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In less than nine minutes, we can convincingly prove to any judge or jury we should only pay for the channels and networks we actually want to see. Our cable/satellite dollar helped pay for these video atrocities of 2013. Watch if you dare, but NSFW. (8:39)

Phillip “Free Trade in Bad Broadband” Dampier

Sure we’ve had our cultural skirmishes in the past,  but on one thing we can all mostly agree: our largest cable, phone, and broadband providers generally suck.

Outside of hockey season, Canada’s national pastime is hating Bell, Rogers, Vidéotron, Telus, and Shaw. The chorus of complaints is unending on overbilling, bundling of dozens of channels almost nobody watches but everybody pays for, outrageous long-term contracts, and bloodsucking Internet overlimit fees. In fact, dissatisfaction is so pervasive, the Conservative government of Stephen Harper spent this past summer waving shiny keys of distraction promising Canadians telecom relief while hoping voters didn’t notice their tax dollars were being spent by the country’s national security apparatus to spy on Brazil for big energy companies.

The Montreal Gazette is now collecting horror stories about dreadful service, mysterious price hikes, and promised credits gone missing on behalf of readers fed up with Bell and Vidéotron.

Rogers Cable, always thoughtful and pleasant, punished a Ottawa man coping with multiple sclerosis and cancer with a $1,288 bill, quickly turned over to a collection agency after his home burned to the ground. It took headlines spread across Ontario newspapers to get the cable company to relent.

Things are no better in the United States where the American Customer Satisfaction Index rates telecom companies worse than the post office, health insurers airlines, and the bird flu. National Public Radio opened the floodgates when it asked listeners to rate their personal satisfaction with their Internet Service Provider — almost always the local cable or telephone company.

The phone company Canadians love to hate.

Many responded their Internet access is horribly slow, often goes out, and is hugely overpriced. In response, the cable industry’s hack-in-chief did little more than shrug his shoulders — knowing full well American broadband exists in a cozy monopoly or duopoly in most American cities.

Breann Neal of Hudson, Ill., told NPR she has one choice — DSL, which is much slower than advertised. Hudson is Frontier Communications country, and it is a comfortable area to serve because local cable competition from Mediacom, America’s worst cable company, is miles away from Neal’s home.

“There’s no incentive for them to make it better for us because we’re still paying them every month … and there’s no competition,” Neal says.

Samantha Laws, who gets her Internet through her cable provider, says she also only has one option.

“It goes out at least once a day, and it’s been getting worse the last few months,” Laws says. She works with a pet-sitting company that handles all of its scheduling through email and the company website. At times she can’t do her job because of the unreliable connection.

Chicago is in Comcast’s territory and the company is quite comfortable cashing your check while AT&T takes its sweet time launching U-verse in the Windy City. AT&T isn’t about to throw money at improving DSL while local residents wait for U-verse and Comcast doesn’t need to spend a lot in Chicago when the alternative is AT&T.

Where there is no disruptive new player in town to shake things up, there is little incentive to speed broadband service up. But there is plenty of room to keep increasing prices for a service that is becoming as important as a working telephone. Companies are using broadband profits to cover increasing losses from pay television service, investing in stock buybacks, paying dividends to shareholders, or just putting the money in a bank, often offshore.

NPR’s All Things Considered:

“[For] at least 77 percent of the country, your only choice for a high-capacity, high-speed Internet connection is your local cable monopoly,” says Susan Crawford, a visiting professor at Harvard Law School. She is also the author of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age.

Crawford says that today’s high-speed Internet infrastructure is equivalent to when the railroad lines were controlled by a very few moguls who divided up the country between themselves and gouged everybody on prices.

She says the U.S. has fallen behind other countries in providing broadband. At best, Crawford says, the U.S. is at the middle of the pack and is far below many countries when it comes to fiber optic penetration. Given that the Internet was developed in the U.S., she says the gap is a result of failures in policy.

“These major infrastructure businesses aren’t like other market businesses,” Crawford says. “It is very expensive to install them in the first place, and then they build up enormous barriers of entry around them. It really doesn’t make sense to try to compete with a player like Comcast or Time Warner Cable.”

So Crawford is calling for is a major public works projects to install fiber optic infrastructure — a public grid that private companies could then use to deliver Internet service.

Powell

That’s an idea met with hand-wringing and concern-trolling Revolving Door Olympian Michael Powell, who made his way from former chairman of the Federal Communications Commission during the first term of George W. Bush’s administration straight into the arms of Big Cable as president of their national trade association, the NCTA.

Powell, well compensated in his new role representing the cable industry, wants Americans to consider wireless 3G and 4G broadband (with usage caps as low as a few hundred megabytes per month) equivalent competitors to the local cable and phone company.

“I think to exclude [wireless] as a substitutable, competitive alternative is an error that leads you to believe the market is substantially more concentrated that it actually is,” Powell says.

Of course, Powell’s new career includes a paycheck large enough to afford the wireless data bills that would shock the rest of us. All that money also apparently blinds him to the reality the two largest wireless providers in America are AT&T and Verizon — the same two companies that are part of the duopoly in wired broadband. It’s even worse in Canada, where Rogers, Bell, and Telus dominate wired and wireless broadband.

Although America isn’t even close to having the fastest broadband speeds, Powell wants you to know the speeds you do get are good enough.

“I think taking a snapshot and declaring us as somehow dangerously falling behind is just not substantiated by the data,” he says. He says it is like taking a snapshot of speed skaters, where there might be a few seconds separating the leaders, but no one is “meaningfully out of the race.”

That is why we still celebrate and honor Svetlana Radkevich from Belarus who competed in the speed skating competition at the Vancouver 2010 Winter Olympics. She made it to the finish line and ranked 33rd. Ironically, South Korea ranked fastest overall that year, taking home three gold and two silver medals. In Powell’s world, that’s a distinction without much difference. You don’t need South Korean speed and gold medals when Belarus is enough. That argument always plays well in the United States, where Americans can choose between Amtrak or an airline for a long distance trip. Who needs a non-stop flight when a leisurely train ride will get you there… eventually.

There are a handful of providers uncomfortable with the mediocre broadband slow lane. Google is among them. So are community broadband providers installing fiber broadband and delivering gigabit Internet speeds. EPB in Chattanooga is among them, and it has already made a difference for that city’s digital economy neither AT&T or Comcast could deliver.

Unsurprisingly, Powell thinks community broadband is a really bad idea because private companies are already delivering broadband service — while laughing all the way to the bank.

If a community really wants gold medal broadband, Powell says, they should be able to have it. But Powell conveniently forgets to mention NCTA’s largest members, including Comcast and Time Warner Cable, spend millions lobbying federal and state governments to make publicly owned broadband illegal. After all, cable companies know what is best.

All Things Considered recently asked its fans on Facebook, “How satisfied are you with your Internet service provider?” Many responded that they didn’t like their Internet service, that it often goes out and that their connection was often “painfully slow.” Listen to the full report first aired Jan. 11, 2014. (11:30)
You must remain on this page to hear the clip, or you can download the clip and listen later.

The Weather Channel has been removed from DirecTV’s lineup and replaced with WeatherNation, a much-smaller channel based in St. Paul, Minn., because the popular weather network reportedly sought a $0.01 monthly rate increase.

DirecTV subscribers told Stop the Cap! the channel change happened just after midnight, although WeatherNation was already a part of DirecTV’s lineup.

“This is unprecedented for the Weather Channel,” said David Kenny, CEO of the Weather Channel’s parent company. “In our 32 years, we have never had a significant disruption due to a failure to reach a carriage agreement.”

The Weather Channel has launched a campaign to restore the network that carries the impression DirecTV does not care about the safety of their customers. The Weather Channel executives have stated their severe weather coverage is unparalleled and would leave satellite dish customers in rural areas without important information about dangerous weather.

But Dan York, responsible for DirecTV content, said weather information is available from a variety of sources, especially smartphones, and The Weather Channel has drifted away from its core weather mission, devoting up to 40 percent of its programming to reality TV shows.

The two sides are far apart, even arguing over the amount of the increase The Weather Channel wants for its programming. Executives at The Weather Channel claim their requested increase amounts to $0.01 per month, per subscriber, on top of the $0.13 average cost distributors pay for the weather network. DirecTV says it is substantially more than that and it seeking a 20% rate cut due to declining ratings.

The Weather Channel lacks the clout major corporate conglomerates like NBC Universal, Time Warner Entertainment, or Viacom have when negotiating contract renewals. Instead, it is counting on its loyal audience to bring the fight to the satellite provider.

So far, viewers seem to be responding. An anti-DirecTV website run by The Weather Channel has received more than 700,000 page views and reportedly brought 150,000 complaint calls to DirecTV customer service.

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The Wall Street Journal reports the advent of smartphones has taken a significant toll on The Weather Channel’s viewership, leading DirecTV to ask for a 20% rate cut. (4:17)

A U.S. appeals court today ruled the FCC’s Net Neutrality policy requiring all Internet Service Providers to treat Internet traffic equally lacks legal authority.

The court found the FCC relied on an untenable foundation for its Net Neutrality policy that lacked legal standing, handing a victory to Verizon Communications that claimed its free speech rights were being violated.

The three judge panel were unanimous, finding the FCC could not regulate the Internet under the existing regulatory formula, in place since 2011 under the chairmanship of Julius Genachowski.

“Even though the commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates,” Judge David Tatel said.

Many analysts predicted the FCC had a shaky case from the outset, relying on a controversial classification of broadband as an “information service” that was unlikely to survive a court challenge.

“Given that the commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the commission from nonetheless regulating them as such,” Tatel wrote.

Many consumer groups argued the FCC should have reclassified broadband as a “telecommunications service” before implementing Net Neutrality. Today’s court decision seems to agree.

Wheeler

“The FCC — under the leadership of former Chairman Julius Genachowski — made a grave mistake when it failed to ground its open Internet rules on solid legal footing,” said Craig Aaron, president of Free Press. “Internet users will pay dearly for the previous chairman’s lack of political will. That’s why we need to fix the problems the agency could have avoided in the first place.”

FCC chairman Tom Wheeler expressed disappointment in today’s ruling and suggested the court would not have the last word.

“I am committed to maintaining our networks as engines for economic growth, test beds for innovative services and products, and channels for all forms of speech protected by the First Amendment,” Wheeler said in a statement. “We will consider all available options, including those for appeal, to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans.”

“We’re disappointed that the court came to this conclusion,” said Aaron. “Its ruling means that Internet users will be pitted against the biggest phone and cable companies — and in the absence of any oversight, these companies can now block and discriminate against their customers’ communications at will.”

But the cable industry denies it will attempt to interfere with Internet traffic.

Former FCC chairman Michael Powell, who helped design the “information service” framework for Internet oversight during the Bush Administration, said the cable industry he now represents as president of the National Cable and Telecommunications Association will maintain a “hands-off” approach to Internet traffic.

“The cable industry has always embraced the principles of an open Internet and the Court decision will not change that,” Powell said. “Consumers have always been entitled to enjoy the legal web content of their choosing and they will continue to do so. An open Internet is good for our customers, and good for our business. The cable industry has always made it clear that it does not – and will not – block our customer’s ability to access lawful Internet content, applications or services.”

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CNBC reports today’s Net Neutrality decision could impact online services like Netflix with an Internet “toll road” for video content. (1:48)

As expected for months, Charter Communications, Inc. today formally offered Time Warner Cable shareholders $132.50 per share to assume ownership of the nation’s second largest cable operator in a deal worth more than $61 billion, including debt.

Bloomberg News this afternoon reported Charter Cable has offered $83 in cash for each outstanding share of TWC stock, as well as about $49.50 in Charter stock. That makes the attempted takeover the third largest merger deal worldwide since 2009.

Rutledge

Charter CEO Thomas Rutledge, a former executive at TWC and Cablevision would lead the combined enterprise under the Charter Cable name, likely pushing out TWC’s new CEO Robert Marcus. Rutledge argues that combining Charter and TWC would bring about considerable cost savings, particularly for spiraling programming costs. Analysts say the deal would also mean a reduction in Time Warner Cable’s workforce, especially in middle management, as operations are consolidated around Charter’s leadership.

Rutledge today said he privately approached Time Warner Cable executives with an offer in late December.

“We haven’t received a serious response,” Rutledge said today in a Bloomberg News telephone interview. “Our objective was to talk to management and try to get them engaged. They have not, so we’re going to make our case to shareholders about why this deal is good for them and hope they ask management and the board to watch out for the interests of shareholders.”

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Chris Marangi from Gamco tells CNBC Charter Communications’ proposal to buy Time Warner Cable for $61.3 billion is probably too low, but the cable industry is “ripe for consolidation” and further mergers are likely. (1:39)

Time Warner Cable’s chief financial officer Artie Minson reportedly requested Charter make a higher bid that included more cash, but Charter refused.

Malone

The man pulling the levers behind Charter’s curtain is Dr. John Malone, former CEO of Tele-Communications, Inc., which was America’s largest cable operator in the late 1980s and 1990s. Malone’s Liberty Media is Charter Communications’ largest single investor. Malone has long argued for consolidation and cooperation in the cable industry to boost profits and control programming costs that drive up cable television bills.

Malone specializes in structured mergers and acquisitions that result in tax-free buyouts. Charter’s offer relies heavily on debt financing and would allow Charter to shield its ongoing net operating losses from taxes.

Malone indicated he is willing to play hardball to force a merger.

Malone told investors he expected Time Warner Cable to resist a takeover by Charter — America’s fourth largest cable company — so he is prepared to nominate Charter-friendly directors for Time Warner Cable’s board before nominations close Feb. 15. Time Warner Cable shareholders could force the merger by voting for Malone’s handpicked directors, who would promptly approve Charter’s takeover offer. But Time Warner executives will likely argue Charter’s offer is disadvantageous for TWC shareholders.

“Since we made our first proposal, Time Warner Cable has lost another half million video customers,” Rutledge said. “Their customer service continues to decline in every measure. We can improve it. We have a demonstrated track record of improving customer service. It’s a question of credibility.”

Consumer Reports reports otherwise. Charter Communications has perennially been ranked America’s second worst Internet Service Provider cable operator in annual reader surveys. Only Mediacom is ranked lower among cable operators.

Now that Charter’s offer has gone public, investors suspect other cable operators may soon consider bidding for Time Warner Cable as well. Comcast is a likely bidder with an interest is taking control of Time Warner Cable’s systems in New York City and certain midwestern markets. Comcast would also like TWC’s regional sports channels serving southern California.

Customers will have no say in the matter, except through appeals to federal regulators which must approve any sale.

Unlike TWC, Charter Cable has usage limits on their broadband service.

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CNBC’s David Faber reports today’s offer from Charter Communications is not technically a “bid” for Time Warner Cable. Instead, it’s a public offer to hopefully force TWC executives to take Charter’s offer more seriously. (3:25)