Craig E. Moffett joined Sanford C. Bernstein & Co. as the Senior Analyst for U.S. Cable and Satellite Broadcasting in 2002.

Craig Moffett, perennial cable stock booster, predicts AT&T’s move to implement usage limits on its broadband customers will provide cover for cable operators to rush in their own Internet Overcharging schemes, starting with budget-priced usage plans.

Moffett released a research note Monday claiming Charter Communications, Cox Communications, and Time Warner Cable are among the first most likely to move towards limiting their customers’ broadband usage, with Comcast standing on the sidelines, at least for the moment.

Moffett thinks AT&T’s announcement is excellent news for wired providers, who could reap enormous new profits on top of some of the world’s most expensive broadband packages.

“AT&T’s move provides air cover that makes it easier for all of them to follow,” Moffett told his clients. “We view the move as good news for all the terrestrial broadband operators.”

Moffett believes usage caps have everything to do with stopping the torrent of online video.  He notes AT&T’s caps are set high enough to target AT&T customers who use their connections to watch a considerable amount of video programming online.

“Only video can drive that kind of usage,” Moffett writes.

Moffett has repeatedly predicted any challenge to pay television models from online video will be met with pricing plans that eliminate or reduce the threat:

“[I]f consumption patterns change such that web video begins to substitute for linear video, then the terrestrial broadband operators will simply adopt pricing plans that preserve the economics of their physical infrastructure,” Moffett said. “Of course, any move to preserve their own economics has far-ranging implications. Any move towards usage-based pricing doesn’t just affect the returns of the operators, it also affects the demand of end users (the ‘feedback loop’).”

A company claiming to own a broad patent covering ‘storage and retrieval playback systems’ has sued six large cable companies claiming they are infringing its patents.

Comcast, Time Warner Cable, Cox Communications, Bright House Networks, Charter Communications, and Cablevision have all been accused of violating patents that could cover their respective video-on-demand systems.

Pragmatus, whose website is “under construction,” acquired the patents from Intellectual Patents, which has extracted more than a billion dollars in licensing fees on broad-based general patents.  Law.com calls both firms “patent trolls,” because they exist largely to collect money from deep pocketed technology companies.

The lawsuit covers patents 5,581,479 and 5,636,139 which describe technology that uses “information service control points” that send blocks of data to remote stations.  That could cover just about any server.

As proof of infringement, the legal filing simply includes the URL’s of websites that promote video-on-demand services.

Many lawsuits eventually settle out of court quietly, with licensing deals that extract a portion of each subscriber’s monthly payment and send it on to companies like Pragmatus.

Harry Cole, who has dealt with these nuisance suits before, says they are a product of a broken patent system.

“[A patent trolls does] not produce anything. It does not sell anything bought or processed, nor does it buy anything sold or processed, nor does it process anything sold, bought or processed, nor does it repair anything sold, bought or processed … All the company does is speculate on patents, which it purchases on the secondary market in the hope that one such patent will hit it big.”

Time Warner Cable’s shares tumbled on news that the nation’s second largest cable operator is likely to report it is losing subscribers tired of high cable prices in a tough economy.  These challenges are fueling press speculation the company is exploring a “broad alliance” with Cox Cable to join forces in an effort to reduce programming costs.

Bloomberg reports growth has slowed across the board at Time Warner.  The cable company blamed the weak economy for most of its troubles, suggesting the lack of new housing developments and home purchasers is responsible for a lot of the negative growth.

“Overall, I would say that the subscriber environment is very, very weak,” Chief Financial Officer Rob Marcus told investors at a Bank of America Corp. conference in Newport Beach, California. “We’re being negatively affected by very high rates of unemployment, high vacancy rates, both at the rental and the owned home levels, and really anemic new home formation.”

Growth has slowed across all Time Warner Cable’s businesses and because of that the company may see a loss in total customers, or what it calls primary service units, Marcus said.

Last quarter, the U.S. pay-TV industry lost basic-cable subscribers for the first time ever, according to research firm SNL Kagan.

Despite subscriber losses, Marcus calmed Wall Street reminding them the company expects to meet expectations for 20 percent growth in adjusted operating income thanks to a series of revenue-enhancing rate increases underway this year and declining costs in some areas of the business.

Reuters reported this week that Time Warner Cable was in the early stages of a discussion about a potential system swap affecting southern California that could blossom into a “broad alliance” on programming negotiations and potentially even a Time Warner buyout of Cox’s cable systems nationwide.

The Cox systems rumored to be at issue serve Irvine and San Diego and smaller properties in Santa Barbara and Rancho Palos Verdes.  Light Reading speculated Time Warner Cable wants Cox’s Irvine system to increase the size of its footprint in Orange County and Cox would get Time Warner’s San Diego system.

Reuters speculated Time Warner Cable would also negotiate programming carriage contracts on behalf of Cox, just as they currently do with Bright House Networks.  A combination of all three systems could deliver programmers carriage commitments for more than 20 million subscribers across all three systems.  That is still a few million short of Comcast, but easily worth significant volume discounts on programming.

A few industry reports shared rumors Time Warner Cable would eventually buy out the Cox family, which privately owns Cox Cable, and combine those cable properties under the Time Warner Cable name.

But in today’s political climate, and concerns about market power and concentration, such a combination would likely face considerable scrutiny from regulators.

[Stop the Cap! will be closely following Google’s experimental gigabit fiber-optic broadband network. We’ll be bringing regular updates about the communities applying, the strategies they are using to attract Google’s attention, what the competition thinks, and the impact of the project on American broadband.  You can read our earlier community profiles, and news about the project here.]

Topeka wants Google’s fiber experiment so badly, it is willing to rename itself to Google, Kansas — at least for the month of March, anyway.

Mayor Bill Bunten signed a proclamation Monday rechristening the city “Google, Kansas — the capital city of fiber optics.”

It’s all part of a well-organized effort to bring Google’s fiber optics to 122,000 residents living and working in the capital city of Kansas.

Think Big Topeka, a local group started by three people just a few weeks ago, was launched to promote Topeka as a candidate city.  It includes links to e-mail elected officials, complete Google’s online nomination form, and coordinate upcoming events.

It has since collected more than 10,000 Facebook fans and has gotten a big push from most of the local broadcast and print media, which have run more than a dozen stories about the group and the petition to nominate Topeka.  Several stations even have prominent links back to Think Big Topeka’s website.  The city government is also an enthusiastic supporter of the experimental project.

Think Big Topeka knows how to get media attention.  The group recently started running “flash mobs” — events where hundreds of people silently promote the project by suddenly stripping off jackets to uncover T-shirts promoting the Think Big Topeka campaign.  Engineering events that are “made for television” guarantee plenty of attention on the evening news.

The Google “Think Big With a Gig” experiment has excited communities from coast to coast, convinced advanced fiber optic networks will bring new jobs, high technology business, and improved broadband service for both consumers and area businesses.  Many hope the competition will also finally lower prices.

Incumbent providers Cox Cable and AT&T are the largest local providers.

Cox currently offers three broadband tiers — Essential 3 Mbps/384 kbps ($29.99), Preferred 12/1.5 Mbps ($46.99), and Premier 25/2 Mbps ($61.99).

Cox Cable, when asked by KSNT-TV news what they thought about the project brought a response from Kelly Zega, a representative from Cox Communications: “We have always believed competition in the marketplace is a healthy thing, as it leads us all to improve and innovate in ways that ultimately benefit consumers.”

AT&T offers U-verse in selected areas of Topeka, but most areas are still served by AT&T’s traditional DSL service which offers considerably slower speeds — Basic 768/384 kbps ($19.95), Express 1.5 Mbps/384 kbps ($24.95), Pro 3 Mbps/512 kbps ($24.95), or Elite 6 Mbps/768 kbps ($24.95).  (Note the prices for Express, Pro, and Elite are identical — apparently which plan you get depends on what actual speeds AT&T is capable of delivering to your home.)

If Google can deliver faster speeds and lower prices, it’s no surprise thousands of Topekans are excited.

The Topeka Capital-Journal, the community’s daily newspaper, is also promoting the project on its editorial pages:

This excitement is being created by a lot of people who see opportunities to help the city grow and become an even better place to live, and are determined to do everything they can to make it happen.

Evidence of their enthusiasm and dedication was on display Thursday evening when about 500 of them gathered at the Ramada Hotel and Convention Center to talk about plans to revitalize downtown Topeka. Granted, the audience consisted of two different groups, but each had visions that, if fulfilled, would mean great things for our city.

We’ve written recently in support of Think Big Topeka, a group trying to convince Google that Topeka is the place to test an ultrafast Internet connection that promises to provide Internet service about 100 times faster than anything we are working with now. The effort has attracted about 7,875 supporters in a very short time and some of them turned out for Thursday’s meeting, sponsored by Heartland Visioning, to encourage others to jump on the bandwagon.

Supporters of the Google project and those interested in revitalizing downtown meshed during the evening as the discussion flowed between both issues.

Such a confluence of people and organizations with visions, dreams or plans — call them what you will — is a healthy, and welcome, development itself that bodes well for the city’s future. Most good things start with someone’s vision or dream, and they aren’t to be scoffed at or dismissed out of hand.

Think Big Topeka has more than 10,000 fans on its Facebook page

Dreams can come true… if a city actually applies.  The city of Topeka will.

“The city of Topeka welcomes the opportunity to participate in this unique technological experiment, if selected as Google trial community, to benefit our citizens in providing all opportunities to access Internet technologies,” city officials wrote on the city’s Facebook page.

The city’s information technology department has been tasked with working on what they characterized as a very long and detailed application.  Mark Biswell, IT director for Topeka city government, said his department has been hard at work on the application from the moment Google announced the project.

Shawnee county, which includes Topeka, is conducting an online  survey running until Saturday asking residents about their interest in the Google fiber project.  They are seeking input on what kinds of broadband speeds residents actually obtain, instead of relying on marketing promises made by the incumbent providers.  They also want to learn how satisfied residents are with Cox and AT&T.

For Topeka, a city coincidentally working on its own revitalization plan for downtown development, the prospect of Google gigabit fiber could be the crown jewel of a complete city makeover.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/KTKA Topeka Google Fiber 3-1-2010.mp4[/flv]

KTKA Topeka aired three reports about the Google fiber experiment, including an interview with one of the founders of the Think Big Topeka group. (3 minutes)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WIBW Topeka Group Wants Google’s Blazingly-Fast Internet To Come To Topeka 2-17-10.flv[/flv]

WIBW Topeka has these two reports featuring the Think Big Topeka group and how the city government is involved in the project.  (4 minutes)

[flv]http://www.phillipdampier.com/video/KSNT Topeka City Renames Itself Google for March 3-1-10.flv[/flv]

KSNT Topeka has several reports about the organizing effort, a “flash mob” and Topeka city government’s strong belief in the project.  (6 minutes)

[flv]http://www.phillipdampier.com/video/Think Big Topeka.flv[/flv]

Finally, Think Big Topeka has some of its own videos on offer, answering residents’ questions and cheerleading the effort to bring better broadband to Topeka.  (3 minutes)