Time Warner Cable customers in central New York will face paying higher cable bills next month as the company boosts rates.

The cable operator is raising prices on a range of services and equipment. Most customers on double-play or triple-play packages of phone, Internet, and television service will see increases of around $3 a month. Cable TV-only customers will pay $5 more.

Time Warner has been testing its new Navigator cloud-based interactive cable guide on selected set top boxes in Syracuse (and Charlotte, N.C.) The newest software also comes with a significant monthly fee for the enhanced service — $2.79 a month, in addition to usual equipment rental fees. As Time Warner rolls the new set top equipment out to other cities, customers will pay around $11 a month for the boxes, up from $9.50.

A spokeswoman for Time Warner says two-thirds of its customers in central New York are enrolled in promotional packages and are exempted from rate increases until their current package expires.

Others are not waiting for the rate increase to take effect and are departing for Verizon FiOS, where available. Syracuse resident Bill Venson is one of them.

“[When I] dropped off Time Warner Cable’s equipment at their office, I wasn’t even asked why,” he comments to the Syracuse Post-Standard. “The clerk just gave me a receipt and didn’t even tell me to have a nice day. That speaks volumes.”

Unfortunately for many Syracuse residents, Verizon FiOS remains out of reach. Verizon canceled expansion of its FiOS fiber to the home project, leaving service only available in a handful of suburbs outside of the city.

The Man from A.L.E.C. represents premiere members Time Warner Cable and AT&T.

The News & Observer has printed a rebuttal to a guest editorial from Christopher Mitchell and Todd O’Boyle accusing the two of misleading readers about the true state of North Carolina’s broadband.

The author, John Stephenson, is director of the Communications and Technology Task Force at the American Legislative Exchange Council (ALEC). Considering North Carolina’s largest broadband providers — AT&T and Time Warner Cable — are both card-carrying members of ALEC, his response mouths their words.

Nearly 300 million Americans have access to at least one and, in most cases, two or three broadband providers. Moreover, wireless and satellite providers continue to invest in 4G wireless technology and new satellites that can now offer speeds rivaling wired broadband.

By contrast, government-owned broadband has demonstrated mixed results at best and abject failure at worst. Cities’ attempts to build and operate their own broadband networks have been marked by poor results, huge debts and accounting gimmicks that threaten taxpayers.

In North Carolina, broadband “consultants” persuaded cities like Salisbury and Mooresville to ignore basic economics and to compete against private providers. But the broadband networks recorded deficits and were forced to tap other sources of financing. Despite these losses, as many as three dozen North Carolina cities appeared ready to go down the same dangerous path.

Stephenson’s rebuttal regurgitates the usual Time Warner Cable and AT&T talking points — the same ones used to convince North Carolina legislators to ban community broadband (with contributions to their campaign coffers stapled to the back).

Fact: North Carolinians typically have at most two choices for broadband, the telephone and cable company. Only a few cities were lucky enough to construct community-owned alternatives before the hammer fell in the General Assembly. Stephenson’s alternatives include satellite broadband, which delivers slow speeds and a paltry usage allowance or wireless 4G broadband that will set you back a fortune. North Carolina’s largest providers AT&T and Verizon Wireless sell service with a starting monthly cap of 1GB. Anything more costs more. These are hardly comparable choices to wired broadband.

Fact: Community broadband in cities like Wilson and Salisbury dramatically outperform Time Warner Cable and AT&T and deliver a fair deal instead of temporary promotions and endless rate hikes from the cable/telco bully boys. Stephenson uses the case of Mooresville to trash community broadband, which is a weak example. That city bought a decrepit cable system from bankrupt Adelphia Cable and had to spend a fortune to rebuild it. It’s now on track to deliver for local residents. Those communities would have been better off with a fiber to the home system, but the rebuilt cable system still delivers more competition than Time Warner and AT&T ever gave one-another.

Stephenson also ignores the debts the cable and phone companies piled up when they first built their networks. It is the cost of getting into the telecommunications business. Cable companies needed 10, 20, or even 30 years to pay off construction costs. Community providers got into telecommunications with the knowledge it would take time to pay back the initial debt, but they hope to do it without gouging customers.

ALEC routinely pits community providers against private ones as “government funded unfair broadband competition.” But the group ignores the fact cities like Charlotte have doled out tax incentives and other goodies to Time Warner Cable for building its new headquarters there. AT&T is not doing too bad either, securing statewide video franchising and effective permission to drop its ugly U-verse cabinets on public easements all over the state.

The fact is, the only disruptive force in North Carolina’s broadband market comes from community-owned providers trying to break up the comfortable telco-cable duopoly that charges nearly the same prices for the same yesteryear service. That’s a story The Man from A.L.E.C. cannot afford to tell you.

Malone

Dr. John Malone is a force to be reckoned with and the British are about to get an introduction with this morning’s announcement Liberty Global has acquired Virgin Media in a blockbuster $16.3 billion acquisition deal that will make Malone and Liberty one of the biggest broadband providers in the world. (The deal is valued at $23.3 billion after Liberty agrees to take on Virgin Media’s existing debts.)

Malone will take control of Britain’s largest cable operator and will now also control another 18 million broadband customers in Europe, particularly in Germany and Belgium. His biggest rival will be News Corp.’s Rupert Murdoch who controls BSkyB, Britain’s largest multichannel provider.

Malone’s reputation for ruthlessness precedes him. In the early 1990s, then Sen. Al Gore, Jr., called Malone the Darth Vader of the cable industry. Gore also referred to Malone as the head of a mafia-like “cable industry Cosa Nostra” best known for customer abuse, cold-hearted mergers and acquisitions, and endless rate increases. In the 1980s and 1990s, Malone appeared regularly at congressional hearings to discuss cable industry abuses. At the time, Malone was CEO of America’s largest cable operator Tele-Communications, Inc. (TCI). Today, most of those cable systems are known by another name — Comcast.

In the late 1980s, TCI got the ball rolling on massive rate increases for basic cable service. Other operators quickly followed. As rates exploded upwards, the phones began ringing in Washington from outraged constituents. Gore recounted several recent rate hikes in his own home state of Tennessee in one hearing:

• In three years, rates increased 71% in Memphis,
• 99% in Crossville,
• 113% in Nashville,
• 115% in Chattanooga,
• and 116% in Knoxville.

Under Malone’s leadership, TCI Cable raised rates 60 percent in 1992 alone, helping drive the enactment of the 1992 Cable Act which began to slow the pace of rate hikes. The bill was vetoed by then President George H.W. Bush but overridden in Congress after tens of thousands of constituent complaints poured into Washington. It was sweet justice for many elected officials who were on the receiving end of Malone’s hardball tactics for nearly 20 years. Malone was well known for retaliating against local officials who opposed his unfettered rate increases by suddenly cutting off service to customers and putting up on-screen messages in the place of favorite channels with the names and phone numbers of elected officials Malone claimed were responsible.

Under Malone’s leadership, city officials and consultants working to bring a competing cable operator into Jefferson City, Mo., got a taste of TCI’s ruthlessness when Paul Alden, TCI’s vice president and national director of franchising personally threatened the mayor and a consultant working on the project.

“We know where you live, where your office is and who you owe money to. We are having your house watched and we are going to use this information to destroy you. You made a big mistake messing with TCI. We are the largest cable company around. We are going to see that you are ruined professionally.” Alden warned.

TCI later also claimed it had a First Amendment right to provide service wherever it wanted, with or without a cable franchise. It also threatened any would-be competitor with ruin. In Jefferson City, that would-be competitor eventually won $35 million in damages in a jury trial over TCI’s tactics.

Malone has made no secret he believes government officials are simply getting in his way. In 1999, The Guardian noted Malone is a big believer in telecom oligopolies:

He is scathing about regulatory attempts to prevent monopolies and mergers. Governments, he says, are “antediluvian” in their approach to the emerging new world economic order. Instead of trying to prevent mergers and collusion between media and communications companies, Malone says governments should actually promote the creation of “super-corporations” (such as his own) with enough capital to exploit the potential of new technology.

Malone has plenty of money to throw around. He engineered the sale of TCI Cable to AT&T and personally earned billions from the transaction. Three years later, AT&T sold those systems to Comcast.

Liberty Global has stayed on the sidelines of the cable business domestically, preferring to invest in cable networks and programming. Malone’s firm owns Starz!, which gave Netflix considerable trouble when the online video service lost the rights to a large number of recent movie titles. Netflix had negotiated a $30 million yearly deal with Liberty in 2008 which expired in early 2012. Renewal talks fell through when Liberty demanded $200 million annually to let Netflix keep streaming its movies.

Consumers in the United Kingdom may experience Dr. Malone’s idea of finesse soon enough, if shareholders and British regulators approve the buyout deal.

[flv width=”384″ height=”236″]http://www.phillipdampier.com/video/BBC News Liberty Global to buy Virgin Media for 23bn 2-6-13.flv[/flv]

BBC News reports the blockbuster deal will pit Dr. John Malone against his biggest rival, Rupert Murdoch. Virgin has five million customers in the UK and provides the country’s fastest broadband service. (2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bill Moyers How Big Telecom Increases Our Digital Divide 2-5-13.mp4[/flv]

Susan Crawford appears this weekend on Moyers & Company (check to see if it airs on a local public television station) to explain the real reason America has a digital divide with broadband have’s and have-not’s. The heart of the problem is America’s largest telecom companies, who are only interested in picking off the low hanging fruit — urban customers they can wire cheaply for service and demand monopoly or duopoly-style high prices. Rural America is being left behind, putting profit ahead of the public interest.

America has seen this before during the era of electrification, when power was denied to small towns and family farms. Then the country decided electric service was a utility and must be provided to all Americans. So it should be with broadband. Only the same ideology that argued rural Americans should pick up and move if they want electric service is back in force with broadband, where some argue companies should not have to spend money to provide universal service when they can sit back and reap enormous profits from the areas they choose to serve.

Check out this preview. (2 minutes)