Time Warner Cable subscribers who are passionate about their hockey and basketball won’t be watching all of the Buffalo Sabres or New York Knicks games, thanks to another year-end programming dispute primarily affecting cable subscribers in New York State.

MSG terminated their program feed for approximately 2.8 million Time Warner customers early Sunday, leaving the cable operator to make amends with irritated subscribers.

Once again, the cost of sports programming was the issue. MSG has raised prices at least 70 percent over the last five years, according to cable research group SNL Kagan.  The package that includes MSG and MSG Plus now sells at a wholesale price of more than $4.50 per month, rivaling the most expensive sports network ESPN, which will charge $5.06 a month in 2012.  Time Warner reportedly balked at a renewal deal for 2012 that would have increased prices well beyond the six percent the cable operator offered to pay.

Time Warner has e-mailed subscribers indicating MSG pulled the plug, and is offering some replacement programming to ease the suffering of sports-addicted subscribers:

At Time Warner Cable, we’re sports fans too – that’s why we fight hard to keep the sports you love on the air at a price you can afford.

With the game clock running down, MSG Networks rejected all proposals, refused to engage in any meaningful way, and refused to allow us to keep the channel on. In the end, MSG pulled the plug on Time Warner Cable customers. We regret that MSG Networks has taken away their sports programming, but remind fans that even without MSG, Time Warner Cable will carry nearly 20 percent of this season’s remaining Sabres games, and dozens of other NHL and NBA games and most of the NHL and NBA playoffs. For information on where to find your favorite teams, visit www.twcconversations.com/MSG.

We don’t think that MSG’s actions are fair to sports fans, so Time Warner Cable is offering the following in appreciation of our customers:

•

A special month-long preview of the Time Warner Cable Sports Pass, a package of more than 15 sports-oriented channels. This package—which normally costs $5.95 per month for residential customers—will be available from January 1 – 31, 2012. (Visit www.timewarnercable.com/sportspass to see the full list of channels and channel numbers.)

•	A free preview of the NBA League Pass premium sports package which offers up to 40 live games per week. This offer is good through January 8th and more details are available at www.twcconversations.com/MSG.

•

The launch of YNN Hockey Tonight, a new nightly hockey show, premiering January 2nd on YNN in Western New York, including the Buffalo and Rochester areas. YNN Hockey Tonight will feature live interviews & analysis, plus scores, standings and information from all around the world of hockey, every night at 11:15 PM through the end of the NHL season.

We think MSG is being unreasonable – and unfair to fans. They continue to demand a 53% price increase for their programming, which just doesn’t make sense. We do want MSG to return to our channel lineup, and we will continue to work hard to reach an agreement that gives you the sports you love at a price you can afford to pay.

Don’t forget: every TV provider is at risk for blackout threats. Last year MSG pulled the plug on DISH – so switching is not a solution. If MSG really cared about the fans, they wouldn’t be holding your sports hostage.

Thank you for your patience and continued loyalty.

Tell MSG to Get Real and Do the Deal.

MSG is telling Time Warner customers to cancel their cable service and sign up for Verizon FiOS TV or one of the satellite dish providers instead.  But those alternative providers are not happy with the rising cost of sports programming either.

DirecTV’s Michael White and Dish Network Corp. Chairman Charlie Ergen have both repeatedly criticized price inflation for sports networks, and both have fought their own battles over the issue.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WHAM Rochester MSG Pulls Programming Disappoints Sports Fans 1-1-12.mp4[/flv]

WHAM-TV in Rochester talks with irritated sports fans about the loss of MSG Networks on Time Warner Cable.  (3 minutes)

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg Harrigan Says Time Warner-MSG Deal Will Take Time 12-30-11.mp4[/flv]

Bloomberg News reports that wholesale rates for sports programming have grown so great, cable operators may be prepared to drop sports networks off cable television altogether.  (4 minutes)

RIM has a new PR problem.

Research in Motion, already reeling from a year of bad news about its beleaguered BlackBerry, is now red-faced over reports that two of its employees got drunk and engaged in raucous mayhem on an Air Canada flight to Beijing that grew so out of control, the pilots were forced to land the plane in Vancouver.

Now, the CBC has garnered an official transcript from a sentencing hearing which has further tarnished the image of RIM over its employees’ behavior, which a B.C. Provincial Court Judge called “disgusting.”

Pre-boarding, some fellow passengers noticed the pair of corporate executives appeared highly inebriated.

CBC News quoted from the court transcript: “…When the males boarded the flight they seemed quite intoxicated, they drank more, passed out, one would wake up and lean over the little cubicle, slap the other guy on the head because he wanted somebody to drink with, and then they would yell and abuse each other, then they’d pass out, then they’d wake up and start kicking again.”

When other passengers tried to intervene, they were threatened.  One was told “I know who you are,” while others were warned by one of the executives he would “off people when they left the plane.”

Eventually, both men were wrestled kicking and screaming to the floor, assaulting one flight attendant in the process.  Even a combination of plastic restraints and heavy tape were not enough.  Police reports indicate both men literally chewed through the plastic cuffs and ripped the tape off with their teeth.

At that point, pilots declared a security emergency and diverted the plane first to Anchorage, but quickly settled on much-closer Vancouver, where authorities met the aircraft and took both men into custody.

Air Canada eventually pegged its losses (assuming nobody files a civil case against the airline for the ‘air show’) at $193,900, which includes putting up passengers in Vancouver hotels overnight, extra fuel, navigation charges, and flying in a new crew for the resumption of the flight the following morning.

The B.C. Court Judge swiftly fined the two executives $70,000 to cover the costs of the hotel and meal vouchers for the passengers.  The judge wouldn’t hear defense attorney objections.

“I am somewhat sympathetic to your position but I am, quite frankly, absolutely disgusted with the actions of these two individuals who know better and acted like absolutely — well, I can’t say it. But that is the punishment that they should suffer,” the judge ruled.

Both men were quickly fired from the company when they returned to their Waterloo, Ont. homes.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CBC News RIM Executives Launch Mayhem 12-12-11.flv[/flv]

CBC News has this exclusive report about the chaos caused by Research in Motion executives on Air Canada’s Flight 31.  (4 minutes)

Haven't we been here before?

History is best ignored when a Wall Street Journal columnist frames an argument in favor of strengthening the hegemony of Ma Bell, and darn ‘ole past precedent gets in the way of the writer’s “facts.”

Gordon Crovitz is a media and information industry adviser and executive, including former publisher of The Wall Street Journal, executive vice president of Dow Jones and president of its Consumer Media Group.  But today he’s unofficially, unabashedly AT&T.

In a column published this week, Crovitz hosts a whine and cheese festival on behalf of poor and abused AT&T, whose multi-billion dollar takeover of T-Mobile is in tatters. Crovitz places the blame squarely on the government for ruining everything:

How soon we forget the risks of overregulation: Last week, the Federal Communications Commission flexed the same muscle it once used to quash market forces in the phone industry to quash market forces in the wireless industry.

Today’s AT&T, a spinoff from the original, needs more spectrum to catch up with market leader Verizon, also a Ma Bell descendant, to support iPhones, Androids and other devices that feature video and sophisticated apps. It wants to buy T-Mobile, a division of a German company, which doesn’t have the resources to compete in the United States on its own. But the FCC decided to apply antitrust theory from the industrial era and claims to know better than wireless companies how they should operate their businesses.

AT&T’s proposed acquisition is best understood as a private-sector solution to a government-created problem. The FCC has not been able to get Congress to approve auctions to reallocate spectrum to wireless from less valuable uses. AT&T wants T-Mobile’s bandwidth so it can extend the latest fourth-generation network to 97% of the country from 80% and improve its spotty service in congested areas.

Under laws dating to the 1920s, the FCC gets to decide if a merger is in the “public interest,” a vague standard for top-down decision making. Government is the last institution in this era of fast technological innovation to act as if it has the information and power to dictate how change happens.

Crovitz apparently prefers AT&T and its phone pal Verizon Wireless dictate how “change happens,” because the two companies control the vast majority of wireless telecommunications in the United States.  Both also charge near-identical prices for near-identical levels of service.  AT&T & VZW are completely comfortable with that status quo, especially if disruptive competitor T-Mobile is dealt with in the usual industry manner (merger/buyout).

There is nothing vague about the FCC report that condemns the merger of AT&T and T-Mobile for the anti-competitive monstrosity it represents.  In hundreds of pages Crovitz evidently never read, a careful and credible argument against the deal was laid out for all to examine.  That evidence is far more persuasive than AT&T’s heavily-redacted filings the public was not authorized to see (for ‘competitive reasons’), and a multi-million-dollar-a-holler public relations distortion strategy based on hollow promises.

Playing Catch-Up With Verizon Wireless?  Hardly.

AT&T hardly needs to “catch up” with Verizon Wireless.  Both companies own wireless spectrum they have warehoused for “future use.”  As a backdrop to the merger, FCC Chairman Julius Genachowski has already indicated the agency is hard at work carefully re-allocating spectrum to make more room for wireless services.  The “bandwidth crisis” AT&T talks about is a convenient argument for a merger, until you realize T-Mobile’s mostly-urban wireless network won’t help AT&T achieve its goal of rural wireless expansion.  T-Mobile has never provided service in rural America and never will.

Crovitz attempts to leverage Verizon Wireless’ recent deal with America’s largest cable companies as an argument for the AT&T and T-Mobile merger, suggesting that deal was a game changer.  What goes unsaid is the fact AT&T could have pursued that deal for themselves.  Did they?  No.  Despite AT&T’s public relations spin, the proposed merger with T-Mobile is much more than a spectrum acquisition. As the FCC and the Justice Department have argued, this merger is about ridding AT&T of a competitor willing to offer more services at lower prices.  That forces AT&T to respond in kind to compete, and consumers have benefited greatly from that competition. Verizon Wireless is hardly competition at all considering both companies price services nearly identically.  Beyond that is Sprint, already saddled with the financial albatross Clearwire and questions about its long term viability in a duopolistic wireless market.

Crovitz is wrong on his other “facts” as well:

Deutsche Telekom is hardly short on cash.  The company has plenty of resources and could bolster T-Mobile USA to compete if it saw fit.  It doesn’t, preferring to focus on its more lucrative European markets.  Instead of selling the operation on the open market to other players, which could include foreign providers interested in competing in the high-priced American market, it elected to be courted by AT&T.

Overconfident AT&T

Henry De Lamar Clayton, Jr.: Author of the Clayton Act

The merger illustrates AT&T’s unparalleled level of overconfidence it could deal with regulators and consumer groups who would certainly object to the deal.  The company has since spent millions it could have used to improve its network on campaign-contribution-fueled support building on Capitol Hill, a shameless dollar-a-holler astroturf campaign that pays off non-profit groups to sing the deal’s praises, and an expensive ad campaign to sucker Americans into thinking reduced competition will somehow deliver lower prices and better service.

Even former Republican FCC Chairman Kevin Martin would have likely paused over such an obvious monopoly-building operation.  The Obama Administration’s FCC chairman — Julius Genachowski —  while often too timid for our tastes, at least knows when it is time to join the chorus of opposition.

The FCC doesn’t pretend to tell AT&T how to run its business.  It does, however, serve the public interest by providing checks and balances to unfettered corporate power.  While the Wall Street Journal‘s world view of capitalism would have been favored by the most egregious robber barons, history has taught us that when big corporations get a stranglehold on vital industries, the entire economy can suffer.

Crovitz would have us ignore the massive corporate abuses of 100 years ago that eventually provoked Congress into trust-busting legislative reform, breaking up the monopolies and oligopolies that presided over the railways, early telecommunications networks, and industrial raw materials like oil and steel.  Restrained competition brought monopoly prices and blockades against would-be competitors.  What was true then is still true now, only the technology has changed.

In 1911, the economy was powered in part by railroads, which transported goods and raw materials.  Telecommunications networks like the telegraph and early telephone helped conduct business and coordinated the movement of goods.  In 2011’s growing digital economy, telecommunications increasingly represents the railroads, telegraph, and telephone all combined-into-one.  Some of America’s richest tech companies depend on broadband and communications to fuel demand for their products.  Allowing AT&T to control the largest part of that pipeline could be disastrous to everyone but that company and their shareholders.

History Repeats Itself

In 1914, the Clayton Act was passed to put a stop to increasing anti-competitive activity and abusive market tactics.  Amazingly, the problems being solved a century ago are back with a vengeance today, all thanks to the endless drumbeat for deregulation, which has fueled mergers, acquisitions, and increased concentration of market power.  That Act cracked down on:

• Price discrimination: selling products and services at different prices to similarly situated buyers;
• Tying and exclusive-dealing contracts: sales on condition that the buyer sign exclusive contracts that force an end to dealing with the seller’s competitors;
• Corporate mergers: acquisitions of competing companies to reduce competition; and
• Interlocking directorates: Boards of directors of competing companies, packed with common members.

Today’s laissez-faire attitude towards government checks and balances helped provoke the Great Recession, corporate scandals of epic proportions, and a revolving door in Washington where regulators end up working for the companies they used to regulate. Just ask former FCC chairman Michael Powell. Three years ago he worked for us.  Today he works for Big Cable’s largest lobbying group — the National Cable & Telecommunications Association.  FCC Commissioner Meredith Attwell Baker went to work for Comcast shortly after green-lighting their super-merger with NBC-Universal.

It’s All About the Money. Always.

The only thing stopping AT&T from providing wireless nirvana to rural America is its own unwillingness to spend money on behalf of customers to upgrade its network.  The company claims it didn’t see the value of spending nearly $4 billion needed to deliver expansive 4G service, but suddenly had no trouble at all finding nearly ten times that amount to purchase T-Mobile USA.

Did AT&T suddenly win PowerBall?

AT&T saw crushing a competitor Job #1.  Central Idaho’s 4G service could wait.

Crovitz later notes AT&T “was unusually blunt” criticizing the FCC report, a classic case of protesting too much.  The company got caught with its rhetorical pants down, with a series of evolving arguments for a deal that never made the first bit of sense once you began to dig deeper into their case.

In the end, Mr. Crovitz wants you to blame Big Government for AT&T’s pervasive dropped-call problem that its competitors don’t seem to have.

It’s not the company that owns and runs the network, it is that Obama and his nasty henchmen at the FCC who are responsible!  Who knew?

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg FCC Says ATT Failed to Show Public Benefit of Merger 11-30-11.mp4[/flv]

Bloomberg News reports the FCC found AT&T failed to demonstrate any real public benefit of its merger with T-Mobile USA.  (2 minutes)

You can look all over this astroturf group's website and never find the fact it's bought and paid for on behalf of Colorado's largest cable company -- Comcast.

The next time Comcast or CenturyLink wants to increase your rates because of the “increased costs of doing business,” you might want to ask them why they have collectively spent more than $300,000 on an astroturf campaign to stop the city of Longmont, Col. (pop. 86,000) from using excess fiber capacity to provide competition to the phone and cable company without raising taxes a penny.

Longmont voters are headed to the polls today with a simple question to answer: should the city be allowed to open their fiber network to all-comers to provide competitive video, data, and telephone services to city residents.  Longmont’s fiber network was constructed in the 1990s as part of its electrical infrastructure.  Some utility companies buried enormous amounts of fiber intending to use it to electronically collect usage data from ratepayers so meter readers could become a thing of the past.  Like in other cities, Longmont now has a fiber network that is woefully underused, and the city wants to open up the tremendous excess capacity for telecommunications uses.  They are even open to allowing Comcast and CenturyLink to use the network to help service their own respective customers, but the thought a new competitor (including a community-owned provider) might deliver service over that network has created an absurd $300,000 Hissyfit.

Comcast has been caught funding the majority of the opposition, the so-called “No on 2A” and “Look Before We Leap” projects, sponsored primarily by the Colorado Cable Telecommunications Association, which counts Comcast as a member.

But visitors to the campaign’s cheesy website never realize who is running the show because the effort hides its association with Big Telecom.

It’s a classic example of Astroturf Fear, Uncertainty, and Doubt.  Scare residents into believing the city will raise taxes or go into financial distress.  Raise uncertainty by claiming important details are being left out.  Encourage doubt by comparing the advanced fiber network with anemic public Wi-Fi failures of the past involving Earthlink (remember them?).

But the No on 2A campaign is also willing to check themselves into a deluxe suite at the Hypocrisy Hotel, accusing city officials of hiding the names of their pro-fiber supporters and backers, including (gasp!) a company based in France!

The No on 2A website breathlessly relates the incriminating documents were unearthed from “previously secret emails just made public thanks to a Colorado Open Records Act.” They suggest a nefarious connection with Alcatel-Lucent because that company, which sells products and services related to fiber networks, communicated with the city in a handful of e-mail messages last summer.  You know those French, always up to something.

When it doubt, blame the French for being in on it.

The rich, buttery irony of a “group” secretly funded by the state’s largest cable company accusing others of keeping secrets is ignored at Kabletown.

But then I’ve received e-mail from Alcatel-Lucent (and Comcast) myself.  And I have a French last name.  Sacrebleu!

The website’s “opponents,” evidently gleaned from the few hundred residents that signed their visitor’s book, includes names like Joanna Crawford, “Garrett County,” and El Cordova, which we think could be the name of a Mexican pro-wrestler, we’re not sure.

City officials are stunned by the sheer amount of money being spent by cable and phone companies to keep competition far, far away.  So apparently is the local media, which has taken to identifying the “grass roots” opposition right down to their job title and name of the lobbying firm they work for.

Take Times-Call, which helpfully discloses “Look Before We Leap” spokesman George Merritt is actually a senior strategist for Onsight Public Affairs of Denver.  That’s a real nice way to say “lobbying firm hired to develop social media strategies to snooker influence public opinion on behalf of corporate clients.”

You know you’re not dealing with a neighborhood group lobbying to reduce road speeds in the neighborhood or sign a petition for improved trash collection when you read Leap’s financial disclosure reports:

• $120,913.64 to mass communications firm SE2 of Denver for a variety of services, including mail pieces, consulting, two television buys and ad production and design.
• $70,500 to Rocky Mountain Voter Outreach of Denver for “canvass, management rent and miscellaneous associates.”
• $37,500 to OnSight Public Affairs for consulting.
• $22,000 to Drake Research and Strategy of Boulder for polling.
• $15,776.84 to Zata3 for phone work.
• $12,260 to Holland and Hart of Denver for legal expenses.
• $8,000 to EIS of Grand Junction for consulting.
• $4,334.65 to Campaign Products of the Rockies, of Denver, for a voter file, mailing lists, stickers and yard signs.
• $2,500 to Mark Stevens of Denver for research.
• $743.75 to Tim Thomas of Boulder for general campaign work.

The whole dog and pony show of Big Telecom money has bemused Longmont mayor Bryan Baum, who supports the 2A measure and believes the distortion campaign has gone way over the top.

“It doesn’t really matter at this stage of the game,” Baum told the newspaper. “It’s going to the electorate. The electorate will vote. And we will know on Tuesday how they voted – if they believe a $300,000 ad campaign, or if they believe the people they’ve entrusted their votes to.”

Some of that $300,000 has also gone into vilifying a real grass-roots effort in support of the Longmont fiber initiative — Longmont’s Future.  Comcast’s front group tried to raise questions about where that pro-fiber group got their backing and money.  The newspaper discovered Longmont’s Future isn’t backed by any French conglomerate or nefarious outside interest.  It’s the work of Jonathan Rice, who operates the website all by himself, spending a grand total of $353 to fight Comcast’s $300,000.

“Every single candidate for office and every incumbent, in every race, supports this measure,” says Rice. “But Comcast and its friends are more interested in profit than progress, and continue to run a smear campaign to spread misinformation and outright lies – they recently posted Mayor Baum’s name as an opponent of 2A when he is actually a vociferous supporter.”

Community Broadband Networks has compiled a series of articles detailing the project and helping to expose the so-called “grassroots” opponents.  We encourage readers to become better acquainted with the underhanded tactics community broadband opponents will use to stop anything that resembles competition.

Stop the Cap! received this unsolicited letter from an employee working at Frontier Communications about how the company has been running the business and treating their customers.  We’ve been able to independently verify enough of this letter, by talking with other Frontier employees, to highlight it for our readers. 

Frontier Communications is a long way from its progenitor (and namesake) — Rochester Telephone Corporation, which operated locally with excellence for 100 years.  Rochester Tel changed its name to Frontier Communications as it sought to abandon its image as a basic phone company.  It was later sold to Global Crossings, which later sold it to Citizens Communications, which decided to adopt the Frontier name itself.