Time Warner Cable broadband customers who briefly unplug their modems to reset them will discover slightly improved download and upload speeds from the cable company.

Multiple customers from around the country have reported to Stop the Cap! Internet speeds have been over-provisioned by at least 10 percent as of this week and the PowerBoost feature that delivered a short burst of faster speed during the first few seconds of a download appears to be discontinued.

Before

On average customers can expect the following speeds:

• Standard (was 15/1Mbps) is now 16.5/1.2Mbps
• Turbo (was 20/2Mbps) is now 22/2.2Mbps
• Extreme (was 30/5Mbps) is now 34/5.6Mbps
• Ultimate (was 50/5Mbps) is now 55/5.6Mbps

We have also heard from four different customers that Time Warner Cable has started providing a DOCSIS 3 modem for Turbo customers, which means those considering Turbo service and planning to buy their own modem will best be served choosing a DOCSIS 3 compatible unit. We continue to highly recommend the Motorola SB6141.

After

We do not expect Time Warner Cable to advertise the speed increases. They are likely a result of the discontinuation of the PowerBoost feature which was first offered to Time Warner Cable customers in New York City in 2008 and became available nationwide a year later for Standard and Turbo tier customers.

The Federal Communications Commission’s ongoing verification of the nation’s largest ISPs advertised speeds would have registered a broad-based speed decline had Time Warner simply discontinued the temporary speed boost technology. PowerBoost does affect speed test results because it provides a temporary speed bump during the download speed verification process. By “over-provisioning” customers’ broadband speeds, the company can compensate for the change and likely even see an improvement of its speed ranking by the FCC’s testing program.

Time Warner Cable increased broadband rates by $3.00 this summer and raised its monthly modem rental fee to $5.99 this month.

A Wall Street analyst has urged Time Warner Cable’s competitors to deny promotional pricing to new customers switching providers because of the CBS blackout.

“While Time Warner Cable’s competitors appear to be resisting predatory marketing campaigns to take advantage of the CBS blackout, at least so far, we believe they need to go even further to cause real industry change,” wrote BTIG Research’s Richard Greenfield. “While TWC’s competitors cannot stop consumers from switching their video service provider due to the loss of CBS, they could make it less appealing to switch due to a programming dispute blackout.”

Greenfield wants providers to support solidarity against programmers like CBS by not taking advantage of the situation to poach subscribers away from Time Warner with attractive promotional packages and pricing. He believes it will ultimately lead to lower prices for consumers.

“The only way to begin to shift leverage in these content negotiations is for [providers] to start supporting each other in programming disputes, rather than try to steal each others’ subscribers,” said Greenfield. “We believe it would make strategic sense for all major [providers] to add a script to their website and call-center new customer acquisition process that asks whether a customer is switching due to the Time Warner CBS dispute (or whatever disputes are currently on-going in the country).  If the answer is ‘Yes’ we believe that consumer should not be offered promotional pricing and should be informed that these types of disputes are becoming a problem for all video providers — essentially teaching consumers that ‘switching won’t help’ during these short-term programming battles.”

DirecTV is among the first to express solidarity with its cable competitor, issuing a statement last weekend:

DirecTV has certainly had its share of these battles, so we applaud Time Warner Cable for fighting back against exorbitant programming cost increases. We are also appalled to learn that CBS is now punishing DirecTV customers, who may happen to have Time Warner as their Internet provider, by denying them access to CBS content online.

Greenfield’s suggestion essentially asks that cable operators and telephone companies agree not to compete. His idea also penalizes consumers caught in the middle of programming disputes that customers ultimately pay for in the form of higher bills. We think it comes dangerously close to illegal, anti-competitive behavior. Even Greenfield seems to understand his suggestion comes close to the line.

“It is obviously illegal for MVPD’s to collude,” Greenfield concludes. “However, it is not illegal for each to do what is right for the future of their business, even if it means passing on short term opportunity.  Tacit cooperation is the best strategy we see available, barring government intervention.”

What is right for business is not right for consumers. Stop the Cap! strongly recommends those signing up with a competitor over programming blackouts avoid explaining their reasons for switching. As well as being none of their business, being candid could cost consumers valuable money-saving discounts and promotions that other new customers receive.

We believe the most effective “game-changer” in the fight between providers and broadcasters demanding 600% rate increases for programming available for free on any television is technology like Aereo, which picks up over-the-air stations with dime-sized antennas and provides customers with online streams of those channels. This technology, if found legal, could eventually be adopted by cable operators to avoid retransmission consent payments altogether or use as effective leverage in negotiations. Aereo is a win-win for providers and consumers. Telling providers to deny consumers new customer pricing just because someone wants to get missing programming back is not.

We’d remind Greenfield of this universal truth: cable bills never go down unless a customers downgrades or threatens to leave.

Frontier is enticing Rochester-area customers to “say goodbye to Time Warner Cable.”

Time Warner Cable’s relentless rate increases, particularly on its broadband service, are leading to calls for more competition in the upstate New York cities of Buffalo and Rochester, now dominated by Time Warner, Verizon Communications (Buffalo), and Frontier Communications (Rochester).

“Bloodsuckers,” came the terse reply of Cathy Slocum.

Frontier Communications is making the most out of the cable company rate increases with a new “Goodbye Time Warner” ad campaign (that incidentally includes a link to Stop the Cap!’s coverage of TWC’s modem fee). It is pitching $19.99 broadband price-locked for two years — an improvement over its earlier offers thanks to a major reduction in sneaky fine print.

Customers can get up to 6Mbps service (up to 12Mbps available in limited areas) at the special offer price as long as they keep a Frontier landline active with a qualifying calling package. There are no contracts with this promotion, but Frontier’s pesky $9.99 “Broadband Processing Fee” applies if customers ever choose to disconnect Internet service. A free Wi-Fi Internet router is included and the company claims it offers “free Internet activation.” But an installation fee still applies, discounted if customers choose the self-install option. Taxes, governmental and other Frontier-imposed surcharges also apply and new Frontier customers are subject to credit approval, which will show up as an inquiry on your credit report.

In the past, we have taken Frontier to task for its expensive early termination and modem rental fees, as well as its bundling requirements, but the company has since ditched most of these as part of its new self-proclaimed reputation as “BS free.”

Unfortunately, Frontier’s DSL speeds can wildly vary, so if you take advantage of their offer, be sure to verify the speed actually get at your home or office. If the service proves too slow to your liking after installation, you can negotiate canceling within the first two weeks without any termination fees.

Where FiOS is available in Buffalo, Verizon is offering promotional pricing on its bundled services, including an $84.99 offer including 50/25Mbps Internet with a Verizon landline offering unlimited calling. This is cheaper than Time Warner’s offer with considerably faster upload speeds and no modem fees. In parts of Buffalo, Verizon is authorized to offer broadband and phone service only, although several suburbs have franchise agreements that allow the phone company to also sell television service. A large part of the city and other suburbs are still stuck with Verizon’s copper network, however, which means DSL is the best they can offer.

Time Warner Cable’s new customer promotions, useful when negotiating a customer retention deal, have resumed bundling Standard tier (15/1Mbps service) Internet speeds into most offers. Previously, the company bundled 3Mbps service in many of its promotions. Broadband-only customers can pay as little as $34.99 a month for a year of Internet service at 15/1Mbps speeds, assuming one buys their own cable modem. A double play offer of broadband basic television (around 20 channels, mostly local over-the-air) with 30/5Mbps Internet service is now priced at $94.97 a month after a $5.99 mandatory modem rental fee is included (not optional with this package).

Time Warner Cable executives have repeatedly told investors its higher priced promotions are intentional to increase revenue and profits even if the company loses customers by charging higher prices.

Verizon FiOS offers in the Buffalo area.

“I moved here from the New York City area a year ago where we had two cable companies — Cablevision and Verizon FiOS,” noted Stephen O’Brien. “Competition changes everything. Not only were the rates much lower than here, the companies would offer you all kinds of incentives to switch from one to the other. One time we switched and got a free iPod Touch. The argument that the rate increase is needed to cover investment is the biggest red herring of all — Cablevision and FiOS spent many times more on infrastructure, yet their rates were much lower.”

Stop the Cap! recommends Time Warner Cable customers check out our guide to getting the best deal possible from TWC.

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WGRZ in Buffalo reports upstate New York residents are upset about two recently announced broadband rate hikes. Time Warner Cable says it needs the money to keep up its broadband service’s reliability. What alternatives do customers have?  (2 minutes)

Cablevision may eventually get out of the cable television business.

Although industry analysts, consumer advocates, and technology columnists have long proclaimed the era of “cord cutting” is upon us, cable operators have always been in denial the product that got them their multi-billion dollar business — selling packages of television channels — is rapidly becoming obsolete.

But at least one CEO sees the writing on the wall.

If you don’t “ride the wave” you “get eaten by the wave,” declared Cablevision CEO James Dolan.

The Wall Street Journal sat down for a lengthy interview with Dolan, who predicted “there could come a day” when the cable television company quits selling television service, because a growing number of viewers have shifted to online video.

Dolan, like many Americans, isn’t watching television as much as he used to, and admitted that both he and his young children prefer spending their viewing time with Netflix, not Cablevision’s television package.

Jim Dolan

Dolan worries the next generation of television viewers don’t need or want a cable television package with hundreds of video channels. Today’s youth wants fast broadband with on-demand viewing of series, movies, and video clips. The transition may have already started. Cablevision reported Aug. 2 it lost 20,000 video customers over the last three months, many moving to broadband-only service and 11,000 abandoned the cable company altogether.

Dolan believes the industry is setting itself up for obsolescence.

“I don’t want to be saddled with an infrastructure that is as big as the one that I have now,” Dolan told the Journal, fearing the bloated cable television package is becoming too costly and unmanageable.

Instead, Dolan has ordered network upgrades to improve broadband service and help boost the company’s image with customers. Cablevision focused most of its spending on broadband and Wi-Fi service upgrades over the past year, both to meet relentless competition with Verizon’s fiber network FiOS, but also to develop the platform Dolan thinks will eventually be the only product the company sells. Although Cablevision cannot match Verizon’s upload speeds, the cable company offers a free Wi-Fi service for customers Verizon lacks. But the changes and network upgrades have been expensive and noticeable, because few cable operators are spending as much as Cablevision to improve service.

The changes in approach were too much for former chief operating officer Thomas Rutledge, who departed Cablevision to run Charter Cable in December 2011.

One of the primary reasons Rutledge left was Dolan’s increasing involvement in the business, causing a clash of business philosophies. Just a few months before Rutledge departed, the FCC issued a report that exposed Cablevision marketing broadband speeds its network could not sustain, especially during prime usage periods. Rutledge believed this was primarily a marketing problem. Dolan concluded the existing broadband infrastructure was inadequate.

“I felt that we needed to reinvest,” Dolan said. “When we took a hard look at what we were offering,… it just wasn’t what we wanted it to be.”

As Rutledge and his allies rapidly departed for Charter Cable, Dolan ordered a 32 percent increase in capital spending to $1.1 billion last year, at least $150 million targeted exclusively on broadband improvements. This year he has already informed Wall Street it will be more of the same, bringing expanded Wi-Fi, new and improved broadband modems for customers, even faster speeds, new outage detection equipment, and an improved cloud-based DVR service.

Existing customers like the changes, but don’t appreciate the price hikes that have accompanied them. Wall Street has the exact opposite point of view, welcoming increased revenue from rate hikes, but concerned about the company’s spending. Investors complain Cablevision’s returns are well below those of other cable operators which don’t face the Verizon FiOS juggernaut.

Still, for some customers, the changes have come too late and Verizon’s promotional offers to switch to fiber have been too good. Cablevision did at least manage to add 1,000 new broadband and 3,000 new voice customers during the second quarter.

“We’re not prepared to starve the business,” said chief financial officer Gregg Seibert. “In terms of upgrades, I think what you’re seeing with the high-speed rollout that we just did is that we feel that our plant is in very good condition. We’re delivering over advertised speeds in every day part. We intend to keep the plant in that type of condition.”

Dolan’s philosophy of upgrading service to improve customer relations also clashes with John Malone, who is rebuilding his cable industry power base at Rutledge’s new home — Charter Cable. Malone believes industry consolidation, not expensive network upgrades, is a better proposition for shareholders.

Dolan told investors Cablevision is, for now, out of the mergers and acquisitions business. It has completed selling off its Optimum West systems to Charter and plans no further expeditionary buyouts in the near future. Instead, the company intends to focus on its business in the northeast. Dolan acknowledged the company is a likely acquisition target, most likely by Charter or Time Warner Cable.

Dolan currently shows little interest in selling out what is and always has been a family affair. Chuck Dolan, 86, founded Cablevision and still offers almost daily advice to his son James, who now runs the business. James also appointed his wife Kristin to lead sales, marketing and product management, with questionable results.

Some other highlights from the second quarter:

• Cablevision has enhanced its Remote Storage DVR product, now providing two tiers: 160GB and 500GB. Customers can record up to 10 channels at the same time. The service is available on customers’ existing set-top boxes;
• Last month, Cablevision announced an increase in our broadband data speeds;
• Wi-Fi remains a major priority for Cablevision and customer usage of its wireless network continues to grow. More than 1 million customers have used the service over more than 90,000 access points;
• Price increases were critical for Cablevision’s revenue growth this year. The company booked increased revenue from a broad-based $5 broadband rate hike implemented in January as well as a “sports programming surcharge” initiated earlier this year. The average subscriber that buys a package including cable television pays $5.49 more this year than last — $162.42 a month.

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The Wall Street Journal sat down with Cablevision CEO James Dolan, discussing the future of the business as the industry watches another cable television programming dispute between Time Warner Cable and CBS.  (5 minutes)

CBS has blocked Time Warner Cable and Bright House Networks’ broadband customers from watching CBS online video in a retaliatory move against Time Warner Cable’s decision to pull CBS-owned programming off the lineup because of a contract dispute.

Broadband customers of both cable companies (Bright House relies on Time Warner Cable to negotiate its programming carriage agreements) started losing access to CBS streamed content late Friday, now replaced with a message blaming Time Warner Cable for the loss. Earthlink customers using either cable operator are collateral damage — Earthlink is effectively reselling the others’ cable broadband services.

“If Time Warner Cable is a customer’s Internet Service Provider, then their access to CBS full episode content via online and mobile platforms has been suspended as a result of Time Warner Cable’s decision to drop CBS and Showtime,” said a CBS spokesperson. “As soon as CBS is restored on cable systems in affected markets, that content will be accessible again.”

In place of the programming, cable customers get to see a brief attack ad criticizing Time Warner for yanking CBS-owned channels and networks, despite the fact CBS authorized the companies to keep the channels up and running until the dispute can be worked out.

Time Warner Cable shot back with their own rebuttal.

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Time Warner Cable claims it does not want a war over programming costs in its latest ad regarding the blackout of CBS programming, which now also affects the cable company’s broadband customers. (1 minute)

“CBS has shown utter lack of regard for consumers by blocking Time Warner Cable’s customers, including our high-speed data only customers, from accessing their shows on their free website,” the company said in a statement. “CBS enjoys the privilege of using public owned airwaves to deliver their programming – they should not be allowed to abuse that privilege.”

Customers well outside New York, Dallas, and Los Angeles discovered several CBS-owned cable channels were missing, even though they are not served by a CBS-owned local affiliate. The most obvious — Showtime/The Movie Channel came during the middle of the latest season of Dexter.

New York City residents can sat least keep watching WCBS by signing up for Aereo, which streams local stations over the Internet. A 30-day free trial is available. Getting programming in other cities is going to be much tougher. Some predict hardcore viewers will just look for pirated copies of their favorite shows.

CBS said no further negotiation took place over the weekend. Some industry analysts predict the impasse could run for weeks, even potentially until the start of football season — considered a line of PR destruction neither company is willing to cross.

Golf is not as critical, apparently. The PGA Championship taking place in Rochester, N.Y., this weekend is likely going to get a smaller viewing audience because of the blocked programming.

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The blackout of CBS programming by Time Warner Cable enters its third day with no light at the end of the tunnel, suggests this Bloomberg News report. (3 minutes)

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This is not the first time broadcasters and cable operators have cut viewers off, sometimes for more than a week. Bloomberg News reports the soft deadline for Time Warner and CBS to sort out their differences is the start of the fall football season. Sources say Time Warner now pays $1 a month for CBS, but the network now wants $2 a month. (3 minutes)