stations or cable channels being stripped from your lineup.

In Louisville, that is precisely what happened to WLKY-TV, one of 15 stations owned by Hearst Television, taken off the lineup when Time Warner Cable/Insight/Bright House Networks could not successfully negotiate a renewal agreement. Time Warner complained Hearst wanted 300% more for each of the affected stations, an increase sure to be passed along to cable customers already long weary of endless annual rate increases. That was the same story told in other cities affected by what is now a week-long blackout. In Greensboro/Winston-Salem, N.C., Time Warner customers are doing without WXII-TV. Kansas City customers lost two local stations owned by Hearst – KMBC and KCWE. Two stations are also missing from Bright House’s lineup in Orlando: WESH and WKCF.

Hearst Television’s general manager and president of WLKY has stopped referring to those watching the station simply as “viewers.” Glenn Haygood now calls them “subscribers.” Haygood talks with WHAS Radio about the dispute and what he thinks about Insight/Time Warner Cable. (10 minutes)

Insight/Time Warner Cable customers in Louisville, Ky. are now watching CBS shows on WROC-TV from Rochester, N.Y.

But why are Louisville viewers now watching the boating forecast for Lake Ontario, several hundred miles away? Because Time Warner Cable thinks it has a signed contract with Nexstar Broadcasting Group that lets them turn several Nexstar-owned stations into “superstations,” importing them in cities where contract disputes have knocked the local station off the cable lineup. In Louisville, WLKY, a CBS affiliate, has been replaced by WROC, the CBS affiliate in Rochester. In Greensboro and several other cities, WXII, an NBC affiliate, has been replaced with WBRE in Wilkes Barre, Penn. Some other Time Warner customers are instead watching WTWO out of Terre Haute, Ind., for NBC shows.

It represents a half-measure that Time Warner Cable’s Jeff Simmermon tells Stop the Cap! is “making the best of a tough situation.”

Viewers are naturally outraged.

“I’ve always wanted to know the weather and news in Rochester, Buffalo, Ontario and Caribou,” Kelly Grether teased. “Louisville did make [WROC's weather] map believe it or not.”

Others are simply confused and engaged in must-flee TV.

“I saw the news coming on,” Greensboro resident Mona Wright told the News & Record. “It didn’t take me but one minute to figure out that these counties were nowhere around us; I changed the channel.”

Some Louisville viewers are even assuming the sales and discounts being advertised on WROC are good in Kentucky as well (often, they are not).

For now, it is difficult for Kentucky viewers to know what WROC is airing because the local on-screen program guide has not been updated to include listings for the Rochester station. Time Warner is pushing a lot of viewers to WROC’s website for program information.

Viewers hoping to practice their Jeopardy and Wheel of Fortune skills during the dinner hour lost that opportunity altogether in some cities, while in the Triad of North Carolina, viewers discovered the two shows on two different channels at the same time.

For now, WROC has completely ignored its new Kentucky audience, but WBRE’s morning anchors now regularly acknowledge and welcome their viewers from several states away.

http://www.phillipdampier.com/video/WFTV Orlando WESH Disappears from Bright House 7-10-12.flv

WFTV in Orlando reports on Bright House Networks’ customers being shut out of WESH-TV in Daytona Beach after the cable operator failed to meet Hearst Television’s demands for an increase in carriage payments.  (2 minutes)

The dispute has since enlarged to bring in side players who are unimpressed with Time Warner’s creative problem-solving:

• Impacted stations now off Time Warner’s lineup think the “new” stations on the lineup are about as honorable as employing scab workers during a union strike;
• Nexstar, for the second time, declares Time Warner is illegally importing their stations to unauthorized places. They are threatening to complain to the FCC and possibly sue to stop the practice. Nexstar earlier complained about a similar dispute in upstate New York which left viewers in northern New York watching WBRE in Wilkes-Barre. But the carriage dispute was settled quickly enough for WBRE to go back to being  viewable only in Pennsylvania, ending the dispute;
• Syndicated program owners sell shows like Wheel of Fortune on a “market exclusive” basis, which means competing local stations already paying for syndicated shows do not want out of area stations also carrying those shows to local audiences, diluting their audience.
• Advertisers on stations now off the lineup paid ad rates based on tens of thousands of cable viewers who are now probably watching another station. Some are demanding “make goods” or outright refunds to get the value for money they were originally promised.

But nobody is more caught in the middle than consumers, especially those paying for channels they are no longer getting.

“I want my money back,” says Orlando Bright House customer Luis Fernandez. “I have lost two stations on my lineup and my bill should be going down to compensate, but Bright House is refusing to credit me.”

Time Warner Cable does not usually give refunds either, arguing that its customers pay for a package of channels and the technology that delivers those networks to customers. Giving a refund for the loss of one or two stations would be tantamount to the industry’s worst nightmare: getting customers used to the idea of paying individually for every channel.

One customer willing to make himself a major nuisance in Wauwatosa, near Milwaukee, Wis., finally wore Time Warner down and secured a $5 a month discount on his bill for the length of the dispute that knocked Milwaukee’s WISN off his lineup.

“[I called] Time Warner to voice my disgust in them putting me (the paying customer) in the middle of their negotiation failures, and after reaching a ‘supervisor,’ I was able to get a discount on my monthly bill,” the reader told the Journal-Sentinel. “It wasn’t easy, but I did it.”

Hearst is encouraging viewers to drop Time Warner like a hot potato and switch to AT&T U-verse or a satellite provider like DirecTV. Negotiations seem to be continuing on a sporadic basis, but one week later, customers heading for the door have already left or are simply watching the local news on another channel.

Satellite Showdown — DirecTV vs. Viacom: Playing Down and Dirty With Everyone

Viacom turns the tables on DirecTV’s clever ads to lambaste the satellite provider for cutting off more than two dozen cable channels owned by Viacom.  (1 minute)

If a customer took Hearst’s advice, they might find themselves out of the frying pan and into the fire. Newly arriving DirecTV customers can join the Anger Party 20 million satellite customers are now throwing over a much larger, higher profile dispute between the satellite provider and Viacom. Collateral damage: the loss of networks including Palladia, Centric, Tr3s, CMT, Logo, NickToons, VH1 Classic, TeenNick, Nick Jr., Nick@Nite, Spike, BET, VH1, TV Land, Comedy Central, Nickelodeon and MTV.

Some financial analysts are calling the dispute the mother-of-all-program-fee-battles, and as they watch both sides dig in, some warn it could mean DirecTV customers won’t be watching The Daily Show with Jon Stewart until August.

DirecTV says Viacom wants a 30% rate increase to renew its contract to carry the company’s networks. That is comparatively cheap contrasted with the prices Hearst wants Time Warner Cable to now pay. Analysts expect DirecTV and Viacom will eventually settle their dispute by agreeing to a 27% rate increase, but nobody knows how long the two will battle it out before an inevitable agreement is reached.

Regardless of the timing, customers will likely pay the price. Nomura analyst Michael Nathanson informed his Wall Street clients DirecTV will end up paying Viacom $2.85 per subscriber — about 60 cents more per month than it pays today. That’s tough for DirecTV to swallow, and probably even harder to pass along to customers. Satellite TV providers have some of the country’s most-frugal pay television customers who are especially resistant to rate increases.

The dispute is so high profile, both companies are bringing out high-powered executives and show talent to argue their respective cases.

Millions of dollars are at stake, and both Viacom and DirecTV are willing to fight to the death, even leaving customers on the battlefield.

Not so fast, says DirecTV CEO Michael White, seen here presenting DirecTV’s position in the Viacom dispute for the benefit of concerned customers.  (1 minute)

“All we are trying to get is a fair deal for our customers and I’m sorry our customers are being forced into the middle of this,” DirecTV’s Michael White said. “We just think we pay a half a billion dollars a year and a billion dollar increase over five years, over 30 percent, is not justified by the marketplace or fair relative to our largest competitors or by their ratings.”

Viacom CEO Philippe Dauman counters, “In the last seven years since we did the last DirecTV deal, we have successfully and peacefully concluded affiliate agreements with every major distributor in the U.S. We are prepared to move forward. It’s unfortunate consumers for the first time are not able to enjoy our channels,” said Dauman, adding, “I don’t want to negotiate in public.”

DirecTV was telling its customers it can watch many of the missing shows for free online, until Viacom reportedly began removing that direct viewing option last week. That hardball tactic could impact everyone trying to stream Viacom’s shows — DirecTV customer or not.

“We’ve temporarily slimmed down our offerings, as DirecTV markets them as an alternative to having our networks,” a Viacom spokesman told CNNMoney. “The online content is intended to serve as a complimentary marketing tool for our partners.”

“At least they were honest about the reasons why they pulled this,” said Stop the Cap! reader Dick Armlo, a DirecTV customer in Idaho. “But fortunately, you can still find a lot of the shows on Amazon’s video on demand and Hulu.”

Customers threatening to switch providers often discover the new neighborhood they move to is just as bad as the one they left.

Dish Network customers are currently enduring a long-standing dispute with Cablevision-owned AMC Networks. The result is no AMC, IFC, Sundance Channel and WeTV on Dish. AMC is telling Dish customers to turn their dish into a birdbath and head elsewhere… perhaps to AT&T U-verse which just recently averted its own blackout with AMC over the same channels. AT&T customers can expect part of their next rate increase to cover the negotiated rate hike AMC won for itself — the one AT&T agreed to on your behalf. After all, it’s your money at stake, not theirs.

CNBC talks with Viacom CEO Philippe Dauman to get his views about the dispute with one of his best customers — DirecTV.  (2 minutes)

Other stories of interest:

1. Last Day for Time Warner Cable-Fox Negotiations – Which One Will Cave First?
2. Time Warner Cable & Viacom Make Peace: Comedy Central, MTV Coming to Apps
3. More Carriage Disputes: Time Warner vs. Disney, AT&T vs. Hallmark – Online Video Dispute New to Fight
4. Insight Leaves 300,000 Louisville Customers With Frozen Pictures for Nine Hours – No Refunds (Unless You Ask)
5. Fox – Time Warner Cable Battle Rages On, Cable Company Threatens Fox With A-La-Carte Option

In the eyes of many entertainment executives, pressing fast forward to skip past commercials recorded by your DVR is a crime, and they want it stopped.

We’ve made progress. In the 1970s and early 1980s, those same executives were arguing recording a television show itself was a crime.

The copyright infringement wars continue, beyond college students facing ruinous lawsuits from the recording industry or movie studios sending a blizzard of subpoenas to Internet Service Providers seeking the names and addresses of those suspected of using file swapping networks.

With the increasing concentration and combination of entertainment conglomerates, the reflexive need to “control” the medium and means of distribution is gaining a receptive audience in Washington and in the courts, threatening to influence what you can and cannot do with the programming you pay to watch.

The impact is also weighing on innovative new technology from small companies like Aereo and much larger ones like Dish Network that have attempted to launch new services that challenge the conventional ways Americans watch entertainment. The result for all concerned: lawsuits designed to stifle anything the media business perceives as an imminent threat.

Dish Network has a new DVR box that can automatically skip past commercials on selected networks. The satellite company’s new “Hopper” DVR automatically records eight days’ of prime time programming from the four major American broadcast networks, analyzes the programming to find commercials, and allows subscribers to watch the recorded shows “ad-free” just hours after the original broadcast.

Major entertainment moguls immediately denounced the feature as criminal theft.

“If there were no advertising revenues, the free broadcast television model in the United States would collapse,” wrote an alarmed News Corp. (owner of FOX Broadcasting) in its complaint filed in Los Angeles federal court. That network also accuses Dish of violating their contract with FOX and copyright infringement.

“Of course, you know this means war.” — Dish’s new AutoHop feature raises the ire of the entertainment industry.

“This service takes existing network content and modifies it in a manner that is unauthorized and illegal,” CBS said in a prepared statement, echoing earlier statements that have historically argued recording, modifying, or re-purposing broadcast content in any way is automatically a violation of federal law, copyright, or the terms and conditions under which the network makes programming available for viewing.

NBC and ABC filed their own complaints against the technology as well.

Technically speaking, subscribers who pay a cable or satellite provider for television programming are already paying extra for the programming they are watching, negating the usual arguments commercial sponsorship covers the cost of watching “free TV” (that isn’t always free) and skipping commercials is the same as stealing.

Commercial television business models in the United States increasingly rely on “retransmission consent” fees — money paid by your satellite, cable, or phone company to the programmer for permission to carry a channel on their lineup. Virtually all of those fees are passed along to consumers as part of their monthly bill.

Some station owner groups are willing to play extreme hardball to get viewers to pay up -and- win the right to put a piece of tape over their fast forward buttons to keep them from skipping commercials on their stations.

Dallas-based Hoak Media is an example. Viewers in Panama City, Fla. were without WMBB-TV, the Hoak-owned ABC affiliate, on Dish Network for a week. Hoak Media pulled the plug on viewers earlier this month after Hoak demanded a 200% increase in retransmission consent payments and the disabling of Dish’s AutoHop commercial-skipping technology. Thirteen other Hoak stations around the country were also pulled off the satellite TV service.

“WMBB and Hoak don’t respect customer control — they are telling customers they must watch commercials,” Dave Shull, senior vice president of programming for Dish, said in a news release. “Channel skipping has been around since the advent of the remote and we think Hoak has taken an incredibly hostile stance toward their viewers.”

WMBB’s station management appeared caught off guard by their owners back in Dallas. WMBB General Manager Terry Cole admitted he didn’t even know about the AutoHop feature Hoak was demanding be disabled. A week later, the dispute appeared settled and the stations were back on Dish.

Entertainment executives are hopeful their deep pockets and industry partnerships with content distributors will ultimately win the day. They have a few things they can count in their corner.

In 2002, some of the same companies protesting Dish filed suit against ReplayTV, which had its own automated commercial skipping technology. The case dragged its way through the courts, with mounting legal expenses eventually forcing ReplayTV out of business. Problem solved.

The use of deep pockets have also intimidated other innovative ventures such as Aereo, which delivers over-the-air New York City stations online to a paying local subscriber base.

Innovation like that is also a concern to the cable industry, which itself has been around since the 1970s. Developing an online alternative to the local cable company puts cable TV executives in the same position entertainment industry executives live to fear: a threat to the business model that has earned billions in profits. In those terms, some cable operators seem willing to support the entertainment industry, even at the expense of their own customers.

That may explain why Time Warner Cable applied for, and won, their own patent for technology that disables fast-forward functionality on digital video recorders.

“Advertisers may not be willing to pay as much to place advertisements if they know that users may fast forward through the advertisement and thus not receive the desired sales message,” the cable company explains in its patent application. “Content providers may not be willing to grant rights in their content, or may want to charge more, if trick modes are permitted.”

The technology would look for digitally embedded cue tones, which are today used mostly to let local stations and cable operators insert their own local advertising messages on a network feed, to block fast forwarding past those ads.

Time Warner Cable is not likely to implement the technology anytime soon, not if they expect customers to continue to pay well over $10 a month for a recording device that won’t allow them to skip commercials.

Comcast is taking a different approach, considering plans to insert billboard advertising messages that automatically appear on-screen whenever a customer hits their fast-forward button. Broadcasters and networks have no love for that feature either, claiming it changes the programming the consumer recorded and represents… yes, copyright infringement.

Courts will once again have to find a balance between consumers’ home recording rights and the rights of large entertainment and cable companies. With more courts increasingly favorable to the notion of corporate rights enjoying equal prominence with those of citizens, who ultimately wins the right to your fast forward button remains a toss-up.

At first, DISH Network couldn’t care less about Cincinnati-area resident Jeff Demoss’ problems.  The devastating March 2 tornadoes that ripped through Peach Grove and California, Ky., just across the Ohio border, took away Demoss’ home and all of its possessions. All that remained was a post with an electric meter and his DISH Network satellite dish.

Demoss called the satellite TV company to cancel his service. There wasn’t much point continuing to pay for satellite television when your television has blown into the next town over. At first, DISH Network representatives seemed sympathetic, promising the problem would be taken care of immediately.

That was, until DISH found out Demoss’ satellite receiver was also missing and could not be returned.

“We kept getting letters in the mail saying ‘You are going to have to return the receiver, or we will have to charge you $300 for it,’” Demoss told WCPO-TV’s consumer reporter.

And DISH did exactly that, removing $300 from the family checking account.

DISH Network has earned a mediocre C+ rating from the Better Business Bureau, and has racked up more than 13,000 complaints in the past three years, some about lost equipment fees.

Companies can charge early contract termination and lost equipment fees for customers who cancel service before their service contract ends or who do not return equipment. When tragedies like storms, fires, and floods strike, many satellite and cable companies try to bill customers accordingly, at least until they end up shamed on the evening news.

DISH quickly offered to refund the Demoss family their $300 once the Cincinnati television station got involved, and the satellite company apologized for the inconvenience.

Virtually all cable, telephone, and satellite companies will eventually relent on cancellation fees and damaged/lost equipment fees if customers tell the intransigent customer service representative or supervisor their next call will be to local media to share the story, so it pays to stand your ground.

However, as Stop the Cap! has repeatedly recommended in the past, your best protection is a renter or homeowner insurance policy, which typically covers these types of losses. Renters often assume their landlord maintains insurance on their behalf, but in fact they do not. Insurance purchased by the building owner only covers structural losses, never your personal property. Renters insurance is inexpensive and highly recommended.

WCPO-TV in Cincinnati reports on how a Kentucky man who lost his home and possessions was forced to deal with DISH Network, who withdrew $300 from the family checking account for equipment lost in a March tornado.  (3 minutes)

Other stories of interest:

1. Dish Network Wants to Convert Satellite Frequencies to Add Voice, Broadband Services
2. Dish Network Buys Denver-Based Liberty-Bell Phone Company: Start of a New Trend?
3. Time Warner Cable Reminds Storm Victims They Won’t Charge for Damaged/Lost Equipment
4. Charter Cable Tells Family Tough Luck: Pay Us $1,600 for Cable Equipment, Batteries Lost in Fire
5. Updated: Charter Cable Tells Tornado Victims to ‘Look Around the Neighborhood’ for Cable Boxes or Else

In the era of today’s “triple play” package of voice, data, and phone service, satellite television providers have been left at a competitive disadvantage.  Both Dish Network and DirecTV can sell you all the television signals you want, but their satellite-based distribution limits the options to include broadband and telephone service in the package.  Now Dish wants to convert some of their satellite spectrum to sell voice and data service over a network of land based wireless towers that will put the company in direct competition with AT&T and Verizon Wireless.

Dish CEO Charlie Ergen hopes to avoid making the same mistakes that threaten to kill a similar venture — LightSquared, because of interference concerns.

Dish’s spectrum is way, way up the radio dial, above 2,000MHz.  Other spectrum users in the neighborhood are primarily low-powered, line of sight communications, often satellite-based.  LightSquared’s service would have operated at around 1,500MHz, had it not obliterated reception of global positioning satellite services (GPS) in certain instances.  Whenever new spectrum users begin to move into a neighborhood, those already there feel threatened, primarily from the fear of interference problems.

Both LightSquared and Dish’s proposed services operate at considerably higher power than other incumbent users, and interference to existing services is a proven problem when sensitive reception equipment is unprepared to deal with signal overload.  The Federal Communications Commission found just cause to deny LightSquared operating permission for precisely that reason.  Ergen hopes to sell the FCC on a plan he says will avoid those interference problems.

Ergen

Ergen’s spectrum doesn’t sit immediately next door to other, existing users.  His frequencies are comparable to living the next block over, and there is a protective fence keeping the neighbors apart.

“It’s not as close to GPS, so it’s unlikely to interfere,” Matthew Desch, chief executive officer of Iridium Communications Inc., which operates more than 60 satellites, told Bloomberg News. “But the approval is going to take some time. The FCC is going to make sure they don’t have another LightSquared problem on their hands.”

Mike Marcus, director of Marcus Spectrum Solutions LLC adds Dish has some space between its frequencies — known as a guard band — and other users.  Marcus believes Dish won’t have an interference problem unless existing wireless carriers market handsets and other equipment insufficiently selective to reject interference from higher powered users nearby.

But whether Dish will ultimately spend the billions required to build a nationwide satellite and land-based broadband and phone network to accompany its existing satellite service remains unknown.

Bloomberg reports Wall Street analysts may prefer Dish sell its spectrum assets for a quick profit.  Barclays Capital estimates Dish’s spectrum could net the company about $7.3 billion.  If AT&T or Verizon Wireless were buyers, it would also protect them from new competition in the wireless market.

Regulators may be prepared to limit any such sale, however.  Industry analysts note a similar license for LightSquared required government approval before leasing capacity (or selling the network outright) to AT&T or Verizon Wireless.  The government may seek the same limits on Dish Network’s spectrum.

Ergen may have the final word however.

Vijay Jayant, an analyst at ISI Group in New York:

If the government sets rules that limit how Dish can use the spectrum, Ergen may choose to hoard it, said Jayant, which could be antithetical to the government’s mission of promoting wireless competition.

“Dish isn’t a patsy for the government,” Jayant said. “Dish’s attitude is, ‘Make the rules fair and we’ll do the right thing. Make them unfair and we’ll sit on the spectrum,’ and it will be another black eye for the government.”

Other stories of interest:

1. LightSquared Sunk by FCC; Shared Spectrum Interference to GPS Devices Cited
2. LightSquared’s Last-Minute ‘Solution’ to GPS Interference Gets Skeptical Response from Some
3. Lightsquared Ingratiating Itself With Lawmakers by Donating Phones to Native Americans
4. Congress Moves to Kill LightSquared Approval: Interference Threat Too Great to Ignore
5. LightSquared Fail? America’s Newest Wireless Competitor Could Wipe Out Your GPS