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Invest an hour of your time and learn about how America ceded its broadband leadership to a handful of telecom companies that have carved out comfortable, barely competitive territories for themselves, leaving Americans overpaying for slow broadband service. Susan Crawford is author of the new book, “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,” which has just been published. (65 minutes)

Time Warner Cable is sending apology letters to former customers acknowledging the company’s cable service has not always lived up to expectations, but improvements have been made that ex-subscribers should consider.

The effort is part of a $50 million marketing campaign that will push a 30-day money back guarantee and claims their competitors’ promised savings have not materialized.

“The Better Guarantee”-campaign will target customers who have dropped the cable operator in favor of competitors that include AT&T U-verse and Verizon FiOS.

Although both AT&T and Verizon offer attractive introductory rates, Time Warner Cable says the savings disappear after the promotion expires. The company’s new ad campaign will attempt to entice customers back with offers of lower rates, a $200 reward card, and better service, including faster broadband speeds and new products like online apps for video streaming and home security services.

The New York Times reports the campaign was announced one week before the cable operator releases its latest fourth quarter earnings, which may show a growing number of customers canceling their cable television service. Jeffries & Company forecast Time Warner will report 140,000 subscribers lost during the last quarter, up from 129,000 in the same quarter of 2011.

Customers are invited to sample Time Warner’s offerings for 30 days. If they don’t like the service, the company will send their money back.

That may not be enough. The American Consumer Satisfaction Index has top-rated Verizon FiOS for three years in a row. Time Warner Cable received a below average, but improving rating.

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Time Warner Cable’s new television ad promoting its “Better Guarantee.”  (1 minute)

Follow the money to the real root of this argument.

After conclusive evidence that cable broadband upgrades have eliminated any congestion problems, the cable industry has finally admitted usage caps are not about “congestion relief,” but are, in their view, “about fairness.”

Reports of the Internet data exaflood, tsunami, brownouts, or even blackouts are highly exaggerated and always have been. But we knew that from the first day Stop the Cap! got started.

In the summer of 2008, Frontier Communications attempted to define a top limit on their residential DSL accounts at a staggeringly small 5GB per month. Time Warner Cable initially thought 40-60GB a month was more than fair when it tried to ram its own Internet Overcharging scheme down the throats of customers in New York, North Carolina, and Texas in April 2009. Comcast said using more than 250GB a month could create congestion problems on their network and be unfair to other customers. To this day, AT&T, one of the nation’s largest telecommunications companies, claims that anything more than 150GB on their DSL service or 250GB on U-verse could bring their entire network to its knees.

The Holy Grail of Wall Street economics for broadband is to monetize its usage, creating an endless money party for what is today a utility service. Millions have been spent lobbying anyone who will listen that usage caps and consumption billing were essential to promote investment, upgrades, and to expand broadband service into rural America. Since those arguments have been made, broadband rates have increased, investment has decreased on a per customer and often real basis, and the government is now trying to chip in public taxpayer dollars to get providers to wire areas that will never pass demanding return on investment formulas.

The second prong of selling this meme is the creation of an Internet boogeyman — the “data hog,” a largely fictional creature that supposedly cares only about consuming every possible bit of bandwidth and slowing your web browsing to a crawl. Shouldn’t he pay more, you are asked, at the same time these same companies continue to raise your rates and now attempt to limit your use of a service that should cost less.

This week, Michael Powell, former FCC chairman turned head of the nation’s largest cable lobby — the National Cable & Telecommunications Association, capitulated on the “congestion” myth to an audience at the Minority Media and Telecommunications Association.

Asked by MMTC president David Honig to weigh in on data caps, Powell said that while a lot of people had tried to label the cable industry’s interest in the issue as about congestion management. “That’s wrong,” he said. “Our principal purpose is how to fairly monetize a high fixed cost.”

He said bandwidth management was part of it, though a more serious issue with wireless.

But he pointed out that the cable industry had to spend a bunch of money on its network before the first customer was signed. So, for a business that requires “enormously high” fixed costs — digging up the streets, put the wires in — and operational expense, “it is a completely rational and acceptable process to figure out how to fairly allocate those costs among your consumers who are choosing the service and will pay you to recover those costs.”

When will Washington regulators and lawmakers stop drinking the Kool-Aid handed them by high-paid lobbyists?

But our readers know Powell’s arguments are based on nothing more than the same empty rhetoric that declared the Internet exaflood was at hand.

Cable broadband was introduced as an ancillary service in the late 1990s utilizing cable television infrastructure that was constructed and paid off years earlier. Introducing broadband required only incremental investment and that remains true to this day. Cable operators more than cover their costs with sky high prices for service delivering some operators as high as 95% gross margin on broadband. Capital investments have broadly declined for years as have the costs to deliver the service on a per customer basis.

Suddenlink president and CEO Jerry Kent admitted the days of expensive system upgrades were over and it was now time to rake in profits.

“I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” Kent said. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”

Powell’s arguments ironically may apply partly to Verizon’s FiOS fiber network, which requires the retirement of copper wire infrastructure around since Alexander Graham Bell, but even Verizon covered much of its costs winning permission to raise rates years earlier to cover fiber upgrades. Much of that money was diverted to their wireless business instead. Today, Verizon FiOS manages just fine with no usage limits at all.

In fact, the only argument about fairness that should be open for debate regards the current cost of broadband service in the United States when compared against operators’ enormous profit margins. The lack of competition has allowed providers to increase prices and introduce “creative pricing” that always guarantees protection for the incredibly high average revenue per customer already earned.

Too often, Washington regulators and lawmakers drink the Kool-Aid handed them by an industry with an incentive to distort the truth. That incentive is the billions at stake in this fight.

Powell has even shelved the notion of the Cheetos-eating data hog burning up the Internet in his parent’s basement and has elected to try class warfare instead, claiming the most capacity is used “by a high end elite subsidized by the rest.” The real high-end elite are the telecom company executives cleaning up overcharging customers for a service that has become a necessity. Arguing for usage caps as a way to offer “lower prices” for those who cannot afford the ridiculously high prices the industry charges today only creates a new digital divide – the have’s and the have only so much.

Either way, providers laugh all the way to the bank.

Cox Cable, on the heels of announcing another rate increase, is earning customer ire for downright nasty customer service.

Customers dealing with two different service blackouts and a flood have gotten a thumbs-down response from Cox when looking for some service credits and understanding.

‘We don’t give refunds,’ came the reply from one customer service agent called by Stop the Cap! reader Jennifer from Providence, R.I. Her service went out in mid-December after a burst water pipe in the neighborhood flooded their home, making in uninhabitable until a mold mitigation team completed repairs. After fleeing to stay with relatives, it suddenly dawned on Jennifer that Cox Cable kept her waiting on hold so long, she hung up and forgot to call them back.

“All I needed to do was notify them we were not going to be using our Cox service for about a month and we needed to suspend our account,” Jennifer tells us. “When I finally got a customer service agent, the first thing I heard was him blowing his nose several times before he finally introduced himself.”

The surly agent was not interested in Jennifer’s plight or her request to suspend service.

“Your flooding problems are yours to solve and we can’t help you with suspending service unless you are going away for much longer than that,” came the reply. “And we are certainly not able to give you a refund either. It isn’t our fault.”

Jennifer was stunned at the nasty attitude she got, especially after other companies were far more understanding.

“I had nothing but sympathy from Verizon, the power company, and even the newspaper which we also stopped,” she says. “Cox could not have cared less and we did not even create the problem.”

Cox customers in Ohio also got the same special touch from Cox’s representatives.

Rev. Dave Connor from Lakewood was looking for a $1.50 credit for a few local channels that were stripped off his cable lineup because of yet another carriage-for-money dispute. Raycom wanted more cash for its two local channels and Cox did not want to pay so off they went from the lineup, at least temporarily. But the cable operator did not want to give any refunds for the missing channels customers had been paying to receive.

It took several escalating phone calls before Cox finally relented to a one-time credit, putting a sour taste in the Rev. Dave’s mouth.

“Some ‘friend in the digital age,’” he told the Lakewood Patch, referencing the company’s ad slogan.

Before others got the idea they deserved a refund as well, Dana Alexander Nolfe, director of communications for Cox, hurried out to let customers know they can just forget it.

Nolfe told the Patch the refund granted Connor was a one-time “gesture of goodwill,” adding no one else will likely be given a similar refund.

“We are not crediting our customers as a result of the Raycom dispute,” Nolfe said. “We offer a package of channels, not individual channels on our lineup. We regularly make changes to our lineup, mostly with additions, but at times, regrettably, when a channel is removed from our lineup.”

Ian King called Cox “the worst,” noting the company refused refunds for customers left without service for days after the remnants of Hurricane Sandy meandered across Ohio.

“Cox is nothing but a PR campaign that constantly tells us how wonderful they are, but in reality they could care less,” King said.

Jennifer says she won’t forget.

“After we move back, one of the first things I will be doing is dropping them and their smug representative on their heads.”

Netflix has introduced 3D and Super HD viewing — an improved version of 1080p streamed content — but if you are a Time Warner Cable broadband customer, you will not be able to watch.

Netflix is distributing its highest definition content over its Open Connect CDN network, which minimizes the geographic distance and number of connections between viewers and Netflix’s streaming servers. ISPs can join Netflix Open Connect either by free peering at common Internet exchanges, or save even more in transit costs by putting free storage appliances supplied by Netflix in or near their network.

“OpenConnect provides Netflix data at no cost to the location the ISP desires and doesn’t seek preferential treatment,” Netflix tells GigaOm. “We hope Time Warner will join the many major ISPs around the world who are participating in Open Connect to reduce costs, minimize congestion and improve data delivery to enhance the consumer experience.”

So far, Time Warner Cable has chosen not to participate and accused Netflix of discriminating against its customers.

“While they call it ‘Open Connect,’ Netflix is actually closing off access to some of its content while seeking unprecedented preferential treatment from ISPs,” Time Warner Cable said in a statement to Multichannel News. “We believe it is wrong for Netflix to withhold any content formats from our subscribers and the subscribers of many other ISPs. Time Warner Cable’s network is more than capable of delivering this content to Netflix subscribers today.”

ISP participation in the Netflix Open Connect CDN has proven limited thus far in the United States. Cablevision is the only major cable operator signed on to the content delivery platform. Frontier, Google Fiber and Clearwire also participate. Abroad, Virgin Media, British Telecom, Telmex and Telus also participate.

Netflix’s decision to limit its best streams to participants may be an attempt to force ISPs to take its content delivery network more seriously and enlist subscribers in a push to get additional ISPs on board. By bringing its most watched content directly to ISP’s, the company is attempting to blunt provider arguments for data caps and other viewing limits because the cost to distribute content within a provider’s internal network is negligible.

The necessary hardware powering the Netflix Open Connect CDN is less than you might think. The single device powering Open Connect is easily rack mountable and consists of:

Netflix’s Open Connect CDN hardware