One of Comcast’s biggest investments of 2014 won’t pay to boost broadband speeds, improve customer service, or upgrade cable systems.

Today the cable company announced plans to spend an extra $2.5 billion — $5.5 billion total — this year to buy shares of its own stock in a share buyback program designed to please investors.

The extra investment will only come if shareholders approve the deal to merge Comcast and Time Warner Cable into a single company. If the merger is successful, Comcast is prepared to spend even more on share buybacks with money it plans to collect from the sale of three million current Time Warner customers that will be spun away in the merger.

Bloomberg News reports Comcast shares have fallen 10 percent since the acquisition was announced last month, reducing the value of the company’s all-stock offer. The proposal of 2.875 in Comcast stock for each Time Warner Cable share was worth $142.49 a share last week, down from $158.82 the day the transaction was made public.

By buying back shares in its own stock, Comcast will cut the number of shares outstanding, which increases earnings per share and usually boosts the stock’s price. The share repurchase will benefit shareholders and any top executives who receive bonuses based on successfully increasing the value of earnings per share. Customers get nothing.

Neither will the tax man if Comcast and Time Warner Cable structure its deals as spinoffs qualifying as tax-free transactions.

Time Warner Cable is one of three New York businesses that are the latest to be awarded almost 1 megawatt of inexpensive hydropower under the state’s ReCharge New York program.

The cable company was allocated 176 kilowatts of electricity for its new call center in Buffalo from the Power Authority’s hydroelectric plants in Lewiston and Massena, and from the open market. In return, it plans to add 152 new jobs in Buffalo.

The program is designed to encourage businesses to increase investment in New York communities. Most of the inexpensive power awarded recently went to Pratt and Whitney in Middletown in the Hudson region and to six businesses on Long Island.

“ReCharge NY is one of the strongest tools in the Empire State’s economic development arsenal,” Governor Cuomo said. “Low-cost power for businesses has helped create thousands of high-impact jobs in local communities, and its ripple effect of ReCharge NY can be felt statewide. Innovative initiatives like ReCharge NY continue to establish New York as a great place for businesses to thrive and grow.”

Gov. Cuomo

New York State is hardly overwhelmed with excitement over the merger of the nation’s largest and second-largest cable operators and is taking steps to give regulators enough power to derail the merger.

New York Governor Andrew Cuomo has decided the state will not be a bystander as the $45 billion deal is reviewed by federal regulators and is seeking new powers for the state’s Public Service Commission that could force Comcast and Time Warner Cable to prove their merger is pro-consumer.

The New York Post reports the new approach would be the opposite of current rules that force the PSC to carry the burden of proof that a deal hurts the public interest.

“[The proposed changes] are very important arrangements, and the state has a valid role in making sure that the consumer is protected,” Cuomo said at the State Museum in Albany.

A source told the newspaper the rules change “could essentially kill the deal.”

Since the federal government deregulated the cable industry in the 1990s, state and local officials have had little oversight over cable service and pricing, but in many states regulators still have a voice in mergers and other business deals.

The Cuomo Administration denied the rule changes were specifically aimed at Comcast, claiming that the state was simply mirroring the type of regulations impacting gas and oil companies doing business in New York.

If the deal fails to win approval in New York, it would mean Comcast could not assume control of Time Warner Cable’s lucrative franchises in New York City and most of upstate New York. Analysts speculate Comcast is especially interested in aligning its operations in northern New Jersey with those of Time Warner Cable in New York — both part of the largest television market in the country.

So far, Comcast does not seem concerned about Cuomo’s proposal.

“We are confident that the pro-competitive, pro-consumer benefits like faster Internet speeds and improved video options resulting from the transaction are compelling and will result in approval from the state,” Comcast said in a statement, adding that it looks forward to “presenting the multiple consumer benefits” of the deal for New Yorkers.

Reuters reports Florida, Indiana and Pennsylvania — home state for Comcast’s corporate headquarters — will also be taking a closer look at the merger.

Florida will be coordinating with U.S. Department of Justice’s anti-trust officials to review the deal.

“We are part of a multistate group reviewing the proposed transaction along with the U.S. DOJ Antitrust Division,” the Florida attorney general’s office said in an email.

Indiana is studying the impact of the merger on its state, and Pennsylvania promised an “independent review.”

The attorneys general group is focused on broadband instead of cable television in assessing the $45.2 billion deal, according to a source familiar with the effort who was not authorized to speak on the record.

Phillip “More empty promises from the cable industry” Dampier

Listening to Time Warner Cable’s “Here today and gone much richer tomorrow” CEO-in-passing Rob Marcus prattle on endlessly about improving “the customer experience” on analyst conference calls, the cable company’s blog, and in various press statements always makes me pinch myself to be certain I am not dreaming.

Time Warner’s Rob Marcus:

I’m focused on ensuring we establish a customer-centric, performance-oriented, values-driven culture defined by four basic tenets:

• We put our customers first,
• We are empowered and accountable,
• We do the right thing, and
• We are passionate about winning

What does that mean for customers? If we expect customers to trust us to connect them to what matters most, we must put them at the center of everything we do.

How is that working out for you?

Based on consumer surveys, many of Marcus’ customers may have a different sentiment:

• Time Warner puts what is best for Time Warner first,
• Time Warner is empowered to raise rates for no clear reason and as a deregulated entity is accountable to no one,
• Time Warner does the right thing for Time Warner executives and shareholders,
• Charlie Sheen was also passionate about “winning.”

So much for Comcast’s customer service improvement project promised back in 2007. (Source: ACSI)

There is nowhere to go but up when it comes to improving the abusive relationship most Americans have with the local cable or phone company. CNN asked the question, “do you hate your Internet provider,” and within hours more than 600 customers sang “yes!”

Marcus

This is hardly a new problem. Karl Bode at Broadband Reports reminds us that Comcast broke its promises for major improvements in customer service more than five years ago. CEO Brian Roberts at the time blamed the troubles on Comcast’s enormity — taking 250 million calls a year handling orders, customer complaints, etc., is a lot for one company to handle.

“With that many calls, you are going to have failures,” Roberts admitted.

With more than 10 million Time Warner Cable customers waiting to move in at Comcast, if what Roberts says is true, things are about to get much worse. In fact, even before the merger was announced Comcast was just as despised as ever, thanks to rate hikes, usage caps, and poor service often delivered from their notorious sub-contractors that appear on the news for falling asleep, murder, digging in the wrong yard or blowing up laptops, dishwashers or homes.

Judging from the enormous negative reaction customers of both Time Warner Cable and Comcast had to the news the two were combining, it’s clear this merger isn’t the exciting opportunity Marcus and Roberts would have you believe.

‘If you despise Comcast today, your hate will know no bounds tomorrow as Comcast spends the next two years distracted with digesting Time Warner Cable,’ suggested one customer.

Another asked whether Americans have resigned themselves to a trap of low expectations, seeking out one abusive telecom company relationship after another.

“After twenty years of Time Warner’s broken promises, service you can’t count on, and price hikes you can, I made the fatal mistake of running away from one bad relationship into the arms of another with the Bernie Madoff of broadband: AT&T,” wrote another. “Slower service, an unnecessary allowance on broadband usage, and one rate increase too many is hardly the improvement we were promised in the shiny brochure. But we have nowhere else to go.”

Being stuck with an independent phone company with no cable provider nearby can mean even worse service.

“I live in Seattle, and the only option in my neighborhood is CenturyLink DSL,” wrote Jen Wilson.

CenturyLink’s top speed in Wilson’s neighborhood? 1Mbps. At night, speeds drop to 122kbps — just twice the speed of dial-up Internet.

CNN’s Frida Ghitis observed the current state of broadband in the United States is alarmingly bad, and allowing Comcast and Time Warner Cable to merge won’t fix it:

Americans are divided on many issues, but resentment against these telecom giants is so pervasive that it may just be the most heartwarming symbol of national unity. And that’s as it should be. Except that the resentment should extend to politicians who have made this disastrous system possible and allow political contributions to prevent them from fixing it. The problem is not just one of dismal customer service. Instead, it is a growing threat to the country’s economic and strategic position.

If you travel overseas, you will quickly notice that Web access in much of the developed world is light years ahead of America’s. You may also be irritated to discover that far better Internet is much, much cheaper in other countries.

Time Warner’s notorious modem rental fee was just a hidden rate hike, according to the ex-CEO.

Thus far, Time Warner’s remedy to improve service is yet another rate increase. Broadband prices are rising an average of $3 a month — $36 a year, with no speed enhancements on the horizon except in New York, Los Angeles, and cities where Google Fiber is threatening to kick the cable company in the pants. That means Time Warner’s 11.1 million broadband customers will deliver as much as $33.3 million more in revenue each month for broadband service alone. What will you get in return? In most cases, nothing.

Television customers will be pick-pocketed for the newly-“enhanced” on-screen guide many still loathe, which carries a new surcharge applied to the cost of set-top boxes and DVRs. This “enhancement” alone will cost most customers with two boxes an extra $30 a year. It will provide Time Warner with more than $170 million each year in revenue enhancement.

The cable company that fought a battle with CBS last summer “on behalf of customers” faced with paying extortionist pricing for CBS-owned cable networks and local stations will instead send their extortion payment direct to Time Warner, thanks to a new $2.25/mo “Broadcast TV Fee” imposed this spring by the cable company.

But Time Warner is unlikely to hang on to that money for long.

If it wanted to discourage programmers from demanding double-digit percentage rate increases, the plan is likely to backfire once the networks smell the money — more than $25 million a month, $300 million a year — Time Warner claims to be collecting on their behalf.

Good luck reading the fine print.

A Texas Time Warner Cable customer has discovered the fine art of cable company fine print, and it only cost her the Samsung Galaxy Note tablet promised in return for upgrading her cable package.

Sherry Buffington of Farmers Branch learned first hand that 1/16th of an inch print has but one purpose — to take away the promised tablet worth $399.

Time Warner Cable ran the tablet promotion nationwide over the holidays. Buffington wanted to know she would qualify before upgrading her service, so she called Time Warner Cable and got confirmation. She upgraded her service on the spot.

Weeks later, no tablet and no answers from Time Warner Cable. It took the Dallas Morning News’ Watchdog reporter to finally pry some answers out of the cable company.

Time Warner Cable’s position was finally made clear: No tablet for Ms. Buffington; she did not qualify for the offer because she didn’t pay attention to the fine print. It turns out customers have to switch to a specific bundled package to qualify for the promotion. Customers who simply upgraded service more often than not did not qualify for the promised tablet.

But Buffington still got something after her ordeal. It turns out Time Warner likes to keep recordings of customer calls indefinitely. A supervisor was able to pull the months-old recording of the call between Buffington and the customer service representative who promised she qualified for the tablet even though Time Warner now insists she does not. The cable company offered Buffington a $300 credit on her next bill to set things right.

Consumer advocates warn customers to take special care reviewing the fine print attached to most promotional offers and follow instructions precisely to qualify. But Watchdog Dave Lieber said Time Warner really went beyond the pale with the “disgustingly small” fine print he found completely unreadable.

Lieber’s inability to read the terms and conditions did not faze Melissa C. Sorola, TWC’s director of public relations. She reminded him the requirements are “stated three times in the documents.”

“Yes, that’s true,” wrote Lieber. “But it was in 1/16 of an inch everywhere. I don’t find that acceptable. Do you?”

Texas’ competing electric companies are held to a different standard. They have to produce their fine print in no smaller than 10-point type in paragraphs that do not exceed 250 words. Time Warner’s is half that size.

Customers rejected for rebates or promotions should file complaints with both the Better Business Bureau and their state’s Attorney General. This usually triggers a contact from an executive customer service agent to settle the matter. If you made a good faith effort to comply with the rebate, you should be able to receive a service credit equal to the amount or value of the rebate. Do not insist on receiving the promotional item or gift card, which is usually handled by a third-party fulfillment company.