Charter Communications is wasting no time looking for increased shareholder value by slashing jobs in states where regulators placed few, if any conditions on the acquisition of Time Warner Cable and Bright House Networks.

The Charlotte Agenda reports North Carolina-based Time Warner Cable employees are just starting to feel the pain of the multi-billion corporate cable merger, with the elimination of 258 jobs in Time Warner Cable’s accounting department in Charlotte. Nearly 20% of the workforce, including 70 senior accountants, 45 staff accountants, 44 accounting supervisors or managers, and an even larger number of finance analysts and accounts payable specialists will be collecting unemployment starting Nov. 1 and extending through the second quarter of 2017.

Company officials claim affected employees can seek employment with Charter Communications at other office locations around the country.

North Carolina regulators effectively rubber-stamped the acquisition of Time Warner Cable in granting its approval. The only condition Charter Communications has to meet is notifying North Carolina’s Department of State Commerce at least 30 days before those unlucky employees are out of a job.

Time Warner’s Enhanced DVR works fine, but those avoiding TWC equipment run into DRM problems.

If you’re accustomed to using Time Warner Cable’s DVR box, you probably don’t realize how heavy-handed Time Warner Cable can be with copy protection, but as set-top box alternatives proliferate, more customers are encountering the frustration of digital rights restrictions.

For several years, customers using alternatives to Time Warner’s set-top boxes or who wanted to store their DVR recordings on another hard drive quickly discovered the cable operator heavily enforces copy protection mechanisms designed to thwart digital archival copies of programs recorded from cable television.

Copy Control Information (CCI) is an invisible flag sent in digital television signals that is designed to give control to copyright owners over how their shows can be duplicated. Since at least 2007, Time Warner Cable and Bright House Networks customers have been frustrated if they use their own DVR or devices like TiVo. When customers attempt to copy their recorded shows to other devices or playback units in their home, the CCI flag often stops the copy cold.

ZatzNotFunny has covered this issue for years, noting Time Warner Cable, Bright House, and Cox have been particularly unfriendly to third-party set-top boxes like TiVo.

Among cable operators, the most common flags are Copy Freely and Copy Once. Many cable operators set their basic cable network CCI flags to “copy freely,” while premium pay movie channels like HBO are set to “copy once” — primarily to allow time-shifting devices like a DVR to record the show. Once your DVR has a copy of a show with a restricted flag, it cannot be copied again.

Digital Rights Management policies are part of the nation’s struggle between Hollywood-inspired copy protection and the public’s right to make and store recordings of programming for their own personal use. Some telecom companies like Verizon and Comcast have come down more in favor of consumers, while Time Warner Cable and Bright House (which have traditionally shared engineering practices and programming contracts for at least a decade) are far more responsive to Hollywood. The result for subscribers with $200 cable bills is endless frustration, especially if they choose not to use the pricey set-top boxes and DVRs supplied by the TWC or Bright House.

CableCARD and TiVo users, as well as those relying on Extenders for Windows Media Center like the Xbox 360 are often stymied by CCI flags, especially when a consumer tries to watch a show in one room and finish it in another using Multi-Room Viewing features.

ZatzNotFunny rates TWC, Bright House and Cox as unfriendly to alternative set-top boxes like TiVo. (Image: ZatzNotFunny)

Wikipedia supplies insight into the available CCI options cable operators can choose to use for cable television channels:

• 0x00 – Copy freely – Content is not copy protected.
• 0x01 – Copy No More – A copy of the content has already occurred and no more copies are permitted.†
• 0x02 – Copy Once – One recording can be made, but it cannot be copied to another device.†
• 0x03 – Copy Never – the content can be recorded and viewed for 90 minutes after transmission, and is not transferable.†
• 0x04 – Content is Copy Once for digital output, but would have Macrovision 7 Day Unlimited restriction applied on the analog outputs. This affects content viewed either on an HDTV with component cabling or on a standard definition TV. It also affects content saved to VCR or DVD when the recorder is connected to an analog output on the DVR.†
• 0x07 – Content is Copy Never for digital content (deleted after 90 minutes) and Macrovision 7 day/24 hour for content recorded from analog channels. Content cannot be transferred via TiVoToGo transfers or MRV, and cannot be saved to VCR or DVD.†

† – Any live stream with a CCI flag set higher than 0x00 is to be encrypted or protected in a way that only trusted platforms that will obey the flag (Such as Microsoft’s PlayReady system used in Windows Media center) can access it.

A Time Warner Cable customer known as MachineShedFred noticed this problem first hand and wrote about it in a complaint to Time Warner Cable back in March, and Stop the Cap! reader Chris N. pointed us to this ongoing issue:

The only software that allows me to use the CableCARD hardware that you officially support and distribute is Windows Media Center, which Microsoft is no longer developing, and is no longer distributing.  All other DVR software available for every platform will not work, as they cannot decrypt the video stream due to the abuse of the CCI flag.

No other cable company in the US abuses the CCI flag in this manner, and every other cable subscriber in the US that isn’t on Time Warner has a wide choice of solutions for enjoying their service better than we can as your subscribers.  Why are you restricting the choices of your subscribers for no reason?  It’s clearly not contractual from the media networks, as they would have pushed for the same stipulations with at least one of your competitors.  Yet, anyone outside of TWC’s monopoly can use any other software they want.

When even Comcast allows their subscribers more subscriber-friendly choices, you know you’re doing it wrong.  Please revisit this ridiculous policy and cease the overuse of the CopyOnce CCI flag that unduly burdens your subscribers by forcing them to replace perfectly good hardware, or replace YOU.

Some believed this problem could eventually resolve itself with Charter Communications’ buyout of Time Warner Cable and Bright House Networks. Would Charter bring their own policies to affected TWC/BH customers, or will Charter customers soon have to contend with the CCI CopyOnce flag loved by Time Warner Cable as well.

An official complaint to the FCC brought a cryptic non-answer answer from William Wesselman, Time Warner Cable’s regulatory compliance counsel. Wesselman implied the liberal use of the CCI  CopyOnce flag was the result of restrictions in contracts with major programmers, which seems unlikely because other cable operators — larger and smaller — have successfully navigated around this issue. Wesselman’s answer implies as Time Warner Cable and Bright House are brought into the Charter hegemony, “the policies of the two companies will ultimately become the same.”

Of course, he never defines which policy Charter, TWC and BH customers across the country will eventually get by sometime in 2017.

Mr. Wesselman’s full response:

At this time, TWC and Charter continue to integrate their two systems into one. Both TWC and Charter, like other distributors of multichannel video programming, negotiate the distribution rights for the content it carries independently with individual rights holders. These bilateral commercial negotiations take into consideration many different factors, include the content protection and digital rights management requirements of the rights holder; applicable law, license and regulations; and the interests of subscribers. Each of these commercial negotiations, and the terms of the agreements that result, are unique to the specific distributor and programmer involved. As the integration of the two companies continues, Mr. X will notice that the policies of the two companies will ultimately become the same based on our agreements.

For the first time, the average American now pays over $100 a month just to watch television.

Leichtman Research Group, which has measured cable television rates annually for years, just released a report finding the average amount paid for cable television is now $103.10 a month. That’s an increase of about 4% over last year, the lowest annual increase in five years. But it’s still a 39% increase from 2011-2015, which is nearly eight times the rate of inflation.

As rates rise, customers are increasingly cutting cable’s cord for good. More than 800,000 Americans said goodbye to cable TV in the second quarter of this year alone, according to cable industry researcher SNL Kagan. eMarketer says the biggest reason customers are leaving is obvious: higher bills.

“About 82% of households that use a TV currently subscribe to a pay-TV service. This is down from where it was five years ago, and similar to the penetration level eleven years ago,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “The rates of those exiting the category, or intending to leave, are actually similar to recent years. The decline in penetration is also due to a lack of those who are coming into the category, and the industry not keeping pace with movers and related rental housing growth.”

Customers are no longer fooled by promotional rates that offer cable TV for $30-50 a month, usually expiring after one year. Once their first bill arrives, they are unhappy to discover growing mandatory equipment fees and bill padding charges for sports programming, local stations, fake official-sounding surcharges like “regulatory recovery fees,” and more.

“Once the XFINITY bill arrives, my $60 television promotion is $104 after the $5 fee for local stations, $3 for sports, additional outlet charges, equipment rental fees, and taxes/surcharges,” said Comcast customer Dan Ho from central California. “You almost have to take the internet and phone service just to feel like you are getting anything of value for your money, because the bundle price seems like a better deal.”

The cable industry argues cord-cutting won’t save consumers much money, but as Fortune magazine reports, those arguments are traditionally based on temporary rates that never tell the whole story,

“Too often, the comparisons quote a low, promotional, or entry-level price for the cost of a cable TV package instead of looking at the real prices people actually pay,” wrote Fortune author Aaron Pressman. “Left out of the superficial analysis all too often are set-top box fees, regional sports network fees, fees dressed up as faux taxes, and actual taxes.”

Fortune adds every year is a new record high for cable television bills.

Leichtman Research reports that once consumers cut the cord, an increasing number never look back, while those still subscribed to cable are often earching for a better deal:

• Overall, about 3% of TV households last subscribed to a cable/pay-TV service 1-3 years ago, about 6% subscribed over 3 years ago, and about 6% never subscribed to a pay-TV service;
• 7% of current cable subscribers did not subscribe to a TV service for more than a month at some time over the past two years;
• 25% of those who moved in the past year do not currently subscribe to a cable TV service — a higher level than in previous years;
• 12% of cable subscribers are likely to switch from their provider in the next six months — similar to 11% in 2015, and 12% in 2014;
• 6% of pay-TV subscribers are likely to disconnect from their provider and not subscribe to any TV service in the next six months — similar to 7% in 2015, and 7% in 2014.

The cable industry’s broadband Achilles’ heel has always been upstream speeds that are set much lower than download speeds. But the days of asymmetric cable broadband may soon be a thing of the past if CableLabs successfully defines a new Full Duplex extension for DOCSIS 3.1 — bringing symmetrical broadband speeds to cable companies across the country.

CableLabs sees the potential of eventually offering multi-gigabit broadband over today’s existing hybrid fiber-coax (HFC) cable systems. Marketing 1,000/1,000Mbps internet access could keep cable operators competitive with fiber to the home services that already offer symmetrical internet speeds.

The cable industry-supported research group is collaborating with vendors, according to Belal Hamzeh, vice president of wireless for CableLabs, in a blog post.

“The ecosystem support for the Full Duplex DOCSIS 3.1 technology has been staggering, with many vendors collaborating and contributing to the development of the technology,” Hamzeh wrote. “A recent example is Cisco’s contribution of a new silicon reference design of a digital echo canceler that maximizes the use of HFC capacity to provide a scalable multi-gigabit return path.”

The Full Duplex DOCSIS 3.1 project transitioned from the innovation phase to the R&D phase in June. A working group will continue to meet on a regular basis to finalize the specification, which will allow vendors to begin producing modems that support the new standard.

Charter channels Don Rumsfeld

A Charter Communications executive told a western Massachusetts cable advisory board he had no idea how much Charter’s set-top boxes cost the company.

The question was just one of many asked by concerned public officials and residents worried cable bills could skyrocket as much as 50 percent after Charter takes over for Time Warner Cable early next year in the region.

Charter will require all cable television subscribers to rent a set-top converter for each connected television that will cost $6.99 a month each after a two-year grace period. The Five-Town Cable Advisory Committee that represents the interests of residents of Great Barrington, Lee, Lenox, Sheffield, and Stockbridge, Mass., call that illegal, claiming it violates a 10-year agreement signed in 2013 with Time Warner Cable and transferred to Charter in 2015.

Charter promised officials there would be no changes after taking over Time Warner Cable’s 10-year contract, but officials and some residents are now pushing back against the cable operator after learning customers paying $14 a month for 20-channel basic service will now have to pay at least $21 — a 50% rate hike — to keep cable service after Charter Spectrum arrives.

The Berkshire Eagle covered an open meeting held last night at the Great Barrington Firehouse, where residents and officials wondered why they could only lease a cable box from Charter, and asked the company to share how much the set-top box actually costs the company.

Charter representative Tom Cohan and his lawyer responded they did not know the cost of the equipment and added Charter’s upgrade, which will digitally encrypt all cable television channels, would have happened with Time Warner Cable as well.

Cohan also declared that since Charter views the encrypting of cable channels as “an upgrade,” that means they are not in violation of the agreement with the towns, and they have no say in the matter anyway.

“As the cable operator, we have authority over what technology we use,” said Cohan.

Town officials pointed out there has not been a case of prosecutable cable theft over the last five years, making encryption unnecessary.

“It’s not proper to make us pay for something we don’t need and don’t want,” said Linda Miller, the committee’s chairwoman. “We don’t want to file a lawsuit, but we will if we have to.”