Charter Communications last week filed its 362 page redacted Public Interest Statement laying out its case to win approval of its acquisition of Time Warner Cable and Bright House Networks, to be run under the Charter banner.

“Charter may not be a household name for all Americans, but it has developed into an industry leader by implementing customer and Internet-friendly business practices,” its statement reads.

The sprawling document is effectively a sales pitch to federal regulators to accept Charter’s contention the merger is in the public interest, and the company promises a range of voluntary and committed service upgrades it says will improve the customer experience for those becoming a part of what will be America’s second largest cable operator.

Charter’s proposed upgrades fall under several categories of direct interest to consumers:

Broadband: Charter will commit to upgrade customers to 60Mbps broadband within 30 months (about 2.5 years) after the deal is approved. That could mean some Time Warner Cable customers will still be serviced with standard speeds of 15Mbps as late as 2018. Time Warner Cable’s Maxx upgrade program will be effectively frozen in place and will continue in only those areas “consistent with Time Warner Cable’s existing deployment plans.” That will leave out a large sections of the country not on the upgrade list. Charter has committed to impose no data caps, usage-based pricing or modem fees, but only for three years, after which it will be free to change those policies at will.

Wi-Fi: Charter promises to build on Time Warner’s 100,000 Wi-Fi hotspots, most in just a few cities, and Bright House’s denser network of 45,000 hotspots with a commitment to build at least 300,000 new hotspots across Charter’s expanded service area within four years. Charter will also evaluate deploying cable modems that also act as public Wi-Fi hotspots. Comcast already offers over 500,000 hotspots with plans for many more, making Charter’s wireless commitment less ambitious than what Comcast today offers customers.

Cable-TV: Charter has committed to moving all Time Warner and Bright House systems to all-digital service within 30 months. Customers will need to lease set-top boxes designed to handle Charter’s encryption system for all cable connected televisions. Among those boxes includes Charter’s new, IP-capable Worldbox CPE and cloud-based Spectrum Guide user interface system.

Video on the Go: Charter will adopt Time Warner Cable’s streaming platform and apps to provide 300 streaming television channels to customers watching from inside their homes (a small fraction of those channels are available while outside of the home). Customers will not be able to watch on-demand recorded DVR shows from portable devices, but can program their DVRs from apps or the website.

Discount Internet for the Poor: Charter references the fact its minimum entry-level broadband speed is 60Mbps so that does not bode well for Time Warner Cable’s Everyday Low Priced Internet $14.99 slow-speed Internet plan. Instead Charter will build upon Bright House Networks’ mysterious broadband program for low-income consumers.

Based on Charter’s initial proposal, Stop the Cap! will urge state and federal regulators to require changes of these terms before approving any merger. Among them:

1. All existing Time Warner Cable and Bright House service areas should be upgraded to meet or exceed the levels of service offered by Time Warner Cable’s Maxx program within 30 months. It is not acceptable to upgrade some customers while others are left with a much more modest upgrade program proposed by Charter;
2. Charter must commit to Net Neutrality principles without an expiration date;
3. Regardless of any usage-cap or usage-based pricing plans Charter may introduce after its three-year “no caps” commitment expires, Charter must permanently continue to offer unlimited, flat rate Internet service at a reasonable price as an alternative to usage-priced plans;
4. Customers must be given the option of opting out of any leased/provided-modem Wi-Fi hotspot plan that offers a wireless connection to outside users without the customer’s consent;
5. Charter must commit to a more specific Wi-Fi hotspot program that details towns and cities to be serviced and proposed pricing for non-customers;
6. Charter must allow customers to use their own set-top equipment (eg. Roku, Apple TV, etc.) to receive cable television service without compulsory equipment/rental fees. The company must also commit to offering discount alternatives such as DTAs for secondary televisions and provide an option for income-challenged customers compelled to accept new equipment to continue receiving cable television service;
7. Charter must retain Time Warner Cable’s Everyday Low Priced $14.99 Internet plan regardless of any other low-income discount program it offers. If it chooses to adopt Bright House’s program, it must broaden it to accept applications year-round, simplify the application process and eliminate any waiting periods;
8. Charter must commit to independent verification of customer quality and service standards and adhere to any regulatory guidelines imposed by state or federal regulators as a condition of approval.
9. Charter must commit to expansion of its cable network into a reasonable number of adjacent, unserved areas by committing a significant percentage (to be determined) of measurable financial benefits of the merger to the company or its executives towards this effort.

Stop the Cap! will closely monitor the proceedings and intends to participate on both the state (New York) and federal level to guarantee any merger provides consumers with an equitable share of the benefits. We will also be examining the impact of the merger on existing Time Warner Cable and Bright House employees and will promote merger conditions that protect jobs and limit outsourcing, especially overseas.

Think you are already paying too much for cable television? If you thought Comcast charges too much, consider what CBS thinks is fair to charge for an on-demand library of CBS shows and a single live stream of your local CBS station – $5.99 a month.

Retransmission consent disputes are all about the money. As your local provider fights with a local station or cable network over their latest demand for more money, channels get dropped, providers get blamed and the content owners get richer when networks are restored.

One of the richest of all is CBS, which has told investors it plans to empty $2 billion from the pockets of American cable customers by the year 2020, up from $500 million in 2013. Not only will CBS demand new programming fees from its affiliates, it is also cajoling stations to demand not less than $1.75 a month from every cable subscriber for access to the local CBS over the air station.

Each time a retransmission consent contract comes up for renewal, cable operators know as certain as the sun will rise from the east that programmers will demand a healthy rate increase for the next contract period. That is why many cable companies now look to broadband for much of their future profits, because the TV business is getting very expensive when everyone has their hand out looking for more.

Some cable companies want an end to being stuck in the middle of these disputes and are supporting a plan to compel programmers like CBS, ESPN, TNT, HBO, and all the rest to publish a retail rate for their channel or network and let consumers decide whether it is worth the asking price.

A proposal introduced last year called “Local Choice” would start the process with local television stations, which have demanded ever-higher carriage fees over the last 10 years, especially for network-affiliated stations.

Under the concept, customers would be given a choice of local stations by their provider. Theoretically, a customer could subscribe to CBS and ABC and tell NBC (and its local affiliate) to take a hike if they demanded too much. Another might be happy just paying for FOX and grab the rabbit ears for anything else they wanted to watch over the air for free.

Rockefeller

No local station or network would voluntarily say goodbye to the golden goose that lays compulsory retransmission consent fees programmers currently collect from every cable subscriber, so last summer Congress proposed to mandate the concept in a clause of the Satellite Television Access and Viewer Rights Act (STAVRA).

Then Senate Commerce Committee Chairman Jay Rockefeller (D-W.V.) and Ranking Member John Thune (R-S.D.) beat the bipartisan drum loudly for change. But lobbyists also had drums. Rockefeller and Thune began wavering almost immediately.

“During the last month, Chairman Rockefeller and Ranking Member Thune have successfully begun a discussion on Local Choice, which would empower TV viewers, maintain our policy of broadcast localism, and ensure TV stations get fairly compensated for the retransmission of their signals,” read a joint statement issued last September. “Because it is a big and bold idea, Local Choice deserves more discussion and a full consideration by policymakers, and the committee may not have time to include it as part of STAVRA. Rockefeller and Thune are focused on passing STAVRA next week, and continuing to work with their colleagues on Local Choice.”

After the sudden insertion of Local Choice into a satellite television bill, an orange glow filled the night sky at 1771 N Street in Washington. It was Gordon Brown’s hair on fire. Brown is president and CEO of the National Association of Broadcasters (NAB), the very powerful lobby representing television stations and networks. But that night, he sounded exactly like a cable guy.

“NAB opposes this proposal because it eliminates the basic [cable] tier upon which millions rely for access to lifeline information,” Brown responded in a statement. “It proposes a broadcast a-la-carte scheme that will lead to higher prices and less program diversity. Furthermore, STAVRA appears to confer unfettered and unprecedented authority for government intervention into private marketplace negotiations.”

The cable industry has fought its own battle against a-la-carte on exactly the same ground Brown was now occupying.

Rockefeller later claimed he was only poking the Broadcast TV Bear to provoke a response, and he got one. The idea of Local Choice was stripped out of the bill by the fall. Rockefeller was reduced to saving face.

“What we wanted to do was introduce those ideas,” Rockefeller later told The Hill. “We made it sound like it was the focus of the bill, and K Street just went crazy, which is always good. But we knew that we’d have to take it out.”

Yes they did, after the NAB and their allies launched a major PR campaign against Local Choice, attracting over 130,000 comments against the plan.

Polka

But Rockefeller knew the idea was not going away.

“As people get a taste of being able to say ‘I only watch 10 channels so I should only pay for 10 channels,’ they’re going to love that. It’s going to spread like wildfire,” Rockefeller said.

Fast forward to this spring and it was back to business as usual. Retransmission consent disputes yanked several networks and stations off cable systems, providers mailed their annual rate increase notices, and the cable industry’s popularity and reputation with customers now rivaled ISIS.

Much of the collateral damage (apart from the collective emptying of your wallet) continues to be felt by America’s smallest cable operators that cannot negotiate for what passes as fair and reasonable programming rates from networks like ESPN and CBS. They cannot qualify for volume discounts that are so compelling, it drove AT&T (U-verse TV) into the arms of DirecTV just to get enough subscribers to knock a few more cents off the monthly price of regional sports channels. Only the biggest players in the game have the power and get the savings.

Matthew Polka, president of the American Cable Association (ACA), the other cable trade association representing the interests of small, often family owned cable systems, may not have the most power but he could have the strongest argument against the status quo. While the National Association of Broadcasters spent tens of thousands of dollars arguing today’s retransmission consent system works just fine, some of America’s smaller TV stations apparently didn’t read the NAB’s talking points.

The “TV Station Group,” an informal collective of small market TV stations seeking a renewal of their carriage contract with DirecTV has been stonewalled by DirecTV for months. Last week, the station owners filed a complaint with the FCC asking them to stop or block AT&T’s merger with DirecTV until the satellite provider agreed to negotiate in good faith. It was clear from their filing DirecTV’s idea of negotiation is to send ‘take it or leave it’ nastygrams to the TV stations, serving markets like Spokane, Wash., and Yuma, Ariz. The only thing clear from the back and forth is that DirecTV has no doubt it can squash the stations like little bugs:

[W]e will not fall victim to your silly and obvious tactics to try to audit our retrans deals so you can see them all. We did not ask you to send to us your supposed rates, and your unilateral decision to do so doesn’t give you the right to see our other deals. But trust [us], no other station group – especially small groups such as Northwest – are paid by DIRECTV nearly what you have proposed, let alone what your sheet says.

A few weeks later, in response to another request from the broadcasters, DirecTV scolded them like a misbehaving teenager:

To repeat yet again, DIRECTV is not going to get pulled into your transparent trap to define what is ‘market’ by seeing our other deals. That is a precedent we will not set, including for NW. Please do not ask again.

“Judging from the TV stations’ complaint, it is evident that the retransmission consent market is broken and not working for these broadcasters any better than for cable operators,” Polka wrote in a press release issued today. “The time has come for these TV stations and others that have also filed good faith complaints to step out from NAB’s long shadow and join ACA in supporting efforts to update the rules and equip them with a strong referee that can help protect consumers and competition when negotiations break down.”

Polka continues to advocate letting customers decide whether they want to pay for local stations and cable networks. He argues CBS is already doing that today with its All Access program for broadband customers. In 94 markets, serving 64% of U.S. households, consumers can voluntarily subscribe to a live stream of their local CBS station and access a large 6,500 title on-demand library of CBS content for $5.99 a month.

Nobody besides CBS knows how many have agreed to pay for All Access, but executives have told investors they are pleased with how the program is working. Still, Marc DeBevoise, executive vice president and general manager of CBS Digital Media at CBS Interactive knows he walks a very fine line promoting a product that could eventually undermine CBS’s current commitment to today’s retransmission consent system. DeBevoise told The Drum it does not market or intend to offer All Access as an alternative to the current cable model.

“At a high level, our strategy in launching CBS All Access was two-fold. First, to delivery our best fans access to the most CBS content we could on any device at any time – really delivering a service for our ‘superfans,'” DeBevoise said. “Additionally this service enables us to reach ‘cord-nevers’ that want to watch CBS content but don’t have a traditional cable package –a significant audience, with industry estimates ranging from 6.5 to 16 million households.”

But at $5.99 a month, that price may prove too steep for many casual viewers looking only for a show or two. Many viewers now rely on ad-supported Hulu, a project of the major American broadcast networks except CBS. Most Hulu customers watch their favorite network shows for free. The future possibility of paying $6 for each of four major American broadcast networks will likely be seen as out of line, especially by more casual viewers.

But for Polka and ACA member cable systems, the idea that customers will direct their All Access price shock wrath out on CBS, not the cable company, may be worth it.

A Prattsburgh, N.Y. family-owned company has picked up where Verizon left off and is busily wiring up small communities across western New York and the Southern Tier with fiber to the home service, giving both Verizon and Time Warner Cable some competitive headaches.

Empire Access is concentrating its service in areas where Verizon FiOS will never go and Time Warner Cable maxes out at 50/5Mbps. The company recently launched service in downtown Batavia in Genesee County and will be launching serving in Big Flats later this year.

Empire promises no data caps or usage-based billing and offers 100/20Mbps at introductory prices ranging from between $45-65/mo. Gigabit broadband speed is also available.

Where it has franchise agreements with local communities, Empire also offers cable television packages ranging from $31.45-73.40, with up to 130 channels. The packages are not as comprehensive as those from Time Warner Cable, but customers may not mind losing a dozen or two niche cable channels to save up to $30 a month off what Time Warner charges. Nationwide home phone service is also an option.

Empire relies heavily on two public/non-profit fiber backbone networks to deliver service. The Southern Tier Network comprises a 235-mile long fiber backbone that runs through Steuben, Chemung and Schuyler counties. Further north, Axcess Ontario provides backbone connectivity across its 200+ mile fiber ring around Ontario County.

With the help of public and non-profit broadband infrastructure, residents in small communities across a region extending from Sayre, Pa., north to Batavia, N.Y., will have another choice besides Verizon or Frontier DSL, Comcast or Time Warner Cable.

Residents in some communities, like Hammondsport and Bath — south of Keuka Lake, love the fact they have a better choice than Time Warner Cable. Empire has reportedly signed up 70 percent of area businesses and has more than a 20% residential market share in both villages after a year doing business in the Finger Lakes communities.

Empire targets compact villages with a relatively affluent populations where no other fiber overbuilder is providing service. It doesn’t follow Google’s “fiberhood” approach where neighborhoods compete to be wired. Instead, it provides service across an entire village and then gradually expands to nearby towns from there.

Most western New York villages are already compact enough to attract the attention of cable companies, predominately Time Warner Cable, which has an effective broadband monopoly. Verizon and Frontier offer limited slowband DSL, but Verizon has stopped expanding the reach of its broadband service and will likely never bring FiOS fiber to the home service to any western N.Y. community outside of a handful of suburbs near Buffalo.

The arrival of Empire reminds some of the days when the first cable company arrived to wire their village. Word of mouth is often enough to attract new customers, but a handful of local sales agents are also on hand to handle customer signups. From there, one of the company’s 80+ employees in New York handle everything else.

Bryan Cummings, who shared the story of Empire Access with us, “is pretty stoked.”

“Bye, bye Time Warner Cable,” Cummings tells Stop the Cap!.

Time Warner has treated most of western New York about as well as its service areas in Ohio, often criticized for not keeping up with the times. With fiber overbuilders Empire Access in the Finger Lakes region and Southern Tier and Greenlight Networks in Rochester, the fastest Internet options are not coming from the local phone and cable company anymore.

WSKG in Binghamton explores fiber broadband developments in the Southern Tier of upstate New York. Empire Access is providing the fast fiber broadband Verizon, Frontier, and Time Warner Cable won’t. (3:54)

You must remain on this page to hear the clip, or you can download the clip and listen later.

At present, Empire Access provides service in:

• Village of Arkport
• City of Batavia
• Village of Bath
• Village of Canisteo
• Village of Hammondsport
• City of Hornell
• Village of Montour Falls
• Village of Naples
• Village of North Hornell
• Village of Watkins Glen
• Village of Waverly (N.Y.)
• Boroughs of Sayre, Athens, and South Waverly (Pa.)
• Borough of Troy (Pa.)

Communities on Empire’s radar for future expansion include Urbana, Dansville, Wayland and Cohocton. Further out, there is some consideration of larger cities like Corning and Elmira, as well as other towns in far northern Pennsylvania. With Empire’s expansion into Naples, the company also has many options in affluent and growing communities in Ontario County, south of Rochester.

Ranger

While fast-forwarding through the 5,000th time I’ve briefly endured the mangling of Blondie’s “Rapture,” in those 2015 Acura RDX ads, I concluded two things:

• I will never buy an Acura RDX, if only to deliver the message that grating ads first thing in the morning will not win you any sale from me;
• I have not watched a commercial (on purpose) since 2011.

Ironically, the young woman behind the wheel of the aforementioned Acura is none other than Chelsea Ranger, who became a YouTube sensation after her husband recorded his wife rapping in the car to Salt-n-Pepa’s “None of Your Business,” itself an irony. Ranger’s singing was viewed by 17 million people watching a recorded YouTube video instead of cable television. Like popcorn, nobody quits after just one. YouTube is a confirmed time wormhole, where hours can disappear in what seemed like just a few minutes. This phenomena can also be experienced with Netflix, Amazon, or a myriad of other multimedia websites where on-demand entertainment is always on. How can it be 2am already? Darn, it’s too late to watch Anthony Bourdain and 18 minutes of ads on CNN now.

Advertisers wondering how many viewers actually spend time watching their commercials are right to be worried. Some have tried to cover their bases by spreading ad budgets around to include online video advertising. But when the online ads become meddlesome (Hulu, anyone?), here comes ad blocking software. No more Geico ads on YouTube, but the experience is less fulfilling watching a blank screen for a few minutes on certain other services. You might actually have to talk to the person sitting next to you.

What cannot be found online can be recorded with a DVR, if only to build up enough buffered video to blow right past those ad breaks. Others collect entire seasons of favorite shows, reserved for binge viewing later. All of this after-the-fact viewing is conditioning you (like a gateway drug) for a future life without linear/live television. You started just to be rid of the advertising, but now you seriously toy with getting rid of cable TV if you can find enough to watch online.

There are exceptions, of course. News and sports junkies are often uncomfortable watching recordings of in-the-moment events. Others cannot imagine losing sports aired on ESPN or CNN for breaking news. But beyond these groups, the chains that hold us to the linear 500-channel pay television universe are rusting.

Phillip “Ad nauseum” Dampier

Getting off the cable television drug is easiest if you never started. That is why Millennials, often cable-nevers, are among the least likely to buy a cable television package. They don’t miss what they never watched, preferring the personalized viewing of their mobile device or tablet over the family television. For those that grew up with the cable box and have never been without it, there was always suspicion that the stories from brave souls who canceled service and never regretted it come from closeted book-reading Luddites.

But consider for a moment you may already be watching less cable television than you think. Spend a week and take note of how much time you spend with the cable box. Then compare it with how many hours you watch Roku, YouTube, Apple TV, Netflix, or any other non-linear television experience. If you can find more to watch on YouTube than on cable, ditching pay TV may not be as hard as you think.

The cable industry’s response to the challenge of online video has been to shoot itself in the foot. Despite the constant complaints that cable programming costs are rising out of control, there is always room for more networks customers did not ask to receive. Navigating cumbersome set-top box software means many customers won’t find those new channels anyway. But they will pay for them.

The higher the price of cable television, the less value many place on it.

Cable operator (and network) greed has effectively ruined the industry’s best chance to prove continued value in an increasingly on-demand viewing world. TV Everywhere was supposed to make the 500 channel universe accessible online and on-demand for authenticated paying customers.

Some networks want customers to watch on their websites, others deliver shows on-demand from a set-top box. Instead of envisioning a TV Everywhere model to compete with online video, most cable companies are turning it into the equivalent of a DVR viewing experience with the fast-forward button disabled.

Comcast and Time Warner Cable make enormous amounts of free video available to customers. At the beginning, programmers used an informal honor system. In return for a quick pre-show advertisement and limited commercial interruptions, viewers wouldn’t bother ad-skipping if it meant they could watch a one-hour show in less than 50 minutes. Start inserting five 30 second commercials in every ad break and viewers will start looking for the remote control.

The challenge: should cable companies side with their customers and deliver a compelling TV Everywhere experience or with their bean counters, cramming ads into every available spot. Many are choosing the money. When customers rebelled and began to fast forward through the ads, the cable company retaliated by disabling that option (sometimes, it must be admitted, at the behest of a cable or broadcast network).

But it has gotten worse. For absolutely no reason other than to torture customers, Comcast is notorious for running a very small number of ads aired over and over and over again. Nothing makes television less fun than the same car ad repeated 10-15 times in a single one-hour show. Less is more is not a concept known to the cable industry. As a result, they will now have fewer television customers.

There is nothing about this quest for cash that has not been repeated in other forms of entertainment. Corporate commercial radio with 10 minute ad breaks drove listeners to Sirius XM or MP3 players. Running three minutes of ads to a captive movie theater audience that just paid $10 for a seat will not bring a theater chain any fans. The traditional 30-second ad is increasingly dead in the online world and advertisers and the companies that show them should adopt to the new reality instead of trying to force compliance to the “old ways.”

The cable industry earned its bad reputation by not listening to customers. Now that those customers have a choice to watch something else, the $80 cable TV bill is increasingly expendable as viewers cut the cord and never look back.

Is your linear TV experience not what it used to be? How often are you watching non-news/sports shows live? When the commercials start, do you reflexively reach for the remote control? Are you spending time with cable’s TV Everywhere on demand services? Share your thoughts in the comment section.

Drahi

Patrick Drahi, the billionaire ruthless cost-cutting owner of Altice SA told a French parliamentary hearing he didn’t go ahead with a serious bid for Time Warner Cable because he lacked enough management talent to run a huge cable company in a country he only recently entered.

“I didn’t follow up on the exchanges we had on Time Warner Cable that were mentioned in the media because we were not ready,” Drahi told a French parliamentary hearing on Wednesday.

Drahi testified French-owned banks were ready to help finance a deal that would have stolen Time Warner Cable away from Charter Communications. Instead, Drahi has decided to spend a little time digesting his acquisition of Suddenlink to gain experience in the U.S. cable market before he moves on other cable operators. Drahi believes he will be the only buyer left to cut major cable consolidation deals.

“Time is on our side” for the U.S. expansion,” Drahi said. “The two leaders Comcast and Charter will not be able to buy anything else because of their size so we will have an open boulevard ahead of us. If I buy five small operators, I can be as big as Time Warner Cable.”

The five most-likely cable operators Drahi will pursue, according to a business editor at RFI, the French overseas broadcaster: Cablevision, Cox, Mediacom, WOW!, and Cable One. Cox and Mediacom are privately held and Cablevision is tightly controlled by its founding Dolan family, so Drahi will likely have to sweeten deals to convince all three to sell.

Reuters reports Drahi is especially interested in the smaller, less profitable operators because they are ripe for his brand of cost management and consolidation-related savings.

“Even better, that means we will have room to improve them,” Drahi said.

Drahi remained enthusiastic about Cablevision, despite the fact it serves one of the most competitive markets blanketed by Verizon FiOS in the United States.

“It’s good actually since it means they know how to compete,” Drahi said.

Drahi’s reputation is well-known in Europe based on his earlier acquisitions. Altice favors telecom and cable companies seen as poorly managed or undervalued which Drahi targets for massive cost-slashing to improve profitability. The investments he does make are largely to benefit high-end customers he values the most.