Beggars can be choosers if you are running Cablevision, the northeast’s largest non-conglomerate cable company, still run by the Dolan family.

In a conference call with Wall Street analysts, company officials noted Cablevision had noticeably tightened its credit standards during the third quarter and has implemented incentives for slow-pay and no-pay customers to take a hike and not come back, even at the risk of subscriber losses.

“Certain of our promotional eligibility policies have put pressure on our net subscriber results,” reported Cablevision CEO James Dolan. “However, we believe that these policies are consistent with our goal of growing long-term shareholder value. For instance, during the third quarter, we tightened certain of our customer credit and payment policies. While these policy changes effectively reduce the number of available sales, they are expected to contribute a stronger base of customers over time.”

For more than a year, Cablevision has restricted promotional pricing and retention offers to keep customers from coming back for better deals when their existing promotion expires. Now it is stripping eligibility for promotional pricing for late-paying customers as well. Subscribers are leaving as a result. Video customers declined by 56,000 during the third quarter, high-speed data customers declined by 23,000, and voice customers declined by 33,000.

“We’re no longer marketing [to] subscribers who have a history of non-pay, so we’re not inviting them back in if they’re not good actors,” said Cablevision’s chief operating officer Kristin Dolan. “We’re requiring full payment in a number of areas where homes have a history of bad debt. And then we’re not doing promotions [for] those customers either. So if you have a history of bad debt with us, you can’t come back in on a promotional offer. [We’re] not letting people back into the bucket that are going to end up being problematic later on in their relationship with us.”

Mr. Dolan was scathingly critical of his biggest competitor, Verizon FiOS, claiming the company will stop at nothing to poach Cablevision’s customers.

“Verizon, in our opinion, continues on a path of pursuing the destruction of their own capital,” said Dolan. “We don’t believe that they’re profitable on any level in our service area. They just rabidly pursue us in an attempt to try and get customers. And I think our strategy is actually working quite well because we’re giving them all the customers that we think are the most expensive customers and the ones that provide the least free cash flow to us.”

Mrs. Dolan told analysts Cablevision is particular about the kinds of customers it wants to win back from competitors.

“I think if it’s a win back that we want to have, that’s a differentiator,” she said. “We’re not going to just chase subscriber numbers. We don’t want to invite people into our store if they’re going to shoplift.”

Comcast’s dependence on third-party contractors to support its cable plant and handle certain service calls has made a few companies very rich while putting several others into bankruptcy.

In March, Cable Line, Inc., and McLaughlin Communications filed suit against the cable company in Philadelphia Common Pleas Court for putting them out of business after being compelled “to start and finance work in new markets, only to abandon [both] firms once they had been induced to create the infrastructure necessary for Comcast’s expansion.”

Attorney Charles Mandracchia alleges both companies were sold on Comcast’s commitments and hired and trained scores of workers, opened new facilities and borrowed heavily to finance purchases of trucks and equipment only to face what the suit calls an arbitrary cancellation of both companies’ contracts while their workforce was hired away by firms favored by Comcast.

“This is about more than my company,” Cable Line owner Kevin Diehl told the Philadelphia Inquirer. “‘Scale up or die,’ they told us. I bought a Harrisburg warehouse and a Perkasie office,” and built his staff up to 120 workers.

Comcast’s dependence on Diehl’s firm was so strong, the cable company enforced a no-compete clause in Cable Line’s contract to block a lucrative acquisition offer from another company in the early 2000s.

Things changed dramatically in 2012 when Comcast suddenly canceled its contract and gave Cable Line’s business to larger firms that recruited away his trained workforce. Cable Line went out of business shortly afterwards. McLaughlin makes similar claims.

“Comcast clearly had a decided intent and plan to eliminate small companies like Cable Line and McLaughlin Communications in order to monopolize the market, and in fact it did precisely that,” according to the lawsuit.

Allegations of corruption were included in a similar federal lawsuit filed by an Illinois-based cable installer, Frontline Communications, that claimed top Comcast officials “accepted cash, gifts and other benefits” in exchange for awarding installation contracts to favored firms. That case was dismissed on a technicality and has yet to be refiled.

A handful of firms favored by Comcast have done well as favored partners. Dycom, a Florida-based telecommunications installer with a nationwide footprint has acquired a number of smaller competitors over the last three years and disclosed to the Securities & Exchange Commission that just three companies — AT&T, CenturyLink and Comcast account for 39% of its business. If Comcast and Time Warner Cable win merger approval, that number will increase to above 50%.

With consolidation of third-party cable contractors continuing, workers have seen dramatic compensation cuts. Installers working for Dyson-acquired Prince Telecommunications accuse the company of cutting their labor rate in half. Others complain contractors force them to buy their own tools, under-compensate for fuel and don’t pay workers when they arrive to find subscribers not at home to accept a service call.

“This consolidation across the country is very bad for skilled cable technicians, who now have very few choices of employment,” Diehl told the newspaper, warning that installers working for Time Warner Cable will see even more dramatic compensation and benefits cuts “as Comcast gobbles them up.”

Diehl told the newspaper he personally helped build Comcast’s cable system in the Philadelphia suburbs and calls it “obsolete.”

“It should be fully fiber. It should have a bigger power supply, like FiOS,” Diehl said. “That’s why your TV sometimes doesn’t work after a storm.”

Earlier this week, UniTek Global Services Inc., a Blue Bell company that employs 3,200 people installing DirecTV, ATT, Comcast and other TV and Internet systems, filed for Chapter 11 reorganization in federal bankruptcy court in Wilmington, Del. The company is seeking a “comprehensive debt restructuring” after trying to diversify its business portfolio beyond its major clients, including Comcast.

GreatLand Connections, a new cable company with no headquarters building and only a handful of employees, is seeking permission to serve 2.5 million ex-Comcast/Time Warner Cable customers while saddled with $7.8 billion in debt the day its opens for business.

The entity, now administered primarily by a small executive team, will trade on the NASDAQ exchange under the symbol ‘GLCI’ and would start operations in 2015. Tidbits about the planned cable operator were included in a regulatory filing with the Securities and Exchange Commission, primarily concerning how shareholders and executives will be handled if the merger is approved.

GreatLand Connections was created to appease the U.S. Justice Department and Federal Communications Commission that earlier expressed concern about any single cable operator exceeding 30 percent of the national cable television market. Spinning off 2.5 million customers in less desirable service areas keeps Comcast’s market share just under 30%, but the SEC filing reveals Comcast isn’t exactly kicking customers out in the cold and disinheriting them. Comcast shareholders will own and control 67% of GreatLand Connections. Comcast will also select six of the nine members of the Board of Directors at GreatLand, and the SEC filing includes an admission to shareholders that a conflict of interest could exist between certain executives and board members who have investments in both cable companies.

The new company’s large debt load — about five times the company’s estimated earnings before interest, depreciation, taxes, and certain other expenses, is designed to shield Comcast from having to pay taxes on the spinoff. GreatLand’s filing states the transfer deal and spin-up of its company will qualify as a tax-free reorganization transaction.

The initial debt load is considerably higher than what most other cable companies carry, which makes it likely subscribers will be asked to help pay it off in the form of higher rates for years to come.

Even without a single piece of office furniture in place, GreatLand could begin serving as one of the nation’s largest cable companies with an estimated value of $5.7 billion in less than a year.

(Clarification: This article was updated to reflect Comcast shareholders will own 67% of GreatLand after the transaction closes.)

After raising prices for Internet service and imposing the nation’s highest modem rental fee, Comcast customers in Oregon and southwest Washington are finally getting some good news: speed boosts.

Comcast will double Internet speeds for “the vast majority” in the Pacific Northwest between now and the end of the year, bringing 100Mbps service to Comcast’s “Blast” Internet plan and 50Mbps to “Performance” tier customers. Comcast says it is the 13th speed increase in the last dozen years in the region, but that isn’t all that has increased.

Comcast raised prices for its broadband plans last month: $66.95 for standalone Performance service ($53.95 if you bundle), $78.95 for Blast ($65.95 for those also taking cable TV or phone service). The modem rental fee remains a steep $10 a month.

Customers will receive e-mail when the faster speeds become available in their area, and a modem reset (unplug it briefly) will be required to get the new speeds.

Comcast is facing competition from CenturyLink, which is installing fiber optics in the area and Frontier, which inherited Verizon’s FiOS network when it acquired landlines in the region. Google Fiber is also expected to eventually make an appearance in the Portland area. Comcast prices are on the high side in comparison to the competition. CenturyLink’s introductory rate is as low as $50 a month for fiber service and Frontier charges $35 a month for 30Mbps service on its FiOS network.

For now, Comcast broadband service remains uncapped in the region, but Comcast is continuing market trials elsewhere that include a 300GB usage cap and an overlimit fee for those exceeding it.

Big Telecom companies like Verizon and AT&T use phony numbers and perpetuate myths about broadband traffic and network investments that have conned investors out of at least $1 trillion in unnecessary investments and consolidation.

Alexander Goldman, former chief analyst for CTI’s American Recovery and Reinvestment Act grants, is warning Wall Street and investors they are at risk of losing millions more because some of the largest telecom companies in the country are engaged in disseminating bad math and conventional wisdom that relies more on repetition of their talking points than actual facts.

Goldman’s editorial, published by Broadband Breakfast, believes the campaign of misinformation is perpetuated by a media that accepts industry claims without examining the underlying facts and a pervasive echo chamber that delivers credibility only by the number of voices saying then same thing.

Goldman takes Verizon Communications CEO Lowell McAdam to task for an editorial published in 2013 in Verizon’s effort to beat back calls on regulators to oversee the broadband industry and correct some of its anti-competitive behavior.

McAdam claimed the U.S. built a global lead in broadband on investments of $1.2 trillion over 17 years to deploy “next generation broadband networks” because networks were deregulated.

Setting aside the fact the United States is not a broadband leader and continues to be outpaced by Europe and Asia, Goldman called McAdam’s impressive-sounding dollar figures meaningless, considering over the span of that 17 years, the United States progressed from dial-up to fiber broadband. Wired networks have been through a generational change that required infrastructure to be replaced and wireless networks have been through at least two significant generations of change over that time — mandatory investments that would have occurred with or without deregulation.

Over the past 17 years, the industry has gotten more of its numbers wrong than right. An explosion of fiber construction in the late 1990s based on predictions of data tsunamis turned out to be catastrophically wrong. University of Minnesota professor Andrew Odlyzko, the worst enemy of the telecom industry talking point, has been debunking claims of broadband traffic jams and the need to implement usage-based pricing and speed throttling for years. In 1998, when Wall Street was listening intently to forecasts produced by self-interested telecom companies like Worldcom that declared broadband traffic was going to double every 100 days, Odlyzko was telling his then-employer AT&T is was all a lot of nonsense. The broadband traffic emperor had no clothes, and statistics from rival telecom companies suggested Worldcom was telling tall tales. But AT&T executives didn’t listen.

“We just have to try harder to match those growth rates and catch up with WorldCom,” AT&T executives told Odlyzko and his colleagues, believing the problem was simply ineffective sales, not real broadband demand. When sales couldn’t generate those traffic numbers and Wall Street analysts began asking why, companies like Global Crossing and Qwest resorted to “hollow swaps” and other dubious tricks to fool analysts, prop up the stock price and executive bonuses, and invent sales.

Nobody bothered to ask for an independent analysis of the traffic boom that wasn’t. Wall Street and investors saw dollars waiting to be made, if only providers had the networks to handle the traffic. This began the fiber boom of the late 1990s, “an orgy of construction” as The Economist called it, all to prepare for a tidal wave of Internet traffic that never arrived.

After companies like Global Crossing and Worldcom failed in the biggest bankruptcies the country had ever seen at the time, Odlyzko believes important lessons were never learned. He blames Worldcom executives for inflating the Internet bubble more than anyone.

A bubble of another kind is forming today in America’s wireless industry, fueled by pernicious predictions of a growing spectrum crisis to anyone in DC willing to listen and hurry up spectrum auctions. Both AT&T and Verizon try to stun investors and politicians with enormous dollar numbers they claim are being spent to hurry upgraded wireless networks ready to handle an onslaught of high bandwidth wireless video. Both Verizon’s McAdam and AT&T’s Randall Stephenson intimidate Washington politicians with subtle threats that any enactment of industry reforms by the FCC or Congress will threaten the next $1.2 trillion in network investments, jobs, and America’s vital telecom infrastructure.

Odlyzko has seen this parade before, and he is not impressed. Streaming video on wireless networks is effectively constrained by miserly usage caps, not network capacity, and to Odlyzko, the more interesting story is Americans are abandoning voice calling for instant messages and texting.

That isn’t a problem for wireless carriers because texting is where the real money is made. Odlyzko notes that wireless carriers profit an average of $1,000 per megabyte for text messages, usually charged per-message or through subscription plan add ons or as part of a bundle. Cellular voice calling is much less profitable, earning about $1 per megabyte of digitized traffic.

Wireless carriers in the United States, particularly Verizon and AT&T, are immensely profitable and the industry as a whole haven’t invested more than 27% of their yearly revenue on network upgrades in over a decade. In fact, in 2011 carriers invested just 14.9% of their revenue, rising slightly to 16.3 percent in 2012 when companies collectively invested $30 billion on network improvements, but earned $185 billion along the way.

While Verizon preached “spectrum crisis” to the FCC and Congress and claimed it was urgently prioritizing network upgrades, company executives won approval of a plan to pay Vodafone, then a part owner of Verizon Wireless, $130 billion to buy them out. That represents the collective investment of every wireless provider in the country in network upgrades from 2005-2012. Verizon Wireless cannot find the money to upgrade their wireless networks to deliver customers a more generous data allowance (or an unlimited plan), but it had no trouble approving $130 billion to buy out its partner so it could keep future profits to itself.

Odlyzko concludes the obvious: “modern telecom is less about high capital investments and far more a game of territorial control, strategic alliances, services, and marketing, than of building a fixed infrastructure.”

That is why there is no money for Verizon FiOS expansion but there was plenty to pay Vodafone, and its executives who walked away with executive bonuses totaling $89.6 million.

As long as American wireless service remains largely in the hands of AT&T and Verizon Wireless, competition isn’t likely to seriously dent prices or profits. At least investors who are buying Verizon’s debt hope so.

Goldman again called attention to Odlyzko’s latest warning that the industry has its numbers (and priorities) wrong, and the last time Odlyzko had the numbers right and the telecommunications industry got its numbers wrong, telecommunications investors lost $1 trillion in the telecommunications dot.com bust.

As the drumbeat continues for further wireless consolidation and spectrum acquisition, investors have been told high network costs necessitate combining operations to improve efficiency and control expenses. Except the biggest costs faced by wireless carriers like Verizon are to implement strategic consolidation opportunities like the Vodafone deal, not maintain and grow their wireless network. AT&T is putting much of its spending in a proposed acquisition of DirecTV this year as well — at a cost of $48.5 billion. That could buy a lot of new cell towers and a much more consumer-friendly data plan.

Voice to text substitution (US)

Cell phone network companies (if you can believe their SEC filings) are incredibly profitable, and are spending relatively little on infrastructure: