QUBE's "revolutionary" interactive wired remote control, from 1978 (courtesy: QUBE-tv.com)

Happy Thanksgiving to all Stop the Cap! readers.

While we take a break from our usual reports, let’s turn the clock all the way back to 1978, an era before broadband (or dial-up for the most part) and even before most of the basic cable networks know today existed.  Cable television was not even an option yet in many communities, although discussions about the concept were well underway.

In Columbus, Ohio Warner Cable constructed an experimental two-way cable system called QUBE, which brought 30,000 homes in the city access to interactive, locally-produced programming.  Viewers could vote on different topics, share their opinions, answer quizzes, and order individual pay-per-view movies — a new concept for most people back then.

Cable television in 1978 didn’t deliver CNN, TNT, ESPN, or any of dozens of other cable networks that are household names today.  Instead, most delivered clear signals of broadcast television stations received over the air from a master antenna mounted high above the local cable company, supplemented with text-based information channels running newswires, sports scores, financial tickers, weather and other wire service reports.  Locally produced government, public access and educational programming covered much of the rest of the channel lineup.  Cable radio hooked up to home stereos and delivered improved FM radio reception and some privately run cable radio stations.

QUBE was no different in this respect.  The bulk of the programming people watched came from local broadcasters and imported stations from Indianapolis, Cleveland, Cincinnati, and Athens — all selected from a wired remote control.  It total, QUBE carried 30 channels, 10 of which were premium or pay per view.  The concept was so revolutionary, some folks traveled from miles around to record sample programming off the system and share copies of videotapes with other cable enthusiasts.

QUBE was not a financial success for Warner, however.  The costs to produce interactive programming, building brand new cable systems, and purchasing the equipment to run them, caused Warner to accumulate $875 million in total debt by 1983.  It abandoned the concept a few years later because new cable networks and superstations were rapidly signing on, creating a huge number of new viewing options that effectively drowned out the locally-produced interactive shows.  Cable would remain a one-way medium, at least for awhile.

Watching the enthusiasm of Ray Glasser, who produced the video included below, all over a 30-channel cable system was fascinating, as was watching the assortment of television stations sampled from more than 30 years ago.  And check out those supermarket prices listed on one of the text channels Ray previews.  After a series of sales and ownership transfers, Warner Cable still exists in Columbus.  But today, we know it better as Time Warner Cable.

[flv width=”422″ height=”327″]http://www.phillipdampier.com/video/Qube.flv[/flv]

A video tour of Warner Cable’s QUBE system in Columbus, Ohio, produced in 1978 by Ray Glasser.  (50 minutes)

Additional details about Time Warner Cable’s new TV Essentials package, which provides a more limited cable TV lineup to viewers are making their way to Stop the Cap!

So far, Wall Street appears generally unimpressed with Time Warner’s efforts to retain customers planning to depart the cable company over cost issues.  Richard Greenfield of BTIG says consumers have to give up too much to subscribe to a package that deletes many of America’s most popular basic cable networks and delivers no HD programming.

The package seems to alienate every age group.  Stop the Cap! confirmed Time Warner Cable made most of the decisions about the channel lineup themselves, and although some networks are insistent about not being excluded from such packages, many of the decisions about what channels to leave out were made by the cable company.  For example, younger viewers will miss Comedy Central despite the fact the network is hardly the most expensive basic cable channel around, and nothing prevented them from carrying it.  We’ve also learned the Essentials package deletes several more channels some consumers will consider deal-breakers to lose.  We’ve confirmed in Ohio, customers will have to give up Food Network and The Weather Channel.  No Ms. Palin’s Alaska either — TLC is also off the channel lineup.

We’ve learned from a few of our readers in Akron and Cleveland who inquired about the new package that Time Warner told them they cannot continue to get phone or Internet service with the Essentials package on their account.  We earlier heard customers were supposed to be excluded from promotional deals for these services, not banned from buying them at any price.  We’re trying to get a confirmation from Time Warner’s northeast Ohio division about this, and suspect there might be some mis-communication going on here.

Greenfield adds Time Warner is offering a lousy deal to budget-minded consumers.

“Cable subscribers looking to save money have already defected to Dish Network’s $40 package called America’s Top 120, which is better than TV Essentials,” he noted.

Meanwhile, residents in upstate New York — watch out.  Time Warner Cable is finalizing its decisions about 2011 rate increases which are likely to be announced in mailers sent just after the holidays.  A source tells Stop the Cap! the rate increases will echo the ones in North Carolina.  The biggest rate increases will hit customers only getting one or two services from the cable company.  Video customers can expect the largest increases.  Phone rates will likely remain unchanged for most.

Customers will be encouraged to avoid the rate increases by bundling services.  Time Warner Cable raised rates on western New York customers three times in 2010 for different services.  This rate increase, likely effective in February, will be similar in percentage to the one announced last winter.  The company will blame programming costs and also use the introduction of several new services, including Primetime on Demand, Look Back, and Remote DVR as  justification for the rate hikes.

We’ll have much more coverage on this in late December.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WFMY Greensboro TWC Rate Hike 11-22-10.flv[/flv]

You can preview the excuses for forthcoming rate hikes from Time Warner Cable by listening to a company representative in North Carolina deliver them to customers there, who will see their rates increase Dec. 3rd (from WFMY-TV Greensboro).  (2 minutes)

Although the cable trade press reports it is business as usual at most of the nation’s largest cable companies, news that several companies are losing more cable-TV subscribers than they are adding is creating concern in boardrooms and on Wall Street.  Although the power of the perennial “rate increase” has kept revenues up, cable operators like Time Warner Cable are beginning to realize they can’t just keep raising rates expecting customers to sit still for it.

For more than 30 years, cable operators have assumed (correctly) that raising rates far in excess of inflation will bring about a lot of grumbling from upset subscribers, but few will actually resort to cutting the cord and going back to free TV (or books).  But as many cable households now routinely pay “triple-play” bills well in excess of $200 a month, that is finally starting to change:

• For many households, the switch to digital TV and an increasing number of sub-channels has proved adequate to meet the needs of many viewers, so long as they receive a decent picture and at least a handful of digital sub-channels;
• Online access to at least some cable programming, movies, and television shows on-demand has solved the problem of having too few viewing options.  If nothing of interest is running on local channels, a quick visit to Netflix or Hulu can satisfy most viewers;
• Many increasingly prefer spending their free time online instead of parked in front of the television;
• The realities of the current economy and tightened middle class budgets make many cable packages simply unaffordable, even if customers wanted them.

Time Warner Cable has recognized the growing strain on their video side of the business and has initiated some strong marketing efforts to hold onto customers who are one rate increase away from canceling.

This fall, the cable company unveiled its $33 per service promotion, charging that price for each component of their triple-play package for a year.  While Time Warner has more aggressively priced individual services in the past for new customers, this one is unique because it is open to existing customers as well.  Customers speaking to Time Warner’s retention agents are being offered this package in an effort to keep customers hooked up to the company’s video, broadband, and phone services.  Currently, many markets also include a free year of Showtime or at least six months of DVR service, and a year of Road Runner Turbo.  In highly competitive markets, informal promotions can bring even lower prices or extra add-ons.

A few weeks ago, the cable company unveiled online video streaming of ESPN Networks for existing cable subscribers, and an online remote DVR-programming application that lets subscribers set up recordings while away from home.

Now the company is further bolstering its video packages:

1. As part of its long term agreement with Disney, ABC and ESPN, this week Time Warner Cable added over 300 hours of new On Demand programming content from ABC, Disney and ESPN. In addition, the company will launch Primetime HD On Demand tomorrow, which will also be available to Digital Cable customers at no additional cost.  The new channel Primetime HD On Demand will carry primetime programming from ABC, NBC and CBS in High Definition. Subscribers will have over 100 hours of the networks’ popular primetime programs including NBC’s 30 Rock and The Office; ABC’s Grey’s Anatomy and Desperate Housewives; and CBS’ Medium and CSI.
2. Time Warner Cable Look Back will bolster the existing “Start Over” feature by archiving up to three days of programming on more than two dozen different networks and cable channels.  Now, if you missed a favorite show that aired the evening before, you can watch it on demand.  As with “Start Over,” Time Warner has disabled fast-forwarding, so no zipping through commercials is allowed.  But the service comes free of charge, and includes an impressive lineup of participating networks including ABC, NBC, Fox Cable Networks, Discovery Networks, and Scripps’ Food Network, Cooking Channel, HGTV, and DIY.
3. HBO Max and Go Max, part of TV Everywhere, will reach more than 50 million Time Warner Cable customers by the end of the month.  These services deliver online on-demand access to movies, series, and specials airing on HBO and Cinemax and will be available to customers paying for the premium channels at no additional charge.  More than 70 million customers will have access by the second quarter of 2011.
4. Time Warner Cable CEO Glenn Britt told investors on a conference call held last week that the cable company is aggressively pursuing renewal agreements with programmers that allow the cable company to begin offering smaller, budget priced packages of cable-TV programming.  While it won’t be the a-la-carte option many consumers crave, cable programming packages could begin to resemble what home satellite dish customers used to receive — a core package of two dozen channels with theme or network-based add-on “programming packs” for additional fees.  For example, customers looking for reality or educational programming might buy a “Home and Garden” package consisting of Food TV, HGTV, The Weather Channel, Discovery and The Learning Channel.  Movie fans might get a package of Encore, AMC, Turner Classic Movies, Fox Movies and MGM.  “We have negotiated some additional flexibility beyond what we had a few years ago that will allow us to begin to offer some smaller packages at lower prices. Probably not all the way where we’d like to be. But we’re moving in the right direction,” Britt told investors.

The cable company’s friendly former owner — Time Warner, Inc.,  has also helped man the barricades against cable’s competitors.  For Netflix and Redbox customers: longer waiting times for access to the latest Time Warner movies are likely.  The current delay of 28 days could be extended, according to CEO Jeff Bewkes.

“So far the 28-day window has clearly been a success versus no delay,” Bewkes told investors. “The question of whether we ought to go longer is very much under scrutiny. It may well be a good idea.”

Even local movie theaters face some potential competition, as Time Warner considers introducing a premium pay-per-view option that would allow cable customers to watch movies currently in theaters at home.  But they’ll pay a heavy price to watch — reportedly between $30-50 per title, and the cable operator will insert anti-recording technology into the signal to prevent digital recordings.

Will these new services ultimately stop the bleeding from departing cable customers?  For most it’s a matter of dollars and sense.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Cutting Cable’s Cord 11-9-10.flv[/flv]

The media has gotten aggressive about talking to viewers about how they can get rid of their cable-TV subscription and save plenty.  (10 minutes)

Thomas Clancy Jr., 35, in Long Beach, N.Y., canceled the family’s Cablevision subscription this spring. He said he has been happy with Netflix and other Internet video services since then, even though there isn’t a lot of live sports to be had online.

“The amount of sports that I watched certainly didn’t justify a hundred-dollar-a-month expense for all this stuff. I mean, that’s twelve hundred dollars a year,” Clancy told the Associated Press. “Twelve hundred dollars is … near a vacation.”

Customers like Clancy are comfortable with technology and well-versed on how to hook up Internet video and integrate it with the family’s TV sets.  For customers like him, online video will increasingly be an attractive alternative to high cable TV bills.

For some western New Yorkers, Wegmans' Redbox kiosk is their new "cable company."

For homes with less tech-savvy subscribers who have watched their wages fall over the past decade even as cable rates keep increasing, economic realities driven home by the Great Recession are making the decision for them.

“The price of cable TV has risen to the point where it’s simply not affordable to lots of lower-income homes. And right now there are an awful lot of lower-income homes,” Craig Moffett, a Wall Street analyst who favors the cable industry said. “The evidence suggests that what we’re seeing is a poverty problem rather than a technology phenomenon.”

For these customers, including many in the middle class, each time cable companies like Time Warner increase cable rates, they drop a service or two.

“First it was Showtime, the Movie Channel, and Starz!,” writes Stop the Cap! reader Joanne in Penfield, N.Y., a suburb of Rochester. “Then when they raised the rates again on the premium channels, we dropped them all — bye bye HBO and Cinemax.”

“When Time Warner sends us their rate increase notice right after Christmas as they’ve done for years, we’re dropping digital cable and returning our cable boxes,” she writes.  “If they keep it up, we’ll drop cable altogether — something we might have done earlier if we had some competition around here.”

“I don’t care how much they claim it’s a ‘great value,'” Joanne says. “My husband got laid off from his job at Xerox in 2009 and was just let go from his new job at Carestream.  I already work myself and we have three kids, and our health insurance premiums are skyrocketing at the end of the year.  We haven’t had a real raise in five years, so that made the decision for us.”

Joanne now rents movies from Redbox just inside the local Wegmans grocery store and has a $9 monthly subscription with Netflix, mostly for online streaming.

“It’s more than made up for the $40+ a month we used to spend on premium channels with Time Warner,” she said.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WISN Milwaukee Time Warner Cable Offers Start Over For WISN 12 ABC Programs 11-9-10.flv[/flv]

WISN-TV in Milwaukee introduces viewers to Time Warner Cable’s newest on-demand features.  (1 minute)

Frontier Communications is continuing to suffer service outages and problems across many of their respective service areas.  Some of the most serious continue in West Virginia, especially in the northern panhandle region where emergency response agencies continue to complain about sub-standard service from the phone company that took over Verizon phone lines this past summer.

Hancock County officials report their T1 line that connects emergency dispatchers with the county’s dispatch radio system was out of service again early Wednesday evening.  This Frontier-owned and maintained circuit has suffered repeated outages over the past year, and the latest outage comes after company officials promised to inspect the 12,000 foot line inch-by-inch.  Once again, the county’s emergency agency is relying on help from nearby counties and a backup radio system to communicate with at least some of the area’s police and fire departments.

Outages of 911 service are not just limited to West Virginia.  Illinois Valley (Oregon) Fire District Chief Harry Rich was forced to rely on amateur radio operators and extra staffing in county firehouses to cope with a 911 system failure caused by Frontier service problems in late September.  Rich called a public meeting in late October with Cave Junction Mayor Don Moore, Josephine County Sheriff Gil Gilbertson and Josephine County Commissioner Dave Toler to discuss the implications of Frontier’s outage and what steps the region needs to take to mitigate future outages.

In Greencastle, Indiana a Frontier phone outage disrupted service for DePauw University and the Putnam County Hospital Oct. 20.  In Meshoppen, Pennsylvania an outage caused by a downtown fire on Oct. 24 left 1,200 homes in the community without telephone service for most of the day.  Frontier has also suffered periodic copper wire thefts, particularly in the Appalachian region where illicit sales of copper can bring quick cash for those addicted to drugs.  In Eastern Kanawha County, West Virginia, some 100 customers lost service for at least a day after thieves yanked phone cables right off the poles.

Sandman

In Minster, Ohio village officials have hired a law firm to sue Frontier Communications over a wiring dispute.  Village officials accuse Frontier of being intransigent over the removal of telephone lines from poles to bury them underground.  Village Solicitor Jim Hearn told the local newspaper utility companies should be responsible for the costs of installing underground wiring.

In Wenatchee, a community in north-central Washington state, Frontier’s general manager is going all out to try and assuage customers Frontier will provide better service than Verizon.  Steve Sandman went as far as to hand out his direct number to the local media, inviting residents with service problems to call.  It’s (509) 662-9242.

Sandman promises other changes for his customers, according to The Wenatchee World:

Sandman said all Frontier technicians will be fully trained in the installation of phones, internet and TV. No more modems sent through the mail for the customer to install by themselves, he said.

“We’ll be there on the premises for complete installation,” he said. “And, if the customer needs it, we’ll provide some fundamental training on how to turn on the computer, hook up to the internet and get started using online services. Or give advice on how to use the TV remote.”

But all of these issues pale in comparison to the all-out battle forming in the state of West Virginia over broadband stimulus money awarded to help Frontier extend fiber broadband service to local government and community institutions.  One of their biggest competitors, Citynet, has launched a well-coordinated attack on what it calls “a flawed plan that does nothing to provide faster Internet speeds or lower the majority of Internet costs for West Virginians.”

Frontier will spend $40 million of federal broadband stimulus money on a network that will deliver fiber-fast speeds only to government, educational, and health care institutions.

Martin

James Martin II, president and CEO of Citynet argues Frontier is building a state of the art fiber network very few West Virginians will ever get to use, from which it will profit handsomely delivering service to government entities with which it already has contracts.  For the rest of West Virginian homes and businesses, Frontier will deliver outdated DSL service delivering an average of 3Mbps service at a time when adjacent states are enjoying service 2-4 times faster.

Citynet argues funding would be better spent on a middle mile, open fiber backbone available for use by all-comers.  Martin notes West Virginia is one of the few states in the northeast and mid-Atlantic region almost completely bypassed by the core Internet backbone.  The only exception is a fiber link connecting Pittsburgh with Columbus, Ohio, which briefly traverses the northern panhandle of West Virginia.  Citynet’s perspective is that West Virginia cannot improve its poor broadband standing — 48th in the nation, unless it has appropriate infrastructure to tap into for service.

As an example, Martin points to the community of Philippi, served by fiber to the home cable TV and broadband service.  The community’s fiber network is capable of Lamborghini speeds between homes within Philippi. But the community can only afford a single 45 megabit DS-3 connection to the outside world, provided by Citynet for just under $8,000 a month.  That line is shared among every broadband customer in Philippi trying to get out onto the Internet. The result is that Philippi residents can only buy a broadband account with speeds up to 2Mbps for $60 a month on that all-fiber network. That’s equivalent to being forced to drive that Lamborghini on a dirt road.

Martin says if the broadband stimulus money was spent on constructing a statewide open fiber backbone, they could sell the community a 1Gbps pipeline for around $3,000 a month.

Philippi's fiber optic broadband is not so fast, thanks to a bottleneck between the community and the rest of the Internet

“West Virginia is at a crossroads,” Martin said in a prepared statement. “We can build a ‘middle-mile’ solution for high-speed Internet infrastructure and create jobs, or we can stick with the status quo and watch West Virginia fall behind once again. The outcome will determine our state’s economic growth for years to come.”

The state, according to Martin, is reneging on its promise to build a broadband network that will deliver improved service to institutional users as well as at least 700,000 homes and 110,000 business in the state.

Instead, the project would only serve 1,000 “points of interest,” he said. The state’s plan would limit Internet speeds and make broadband service unaffordable, Martin argues.

“If the state were to build a true middle-mile solution, then businesses and residential Internet customers would see a significant reduction in price, as well as an increase in quality, capacity and speed,” Martin said. “Regretfully, the state chose to support a plan that relies on outdated telephone lines and a monopoly.”

Of course, Citynet does have a vested interest in the outcome of the project.  As a provider specializing in selling bulk broadband lines, they would be a prime beneficiary of a government-backed middle-mile broadband network.  Citynet’s argument that funding should be spent primarily on that network ignores the reality few new entrants are likely to enter West Virginia’s rural broadband market, with or without the benefit of a robust broadband backbone.  One of the biggest flaws of broadband stimulus spending is that much of the money will never directly provide “last mile” access to individual consumers and businesses that want broadband service where none is available.

Citynet needs to acknowledge much of West Virginia’s broadband is going to come from the phone company or a local municipality that elects to build its own network.  While cable companies deliver service in larger cities and suburban areas, large swaths of the state will never be wired for cable.  In fact, West Virginia is poorly covered even by wireless companies who see little benefit building extensive cell tower networks in the notoriously mountainous areas of the state that serve few residents.  The only existing rural telecommunications infrastructure universally available is copper telephone wires.  Like it or not, Frontier Communications will be the biggest provider of broadband in rural West Virginia.  A fiber backbone network alone delivers minor benefits to those residents who either cannot connect at any broadband speed, or are stuck with Frontier’s current 1-3Mbps DSL service.

Still, Citynet’s campaign is a useful reminder that too many broadband stimulus projects direct most of their money to networks ordinary consumers and businesses will never access.  And so long as local governments, schools, and hospitals “get theirs,” they have little interest in fighting to share those networks with consumers and for-profit businesses.

Citynet produced two radio ads criticizing West Virginia’s allocation of broadband stimulus money, and Jim Martin appeared on a local radio show to explain to West Virginia why this issue matters. (Ads from 11/2010 — Interview with Jim Martin: September 16, 2010) (18 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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Ultimately, Verizon may get the last word, even after they abandoned the state’s landline customers.  Charleston, the state capital, has been selected as one of the early communities to receive Verizon Wireless’ new 4G LTE wireless broadband network, according to WTRF-TV:

Verizon subscribers in Charleston with devices that are 4G compatible will see changes within the next six to seven weeks. The whole city is expected to be covered by the network by mid-2011, according to company officials. From there, it will be expanded to cover Huntington, Parkersburg, Wheeling, Weirton, Beckley, Clarksburg, Morgantown, Fairmont and Martinsburg by 2013.

The company also plans to expand coverage along the entire Interstate 79 corridor from Charleston to Clarksburg.

The decision to include Charleston among the 39 metropolitan areas where Verizon would deploy its 4G network left many analysts of the industry scratching their heads, although they noted in online posts that Rockefeller chairs the Senate committee that regulates the telecommunications industry.

Should West Virginians find Verizon Wireless a suitable replacement for their landlines, Frontier may have bought themselves a pig in the poke.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/West Virginia Frontier 11-4-10.flv[/flv]

WTOV-TV covers the emergency services outage in northwestern West Virginia in two reports, WBOY-TV covers the Citynet-Frontier controversy, and WTRF-TV covers the arrival of Verizon’s LTE upgrade, starting with Charleston.  (7 minutes)

A Cablevision ad against Fox

Cablevision and Fox finally settled their two week programming dispute Saturday when two local Fox-owned broadcasters and an assortment of cable channels returned to suburban New York area-television screens.  Cablevision ultimately capitulated to Fox’s increased programming fees and grumbled it was stuck paying an “unfair price” for the programming.

“In the absence of any meaningful action from the FCC, Cablevision has agreed to pay Fox an unfair price for multiple channels of its programming including many in which our customers have little or no interest,” Cablevision said, adding that it “conceded because it does not think its customers should any longer be denied the Fox programs they wish to see.”

But in reality, Cablevision subscribers who suffered through the two week outage will ultimately pay the price for Fox-owned programming in the next round of cable company rate increases.

While Cablevision subscribers can now watch the remaining games of the World Series from home, the cable-broadband industry post-game wrap-up show is now underway, surveying the winners and losers.

Let’s take a look:

WINNER: Fox Networks

Fox got everything it wanted, and then some, from Cablevision.  Consumers never take the side of the cable companies that have overcharged them for years. All most know is that when their favorite channels are not on the cable system that charges them more than $50 a month for service, it’s the cable company’s fault. While the terms of the final deal were not disclosed, it’s a safe bet Cablevision is paying rates even higher than those charged to New York’s other cable company Time Warner Cable.  The cave-in by Cablevision means Time Warner and other cable systems will likely also see higher rates for Fox programming now set as a precedent by Cablevision.  So will telco and satellite TV providers.  That’s money Fox will take to the bank.

LOSER: Cablevision

Not only did they alienate their customers, at one point telling them to watch Fox programming on third party websites, they are now facing a $450 million class action lawsuit from subscribers (filed by an attorney with prior connections to Fox parent company News Corporation.)  It is difficult to feel sympathy for a cable company deprived of Fox programming that still charged subscribers full price for channels they could not watch.  One industry executive praised Cablevision for “taking one for the team,” a phrase consumers have heard before to defend corporate pickpocketing.

Cablevision was actively promoting ivi last week through their customer service representatives

WINNER: ivi Networks

Stop the Cap! reported on upstart ivi several weeks back.  The service carries all of metropolitan New York’s broadcast stations and Cablevision ended up recommending its blacked-out subscribers buy an ivi subscription to watch Fox-owned broadcast channels no longer on the cable lineup.  The new online cable system, which started in September, added New York subscribers in droves, annoying Fox to the point of sending a cease-and-desist letter to Cablevision CEO James Dolan to get cable company representatives to stop recommending the service, which Fox claims is “illegal, and perhaps criminal.”

WINNER: Verizon & Satellite Dish Companies

Many subscribers fleeing Cablevision for competitors have probably left for good, especially if they scored substantial discounts and promotions during their first year or two of service.  Verizon FiOS always faced resistance from customers not wanting to devote the time needed to install the service, and when customers have been with a cable company for 20 or more years, change does not come easy.  But die-hard sports fans already inconvenienced by earlier channel interruptions pulled the trigger just to get away from the endless programming disputes.

Verizon scored new customers over the dispute.

LOSER: Comcast-NBC Merger

Lawmakers set to either applaud or introduce roadblocks to the proposed merger between Comcast and NBC saw first hand what can happen when big media companies duel it out over money — millions of customers can be left in the middle with nothing to show for it.  Bloomberg reports the dispute could force significant concessions to prevent or limit such disputes in the future.  U.S. Representative Maxine Waters, a California Democrat, said the Fox-Cablevision spat made her “increasingly concerned with the potential harm” if a dispute arose between an enlarged Comcast and competing video provider. In a letter to FCC Chairman Julius Genachowski last week, she called for “substantive and enforceable conditions” to preserve competition.

WINNER: NFL Networks – Where is Our Binding Arbitration?

Cablevision’s demands for binding arbitration to settle their disputes with Fox rang hollow, if not hypocritical, for NFL Network officials, who have been calling on Cablevision for the same binding arbitration the cable operator demanded of Fox.  The NY Post quoted an unnamed executive at the cable network: “Cablevision has been urging Fox to agree to binding arbitration — the same strategy we’ve been offering Cablevision — but we continue to get sacked.”

LOSER: The Federal Communications Commission

Despite demands from most consumer groups and Cablevision to intervene in the programming disputes, the FCC delivered a rebuke telling all sides to stop with the stunts and start with serious negotiations.  Beyond that, the agency did what it has done best under the Obama Administration: sit on its hands.

THE BIGGEST LOSER: You

With the grandstanding by both sides finally over Saturday — the shouting and expensive publicity campaigns wrapped up and put away for next time (KeepFoxOn.com now renders a blank page) — the person left standing with the bill in hand was you.  Fox wrapped the costs of its expensive publicity campaign into the rate increase Cablevision finally conceded to paying.  The bags of money to be handed from the Dolan family that owns Cablevision over to Rupert Murdoch will be filled from your pockets.  And there is no end in sight to future disputes raising programming costs even higher than ever.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Cablevision Fox Dispute 11-1-10.flv[/flv]

Bloomberg News delivers three reports detailing the impact of increased programming costs on cable bills, inaction by the FCC, and whether Americans are fleeing cable TV for online video instead.  (10 minutes)