The National Cable and Telecommunications Association, the cable industry’s top lobbying group, upped its lobbying activity during the third quarter, spending $4 million to press government officials to adopt a pro-cable legislative agenda.

That amount was up from $3.93 million spent in the second quarter, and $3.78 million spent during last year’s third quarter.

Among the issues on the cable industry’s agenda: stopping Net Neutrality, lobbying against consumer regulatory reforms, tax policies that favor cable companies, cybersecurity, and patent reform.

Among the companies chipping in: Comcast, Time Warner Cable, and Cablevision.

In addition to members of Congress, NCTA lobbyists appealed to the Federal Communications Commission, the National Telecommunications and Information Administration, and the Federal Trade Commission.

Chase Carey (courtesy: Forbes)

Chase Carey, President, Chief Operating Officer of Rupert Murdoch’s News Corp., has blamed the federal government and politicians for giving aid and comfort to Cablevision, the cable system serving most of suburban New York City, forcing Fox to cut off the World Series for millions of subscribers in the recent contract dispute between the two providers.

Carey told Bloomberg News that the standoff with Cablevision would have been resolved much more quickly if lawmakers hadn’t threatened to weigh in, leading the cable provider to hold out in hopes of getting better terms.

“This process would have been resolved more easily, more quickly,” Carey said. “I would actually contend we wouldn’t have gone off the air at all.”

Carey said Fox needs the feeds that it collects from cable companies because even with advertising revenue, the broadcast network loses a “few hundred million dollars” every year. Carey said he came to Washington to explain to lawmakers why Fox needed two streams of revenue and explain why public declarations of support for Cablevision from more than 50 lawmakers only helped to prolong the standoff.

“We’re not running a nonprofit,” Carey said.

Was John Kerry responsible...

If Fox is unprofitable, you wouldn’t know it from Carey’s compensation package.  The COO will earn $8.1 million this year, plus a $15 million bonus and additional compensation totaling more than 26 million dollars.

Carey is upset with Democrats for inserting themselves in private corporate matters, despite the fact the resulting dispute left millions of cable subscribers without the networks they were paying for (and forced to fight for refunds from Cablevision.)

“You’re going to bastardize every negotiation because you’re going to have this specter of arbitration,” he said.

At least 50 members of Congress, many from the northeastern United States where cable blackouts have been the most prevalent, support binding arbitration for such disputes, and criticized Fox for demanding increasing amounts of money for formerly free television signals.  Cablevision contends it was forced to pay an “unfair amount” to get the signals back on cable.

Carey especially targeted Democratic senator John Kerry from Massachusetts, who was among the most vocal opponents of cable systems and programmers putting viewers in the middle of disputes.

...or Rupert Murdoch?

Kerry intends to introduce legislation during the lame duck session of Congress to force both parties to keep programming on while negotiations are underway, especially because consumers have already paid, often in advance, for such programming.  Analysts say Republicans in the Senate will likely filibuster any such measure.  Most Republicans are inclined to share Carey’s view and let the companies duel it out amongst themselves, according to Andrew D. Lipman, a Washington-based partner with the law firm Bingham McCutchen.

Carey himself has been on both sides of the issue.  His former job was chief executive of DirecTV, the largest U.S. satellite-television provider.  Carey at the time thought the television networks and local stations were responsible for their own failing business models and were late to the table demanding payments for cable carriage.  When the Great Recession caused advertising revenue to plummet, both networks and local stations decided the concept of free, ad-supported television was no longer a viable business model.  Now stations want dual revenue streams — ad revenue and payments from the majority of Americans who watch those stations on cable, satellite, or telco-TV.

More importantly, Carey wants the government to butt out, even when consumer dollars are at stake.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Man Who Blacked Out World Series Blames Politicians 11-9-10.flv[/flv]

Bloomberg News reflects on the dispute between News Corp.’s Chase Carey and Cablevision.  (3 minutes)

A Cablevision ad against Fox

Cablevision and Fox finally settled their two week programming dispute Saturday when two local Fox-owned broadcasters and an assortment of cable channels returned to suburban New York area-television screens.  Cablevision ultimately capitulated to Fox’s increased programming fees and grumbled it was stuck paying an “unfair price” for the programming.

“In the absence of any meaningful action from the FCC, Cablevision has agreed to pay Fox an unfair price for multiple channels of its programming including many in which our customers have little or no interest,” Cablevision said, adding that it “conceded because it does not think its customers should any longer be denied the Fox programs they wish to see.”

But in reality, Cablevision subscribers who suffered through the two week outage will ultimately pay the price for Fox-owned programming in the next round of cable company rate increases.

While Cablevision subscribers can now watch the remaining games of the World Series from home, the cable-broadband industry post-game wrap-up show is now underway, surveying the winners and losers.

Let’s take a look:

WINNER: Fox Networks

Fox got everything it wanted, and then some, from Cablevision.  Consumers never take the side of the cable companies that have overcharged them for years. All most know is that when their favorite channels are not on the cable system that charges them more than $50 a month for service, it’s the cable company’s fault. While the terms of the final deal were not disclosed, it’s a safe bet Cablevision is paying rates even higher than those charged to New York’s other cable company Time Warner Cable.  The cave-in by Cablevision means Time Warner and other cable systems will likely also see higher rates for Fox programming now set as a precedent by Cablevision.  So will telco and satellite TV providers.  That’s money Fox will take to the bank.

LOSER: Cablevision

Not only did they alienate their customers, at one point telling them to watch Fox programming on third party websites, they are now facing a $450 million class action lawsuit from subscribers (filed by an attorney with prior connections to Fox parent company News Corporation.)  It is difficult to feel sympathy for a cable company deprived of Fox programming that still charged subscribers full price for channels they could not watch.  One industry executive praised Cablevision for “taking one for the team,” a phrase consumers have heard before to defend corporate pickpocketing.

Cablevision was actively promoting ivi last week through their customer service representatives

WINNER: ivi Networks

Stop the Cap! reported on upstart ivi several weeks back.  The service carries all of metropolitan New York’s broadcast stations and Cablevision ended up recommending its blacked-out subscribers buy an ivi subscription to watch Fox-owned broadcast channels no longer on the cable lineup.  The new online cable system, which started in September, added New York subscribers in droves, annoying Fox to the point of sending a cease-and-desist letter to Cablevision CEO James Dolan to get cable company representatives to stop recommending the service, which Fox claims is “illegal, and perhaps criminal.”

WINNER: Verizon & Satellite Dish Companies

Many subscribers fleeing Cablevision for competitors have probably left for good, especially if they scored substantial discounts and promotions during their first year or two of service.  Verizon FiOS always faced resistance from customers not wanting to devote the time needed to install the service, and when customers have been with a cable company for 20 or more years, change does not come easy.  But die-hard sports fans already inconvenienced by earlier channel interruptions pulled the trigger just to get away from the endless programming disputes.

Verizon scored new customers over the dispute.

LOSER: Comcast-NBC Merger

Lawmakers set to either applaud or introduce roadblocks to the proposed merger between Comcast and NBC saw first hand what can happen when big media companies duel it out over money — millions of customers can be left in the middle with nothing to show for it.  Bloomberg reports the dispute could force significant concessions to prevent or limit such disputes in the future.  U.S. Representative Maxine Waters, a California Democrat, said the Fox-Cablevision spat made her “increasingly concerned with the potential harm” if a dispute arose between an enlarged Comcast and competing video provider. In a letter to FCC Chairman Julius Genachowski last week, she called for “substantive and enforceable conditions” to preserve competition.

WINNER: NFL Networks – Where is Our Binding Arbitration?

Cablevision’s demands for binding arbitration to settle their disputes with Fox rang hollow, if not hypocritical, for NFL Network officials, who have been calling on Cablevision for the same binding arbitration the cable operator demanded of Fox.  The NY Post quoted an unnamed executive at the cable network: “Cablevision has been urging Fox to agree to binding arbitration — the same strategy we’ve been offering Cablevision — but we continue to get sacked.”

LOSER: The Federal Communications Commission

Despite demands from most consumer groups and Cablevision to intervene in the programming disputes, the FCC delivered a rebuke telling all sides to stop with the stunts and start with serious negotiations.  Beyond that, the agency did what it has done best under the Obama Administration: sit on its hands.

THE BIGGEST LOSER: You

With the grandstanding by both sides finally over Saturday — the shouting and expensive publicity campaigns wrapped up and put away for next time (KeepFoxOn.com now renders a blank page) — the person left standing with the bill in hand was you.  Fox wrapped the costs of its expensive publicity campaign into the rate increase Cablevision finally conceded to paying.  The bags of money to be handed from the Dolan family that owns Cablevision over to Rupert Murdoch will be filled from your pockets.  And there is no end in sight to future disputes raising programming costs even higher than ever.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Cablevision Fox Dispute 11-1-10.flv[/flv]

Bloomberg News delivers three reports detailing the impact of increased programming costs on cable bills, inaction by the FCC, and whether Americans are fleeing cable TV for online video instead.  (10 minutes)

Stop the Cap! reader James dropped us a note to let us know Cablevision customers calling to cancel their cable service are scoring $20 a month off their cable bills for two years if they decide to stay with the cable company. It’s all because of the ongoing dispute between Cablevision and Fox over programming fees.

That $500 goes a long way towards compensating Cablevision customers for at least a year of petty programming disputes between executives who think of $500 as tip money.

So if you are a Cablevision customer, here is how to get your money back:

1. Call Cablevision at this number – 1-800-918-2581, which takes you directly to the customer retention department.
2. Tell the representative you wish to cancel your cable service because of the ongoing dispute with Fox and your loss of local and cable channels.
3. When they argue with you about why you should stay, tell them you are tired of being put in the middle of these disputes and forced to pay for programming you are not getting.
4. They may offer a $20 credit for just 12 months.  Tell them that is not long enough and if the representative won’t do any better, hang up and call back.

Be polite, persuasive, but persistent.  Customers on existing promotional deals may not qualify for this, but if you are paying regular Cablevision prices, you do.

The sooner you call, the better as word is getting out about this deal which could be withdrawn at any time.

You can’t blame a guy for trying.  As the Cablevision-Fox dispute continues to drag on — keeping several Fox-owned cable networks and two New York stations off Cablevision screens, Hamilton Mayor John Bencivengo decided it was time to start shopping for some cable competition.

Bencivengo wrote thoughtful letters to executives of Comcast and Time Warner Cable trying to sell the two cable companies on coming to Mercer County.

“I am writing to inquire as to any interest your company may have in entering into Hamilton Township (Mercer County), NJ as a cable television provider,” Bencivengo’s letter reads. “I understand that any business decision would be predicated on the economic feasibility of entering into a new market, either through a franchise agreement with Hamilton Township or through a statewide franchise agreement available from the State of New Jersey through the BPU (Board of Public Utilities),” the letter reads. “It is a vibrant market that seems ripe for picking at this time.”

He’s also reminding both cable companies they are free and clear to deliver service just by signing a franchise agreement — the one Hamilton Township had with Cablevision expired back in 2005.

The New Jersey Times notes the area is not well-served by cable competition.  Verizon FiOS is an option for only about half of the residents of Hamilton, and only a quarter of residents in nearby Robbinsville.  The only other alternative is attaching a satellite dish to the roof.

Hamilton Township is part of Mercer County, N.J.

“Here we are again with stations that are pretty popular off the cable network without any reimbursement to the cable customers, and that’s unfortunate,” Bencivengo told the New Jersey newspaper. “I want to be proactive to try to woo these people to Hamilton Township.”

Unfortunately, the cable industry in the United States resembles an organized crime network (their prices sure are a crime), each with their own respective territories companies have quietly agreed never to cross.  Comcast and Time Warner Cable are the Godfathers of their respective service areas, and neither will compete head-to-head.  Even though many residents affected by the Fox blackout may think of Cablevision as the Fredo of the cable industry, the chances of another cable company arriving in town to compete with them is next to zero.

Verizon offers the most immediate opportunity for cable competition, but consumers will find pricing generally comparable to what Cablevision charges.

The mayor of Hamilton need not tilt at windmills, however.  There is another way.

If Hamilton Township is fed up with Cablevision’s HissyFits and Verizon’s high prices, the alternative is to build support for a community-owned municipal system that can deliver video, phone, and broadband service to residents.  That’s what communities ranging from Wilson and Salisbury, North Carolina to Opelika, Alabama are doing, among many others.

They’ve decided the future of their communities’ telecommunications needs can no longer be entrusted to a handful of bully boys who put customers in the middle of every dispute over the money those customers will ultimately have to pay no matter who wins.

It’s a far better long term solution than replacing one bad cable company with another.