iPad Owners:  Don’t get too comfortable with the channel lineup on Time Warner Cable’s free app for watching streamed HD video of some of your favorite cable networks.  What you see today may be gone tomorrow (or replaced by something else.)

Time Warner Cable’s ongoing effort to implement their TV Everywhere-vision have run headlong into a legal quagmire as some content owners object to the new service.

Back in March when the app first appeared, the cable company was offering a few dozen channels of national cable feeds, with a heavy emphasis on news and mainstream cable networks.  But then Viacom, News Corp., and Discovery Communications protested, claiming the cable operator had not negotiated streaming rights for their networks.  Viacom and Time Warner Cable are currently suing one another over the matter.

Although some programmers use the excuse streamed video could reach “unauthorized viewers who do not have a cable subscription,” viewing restrictions imposed by Time Warner Cable makes that unlikely.  The cable operator requires viewers to watch from a Time Warner Cable Wi-Fi broadband connection.  Wi-Fi hotspots don’t work; neither does access from 3G or 4G mobile broadband networks.  The cable company says that restriction is by design.

“We believe that the location inside the home grants us the rights, provided the method of delivery is over a traditional cable network which is exactly what we’re doing,” Time Warner Cable’s Alex Dudley told NY1, Time Warner’s 24-hour news channel in New York City. “This is not programming delivered over the Internet; this is delivered over our network just like your cable television is delivered, and then to your Wi-Fi router where it reaches your iPad.”

So it is really about money.  Programmers want extra compensation from the cable company for streaming their content, and the cable company doesn’t want to pay extra.

While negotiators and the courts untangle the mess, the cable operator has been adding some channels while deleting others.  The big losers: Animal Planet, Black Entertainment Television, Country Music Television, Comedy Central, Discovery Channel, FX, MTV, National Geographic, Nickelodeon, Spike, TLC and VH1 — are all currently off the lineup.

The winners: C-SPAN, which gets all three of its channels streamed.  A variety of other “enlightened” (Time Warner Cable’s words) cable networks have given the green light to be a part of the project.  Recently added: AMC, Bio, Bloomberg, CNBC World, Chiller, Current, Disney XD, ESPN News, G4, Golf Channel, History International, HSN, IFC, Jewelry TV, Lifetime, NY1, Oxygen, QVC, Reelz, Sleuth, Soap Channel, Style, and Tru TV.  (In New York City, Galavision, History en Español, PBS Kids Sprout, and We are also included.)

For channels like Bio, Chiller, Current, and Reelz — buried in Digital Channel Siberia on the cable dial only to be found by the most ardent channel surfers — getting a prominent place on an app with just a few dozen channels competing for viewers is exposure gold.

We’ve tested the app here at STC HQ and found the picture quality and responsiveness to be excellent.  Channel changing is nearly as fast on the app as it is on our set top box — quite an accomplishment.  But the restrictions imposed by Time Warner really limit the app’s usefulness.  After all, if you want to watch television at home, why reach for an iPad when your television remote control is nearby.  But for those without digital cable boxes, or who want to wander around the house while watching, Time Warner’s app is useful, and better yet — free to those who already subscribe to cable television.

Suddenlink, one of America’s smaller cable operators, has been undergoing a transformation as it tries to meet expectations of today’s cable subscribers and match whatever phone company competition comes their way.  While some of the upgrades are customer-friendly, others pose ominous signs for the future — particularly with respect to Internet Overcharging broadband customers.

Let’s explore:

The Good — New Broadband Speeds, New DVR, New Investments

Suddenlink cuts the ribbon on its new store in El Dorado. (Courtesy: Suddenlink FYI)

In parts of Suddenlink’s service area, particularly in Texas, the company is moving most of its cable service to a digital platform.  This transition is designed to open up additional space for more HD channels, keep up with broadband demands, and open the door for additional on-demand programming.

In Nacogdoches, Suddenlink announced it was adopting an all-digital TV lineup.  Starting this week, the company is offering subscribers free digital adapters — also known as “DigitaLinks,” to enable continued viewing on analog television sets that do not have a set top box or digital tuning capability.  Every subscriber purchasing more than the broadcast basic package (that only includes local stations and a handful of cable networks) will either need a digital tuner-ready television, a set top box, or a DigitaLink device to continue watching.

What is good about this transition is that Suddenlink is not charging customers a monthly fee for the adapters, either now or in the future.  That contrasts with other cable companies like Comcast and Time Warner Cable that have handed customers a set top box or a digital adapter they will begin charging for after a year or two.

Suddenlink expects to invest nearly $120 million this year in Texas, and by the end of the year will have invested nearly a half-billion dollars in the state since 2006.

Texas is extremely important to Suddenlink.  The third largest cable company in Texas serves about 450,000 households and approximately 27,000 business customers in Amarillo, Lubbock, Abilene, Bryan-College Station, Midland, San Angelo, Georgetown, Tyler, Victoria, Conroe, Kingwood and Nacogdoches.

Suddenlink's New TiVo DVR

The company has also lit new fiber connections to handle data communications, primarily for business customers, and is upgrading its broadband service to fully support DOCSIS 3, which will deliver faster speeds and less congested service.

Customers in the state are also among the first to get access to a new and improved DVR box built on a TiVo software platform.  Suddenlink’s “Premiere DVR” service ($17/mo) is now available in Midland, Floydada, Plainview, Amarillo, Canyon, and Tulia.

The Bad — “Suddenlink Residential Internet Service is for Entertainment” Purposes Only

The Humboldt County, Calif. Journal's "Seven-o-heaven" comic strip commented on Suddenlink's problems. (Click the image to see the entire strip.)

Do you take your broadband service seriously, or is it simply another entertainment option in your home?  If you answered the latter, this story may not be so surprising.

In Humboldt County, Calif., broadband users started noticing their favorite web pages stopped updating on a regular basis.  At one point, a blogger in McKinleyville noticed he couldn’t manage to post comments on his own website.  But things got much worse when several web pages started reaching customers with other users’ names (and occasionally e-mail addresses) already filled in on login screens and comment forms.

It seems Suddenlink started to cache web content in the far northern coastal county of California, meaning the first customer to visit a particular website triggered Suddenlink’s local servers to store a copy of the page, so that future customers headed to the same website received the locally-stored copy, not the actual live page.

But the caching software went haywire.

Web visitors began to receive mobile versions of web sites even though they were using home computers at the time.  Some were asked if they wanted to download a copy of a web page instead of viewing it.  And many others discovered websites were customized for earlier visitors.

While the caching problem was irritating, the privacy breaches Suddenlink enabled were disturbing, as was the initial total lack of response from Suddenlink officials when the problem first started in late January.

The Journal finally reached a representative who provided this explanation:

Suddenlink Senior Vice President of Corporate Communications Pete Abel knew that a cache system had recently been installed in Humboldt County, but was unaware of the particular problems reported by users. After speaking with the Journal and other Suddenlink employees, though, he released a statement explaining what appeared to have happened.

According to the release, the cache system was installed in Humboldt County on Thursday, Jan. 27 — the very day that users began experiencing problems — and was intended as an interim solution to relatively low Internet speeds in Humboldt County. The system, it said, was able to cache only unsecure websites — those which, unlike almost all reputable banking or commerce systems — do not encrypt communications. But the company eventually discovered the problems that its customers had been reporting and, having fruitlessly worked with its vendor to find a solution, turned the system off on Monday.

“The good news is that secure Web site pages will not have been cached,” Abel said in a follow-up call to the Journal. “And I have been assured 100 ways from Sunday that never would have happened.”

Andrew Jones, who runs a blog with his Suddenlink broadband account, tried to opt out of the web caching and received an interesting response, in writing, from a Suddenlink representative.  He was told he could not opt out of cached web pages with a residential account because, “the residential service is for entertainment only.”

Jones was told he would have to upgrade to a business account to escape the cache.

“If a small local radio station intermittently went off air for multiple days, the radio host would be apologizing and explaining the situation,” Jones wrote the Journal. “If a large utility company experienced sporadic power outages, people could hear a recording on a toll-free number to learn the cause and about ongoing repairs. What does an Internet provider do when web access becomes spotty and begins serving customers old copies of web pages? The company gets back to you in a couple days and suggests you pay more if you don’t like its recently degraded services.”

The Ugly — Suddenlink’s New Usage Meter Suggests 43GB is An Appropriate Amount of Usage for Standard Internet, 87GB is Plenty for Their $60 Premium Package

Although Suddenlink has not formally adopted an Internet Overcharging scheme of usage caps or metered billing, the company is sending automated e-mail messages to customers who exceed what they call “typical monthly usage for customers in your package.”  The e-mail tells customers they may be infected with a virus or someone else could be using your connection without your permission.  Boo!  For the uninitiated, this kind of message can bring fear that their computer has been invaded, either with malicious malware or the neighbor next door.

Customers have also received letters in the mail from the company telling them to check out their new “usage meter.”  Several have been sharing how much they’ve racked up in usage during the month on Broadband Reports.  One customer managed 243GB while another looking at the company’s super premium 107/5Mbps package managed a whopping 786GB.

Although the wording of the message has strenuously avoided telling customers they are wrong for this amount of usage, the implication is clear to many: they are counting your gigabytes and identifying the outliers.  One customer called it Suddenlink’s “You’re actually using your connection, and we really wish you wouldn’t”-message.

“No one with an ounce of sense would pay for a 20/3Mbps connection and only use 78 GB in a month. Let’s hope they’re just making cute suggestions, not easing us into a cap, because that just won’t fly,” wrote one West Virginia customer.

Another in Georgetown, Texas did the math and made it clear 43GB better not turn out to be a cap because it means customers can barely use the service they are paying for.

“It’s way too low. I got 10Mbps [service] because of price/value and not because I use less than 43GB,” he writes. “[Even] if I downloaded at 1.25MB/s for 30 days straight (1.25 * 2592000 seconds) I could [still] grab 3.164TB.”

Clyde (Courtesy: KUSH Radio/Donna Judd)

Meanwhile, some controversy over the quality of Suddenlink’s service during the upgrade process had some residents in Cushing, Okla., up in arms at a recent city meeting.  Lorene Clyde complained Suddenlink’s “new and improved” service is worse than ever.

“I’m tired of paying for a service I’m not getting,” Clyde said.  “And the Suddenlink commercials – they are like rubbing salt in a wound.”

KUSH-AM reporters were on hand to cover the event, noting Clyde was not the only one complaining.  The radio station noted that “the buzz around town echoes her sentiments – from the ‘mildly irritated’ to the ‘downright mad’ – citizens have been complaining.  Not only have they been complaining to Suddenlink – as difficult as that may be (the call center is in Tyler, Texas) – but to city leaders.”

What Clyde and others may not have realized is that Suddenlink officials were in attendance and were able to apologize for the problems, but a growing consensus among consumers and city leaders is that a broad-based refund for the poor service was warranted.

Commissioner Joe Manning said while he appreciated the promise to figure out the problem, it wasn’t good enough to just apologize and promise – that subscribers’ bills should be adjusted to reflect the poor service.

Commissioners Carey Seigle and Tommy Johnson agreed with Manning.  Seigle pointed out it would be “good P.R.” to give some sort of rebate across the board to subscribers while Johnson complained that the original “upgrade” was only going to take a few weeks and now 8 months later – things are not better, but worse, noted the radio station.

Suddenlink officials on hand said they did not have that kind of authority, but continued to promise things are going to get better.  “I pledge to you,” one said, “We will find it [the problem] and fix it.”

[flv]http://www.phillipdampier.com/video/KJTV Lubbock Borrowing Wi-Fi 2-7-11.flv[/flv]

KJTV-TV in Lubbock, Texas talked with Suddenlink about the growing trend of neighbors “borrowing” neighbors’ unsecured Wi-Fi networks.  Other than the accidental recommendation that consumers should “invest in Internet spyware” to keep your computer safe, the report does a fair job of shining a light on a practice that could have financial consequences if the provider implements an Internet Overcharging scheme.  (2 minutes)

Does today's decision assure the birth of Comzilla, ready to destroy anything or anyone in its path, or is it the next colossal big media deal flop worthy of AOL-Time Warner?

The wedding of Comcast and NBC-Universal was given the blessings of two federal agencies today that all but seals the multi-billion dollar deal.

In a 4-1 decision, the Federal Communications Commission approved the merger.  It’s chairman, Julius Genachowski, claimed it would ultimately be good for consumers as the company promised to add at least 1,000 hours of news and information programming and a new ultra-budget “lifeline” broadband tier priced at $9.95 per month for low-income families.

The lone dissenter, Democratic commissioner Michael Copps, rejected notions that a combined company the size of Comcast, which controls more than a quarter of all cable subscribers, and NBC-Universal, a major media company, would deliver anything to consumers.

“It’s too big. It’s too powerful. It’s too lacking in benefits for American consumers,” Copps said after the FCC vote to approve the merger. “And it continues us down a road of consolidation we’ve been on for a couple of decades now.  And the most threatening part about it is that this is not just traditional media, but it’s new media, too. It touches just about every aspect of our media environment.”

National Public Radio’s ‘All Things Considered’ gave measured coverage to today’s Comcast-NBC merger developments, and how it will impact consumers. (3 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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Indeed the combined Comcast-NBC will own or control one of every seven television channels and networks seen by Americans.  Copps worries that kind of media concentration is sure to reduce diversity in programming and on-air voices.

Even worse, some analysts predict the merger could trigger a new wave of media consolidation as other players try to maintain their positions in the media marketplace.  Second-place Time Warner Cable could begin looking for merger opportunities with smaller cable companies, such as Cox, for example.

Just about an hour after the FCC gave approval, the Justice Department and five states’ Attorney General announced a tentative settlement that could resolve concerns that the transaction was anti-competitive.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WNYW New York Comcast FCC Approval 1-18-11.flv[/flv]

WNYW-TV in New York reported on today’s merger decision and explained how Comcast customers, and online video fans, could be impacted.  (3 minutes)

The Terms & Conditions

Two different federal agencies insisted on Comcast’s agreement to several terms and conditions before agreeing to the deal.  Many of them presented no problem for Comcast, who had voluntarily agreed to several of them early on in negotiations.  But the Justice Department delivered one of the strongest conditions, and a first for online video protection — it insisted the new combined entity of Comcast-NBC bow out of its voting rights in Hulu, the online video service.

√ No Playing Favorites: Comcast has to agree that if it carries its own news and business channels, it has to include competitors on the same tier.

Since Comcast-NBC has ownership interests in so many news, sports, and weather channels, making space for the competition was considered crucial by federal regulators.  The cable company can’t bury its competitors in Channel Siberia, or stick them on “digital tiers” that are priced higher than standard cable service.  Who wins?  Bloomberg News, rarely found even by cable viewers who go looking, and the very low-rated Fox Business Channel, which can’t attract 30,000 viewers on a good day.  Both will find prominent positions on Comcast Cable going forward, even if nobody watches.

√ Cheap Internet Access for Qualified Families: Comcast has agreed to provide a “lifeline” broadband service, but only for families pre-qualified by federal eligibility for free school lunches.

No word on what speeds these customers will receive, and Comcast estimates the program will barely make a dent in its bottom line.  It is expected to reach only around 400,000 homes nationwide, and only as long as those subscribers remain eligible under federal guidelines.  No free lunch for broadband.

√ Standalone Internet Service Must Be Provided: Comcast must sell at least a 6Mbps broadband plan without cable or telephone service for $49.99 a month for three years.

Since Comcast already routinely sells standalone broadband service to customers at around this price, this was hardly a concession.  Comcast can still pile on extra fees, such as their overpriced cable modem rental, and any other charges that could be mandated by federal, state, or local government in the future.  They can also keep their usage caps.

√ Comcast must agree to the FCC’s Homeopathic Net Neutrality Rules:  Comcast has to agree to the FCC’s heavily-watered down definition of Net Neutrality… the ones Comcast itself suggested.

Since the FCC largely caved-in to Big Telecom’s lobbying against Net Neutrality, Comcast’s agreement to adhere to what the FCC calls Net Neutrality won’t present any problems, because those terms were similar to what Comcast had asked for all along.  Their “digital phone” service is exempted, which means Comcast can “manage” competing Voice Over IP services at its pleasure.

√ Evidence That PBS Has A Lobbyist, Too — Special Favors for Public Broadcasting: Public television stations win carriage protection from Comcast “for several years.”

In an effort to free spectrum, PBS stations could be pressured to give back some channels or reduce their transmitter power to free up UHF frequencies for more wireless broadband.  Should this happen, Comcast has agreed to keep those stations on their cable systems as if nothing changed at all.  It assures stations that even if their broadcast coverage areas are reduced, their cable carriage will stay the same.

√ Binding Arbitration Comes to Buyers of Comcast-owned Networks:  If a cable system or other provider runs into trouble getting an agreement with Comcast, the FCC offers help.

To protect other cable systems, telco-TV, and satellite companies from uncompetitive pricing or access blockades to Comcast-controlled networks, the cable company agrees to come to the table and submit to binding arbitration over carriage disputes.  Unfortunately for Comcast subscribers, the cable giant can’t force broadcasters or other cable networks to the same table to settle their own carriage wars.

√ Online Access to Programming Comes to Existing Players, Unless Something Big Changes: Everyone loves the status-quo, and this agreement assures it.

The Department of Justice provisions protecting access to online video programming were carefully crafted by lawyers with one eye on Washington and the other on Wall Street.  It effectively provides “stability” in the marketplace and avoids the kinds of competitive surprises Wall Street hates.  Effectively, the agreement grants access to Comcast-owned programming to ventures that existed prior to the agreement reached today.  Existing players have the government’s assurance carriage contracts are secure.  Those with a pre-existing relationship to Comcast can also purchase the entire bouquet of Comcast-controlled programming (no a-la-carte) at prices similar to those charged to other cable and satellite customers.

But brand new players that threaten to turn existing business models on their heads?  Forget it.  The agreement says nothing that would require access to Comcast programming for upstart services like ivi, or even Google TV for that matter.  The only potential, real-world competitive scenario comes if an existing player (say Time Warner Cable, Verizon FiOS, or AT&T U-verse) decided to start a national virtual online cable company open to any American, anywhere.  What are the chances of that happening?  How many of you can choose Time Warner -or- Comcast? Verizon FiOS -or- AT&T U-verse?  Would AT&T risk its U-verse revenue selling Time Warner Cable customers the same channel lineup, knowing it can’t also easily bundle broadband and phone packages with it?

√ No Voting Rights for Hulu: Comcast agrees to limit its role in one of the biggest potential reasons some consumers are prepared to cut cable’s cord.

The Justice Department’s requirement that Comcast effectively butt-out of the day to day decisions affecting Hulu may protect consumers, but Hulu’s partners don’t want to devalue their programming by giving it away for free forever, either.  Nothing prohibits the birds-of-a-feather-partners in Hulu to put the service under a full ad load or behind a pay wall, reducing its value and interest to consumers.  Or, the whole project could be terminated at the behest of News Corp. and Disney.

Phillip Dampier: The real answer to this question is "both."

Whatever consumer protections the FCC and Justice have included, they won’t last forever.  Virtually all expire within three to seven years, at which point Comcast might be humbled by the culmination of a bad business decision the likes of AOL-Time Warner, or become Comzilla, ready to trample its competition (and consumers) into the dirt.

Was This a Commission Cave-In or a Foregone Conclusion?

Although Commissioner Copps calls today’s decision a “dangerous” deal, some ex-regulators suggest the package presented to federal regulators was effectively a foregone conclusion.

Bruce Gottlieb was formerly Chief Counsel of the Federal Communications Commission, and offered his take on today’s developments for The Atlantic:

How mergers at the FCC will play out is notoriously hard to predict, but the ultimate result is not. The historical truth is that, in virtually every instance, the commission will approve any major proposed transaction. The only time in recent memory that the commission declined to do so was the proposed merger of the two leading satellite-TV providers (Echostar and DirecTV) — and that marriage was running into problems with other agencies long before the FCC put the final nail in the coffin.

(Yes, then-Chairman Reed Hundt also famously ended rumors of an AT&T and Southwestern Bell merger in 1997 by preemptively declaring it “unthinkable.” But those companies simply had to wait until 2005, when a different FCC chairman let it go through.)

The real action at the FCC involves what “conditions” the agency will put on a merger. These are supposed to be narrowly tailored to address specific harms raised by the merger at issue. But, regardless of who is in charge at the agency, it’s all relative.

Often, the conditions applied to a particular merger have more to do with what the chairman and commissioners at the time want to achieve on an industrywide basis. It’s just easier to get these things done when you have the extraordinary leverage of controlling the timing of a multibillion-dollar transaction that the parties are desperate to consummate.

[…]  The FCC’s rules, as described in the press release announcing the merger, appear to be aimed at ensuring that “over the top” providers have fair access to programming (which the NBCU part of Comcast-NBCU will provide), as well as to consumers (which the Comcast part of Comcast-NBCU will provide).

This is, by far, the strongest statement yet from the commission about the importance of over the top video competition. But the business and regulatory stakes in this fight are only going to increase over time. Indeed, the two Republican commissioners (Robert McDowell and Meredith Attwell Baker) issued separate statements saying they have concerns over whether the FCC should be writing rules to encourage over the top video. So this is likely to be the first skirmish in what will surely be a long and bloody war.

In the weeks ahead, the lawyers will be able to parse the specific provisions to see where the loopholes are and how it will all play out in practice. The details surely matter. But years from now, the specifics of what was decided in this merger may mean a lot less than the fact that the FCC is now deeply involved in the multifront war to decide who will win online video.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/PBS Newshour Comcast Merger Announced 12-3-09.mp4[/flv]

More than a year ago, PBS’ ‘The Newshour’ explored the reasons why Comcast and NBC-Universal would want to join forces.  Now, after millions of dollars of Comcast subscribers’ money has been spent lobbying for approval, will consumers ultimately pay an even higher price later on?  (12/3/2009 — 11 minutes)

"Too rich for my blood."

Former Verizon FiOS customers now served by Frontier Communications in Oregon and Washington are receiving word of astonishing rate increases of as much as 46 percent from the phone company.  The massive rate increase is being blamed on “increasing programming costs” charged by the cable networks carried on a cable system that competes with Comcast, which charges far less for the same channels.

Frontier’s rate hikes are so dramatic — $30 a month for the popular standard 200-channel package, some customers are wondering whether the company is trying to sabotage their own fiber-to-the-home service.

“They sent us a rate increase letter stating our former standard package, priced at $65 a month, is now going up to a ridiculous $95 a month for basic cable,” says Tom, a regular Stop the Cap! reader. “That’s a rate increase only my health insurance company could love.”

New customers face the new rates immediately, but existing customers have until Feb. 18 before the new high price kicks in.  Many are preparing to move back to Comcast, which raised rates this year as well — but is now a relative bargain at $63 a month for a similar package.

“As much as I love FiOS, Frontier has managed to screw it up as badly as the rest of their services and now I am going back to Comcast,” Tom says. “You have to wonder if they are purposely incompetent or if it’s part of a larger plan to sabotage the Verizon FiOS network they inherited.  Either way, they’ve priced their service out of the market.”

When Tom called Frontier to complain, the company offered to rip out the advanced fiber network Verizon installed and stick a DirecTV satellite dish on his roof instead.

“Frontier is a real ‘Back to the Future’ kind of company — they just don’t get it,” Tom said.  “The operator actually told me she couldn’t understand why I would want to cancel service.”

Customers receiving new customer promotional discounts will get a real case of sticker shock when Verizon’s original promotional rates reset to Frontier’s new regular price.

“Washington County better beef up their hospitals because there are going to be a lot of heart attacks when that bill arrives,” Tom says.

The Oregonian newspaper reports customers are not the only ones to be shocked by Frontier’s enormous rate increase.  Regulators promised more competition and cheaper prices as part of Frontier’s purchase of Verizon landlines feel had as well.

“[Frontier’s rate hike] is essentially a white flag surrender and an exit from the head-to-head video competition,” lamented David Olson, director of the Mt. Hood Cable Regulatory Commission.

That’s a far cry from what Frontier Communications CEO Maggie Wilderotter told the newspaper in September when asked if the company would raise FiOS rates.

“That is not our plan. If I look across the board at our basic service pricing, I don’t think we’ve raised prices anywhere in the last four or five years,” she said.

The Oregonian quotes a Frontier representative who says the company’s relatively small customer base disqualifies them from volume discounts Verizon used to receive.

“Part of the challenge we have, compared to other providers, is that our footprint is so small,” said Frontier spokeswoman Stephanie Beasly. “They’re able to spread it out over a much larger customer footprint.”

That can’t be the whole story, said Fred Christ, policy and regulatory affairs manager for the Metropolitan Area Communications Commission, which regulates cable TV in Washington County.

“There’s more to it than programming costs. Anybody in the industry can pretty much figure that out. What more there is, we don’t know yet,” he said. “Unless programmers are trying to run Frontier out of business, why would they jack their rates that much?”

Smaller companies like Frontier generally do not try and buy programming on their own, but join group-purchasing plans like those offered by the National Cable Television Cooperative.  Municipal providers routinely purchase programming at substantial discounts.  It is not known if Frontier is a member, but they could be.

No rate increases are planned for broadband or telephone service.

Verizon FiOS pricing increased at less than half the rate Frontier will demand from subscribers in 2011. (Source: Metropolitan Area Communications Commission, Tualatin Valley, Ore.)

Glenn Britt, Time Warner Cable’s CEO, says the cable company’s biggest challenge in 2011 is remaining “completely focused on the customer.”

Britt told Michael Grebb, writing for CableFAX, that America’s second largest cable company cannot succeed if it dictates terms to customers.

“We have to deliver a differentiated customer experience that’s linked to our brand—a brand that says ‘we give you more control in ways that are simple and easy for you, the customer,'” Britt said. “We’ve heard loud and clear from customers that they want flexibility in packaging, including the ability to buy smaller packages. We’re working hard to deliver what they’re asking for.”

Britt is referring to Time Warner’s new pared-down cable-TV tier, TV Essentials.  Currently undergoing a market trial in northeast Ohio and New York City, it deletes more expensive basic cable networks from the cable package to provide a discounted, smaller lineup to customers.

Britt’s remarks come more than a year after the cable company experimented with an Internet Overcharging scheme that would have restricted consumers’ use of Road Runner unless they were willing to pay triple the price — $150 a month — for unlimited use.  The company shelved the test after an outpouring of customer complaints and threatened congressional action.

Britt’s remarks would seem to indicate Time Warner is not going to antagonize its customers in the coming year, especially considering the economic challenges many face.  Time Warner lost more than 100,000 subscribers in the last quarter alone.

“Even if we weren’t in a bad economy, we’d still want to deliver customized products and experiences to specific customer segments, which is smart business in any environment,” Britt said. “And it just so happens our lower [revenue] customer segments are most affected by the economy and are the same customers who are really shouting about smaller packages. With respect to ‘higher-end fare,’ I would add that, even with the tough economy, we’re still seeing good demand from higher [revenue] customer segments.”

Britt added Time Warner plans to be more aggressive about its own TV Everywhere project in the coming year.  TV Everywhere delivers on-demand programming online for “authenticated” customers who also subscribe to a corresponding cable-TV package.  No cable-TV package means no access to that programming online.

“Our firm belief is that consumers want access to any content, anywhere, any time and from any device,” Britt said.

Britt signaled the cable company feels on-demand is only part of the online video equation.  Portability — the ability to access content on-the-go, is also a very high priority for Time Warner.  Britt encouraged cable programmers to get on board and participate in the TV Everywhere project to help grow awareness of the service for existing cable-TV subscribers.

Britt also telegraphed the company was moderating its tone over retransmission consent agreement battles with cable networks and broadcasters.  While previous statements from the cable operator indicated the company was prepared to “get tough” with programmers seeking dramatic price increases, Britt’s latest comments suggest the company recognized consumers do not want to be put in the middle of the disputes and the company was taking the matter to Washington lawmakers to adjudicate instead.

Time Warner faces a major showdown with Sinclair Broadcasting, owner of several network affiliate stations, which will come to a head on New Year’s Eve.

“We will continue to work hard to reach fair agreements, but we believe existing retransmission consent rules – set by the government almost 20 years ago – have not kept up with a changing marketplace,” Britt noted. “The rules are outdated, and they’re in urgent need of reform in order to avoid more public battles.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Britt Calls for Cable Content Dispute Resolution Process 11-23-10.flv[/flv]

Time Warner Cable CEO Glenn Britt told Bloomberg News the company wants to reform the retransmission consent dispute process.  (3 minutes)