New York City officials are sick and tired of taking complaints about missed cable appointments and other service problems on its 311 city help line.  Nearly 1,200 calls about cable have been made so far this year alone, with fed up New Yorkers annoyed they took a day off work to wait for a cable technician that never arrived, or one who never solved the problem they were called to fix.

Now city officials are forcing the area’s two incumbent cable operators — Time Warner Cable and Cablevision, to pay for their mistakes.

As part of franchise renewal negotiations, both cable companies have agreed to credit subscribers the full amount of that month’s cable bill if the cable guy arrives late, or not at all.

The penalty decreases to $25 after 2012, when Verizon FiOS service is expected to blanket most of the city.

But consumer reforms extend beyond financial penalties for missed appointments.

Customers will soon be able to request notification by e-mail, phone or text message when a technician is heading to their home.  And calls to either cable company should be answered by a real person no more than 30 seconds after dialing.

Many of these reforms are already a part of the franchise agreement New York City’s Office of Information Technology & Telecommunications worked out with Verizon, allowing the phone company to provide cable television in the city.

Time Warner Cable spokesman Alex Dudley didn’t miss the opportunity to turn the challenging new requirements into an opportunity.  He told area reporters Time Warner welcomes the new customer service standards and appreciates the opportunity to compete for customers in the metropolitan New York area.

As Robert Porto, 38, a Time Warner Cable customer in Boerum Hill, Brooklyn, told the New York Times, the new contract will be “the ultimate revenge for the little guy.”

Importantly, none of these consumer-focused reforms would have been possible had New York adopted the kind of “reform” companies like AT&T and Verizon have advocated in other states — statewide video franchising.

New York’s legislature has rejected previous attempts to eliminate local cable and video franchise agreements, citing the loss of control by local municipalities to deal with provider issues that would sail over the heads of a statewide committee in Albany.  New York has been generally hostile to Big Telecom’s deregulation agenda.  One state assemblyman, Richard Brodsky (D-Westchester), even introduced a bill requiring phone companies like Verizon to split the proceeds of asset sales with ratepayers.

Other provisions of the franchise agreements include:

• The right to terminate franchise agreements with Time Warner Cable and Cablevision Systems if broadband-delivered video significantly erodes cable TV revenue over the next 10 years;
• Time Warner Cable and Cablevision are required to invest about $10 million to install Wi-Fi access in 32 public parks in all five boroughs, to be operated and maintained by the companies until 2020;
• At least five new Public, Educational and Government (PEG) community access channels will be added, up from the four that currently exist, by 2012.  At least one must be in HD.  The operators also agree to pay a combined total of more than $9 million, payable in annual installments, plus an additional $2 million of “in-kind” services to pay for equipment and operation expenses;
• More than $20 million to help finance the upgrade of CityNet, the city government-dedicated network;
• Time Warner Cable will establish four community broadband access centers per year (40 total), in collaboration with nonprofits, over life of franchise;
• Time Warner Cable will install 20 miles of fiber per year in underserved commercial/industrial areas over franchise term; and will build-out Brooklyn Navy Yard. Cablevision already serves the commercial blocks in its service areas. Companies will commit to expend $1.8 million per year to bring fiber to commercial buildings of city’s choice.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WABC New York New Yorkers could get money if cable guy stands them up 9-15-10.mp4[/flv]

WABC-TV covers the introduction of pro-consumer cable service reforms for metropolitan New York residents.  (2 minutes)

In many communities across America, there is more fiber optic cable on telephone poles and buried in underground conduit than you may realize.  But as a consumer, you’ll never get to benefit from it because of a broadband duopoly that works hard to keep municipal fiber networks away from your home and out of your reach.

Take Sarasota County, Florida.  The county is making preparations to build a 96-strand fiber network across the county, capable of delivering 100Gbps service over each strand, and early plans suggest they’ll use it for… controlling traffic signals and viewing traffic cameras.  Taxpayers are ultimately paying the costs to construct the $1,000-per-mile fiber network, but current plans won’t allow any of them to access it.

Why?  Because companies like Comcast and Verizon want it that way.

It’s nothing new and it’s not limited to Sarasota.  In cities across the country, enormous capacity networks are devised and constructed to deliver high speed data connections to local hospitals, schools, and public safety institutions.  Many states’ transportation departments have enormous excess fiber capacity, installed from federal and state grant money to develop intelligent traffic systems.  But almost all of these networks are strictly off-limits to the general public and small business entrepreneurs who are stuck with the far slower broadband service the phone and cable companies deliver at ridiculously high prices.

Sarasota has had ultra-fast connections for years, delivering a dedicated 10Gbps connection to one area hospital and insanely fast connections to police departments and other government buildings.  It’s managed by Comcast and was built for $3 million, paid for directly by Comcast subscribers.  Comcast built the county I-Net network with the understanding that commercial use of the network was strictly prohibited.

The result is blazing fast speeds for institutions that can’t possibly utilize all of the capacity they have, and a broadband cartel delivering less service than local residents and businesses need.

The Sarasota Herald-Tribune considered the county’s fiber future so important, it dedicated a week of coverage to municipal fiber, and the providers and politics that get in the way.

The newspaper reports that the existing broadband duopoly under-delivers access to digital entrepreneurs that need those speeds the most.

The co-called creative class — bandwidth entrepreneurs on a budget — struggle to get by on mediocre connections that are largely repackaged retail offerings.

Over and over, businesses surveyed by the Herald-Tribune pointed to the tell-tale distinction between business-class service and retail.

“Businesses upload stuff, while consumers download,” said Rich Swier Jr., who works from a Central Avenue office where the only service comes from Comcast. Swier, the only entrepreneur on the Sarasota Broadband Task Force, is not happy with what he gets from Comcast. “They are repackaging a consumer grade service as a business service and charging three times more.”

Swier is paying about $200 per month for what is supposed to be 50 megabits per second download and 5 megabits up. But in reality, it operates at half those speeds, he said.

The newspaper’s conclusion: Fiber access is to modern business what train stations and interstate connections used to be.

Sarasota’s fiber project has grown considerably since its original proposition — 24 strands of fiber installed for $11 a foot. Then the county received an estimate that said they could have triple the amount of fiber for just 20 cents more per mile.  Broadband enthusiasts urged the county to upgrade the network to 96 strands and they agreed.

Commissioner Jon Thaxton told the newspaper he views the planned fiber network as an insurance policy as Internet speed becomes more and more important.

“It does, at a minimum, put us in a position of not being wholly dependent on some other service provider,” Thaxton said.

The newspaper notes the economic implications of superior broadband are enormous.

Google sparked the issue when it announced plans earlier this year to hot-wire a city or cities somewhere in the United States, creating what could be a prototype for a community with the broadband speeds to more than command its economic future.

Our political leaders clearly saw the import of this. Heck, City Commissioner Dick Clapp even jumped into a shark tank to show Google the community’s spirit (yeah, they were pretty small sharks, but I wouldn’t do it, fiber or no fiber).

Businesses of the 21st century are hungry for fast speeds, and this region has been fortunate to land some with voracious appetites.

[…]Who would have pegged Lafayette, La., as a place where Hollywood would set up a first-rate special-effects studio? (Can you say the Walt Disney Co. as a customer?) But the fiber was there, and the big dogs came.

South of us, in Naples, it is private enterprise driving high-octane broadband, the work of a technology-savvy entrepreneur and a like-minded group of millionaires who want what many of us raising families in Southwest Florida are after: an economy that would allow our kids to remain here with good jobs.

In the Information Age, connectivity is going to be critical in attracting the kind of companies we want, and the well-heeled folks in Collier County know that. (They also clearly know how to make a lot of money, so don’t read their efforts too much as altruism).

Then you have one of the new 800-pound gorillas of the fiber effort, Allied Fiber, a New York-based company in the midst of creating a trans-continental broadband push akin to what the railroad barons of the 1800s accomplished.

Southwest Florida has a good chance of tapping into their $500 million (or more) play.

The county established a Broadband Task Force, but made the same mistake so many other municipalities make when they create these panels: consumers are not represented at all and small business representation is limited to a single participant. Consumers will ultimately be a major source of revenue from municipal broadband projects and their needs and interests must be represented.  Since incumbent commercial providers will seek to impede municipal competition by organizing consumer opposition to such projects, getting trusted consumer advocates and broadband evangelists on your side at the outset can make the difference between enthusiastic support for additional broadband choice or a mind-numbing, incumbent provider-driven sideshow about a “socialist government takeover of the Internet.”

The rest of the panel is made up of public officials from the school district, county and city government and the local hospital.

The newspaper hints these are exactly the wrong people to invite onto a Broadband Task Force.  Virtually all already enjoy the generous bandwidth already provided by Comcast’s I-Net, few are likely to be well informed on broadband technology issues, and apart from the lone businessman on the panel, the group is unlikely to grasp the commercial implications of better broadband for the local digital economy.

Since these individuals all earn a paycheck protecting their own institutional interests, the larger vision of community broadband can easily get lost in turf wars and political disputes, or interference from incumbent providers.

Providers can cut the bottom out of such task forces with rewarding side deals for friends — enhanced services at fire sale prices. For institutional opponents — intransigence and crippling rate increases.

On Florida’s East Coast, Martin County’s public service institutions learned first hand what kind of pricing Comcast is capable of bringing to the table when an existing contract expired.  Comcast demanded a whopper of a rate hike.

“We decided for the kind of money these people are asking us, we would be better off doing this on our own,” Kevin Kryzda, the county’s chief information officer, told the Sarasota paper. “That is different from anybody else. And then we said we would like to do a loose association to provide broadband to the community while we are spending the money to build this network anyway. That was unique, too.”

The last straw for county officials was the loss of a lucrative deal with California-based Digital Domain to build a Florida branch campus.  The company chose St. Lucie County instead.  John Textor, Digital Domain’s co-chairman, told the Herald-Tribune that having a local all-fiber network connection and being able to set up an all-fiber direct connection to remote servers in Miami was a key advantage of the site in Port St. Lucie.

After that, Martin County commissioners voted unanimously to obtain bids for their own network.

Martin County’s fiber network will combine a publicly-constructed institutional network and a tiny rural phone company paying part of the costs to resell excess capacity to commercial users. The downside is that consumers will not be offered service.

In Florida’s Lee and Collier Counties, U.S. Metro network has proved fiber’s ability to transform entire regions economically.

“If you build it, they will come” is a common rallying cry for fiber proponents.  In both counties, they came.  The latest arrival?  Jackson Laboratory of Bar Harbor, Maine, now being showered with more than $200 million in government grants to build a genetic research campus in Collier County.  A large portion of that money will end up staying in Collier County, stimulating the local economy and creating jobs.

Why all the clamor?  Because U.S. Metro runs a network that puts incumbent phone and cable companies to shame.  When a business requests service, owner Frank Mambuca doesn’t tell them what speeds they’ll have to live with.  Instead, he asks, “how many gigabits do you want?”

Unfortunately, U.S. Metro also only sells service to businesses, but they have some wholesale customers that do serve consumers.  Marco Island Cable and a sister company, NuVu are cable overbuilders that offer access to U.S. Metro’s broadband network at speeds and prices Comcast and CenturyLink can’t touch.

Marco Cable is preparing to deliver fiber-based 75Mbps service for $99 a month, along with several other access plans that save at least $12.95 per month over Comcast’s prices, and undercuts CenturyLink’s DSL plans as well.  The company also does something Comcast won’t — it promises unlimited Internet access and email accounts.

If someone wants even faster speeds, say 100Mbps, they can call Marco Cable and request it.

The highest download speed that Verizon offers [locally] at present is 50 megabits per second for $149.99 a month, according to spokesman Bob Elek.

NuVu is currently installing competing service in condos on the mainland.  For the father and son team that run both Marco Cable and NuVu, their philosophy is radically different from most cable and phone companies — delivering as much broadband speed as customers can use at prices they can afford.

For existing providers, who have “marked up” prices for years, the competition’s lower prices threaten profits from delivering “good enough for you” speeds at the highest possible price.

For some, simply lowering prices and enhancing service to compete isn’t the answer — putting a stop to municipal competition at all costs is.

In 18 states, high priced lobbying campaigns financed by giant phone and cable operators have succeeded in restricting or banning competing providers.  AT&T has been the most aggressive, successfully impeding competition in states like Texas, Wisconsin, Missouri, Arkansas, Michigan, Tennessee, and others.  Comcast helped stop competition in its home state of Pennsylvania.

Year after year, Time Warner Cable and AT&T continue efforts to try and do the same in North Carolina, a potential hotbed of locally run, community-owned providers.

For some towns and cities who have spent years begging for improved service, the clock has run out.  The Sarasota Herald-Tribune used Wilson, N.C., as an excellent example.  The city of 50,000 east of Raleigh decided it was through asking Time Warner Cable to provide a platform for a digital economic revival.

Brian Bowman, public affairs manager for the city, told the newspaper the city faced economic disaster from twin blows — the loss of the textile industry and America’s waning interest in tobacco products. Giving the keys to the local cable company to drive Wilson’s nascent digital economy into Lake Wilson was simply not an option.  The town would build its own digital highway — a municipal fiber to the home system for consumers and businesses.

For both, Wilson’s Greenlight system provides up to 100 megabits per second in both directions.  Time Warner Cable residential customers, in comparison, max out at 15/2 Mbps service.

“The way we see it, you’re going to have haves and have-nots in the next generation broadband world,” Bowman said. “The fact is we wanted to invest in our own future; that’s why we did this.”

Cable and phone giants always are going to say that current speeds are adequate and that there is no need for cities to build expensive networks themselves, Bowman said.

“I have heard that here from some of the incumbents, that you don’t need to go that fast. I’m sure the folks in Florida were doing OK without I-4,” Bowman said, noting the state never would have gotten Disney World if not for that interstate access.

People in Sarasota County are about to hear all of the usual arguments against municipal service:

• “Taxpayers will pay for it.” — Not with revenue bonds they won’t.  These bonds deliver returns to investors from revenue earned by the municipal provider, not from taxpayer dollars.
• “We want a level playing field.” — This cable industry opposed providing one when satellite and phone company IPTV showed up, as they tried to withhold programming and lobbied against both.
• “The government should stay out of the private sector.” — Christopher Mitchell, writing for the New Rules Project, tore apart that argument:

Governments “compete” with the private sector in many ways on a daily basis. Libraries compete with book stores, schools with private schools, public transit with taxis, police with security firms, even lumber yards, liquor stores, municipal golf courses and swimming pools with privately owned counterparts. Without public competition in the form of the Rural Electrification Authority, much of the country would still not be wired for electricity or phones.

The focus on whether local governments, who have a wholly different motivation than private companies, are “competing” with the private sector is a red herring to distract the public from incumbent providers’ failures to build modern networks. On matters of infrastructure, a community should always have the option to build the network it needs, just as it can build roads, bridges, water systems, and other modern necessities.

Ultimately, Sarasota County residents have two choices:

1. Obtain the best traffic control and monitoring system America has ever seen, capable of delivering crisp, clear 1080p HD feeds of traffic tieups on Route 301.
2. Deliver Sarasota County 21st century broadband that will power the digital economy and bring hundreds of millions in investment dollars, create thousands of new, high-paying jobs, and save local consumers and businesses a lot of money from broadband competition.

For the third time this year, Time Warner Cable is increasing prices on some of its cable products in upstate New York.

Some customers in western New York are receiving notification that effective this October, the price for the cable company’s digital video recorder (DVR) box is increasing by 18 percent from $10.95 to $12.95 per month (remote control included). Time Warner Cable charges different prices for DVR service, depending on what each local market will tolerate and how much competition the company receives.  A representative of Time Warner Cable in Buffalo told us the company was trying to “standardize rates” across Upstate New York.  If true, residents in Buffalo who already experienced one recent rate increase for DVR service will get a big shock if rates are “standardized” in the same direction Rochester and Syracuse are experiencing.  More details below.

After multiple contacts, we’ve managed to sort out what we believe the increases to be.

Buffalo:  Verizon FiOS and the Buffalo economy have conspired to keep prices considerably lower in Buffalo than other upstate cities.  Buffalo residents pay just $9.95 a month for DVR service and will experience no increase in rates… for now.  If the Buffalo representative was correct about rate standardization, residents there will eventually see a $3 a month rate hike for DVR service.

Rochester: Effective October 15th, DVR service will increase $2 a month from $10.95 to $12.95, an 18 percent increase [Update 9/20 — Many areas are being notified on their bill it is $1, not $2 — see update below.]  Each additional DVR box will cost $11.95.  Originally, we were told the increase was a dollar a month.  Not so fast, says our reader Tim who tipped us off to the story.  He lives in a Rochester suburb and his September bill contained a notification the rate was increasing two dollars a month.  The bill was correct and the original representative we spoke with was wrong.

Syracuse: Residents of the Salt City are in the same boat as residents in Rochester.  On October 15th, DVR service there also increases by two dollars a month, from $10.95 to $12.95.  Apparently Verizon FiOS has not made as much of a competitive difference in Syracuse, probably because it is not widely available yet.

In February, Time Warner broadly increased rates on its cable and broadband services.  In September, rates for broadband-only customers also increased.  The latest increase will not affect customers on promotions or bundled packages that include a DVR.

Our reader Tim says he’s not going to stand for it.

“Time to trim another item off of my TWC bill,” he writes. “I already quit HBO, I guess the DVR is next.”

The Time Warner Cable representative we spoke with only learned about the rate increase “an hour ago.”  She told us, “We’re probably going to get some calls on this.”

Ironically, Time Warner Cable is giving away a year of free DVR service to customers in the northeast using its recently introduced “My Services” control panel and online shopping section.

Our advice to those who don’t want to pay the increase:

• Complain to Time Warner and ask for a credit for the difference in price for a year.
• Turn in your DVR box, wait a week and then take advantage of their “online only” offer, if available in your area, for a year’s free service. (Registration for MyServices required.)
• Cancel something else in your package that will make up the difference.  Are you still watching HBO or Showtime?  Many TWC systems charge $13.95 for HBO and $10.95 for Cinemax and other pay channels.  That’s up to $167 a year per premium network!  Many HD subscribers might still be paying for a Digital HD Tier that used to include HDNet and HDNet Movies.  Now you’re paying an extra $4.95 a month for MGM HD, Universal HD, Smithsonian, and the cattle auctions on RFD-TV.  Not watching those?  Drop that tier and save $60 a year.  If you still want commercial free movies, consider Encore’s Movie Pack instead of HBO, et al.  Encore only charges $5 a month for seven theme-based movie channels.

[Updated 3:30pm ET — We have been on the phone with Time Warner Cable reps in Buffalo, Rochester, and Syracuse a total of eight times to re-verify some of the information for this story after the first representative we spoke with gave us conflicting information.  Subsequent contacts also gave us a range of responses from “I’ve worked here four years and am telling you there is no price increase” to “Unfortunately we are increasing the price and I don’t know why.”  We’ve updated and corrected the details below.]

[Update #2: 9:15am ET 9/20 — I pulled up a copy of my October statement and discovered a dollar increase in the town of Brighton for DVR service, which triggered another call to TWC this morning to learn why the information I was given on the 9th was different from what the bill showed.

The latest explanation is that different areas are subject to paying different amounts.  Apparently.

For folks in the city of Rochester and adjacent suburbs, “less is more,” so the dollar increase is slightly better than the two dollar increase.  I just wish representatives were better trained to answer simple questions accurately.]

So much for “getting tough.”

Time Warner Cable averted a blackout of several Disney-owned cable and broadcast outlets Thursday when it cut a deal with Disney to keep programming on Time Warner Cable.  As part of the agreement, the nation’s second largest cable operator agreed to add several Disney-owned networks subscribers will ultimate pay higher cable bills to receive in 2011.

The cable trade and business press are applauding the agreement.  The Wall Street Journal said the two sides surprised the TV industry by avoiding the level of public acrimony common with similar disputes in the past, avoided nasty publicity campaigns, and reached an agreement that avoided a standoff.

“We are pleased to have reached an agreement without any interruption in service,” said Time Warner Cable Chief Executive Glenn Britt.

Subscribers may also appreciate they aren’t facing the loss of programming they would still pay for as part of their monthly cable bill.

Disney wins new fees for carriage of ABC shows approaching 50 cents a month per subscriber, according to sources close to the negotiations.  The programmer also will receive substantial increases in payments from the cable company for ABC Family and The Disney Channel, along with the right to repurpose that programming online through services like Hulu and ABC.com.

Time Warner Cable has argued that programming costs make up the bulk of rate increases, yet its newest agreement with Disney compels the cable company to add additional networks and services cable subscribers may have no interest in receiving, much less paying to receive.

Among them are:

• Disney, Jr., a new 24-hour cable network targeting preschoolers which will replace ABC SoapNet in early 2012;
• ESPN Goal Line, a new network showing reruns of college football games;
• ESPN Buzzer Beater, still another new network rerunning college basketball games is also under development and will be added to Time Warner Cable’s lineup when launched.
• ESPN 3D, which will show-off sporting events on newly available 3D televisions.
• The addition of ESPN Deportes HD to Time Warner Cable’s larger footprint.
• Availability of ESPN Radio feeds in New York, Los Angeles and Dallas to Time Warner Cable’s video platform.
• A Time Warner Cable/ESPN Deportes co-branded, Spanish language sports website in Los Angeles.

One of the most contentious issues in the debate had been online video programming.  Time Warner Cable agreed to add ESPN3, an online network, for “authenticated” cable subscribers who have a package that includes ESPN.  That’s a departure from Disney’s usual demand that operators pay a fee for every broadband customer they have in return for access. That means Time Warner Cable customers who subscribe to a TV package will soon be able to access ESPN, ESPN2, ESPN3, and ESPNU even if they don’t subscribe to Road Runner.  But it also means Road Runner customers who don’t take cable-TV will not have access.

Finally, Time Warner Cable won the right to include on-demand access to popular ABC and Disney Channel shows.

Ultimately cable customers will pay a price for this agreement, facing even higher cable rate increases in 2011 to cover the costs for additional programming.  Many critics contend Time Warner Cable’s “Roll Over or Get Tough” campaign is more public relations than substance.  The company can claim they are fighting for subscribers when an intransigent programmer forces the cable company to take networks off the air, but in reality most of the time agreements are reached that look to many more like “rolling over” than “getting tough,” especially when the company simply passes along the added costs to cable customers.

[flv]http://www.phillipdampier.com/video/CNBC Disney Time Warner Agreement 9-2-10.flv[/flv]

CNBC covered the announced agreement between Time Warner Cable and Disney, reporting it was Disney’s largest carriage deal ever.  (2 minutes)

Time Warner Cable subscribers are at reduced risk of losing access to Disney owned channels like ESPN, Disney and local television stations in several major cities now that the two companies are close to an agreement.  But, as usual, regardless of whether Time Warner Cable whittles down Disney’s demands or Disney secures dramatically higher pricing for its cable channels, one thing is certain: Time Warner Cable subscribers will ultimately lose, facing higher cable bills in 2011.

AT&T U-verse customers: your nail-biting has just begun, as AT&T sends home postcards announcing the potential loss of the Hallmark Channel and its companion the Hallmark Movie Channel.  AT&T’s contract expired at 12:01 AM this morning, but Hallmark said it was willing to keep the signals running on U-verse while negotiations continued.

Ultimately, it’s all about who gets a bigger piece of your money.  Be it local broadcasters, cable networks, or programming conglomerates who can darken a dozen channels on your basic cable lineup, all say the cable industry is enriching itself on subscriber fees and all these networks are asking for is a bigger share of the pie.  The cable industry says cable programming fees are the most significant part of rate increases, as the industry is unwilling to absorb most of the programming rate hikes.  Cable wants to continue its healthy returns, so programming rate hikes come out of your pocket, not theirs.

Sometimes the amounts involved come down to pocket change, other times several dollars a month can be involved.

For example, Disney-owned ESPN is typically the most expensive basic cable channels in the lineup.

SNL Kagan, a cable research firm, estimates Disney charges Time Warner $4.08 a month per subscriber to carry ESPN.  The costs are high because ESPN competes with major broadcast networks to secure increasingly expensive television rights to major sporting events.  ESPN’s early days were filled with coverage of volleyball, log-rolling, and billiard sports.  The rights to air these events were affordable.  But with the benefit of increased programming fees, the cable network successfully bid for professional football and other popular sports.  The more money ESPN charges, the more money they can use in bidding wars to secure television rights.

With most cable networks charging closer to 20 cents a month per subscriber, what ESPN charges (and demands) for contract renewals can, all by itself, trigger rate increases.

AT&T and Hallmark are currently arguing over an increase in subscriber fees that currently run around just four cents per month per subscriber.  AT&T argues it doesn’t want to pay the percentage increase Hallmark is demanding, even if it amounts to pennies per month.

ESPN’s rate increase demands often exceed 50 cents, if not higher.

This year a new issue enters the debate — online video programming fees. Disney wants to generate income from a whole new tier of sports programming – that streamed online to Time Warner Cable customers.  The sticking point in Time Warner Cable and Disney’s negotiations seems to hinge on the cable company ponying up for ESPN3, an online network.  The concept of cable operators paying programming fees for online content is highly controversial, especially when broadband customers could face ever-increasing broadband bills blamed on the same “increased programming costs” that have taken basic cable packages from under $20 a month in the 1980s to over $60 a month today.

ESPN3 reportedly wants 10 cents a month from every Time Warner Cable broadband customer, regardless if they have the slightest interest in watching ESPN3.  Some in the cable industry fear once this precedent is set, other cable programmers with online shows could start demanding payments for those as well.

While Time Warner Cable continues to resist, other major cable companies like Comcast Corp., Cox Communications Inc., Charter Communications and phone companies AT&T, Frontier, and Verizon Communications have ESPN3.com agreements with Disney.  Nearly all have also boosted their broadband prices for consumers as well.

Despite assurances from Time Warner Cable’s Roll Over or Get Tough website, the cable industry typically caves in on programming fee increases, often agreeing to split the difference.  Since they simply pass those increases along to consumers, it doesn’t impact their bottom line until customers start canceling cable service.

Subscribers on Time Warner Cable’s blog keep coming up with an innovative idea to solve these problems — allow subscribers to pick and choose (and pay for) only the channels they want to receive.  That novel a-la-carte concept invokes fear in the cable industry like garlic repels vampires.

In the end, even if Disney and Time Warner Cable can’t reach an agreement, should screens darken September 2nd, watch in amazement as a deal is achieved hours after the disruption in programming begins.  Then, just a few months later, the accompanying rate hike will surely follow.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WESH Orlando FL Will Bright House Customers Lose ESPN 8-26-10.flv[/flv]

WESH-TV in Orlando notes Bright House cable customers are also potentially affected because Time Warner Cable negotiates on behalf of that cable company, which has a major presence in central Florida.  (1 minute)