At a time when Time Warner Cable is increasing cable-TV rates for millions of subscribers nationwide, the nation’s second largest cable company managed to find several billion dollars to launch a new regional sports network showcasing the Los Angeles Lakers.

An agreement with the basketball team, which some analysts guess will cost the cable company at least $3 billion over the next two decades, will mean the loss of more than three dozen games formerly available over the air, for free, from KCAL-TV in Los Angeles.  Fox Sports West aired most of the rest of the team’s games, for which it paid an estimated $30 million a year, according to the Los Angeles Times.

Time Warner intends to use the Lakers to showcase new regional sports networks — one in Spanish — planned for the company’s two million subscribers in southern California.

The deal stunned both KCAL and Fox Sports.  Time Warner Cable is the only major cable operator not running its own major regional sports networks, which represent the cable industry’s most costly programming.  Unlike premium movie channels, most sports networks are included in standard cable lineups or shifted into “mini-pay” tiers that charge a few dollars per month.  Sports programming costs often represent the most significant part of cable company rate hikes.

The Times predicts Time Warner will end up charging itself at least $3.50 a month for the new networks, which means individual subscribers could be looking at a substantial rate increase down the road.

But Time Warner doesn’t intend to just deal with the Lakers.

Melinda Witmer, executive vice president and chief programming officer of Time Warner Cable, said the company would be “looking at all available sports in the marketplace.”

That could drive prices up even faster.

The cable company says it is getting into the sports network business to “control our economic destiny.”

In case you forgot, Time Warner Cable and Sinclair Broadcasting only agreed to extend talks for two weeks on reaching a long term retransmission consent agreement that will keep 33 Sinclair-owned stations on the cable lineup.

On Thursday night, the latest deadline will expire, and Time Warner Cable is signaling negotiations are continuing, but do not look too promising.

In a prepared statement, Time Warner says Sinclair has summarily rejected every offer and has repeatedly claimed to “terminate” negotiations over the past three months.

The cable company has spent part of the last two weeks arranging for alternative program feeds from all four major networks should negotiations end without a final agreement.  That could be an important distinction for customers, most of whom watch Sinclair stations primarily for network programming.

“We will provide all available Big 4 network programming in the event that Sinclair takes away its signals,” said Rob Marcus, President and COO of Time Warner Cable. “We want our customers to remember that we’re fighting hard to contain the rising costs of broadcast programming. We are also still working to reach a long-term agreement with Sinclair before our current contract ends tomorrow night, and in fact discussions between the Time Warner Cable programming team and Sinclair have taken place as recently as this morning and are ongoing.”

But the two are still trading barbs.  As recently as today, the two were debating about how many customers would be impacted by a loss of the Sinclair signals.

The cable company said Sinclair was “inaccurately portraying” the number of impacted customers.

“Time Warner Cable has approximately 4 million customers who receive local broadcast stations owned by Sinclair Broadcasting,” a cable company statement said.

Epix, the pay-TV channel from Viacom, Lions Gate and MGM, will -not- be coming to Time Warner Cable lineups anytime soon.

Why? Because the network ‘cheapened themselves’ when they agreed to get in bed with Netflix, which will offer online video streaming of the three studios’ movies just 90 days after appearing on the channel.

Time Warner Cable Chief Financial Officer Rob Marcus said the network did itself no favors with that deal.  He told attendees at the Bank of America/Merrill Lynch Media, Communications & Entertainment Conference that Epix’s online video deal “devalued the channel.”

Epix may have irritated the cable company for another reason — it streams much of its content online for its subscribers to watch anytime they like, outside of the industry’s TV Everywhere project.

Indeed, the majority of cable operators seem to share Time Warner’s sentiment, as the new HD pay channel faces a virtual embargo from the industry’s big players, including Comcast and DirecTV.  In fact, Epix’s four million subscribers come primarily from just three companies — Verizon FiOS, DISH Network, and Cox Cable.

[flv width=”480″ height=”292″]http://www.phillipdampier.com/video/Introduction to Epix.flv[/flv]

A short introduction to Epix.  (1 minute)

Time Warner Cable subscribers are at reduced risk of losing access to Disney owned channels like ESPN, Disney and local television stations in several major cities now that the two companies are close to an agreement.  But, as usual, regardless of whether Time Warner Cable whittles down Disney’s demands or Disney secures dramatically higher pricing for its cable channels, one thing is certain: Time Warner Cable subscribers will ultimately lose, facing higher cable bills in 2011.

AT&T U-verse customers: your nail-biting has just begun, as AT&T sends home postcards announcing the potential loss of the Hallmark Channel and its companion the Hallmark Movie Channel.  AT&T’s contract expired at 12:01 AM this morning, but Hallmark said it was willing to keep the signals running on U-verse while negotiations continued.

Ultimately, it’s all about who gets a bigger piece of your money.  Be it local broadcasters, cable networks, or programming conglomerates who can darken a dozen channels on your basic cable lineup, all say the cable industry is enriching itself on subscriber fees and all these networks are asking for is a bigger share of the pie.  The cable industry says cable programming fees are the most significant part of rate increases, as the industry is unwilling to absorb most of the programming rate hikes.  Cable wants to continue its healthy returns, so programming rate hikes come out of your pocket, not theirs.

Sometimes the amounts involved come down to pocket change, other times several dollars a month can be involved.

For example, Disney-owned ESPN is typically the most expensive basic cable channels in the lineup.

SNL Kagan, a cable research firm, estimates Disney charges Time Warner $4.08 a month per subscriber to carry ESPN.  The costs are high because ESPN competes with major broadcast networks to secure increasingly expensive television rights to major sporting events.  ESPN’s early days were filled with coverage of volleyball, log-rolling, and billiard sports.  The rights to air these events were affordable.  But with the benefit of increased programming fees, the cable network successfully bid for professional football and other popular sports.  The more money ESPN charges, the more money they can use in bidding wars to secure television rights.

With most cable networks charging closer to 20 cents a month per subscriber, what ESPN charges (and demands) for contract renewals can, all by itself, trigger rate increases.

AT&T and Hallmark are currently arguing over an increase in subscriber fees that currently run around just four cents per month per subscriber.  AT&T argues it doesn’t want to pay the percentage increase Hallmark is demanding, even if it amounts to pennies per month.

ESPN’s rate increase demands often exceed 50 cents, if not higher.

This year a new issue enters the debate — online video programming fees. Disney wants to generate income from a whole new tier of sports programming – that streamed online to Time Warner Cable customers.  The sticking point in Time Warner Cable and Disney’s negotiations seems to hinge on the cable company ponying up for ESPN3, an online network.  The concept of cable operators paying programming fees for online content is highly controversial, especially when broadband customers could face ever-increasing broadband bills blamed on the same “increased programming costs” that have taken basic cable packages from under $20 a month in the 1980s to over $60 a month today.

ESPN3 reportedly wants 10 cents a month from every Time Warner Cable broadband customer, regardless if they have the slightest interest in watching ESPN3.  Some in the cable industry fear once this precedent is set, other cable programmers with online shows could start demanding payments for those as well.

While Time Warner Cable continues to resist, other major cable companies like Comcast Corp., Cox Communications Inc., Charter Communications and phone companies AT&T, Frontier, and Verizon Communications have ESPN3.com agreements with Disney.  Nearly all have also boosted their broadband prices for consumers as well.

Despite assurances from Time Warner Cable’s Roll Over or Get Tough website, the cable industry typically caves in on programming fee increases, often agreeing to split the difference.  Since they simply pass those increases along to consumers, it doesn’t impact their bottom line until customers start canceling cable service.

Subscribers on Time Warner Cable’s blog keep coming up with an innovative idea to solve these problems — allow subscribers to pick and choose (and pay for) only the channels they want to receive.  That novel a-la-carte concept invokes fear in the cable industry like garlic repels vampires.

In the end, even if Disney and Time Warner Cable can’t reach an agreement, should screens darken September 2nd, watch in amazement as a deal is achieved hours after the disruption in programming begins.  Then, just a few months later, the accompanying rate hike will surely follow.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WESH Orlando FL Will Bright House Customers Lose ESPN 8-26-10.flv[/flv]

WESH-TV in Orlando notes Bright House cable customers are also potentially affected because Time Warner Cable negotiates on behalf of that cable company, which has a major presence in central Florida.  (1 minute)

Rightnetwork's logo, which is actually kind of creepy, would be more true to itself if that "R" was replaced with a "C" for Comcast -- its true progenitor.

When your corporate message has to pass through a media filter, your talking points can get lost along the way.  Comcast has decided to cut out the middleman by launching a new right-wing, pro-corporate cable network that seeks to co-opt the tea party movement for its own agenda.

Rightnetwork, launching this summer, seeks to reach “Americans who are looking for content that reflects and reinforces their perspective and worldview,” according to its promotional material.  Featured prominently in the network’s promotional materials are tea party events and those that promote a pro-corporate agenda.  The network’s on-air talent is embedded in the national tea party tour that has been making its way across the country, which gives you a sense of where the network’s early emphasis will lie.

Comcast sheds any pretense of staying above the political fray and jumps in with both feet to deliver its business agenda to viewers.

“The lineup focuses on entertainment with Pro-America, Pro-Business, Pro-Military sensibilities — compelling content that inspires action, invites a response, and influences the national conversation,” says the network’s promotional “lookbook.”

“We’re creating a welcome place for millions and millions of Americans who’ve been looking for an entertainment network and media channel that reflects their point-of-view. Rightnetwork will be the perfect platform to entertain, inform and connect with the American majority about what’s right in the world,” says Ed Snider, chairman of Comcast-Spectacor.

Reviewing promotional clips for the network’s planned shows, something else is readily apparent — wedding a corporate agenda with a political movement in hopes of currying favor with those that might return the favor one day.

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One of the network’s most prominent planned shows is “Running,” which is little more than a political infomercial for Republican/tea party candidates.  One of the first targets Comcast-Spectacor has in mind is Rep. Henry Waxman (D-California).  Waxman is characterized as “infesting” his Congressional seat in the program.

Waxman, coincidentally, is also a big political foe of Comcast, favoring Net Neutrality and deeply concerned about media concentration issues, something the proposed Comcast-NBC merger would exacerbate.  Rightnetwork has effectively provided millions of dollars in free publicity to Ari David, Waxman’s opponent.  Should David win the seat, he will have Comcast to thank for helping make it possible.

Running‘s featured candidates:

• Ari David, Republican running against Henry Waxman who writes: “Capitalism is under attack from the progressive left.”
• Chris Simcox, Republican who ran against John McCain in the primary, who he called: “a sinister element, a progressive socialist masquerading as the leader and conscience of the Reagan Republican Party.”  Wants to promote free enterprise in a “post-McCain era.”
• Clint Didier, a Republican running against Sen. Patty Murray in Washington.  He uses his Rightnetwork coverage as a campaign ad on his website.
• Donna Campbell, a Republican running for a Texas congressional seat on the platform of deregulating business.
• Republican Jim Gibbons, a vice president of Wells-Fargo Bank who is running for Congress in Iowa on a platform of deregulating business, even after the already-deregulated banking industry caused the Great Recession.
• Republican John Dennis, running against Nancy Pelosi in California, who showcased an anti-Net Neutrality ruling on his Facebook page with a fan base whose views were best summed up by one writer: “If a private internet service provider wants to restrict certain types of content or opinions moving across their wires, then that should be their prerogative.”  That shrugging off of censorship is ironic coming from a supporter of the “pro-Liberty Republican” candidate.

Anyone think there is a “yes” vote for Net Neutrality or oversight of the cable industry and big media mergers among this crowd?

This isn’t Comcast’s first effort to curry favor with conservatives, who seem most likely to support the cable company’s political agenda.  Last September, Comcast and AT&T sponsored a U.S. Chamber of Commerce forum keynoted by Fox News personality Glenn Beck.  The U.S. Chamber of Commerce, itself implicated in notorious astroturfing efforts, is a strong opponent of Net Neutrality and broadband oversight.

The worst part is saved for last.  Who pays for this pro-corporate hackery?  You do, as part of your monthly cable bill, whether you want the corporate point of view on your basic cable lineup or not.

That’s just one more reason why the Comcast-NBC merger is such a bad idea.  It places enormous resources at the disposal of a company that has no qualms about using them to advance its own political agenda at your expense.