One way or another consumers will pay more for their Mediacom cable service in 2010.  The undecided question is will Sinclair-owned television stations get a chunk of your wallet or will Mediacom keep it all for themselves.

Weary Mediacom customers have been through this battle before.  For the second time in three years, residents of Des Moines, Iowa face the prospect of losing access to their local Fox station, owned by Sinclair.

The ads are up and running.

[flv width=”360″ height=”287″]http://www.phillipdampier.com/video/Mediacom WEAR Ad.flv[/flv]

Mediacom is running this spot, customized for each city impacted by the dispute, comparing Sinclair’s demands as another “bailout.”  This one is running in the Pensacola-Mobile market, where station WEAR is threatened with removal from Mediacom’s lineup.

Sinclair is demanding another price increase from the cable operator and Mediacom has a history of playing hardball and refusing to pay.  If the two sides don’t reach agreement by December 31st, 22 Sinclair-owned stations in communities served by Mediacom will be taken off the cable lineup.

Viewers aren’t happy, especially because they do not get a reduced bill from the cable company for the reduced channel lineup that results.

Both sides are waging campaigns to try and get viewers into the fight.  But in the end, it’s a battle of two corporate titans fighting over their portion of your money.

[flv]http://www.phillipdampier.com/video/KCCI Des Moines Mediacom Sinclair Exchange Strong Words 1-23-07.flv[/flv]

Back in January, 2007 Mediacom customers spent five weeks without Sinclair-owned television stations on their cable dial.  A nasty exchange between Sinclair and Mediacom was documented in this report aired by KCCI-TV Des Moines back on January 23, 2007.   (3 minutes)

[flv]http://www.phillipdampier.com/video/KCCI Des Moines Mediacom Loses Customers 5-4-07.flv[/flv]

The fallout from the 2007 dispute could be measured by disgusted customers who fled Mediacom for other providers, as KCCI found on May 4, 2007. (2 minutes)

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/WHO Des Moines Sinclair vs Mediacom 12-15-09.flv[/flv]

WHO-TV Des Moines covers today’s dispute impacting Mediacom and the city’s Fox affiliate. (2 minutes)

[flv]http://www.phillipdampier.com/video/KDSM Des Moines Mediacom vs Sinclair 12-17-09.flv[/flv]

KDSM-TV Des Moines is the Sinclair-owned Fox affiliate.  The station covers its own dilemma, warning viewers they might lose the station for the second time in three years.  (3 minutes)

[flv]http://www.phillipdampier.com/video/KFXA Cedar Rapids Mediacom Sinclair Dispute in Iowa 12-17-09.flv[/flv]

In Cedar Rapids, Sinclair’s KFXA-TV covers the dispute with a decidedly pro-Sinclair point of view. (3 minutes)

[flv]http://www.phillipdampier.com/video/WEAR Pensacola Sinclair Mediacom Dispute 12-16-09.flv[/flv]

WEAR-TV in Pensacola, Florida spends a great deal less “news time” covering the dispute. WEAR is the Sinclair-owned ABC affiliate for the Florida Panhandle. (30 seconds)

Redefining their "new position" to basically mean their "old position"

AT&T’s all-new position on Net Neutrality suspiciously sounds like its old position on Net Neutrality.

In a three-page letter addressed to FCC Chairman Julius Genachowski, James W. Cicconi, AT&T’s senior vice president for external and legislative affairs wrote in glowing terms about the Obama Administration’s efforts to expand broadband service and preserving the “open Internet.”  Those goals are shared by AT&T, according to Cicconi.  But are they?

AT&T has spent millions fighting Net Neutrality policies, calling them unnecessary and harmful to broadband innovation and investment.  Ed Whitacre, Jr., AT&T’s former chairman and CEO infamously kicked off a contentious debate when he declared content producers shouldn’t be allowed to use AT&T’s “pipes for free.”

Little has changed.

Yesterday’s letter to Genachowski brings nothing new to the table from AT&T.  In short, they still feel broad-based Net Neutrality regulations will be harmful to investment.  AT&T wants the FCC’s definition of Net Neutrality to be “flexible enough to accommodate the types of voluntary business agreements that have been permitted for 75 years.”  Flexible, in this instance, means gutting the clear, unambiguous prohibition against fiddling with Internet traffic and inserting loopholes that gut the policy’s effectiveness.  AT&T’s “voluntary agreements” never include consumers.

AT&T wants to provide “value-added” services to content producers who agree to pay more to obtain them.  That typically means additional speed or a guarantee of prioritized service.  Unfortunately, on a finite broadband network, those getting preferential treatment can reduce the quality of service for those who don’t pay.  By trying to refocus the FCC’s attention on obsessing over subjective interpretations of “unreasonable and anti-competitive” content discrimination, AT&T gets a free pass to configure a broadband protection racket and rake in money from content producers afraid to be stuck in the slow lane.

Cicconi

AT&T also continues to complain that such regulations would prevent the company from offering consumers “value-added” broadband services.  As long as those services do not discriminate, providers can freely provide network enhancements like faster speed tiers, “Powerboost” technology which temporarily speeds up connections, and even network management which keeps viruses, malware, and other junk traffic away from subscribers.

Ben Scott at Free Press, a consumer advocacy group, read between AT&T’s latest lines and saw a naked effort to gut Net Neutrality before being enacted:

“After leading a rabid anti-net neutrality lobbying campaign for years, AT&T now submits a letter to the Federal Communications Commission purporting to offer common ground,” Scott said. “What they are proposing would allow them to violate the core principle of Net Neutrality — letting them control the Internet by picking winners and losers in a pay-for-play scheme. That would destroy the free and open Internet, and the FCC should reject this false compromise out of hand.”

“Make no mistake, AT&T opposes Net Neutrality. Their proposed solution is a bait and switch. As bait, they ask to return to a standard of nondiscrimination that was long applied to the telephone network. But they fail to mention that this standard was part of a system of pro-competitive common carriage rules that they have railed against applying to broadband networks for years. They haven’t changed their mind about common carriage. They are simply cherry-picking one piece of the old rules and calling it a compromise. The entire Net Neutrality debate is about the creation of a new system of nondiscrimination that fits broadband networks, not telephone networks –a debate the telephone companies forced by stripping away consumer protection rules from broadband under the Bush administration,” Scott added.

Public Knowledge also called out AT&T in a statement from Gigi Sohn.

AT&T has tried to draw what is an imaginary line among types of discrimination. The company advised the FCC that while ‘unreasonable’ discrimination can be banned, any discrimination caused by ‘voluntary commercial agreements’ is just fine because the parties involved agreed to it. That is nonsense.

As we have said consistently, the Internet has functioned as well as it has because control of the crucial roles at each end of the network. Side deals made by a carrier like AT&T and a content provider or other company take that control out of the hands of the consumer.

Similarly, it is unfortunate that AT&T has resorted to the old tactic of threatening not to invest in its network if the company does not get what it wants in a rulemaking. The growth of the Internet will be driven by consumer demand, not by gimmicks. If the company is truly interested in consumers, it will allow consumers to remain in control.

GVTC Communications yesterday launched 40Mbps service across its service area — the Hill Country north of San Antonio — marking a new broadband speed achievement for south Texas.

The company providing the service is about to reap the rewards of a $35 million investment in a fiber-to-the-home network reaching 80 percent of customers in North San Antonio and the Hill Country.  The new premium speed tier bests the company’s current 20Mbps service, and also includes 10Mbps upstream speed for $89.95 a month with a contract.

GVTC says it can deliver even faster speeds, upwards of 100Mbps, but wants to see what kind of demand they have for 40Mbps service first.

GVTC’s speeds will leave San Antonio’s Time Warner Cable and AT&T U-verse customers drooling.  GVTC speeds achieve nearly twice the speed of either provider, and leaves them in the dust when comparing upload speeds.  The company provides true fiber connections straight to customer homes, not the fiber-copper systems both cable and AT&T rely on.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/GVTC-FTTH 12-10-08.flv[/flv]

GVTC Communications explains the benefits of fiber to the home service.  (4 minutes)

GVTC believes upstream speeds are particularly important for the area’s small businesses, as well as families with multimedia to share.

AT&T U-verse last week announced a speed upgrade to 24Mbps service in San Antonio, but their upstream speed tops out at 3Mbps.  Time Warner Cable currently provides San Antonio customers up to 15Mbps service with 2Mbps upstream speeds.

Time Warner Cable spokesperson Jon Gary Herrera said the company will respond with an upgrade to DOCSIS 3 in San Antonio as soon as the first half of 2010.  The upgrade, dubbed “Wideband” in marketing materials, will provide connections up to 50Mbps downstream and 5Mbps upstream.

[flv width=”320″ height=”260″]http://www.phillipdampier.com/video/KSAT San Antonio – Boerne Gets Wired 9-13-07.flv[/flv]

On September 13, 2007 KSAT-TV San Antonio ran this report about Boerne getting new fiber optic access through GVTC.  (2 minutes)

That GVTC Communications was able to handily beat both AT&T and Time Warner Cable in both product offerings and fiber optic deployment may be a result of the company’s status as a non-profit cooperative.  The more revenue the company brings in, the more the company returns to its customers in the form of Capital Credits.  GVTC has always been a major innovator in Texas, being the first phone cooperative in Texas to launch cable television service in the 1980s and the company began using fiber in the 1990s.  The company’s service area spans 2,000 square miles and eleven counties, some rural.  Despite questions about whether wiring rural customers would provide sufficient return, the company went ahead with the project anyway, which today permits the cooperative to enjoy revenue from telephone, television, and broadband service.  It also permits many of their less-urban customers to enjoy the same level of service as the “big city folks.”

Comcast has formally announced their version of TV Everywhere is now online.  Fancast XFINITY TV “is available to any Comcast customer with a digital cable and Internet subscription.”  There is no additional charge for the service.

Comcast customers can access the service after logging in through Comcast.net or Fancast.com with their account username and password.  Once “authenticated” as a confirmed Comcast cable subscriber, customers can watch approximately 2,000 hours of programming from more than 30 cable networks, including premium channels HBO, Cinemax, and Starz.  A demonstration showed Comcast had complete seasons of series like The Sopranos and Big Love.

Some programmers are exploring whether Nielsen can count online viewing as part of its ratings measurements.

Initially, Comcast will restrict access to customers who are confirmed digital cable and broadband customers, but will extend the service to those who only subscribe to Comcast cable programming in approximately six months once security and authentication issues have been resolved, according to company officials.

The service should be accessible by subscribers on-the-go through mobile broadband or other connections, as long as customers log in.  Access is not allowed outside of the United States for copyright clearance reasons.

Customers should be aware any video accessed by the service counts against Comcast’s 250GB monthly usage limit.  Advertising on the service also counts.  Unlike Hulu which typically provides just one advertisement for every break, Comcast’s program partners have tested full commercial loads, up to seven minutes worth in a 30-minute program.  That’s 14 ads to sit through, each eating into your usage allowance.  Comcast says programmers are individually testing different amounts of advertising to learn how viewers react.  The prevailing view is that online viewers are less tolerant of advertising than typical television viewers.

While Time Warner Cable continues to ask customers if they should “get tough” with cable programmers’ price hikes, they are rolling over customers with more rate increases anyway.

The latest region facing higher cable bills is southern California.  Customers were notified rates were increasing an unspecified amount in January 2010.  Company spokesman Darryl Ryan told the Orange County Register that he can’t easily categorize the average increase since every bill will be different.

Readers managed:

• Margaret from Huntington Beach says that some price hike examples are: The All the Best goes to $122.99, from $119.95; the ‘Surf ‘n View’ increases $2.04; broadcast cable goes up $2; Internet only goes up $2.04; and DVR increases to $1.54. One decrease: the remote control drops $0.05.
• Dana from Anaheim Hills got a letter too and had to call customer service to figure out what it meant. Essentially, Dana found out basic service was going up $5 to $8 per month. To keep the existing price, customers must commit to a 2-year contract.

This price increase, with more likely to follow, comes because of programming costs according to the nation’s second largest cable operator.  The company has recently tried to engage consumers in an effort to “keep costs down” through its “Roll Over or Get Tough” campaign.  Time Warner Cable claims broadcasters and other cable programmers are demanding as much as 300% more for their programming in 2010.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/TWC Holidays Ad.flv[/flv]

Time Warner Cable’s ‘Roll Over or Get Tough’ campaign is running this ad for the holidays.

The Parents Television Council called the marketing campaign “self serving,” said Tim Winter, the organization’s president.  The group said consumers are always put in the middle of pricing arguments, either from the cable company’s perspective or the network trying to get carriage or threatened with removal from cable lineups.  The PTC calls it posturing, and in the end prices typically get negotiated down a few pennies at most.

The PTC advocates consumers being able to pick and choose only those channels they want.  The group runs the website How Cable Should Be, which breaks down some of the estimated wholesale prices programmers charge cable companies for their programming.  Consumers can use the site to pick and choose their favorite channels and add up what their monthly bill could be if they weren’t paying for channels they don’t watch.

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The Parents Television Council’s “Bundling Bummer” message illustrates how consumers get stuck paying for channels they never wanted. (3 minutes)

Time Warner Cable claims that more than 400,000 visitors to their campaign website have been overwhelmingly positive towards the company’s “fight back” stance.

“We’re delighted with the results so far,” said Time Warner chairman, president and CEO Glenn Britt. “Over 150,000 people have left comments, and 95% of them voted for ‘Get Tough.’ Our customers clearly agree that the current programming business model is broken. One comment we’re hearing pretty consistently is that customers would like the choice to buy smaller packages of channels. As an industry, we need to listen to those kinds of concerns.”

But the company’s site doesn’t make it easy to “roll over.”  Those who try to choose “roll over” are prompted instead to choose “fight back.”

Industry observers suggest Time Warner’s campaign is an opening shot for upcoming contract extensions for a handful of programmers, most notably broadcasters.  In the very center?  News Corporation and the Fox family of cable and broadcast stations.

[flv]http://www.phillipdampier.com/video/TWC 300 Percent Pay Raise.flv[/flv]

Time Warner Cable asks if you are getting a 300% pay raise in this ad asking if customers want the company to fight back against programmer price increases.

Behind the scenes, Time Warner Cable has been taking shots at Fox over negotiations between Sinclair Broadcasting, which owns 20 Fox-affiliated TV stations, and Mediacom, a smaller cable operator.  In an ex parte comment filed December 8th, Time Warner Cable took direct aim at the network, suggesting they were demanding veto power over local negotiations with individual stations.  If the network doesn’t like the terms the local station and cable system settle on, Fox wants the right to object.  Time Warner Cable suggested that precedent is already in place based on negotiations between Sinclair and Time Warner which only resulted in one-year extensions.  The cable operator assumes Fox will be back a year from now demanding up to one dollar a month per subscriber for each Fox affiliate the cable system carries.

Why does Fox care so much?  Because they, like many other television networks, have begun asking for a percentage of the revenue earned from retransmission consent agreements.  With a weak ad market, every penny counts.

Fox called the cable operator’s tactics a “desperate campaign to mask its impressive profits and instead malign its program suppliers’ efforts to receive fair compensation.”

Regardless of who wins the fight, subscribers lose because they bear the brunt of the cable operator’s business model which forces customers to pay for dozens of channels they’ll never watch, and when prices for those networks increase, so shall the customer’s bill.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/Canada Retrans Consent Ad.flv[/flv]

Canadians are also going through a similar battle between cable systems and local broadcasters who demand payment for carriage.  The hardball campaign plays out on Canadian TV screens with ads like this.