While Time Warner Cable will pull local channels off its cable lineup when contract negotiations fail, the company was less aggressive fighting demands from Fox News Channel parent company News Corp., and caved in to higher fees for the cable news network.

People familiar with the talks said News Corp. won a major rate increase from the cable operator for its Fox News Channel which could reset the bar when other cable companies negotiate renewal contracts.

Sources told the Los Angeles Times Fox News Channel will now cost each cable subscriber more than $1 a month, up from 89 cents. Time Warner Cable will likely bundle that increase into the next round of customer rate hikes. Fox News Channel’s new price puts them among top tier cable networks like TNT and USA.

Last year,  News Corp. President Chase Carey told Wall Street contract renewals for the channel “will take subscription fees to a whole new level.”

The only concession Time Warner Cable seemed to win was a more limited renewal agreement that only covered the Fox News Channel, Fox Movie Channel, and the barely-watched Fox Business Network. Time Warner Cable officials refused to renegotiate earlier, yet to expire deals with less popular Fox-owned cable networks.

The Times noted Fox News Channel did not want to lose more than 10 million cable subscribers at the height of election season, and the cable company did not want to deal with loyal Fox News viewers likely to complain or leave over the loss of the network.

With the renewal, every Time Warner Cable subscriber will pay even more for the channels whether they watch them or not.

Broadband transport costs continue to decline, at an accelerating pace, according to researcher Telegeography.

Prices to move data across the Internet continue to decline throughout the world. According to new data from TeleGeography’s IP Transit Pricing Service, price declines in most locations accelerated over the past year, at an accelerating pace. But none of those savings are showing up on customer bills. In fact, while providers have been increasing broadband prices over the past three years, their costs to provide the service continue to plummet.

“IP transit prices have reached extremely low levels in developed markets, but remain high in many developing markets and in countries that are remote from major IP transit hubs,” said TeleGeography analyst Erik Kreifeldt. “Nevertheless, few places remain where transit prices exceed $100 per Mbps. As carriers expand into emerging markets and establish new price floors in developed markets, global IP transit prices will continue to fall.”

The median monthly lease price for a full GigE port in London dropped 57 percent between Q2 2011 and Q2 2012 to $3.13 per Mbps, compared with a 31 percent decline compounded annually from Q2 2007 to Q2 2012. In New York, the comparable price dropped 50 percent to $3.50 per Mbps over the past year, and 26 percent compounded annually over the five-year period. Pricing for short term promotions and high capacities have dropped below $1.00 per Mbps per month.

DSL Prime‘s Dave Burstein says that translates to Internet backbone wholesale pricing of less than $0.50 per broadband customer per month in New York or London.

Burstein also notes router and switch prices are also matching the predicted pace of Moore’s Law, declining 25-40 percent per annum. With competition for backbone connectivity robust in North America, the reduced costs are passed along to large broadband providers, but not to customers.

Burstein reports that while Internet traffic continues to expand at “ferocious rates,” your broadband provider’s net cost has been generally flat or even down. In fact, he estimates that when providers add up the cost of backbone transport costs and moving traffic from their network to individual customers, they end up spending less than $1 per month on traffic per customer. But they charge you $40-50 or more for the service.

Burstein also notes that broadband usage has almost no impact on provider costs, whether they offer 3Mbps or 1,000Mbps service, have caps of 50GB, 500GB, or no caps at all.

“With bandwidth costs this low, we’re talking dimes or at most a couple of dollars per month to handle any likely traffic flow,” Burstein reports.

Even accounting for perennial predictions of data tsunamis from equipment manufacturers like Cisco, their own data shows the primary cost of Internet traffic per customer is falling, according to Burstein, even as data consumption increases.

An Australian Internet Service Provider that caps customer usage and charges extra if you want to exceed your allowance has taken to the company’s blog to argue that usage caps are fair, even as their customers start departing for competitors offering unlimited service.

iiNet chief technology officer John Lindsay defends the company’s usage-based billing scheme, which charges more than $30 a month for DSL service with a 20GB usage cap.

“Service providers in favour of a two-speed Internet argue that there is limited capacity on the Internet and that those using the most bandwidth by delivering rich content or transferring large files should pay more,” wrote Lindsay. “In Australia, we have a different business model for the Internet. ISPs operate on a pay-as-you-go model, which also shapes the consumer market. Here, consumers can choose a plan with upload and download quotas to fit their usage and pay according to their needs – the more you use, the more you pay.”

Lindsay

Unfortunately for Lindsay, an increasing number of Australians don’t agree and are switching to providers like TPG and Dodo, which have become enormously popular selling flat rate, unlimited broadband service.

Lindsay warns that if Australia adopts the flat rate service model popular in the United States, a Net Neutrality debate will be sparked as customers discover ISPs are unable to handle the traffic and start prioritizing their own content.

“Operating a quota based business model ensures we’re not responsible for policing activity online – our customers pay a fair price for the services they receive and we can focus on more important issues than where their traffic is coming from,” Lindsay argues. “While US providers argue about a two-tier system, our priority is to provide awesome customer service and ensure our customers enjoy a seamless experience online, whatever it is their Internet connection means to them.”

Of course, Lindsay’s characterization of the American broadband landscape is fact-challenged, because most broadband providers have plenty of capacity to deliver content. Some simply want to earn a new revenue stream from content producers for managing that traffic, even though paying customers already compensate them for that service.

Australia’s data caps have traditionally been onerous because of the higher costs and limited capacity of underseas cables that handle traffic inside and out of the Pacific Basin. But Australians have complained about the low caps for years — so loudly that the Australian government has made construction of a super-capacity fiber to the home network a national priority for the country as international capacity also increases.

Customers were not fooled by Lindsay’s rhetoric.

“This is nonsense,” wrote Lachlan Hunt. “Australia’s model of capped usage limits with higher prices for higher caps, and of ISPs including yourself offering free zones where such data doesn’t count towards the monthly quota is exactly the problem that Net Neutrality advocates aim to deal with. It treats data from companies who choose to partner with you to get their content in the free zone as privileged compared with everyone else, and similarly with other ISPs.”

Hunt complains iiNet’s caps were “ridiculously low” and interfered with his career in the web development industry. Today he lives and works in Europe, where usage caps are increasingly a thing of the past.

“I’m really hoping that you will eventually wake up and realize that usage caps go together with Non-Neutral internet, and with the introduction of the [national fiber to the home network], which brings both higher speeds and capacities, you should be able to lower prices, abolish usage caps and offer a fair model with pricing tiers based on the chosen speeds.”

Stop the Cap! also addressed Lindsay:

[…] We have learned dealing with this issue for several years that ISPs are terrified of their own argument if carried to its fullest extension. If iiNet wants customers to fairly pay for only what they use, they should be billing them on exactly that basis. A flat charge per gigabyte — no allowances/quotas, no penalty overage fees or speed throttles, no wasted, unused quota at the end of the month.

But they don’t dare. If you charged $1/GB (still a crime-gouge compared to the wholesale price), those customers currently paying $30 for up to 20GB service might suddenly be paying $5-15 instead.

[…] If you asked your customers whether they prefer unlimited service or your current cap system, most will clamor for unlimited, even if it costs them a bit more, just for the peace of mind of never facing overage charges or speed throttles.

This argument has never been about capacity. It’s about what it always is about: money.

Just in time for the forthcoming Democratic National Convention, Time Warner Cable has launched TWC Wi-Fi in uptown Charlotte and inside the convention venue — the Time Warner Cable Arena.  Republican House Speaker Thom Tillis, who has collected tens of thousands of dollars in campaign contributions from large telecom companies, including Time Warner Cable, was on hand to help celebrate.

More than 90 hot spots around the city are being fired up, and during the convention (Aug. 27-Sept. 7) anyone will be able to connect for free.

Before and after the Democrats arrive in town, the network is available free only to paying Time Warner Cable customers with standard (10Mbps) Internet service or faster or customers with Business Class service. The cable company claims that covers the “vast majority” of its broadband customers.

Tillis

Most of the hotspots are in and around Center City, South End, Myers Park, Dilworth and Midtown.

Non-customers can purchase access at prices starting at $2.95 per hour.

Customers can connect using their Time Warner Cable e-mail address and password.

Based on comments from local residents, many are convinced the government shelled out the money for the service, or customers ultimately will with the next round of rate increases. In fact, this is Time Warner Cable’s attempt to boost subscriber loyalty by offering broadband while on the go.

No government money is financing this particular project, although several local and state officials were on hand to help cut the ribbon on the service, including the Republican Speaker of the House Thom Tillis, who earlier voted to block community-owned broadband in North Carolina. Tillis has deposited $37,000 in campaign contributions during the 2010-2011 cycle from large telecom companies including Time Warner Cable, despite running unopposed.

AT&T workers launched a two-day strike impacting operations in Connecticut, Nevada, and California.

Around 20,000 AT&T workers in Connecticut, Nevada and California are striking this afternoon in a two-day action to protest what union officials call the company’s lack of good faith during contract negotiations talks.

“Contract negotiations are never easy,” said CWA District 9 vice president Jim Weitkamp. “But when AT&T violates the law repeatedly, the process really can’t work. Given AT&T’s record profits, tax breaks and jaw-dropping executive compensation, there is no reason for them to insist on lowering the standard of living of a single worker.”

While 17,000 workers in the west and 3,000 employees in Connecticut walk picket lines, fellow AT&T employees in the southeast are still on the job after the company reached tentative deals with unions representing those workers.

AT&T says the new three-year deals with the Communications Workers of America and the International Brotherhood of Electrical Workers in Alabama, Georgia, Louisiana, Mississippi, Tennessee and North and South Carolina  bring wage and “modest pension increases,” according to the company.

Connecticut workers say AT&T’s proposed package in the northeast is not sufficient to address the high cost of living in the state.

But AT&T says declining numbers of landlines means cuts are inevitable. AT&T said in a statement Tuesday’s walkout was not in anyone’s best interest.

Connecticut picketers have been blocking the entrances of several AT&T facilities including in New Haven, where replacement workers appear to be honoring the picket lines after talking with striking workers. Unions are requesting customers not do business with AT&T during the strike.

Late reports indicate several cars with New Jersey license plates have hit three persons on one picket line. The union claims the vehicles were being driven by replacement workers, but no independent confirmation was available.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/New Haven Register ATT UNION ON STRIKE 8-7-12.mp4[/flv]

The New Haven Register talked with Tim Smith, a union worker on a picket line outside of an AT&T facility. The video shows picketers encouraging replacement workers to honor the picket line and not report for work.  (3 minutes)