Britt

While your cable bill reached an all-time high this year, Time Warner Cable’s retired CEO Glenn Britt dumped another 30,000 shares of his stock in the cable company on Monday, raking in another $4,208,400.

Ordinary shareholders have to pay $140.28 a share for Time Warner Cable stock at this week’s prices. But Britt was able to acquire many of his shares at a substantial discount last fall – paying the executive-only discount “strike price” of just $23.48 a share.

It seems no matter how many shares Britt sells, he never seems to deplete his stock in Time Warner Cable. In January, Britt had 158,947 shares remaining in Time Warner Cable. But after selling 30,000 shares in February, his number of shares remaining actually increased to 177,542 shares. Despite this week’s sale, Britt still owns the same amount of stock — 177,542 shares — the same as before, worth $24.9 million at current prices.

Britt has sold about $4.3 million in Time Warner Cable stock just about every month since last fall, earning around $4.2-4.3 million a month.

Net Neutrality = Socialism?

The four leading candidates in North Carolina’s Republican U.S. Senate primary, including one heavily backed by the state’s largest telecom companies, all said Monday they oppose Net Neutrality and would not allow the federal government to intervene in the business interests of cable and phone companies.

Dr. Greg Brannon, Heather Grant, Rev. Mark Harris, and current state House Speaker Thom Tillis all agreed during an hour-long televised debate that the government had no business telling companies like Time Warner Cable and AT&T how to manage Internet traffic.

Thom Tillis, who became speaker of the house in 2011, is heavily backed with financial contributions from AT&T, Time Warner Cable, and Verizon. While speaker, Tillis supported the Time Warner Cable-backed bill to ban community-owned broadband networks in the state and helped shepherd the legislation through the General Assembly.

Tillis told viewers that North Carolina customers already have a choice of Internet Service Providers so there is no reason for the government to interfere.

“The last thing we need is the government to tell cable providers and Internet providers how fast or slow the content needs to be,” Tillis said.

Tillis was honored in 2011 as ALEC’s “Legislator of the Year” and received an undisclosed cash reward.

Last year, Tillis was accused of having a secret business relationship with Time Warner Cable by Rep. Robert Brawley (R-Iredell), who resigned his chairmanship of the Finance Committee over the matter.

Brawley’s district is served in part by MI-Connection, a community-owned cable company that was prevented from expanding by a state law restricting municipal broadband.

“You slamming my office door shut, standing in front of me and stating that you have a business relationship with Time Warner,” Brawley wrote in his resignation letter. “MI-Connection is being operated just as any other free enterprise system and should be allowed to do so without the restrictions placed on them by the proponents of Time Warner.”

Dr. Brannon said without the Constitution giving direct authority for the federal government to regulate broadband, it cannot legally get involved. There was no broadband service to regulate when the Constitution was signed on September 17, 1787.

“The worst thing in the world we could do is for the federal government to put in barriers to make things fair,” Brannon said. Any attempt to impose fairness on Internet traffic would be a clear-cut case of socialism, Brannon added.

Grant and Harris both agreed with the others.

The four candidates are vying for the Senate seat held by Democrat Kay Hagan. She holds a different view.

“I support Net Neutrality because it speaks to the values central to our American Democracy – free speech and equal opportunity,” Hagan said in 2008. “With an open Internet, we can ensure communities throughout the state of North Carolina and the nation receive equal access to the Internet as well as the information contained there, to help ensure our country can compete on a global level.”

[flv]http://www.phillipdampier.com/video/UNC-TV NC GOP Senate Debate 2014 – Net Neutrality – Free Market or Socialism 4-30-14.flv[/flv]

Watch occasionally incoherent remarks from four Republican candidates debating the Internet and Net Neutrality as part of the North Carolina Senate primary. (4:31)

If you are a Time Warner Cable customer, one of four things will happen by this time next year:

1. You will still be a Time Warner Cable customer if regulators shoot down its merger with Comcast;
2. You will be a Comcast customer;
3. You will be a Charter Communications customer;
4. You will be served by a brand new cable company temporarily dubbed “SpinCo,” owned partly by Comcast but managed by Charter.

Comcast and Charter this week reached an agreement on how to handle the 3.9 million Time Warner Cable customers Comcast intends to spin-off to keep its total subscriber numbers at a level they believe will appease regulators. The transaction will affect Time Warner customers in the midwest the most, particularly former Insight Cable customers.

Charter Communications will say goodbye to customers in California, New England, northern Georgia, Texas, North Carolina, Oregon, Washington, Virginia and parts of Tennessee. Most of those customers will now be served by Comcast. Among the regions affected: New York, Boston, Dallas/Ft. Worth, Northern/Southern California, and Atlanta.

[flv]http://www.phillipdampier.com/video/WISN Milwaukee First Comcast Now Charter 4-28-14.flv[/flv]

WISN in Milwaukee reports Time Warner Cable customers there were just getting used to the idea of Comcast and they are not happy service will be provided by Charter Communications instead. (2:03)

Comcast and Time Warner Cable will in turn give up many of its cable systems in the midwest, either transferring them to Charter or the “SpinCo” venture managed by Charter.

Charter will take over directly in Ohio, Kentucky, Wisconsin, Indiana and Alabama.

If you are a Comcast or Time Warner Cable customer next to a current Charter service area in Michigan, Minnesota, Indiana, Alabama, Eastern Tennessee, Kentucky or Wisconsin, chances are you will end up a subscriber of the “SpinCo” venture. That will prove a distinction without much difference to customers, because Charter will manage the day-to-day operations of the new cable company and has the right to eventually acquire it outright.

With the exception of a small handful of systems in western sections of Pennsylvania, Virginia and North Carolina, all of New England, New York, and the mid-Atlantic region will be serviced by Comcast.

With the exception of Cablevision in eastern New York, Comcast will be the dominant cable provider across New York State from Manhattan to Buffalo.

The agreement also includes a commitment by Charter to drop its opposition to the Time Warner Cable/Comcast merger.

“Today’s announcement from Comcast would, in essence, lead to the creation of a three-company cable cartel. Masquerading as subscriber divestitures, the agreement with Charter brings together the three largest cable providers, who account for 38% of cable subscribers and 45% of Internet subscribers,” the Writers Guild of America West said in a statement. “The decision of these three powerful companies to divide markets and share ownership of subscribers through a new publicly traded corporation is unprecedented and adds to the mounting evidence against the Comcast-Time Warner Cable merger.”

The transaction is expected to be tax-free and will happen in three stages:

• Asset Sale: Charter acquires systems serving around 1.4 million former TWC customers for an estimated $7.3 billion in cash;
• Asset Transfer: Charter and Comcast transfer assets in a tax-free exchange involving around 1.6 million former TWC customers and about 1.6 million Charter customers;
• Asset Spin-off: Comcast will spin-off a new entity (“SpinCo”) composed of cable systems serving around 2.5 million Comcast customers to its shareholders, with Charter acquiring close to 33% of the equity of SpinCo in exchange for 13% of the equity of a new holding company of Charter.

Charter Communications would become the nation’s second largest cable operator if the deal is approved, owning outright systems with an estimated 5.7 million video customers and managing an extra 2.5 million SpinCo customers, together totaling more than 8.2 million video customers.

Comcast wanted the deal done quickly so it could begin lobbying Washington and other regulators with detailed divestiture plans to keep Comcast’s total subscribers to less than 30% of the national cable market.

Although Comcast will face tough competition in Time Warner Cable territories also served by Verizon FiOS, Charter and its managed SpinCo will compete primarily with AT&T U-verse. Just 1% of Charter’s territory is expected to see competition from Verizon’s fiber network.

[flv]http://www.phillipdampier.com/video/Bloomberg Divesting Comcast Subs 4-28-14.flv[/flv]

Comcast agreed to divest 3.9 million customers to Charter Communications, potentially helping to ease the approval process for its merger with Time Warner Cable. Media Morph Chairman and Chief Strategist Shahid Khan and Bloomberg’s Paul Sweeney speaks on Bloomberg Television’s “In The Loop.” (6:23)

A 2011 state law largely written by Time Warner Cable will likely keep Charlotte, N.C. waiting for fiber broadband that nearby Salisbury has had since 2010.

North Carolina is dominated by Time Warner Cable, AT&T and CenturyLink. Google and AT&T recently expressed interest in bringing their fiber networks to the home in several cities in the state, but neither have put a shovel in the ground.

Fibrant, a community owned broadband provider in Salisbury, northeast of Charlotte, not only laid 250 miles of fiber optics, it has been open for business since November 2010. It was just in time for the publicly owned venture, joining a growing number of community providers like Wilson’s Greenlight and Mooresville, Davidson and Cornelius’ MI-Connection. Time Warner Cable’s lobbyists spent several years pushing for legislation restricting the development of these new competitors and when Republicans took control of the General Assembly in 2011, they finally succeeded. Today, launching or expanding community broadband networks in North Carolina has been made nearly impossible by the law, modeled after a bill developed by the American Legislative Exchange Council (ALEC).

With fiber fever gripping the state, Fibrant has gotten a lot of attention from Charlotte media because it provides the type of service other providers are only talking about. Fibrant offers residents cable television, phone, and broadband and competes directly with Time Warner Cable and AT&T. Although not the cheapest option in town, Fibrant is certainly the fastest and local residents are gradually taking their business to the community alternative.

Charlotte, N.C. is surrounded by community providers like Fibrant in Salisbury and MI-Connection in the Mooresville area.

“A lot faster Internet speeds, a lot clearer phone calls,” said Sidewalk Deli owner Rick Anderson-McCombs, who switched to Fibrant after 15 years with another provider. His mother, Anganetta Dover told WSOC-TV, “I think we save about $30 to $40 a month with Fibrant and the advantages of having the speed is so much better.”

Julianne Goodman cut cable’s cord, dropping Time Warner Cable TV service in favor of Netflix. To support her online streaming habit, she switched to Fibrant, which offers faster Internet speeds than the cable company.

Commercial customers are also switching, predominately away from AT&T in favor of Fibrant.

“Businesses love us because we don’t restrict them on uploads,” one Fibrant worker told WCNC-TV. “So when they want to send files, it’s practically instantaneous.”

Fibrant offers synchronous broadband speeds, which mean the download and upload speeds are the same. Cable broadband technology always favors download speeds over upload, and Time Warner Cable’s fastest upstream speed remains stuck at 5Mbps in North Carolina.

AT&T offers a mix of DSL and U-verse fiber to the neighborhood service in North Carolina. Maximum download speed for most customers is around 24Mbps. AT&T has made a vague commitment to increase those speeds, but customers report difficulty qualifying for upgrades.

Time Warner Cable is a big player in the largest city in North Carolina, evident as soon as you spot the Time Warner Cable Arena on East Trade Street in downtown Charlotte.

Taxpayer dollars are also funneled to the cable company.

Time Warner Cable’s $82 million data center won the company a $2.9 million Job Development Investment Grant. Charlotte’s News & Observer noted the nation’s second largest cable company also received $3 million in state incentives.

When communities like Salisbury approached providers about improving broadband speeds, they were shown the door.

[flv]http://www.phillipdampier.com/video/WCNC Charlotte Fibrant Already Provides Fiber 3-5-14.mp4[/flv]

WCNC-TV reports that with Google expressing an interest in providing fiber service in Charlotte, Salisbury’s Fibrant has been offering service since 2010. (2:57)

“Our citizens asked for high-speed Internet,” says Doug Paris, Salisbury’s city manager. “We met with the incumbent providers [like Time Warner and AT&T, and that did not fit within their business plans.”

Salisbury and Wilson, among others, elected to build their own networks. The decision to enter the broadband business came under immediate attack from incumbent providers and a range of conservative astroturf and sock puppet political groups often secretly funded by the phone and cable companies.

Rep. Avila, a ban proponent, meets with Marc Trathen, Time Warner Cable’s top lobbyist (right) (Photo: Bob Sepe)

Critics of Fibrant launched an attack website against the venture (it stopped updating in March, 2012), suggesting the fiber venture would bankrupt the city. One brochure even calls Stop the Cap! part of a high-priced consultant cabal of “Judas goats for big fiber” (for the record, Stop the Cap! was not/is not paid a penny to advocate for Fibrant or any other provider).

Opponents also characterize Fibrant as communism in action and have distributed editorial cartoons depicting Fibrant service technicians in Soviet military uniforms guarding Salisbury’s broadband gulag.

In January of this year, city officials were able to report positive news. Fibrant has begun to turn a profit after generating $2,223,678 in the revenue from July through December, 2013. Fibrant lost $4.1 million during the previous fiscal year. That is an improvement over earlier years when the venture borrowed more than $7 million from the city’s water and sewer capital reserve fund, repaying the loans at 1 percent interest. The city believes the $33 million broadband network will break even this year — just four years after launching.

Fibrant is certainly no Time Warner Cable or AT&T, having fewer than 3,000 customers in the Salisbury city limits. But it does have a market share of 21 percent, comparable to what AT&T U-verse has achieved in many of its markets.

Fibrant also has the highest average revenue per customer among broadband providers in the city — $129 a month vs. $121 for Time Warner Cable. Customers spend more for the faster speeds Fibrant offers.

Some residents wonder if Fibrant will be successful if or when AT&T and Google begin offering fiber service. Both companies have made a splash in Charlotte’s newspapers and television news about their fiber plans, which exist only on paper in the form of press releases. Neither provider has targeted Salisbury for upgrades and nobody can predict whether either will ultimately bring fiber service to the city of Charlotte.

Those clamoring for fiber broadband speeds under the state’s anti-community broadband law will have to move to one of a handful of grandfathered communities in North Carolina where forward-thinking leaders actually built the fiber networks private companies are still only talking about.

[flv]http://www.phillipdampier.com/video/WSOC Charlotte Charlotte could gain from fiber optic network already in place 4-22-14.flv[/flv]

WSOC-TV in Charlotte reports Salisbury customers are happy with Fibrant service and the competition it provides AT&T and Time Warner Cable. (2:12)

The head of the country’s largest Spanish-language television network Univision said on Monday that Comcast’s proposed purchase of Time Warner Cable could be “bad for Hispanic audiences.”

Univision President Randy Falco told Wall Street analysts that the combined cable company would serve 91 percent of all Latino households and be the dominant distributor of multichannel programming in 19 of the 20 largest Spanish-language television markets.

“We are hoping at the very least there is that scrutiny and potentially much tougher restrictions added to the existing [Comcast-NBCUniversal] consent decree that will protect Comcast competitors such as Univision who are serving minority communities in particular,” said Falco.

Although Falco did not directly oppose the merger, he did express concern that Comcast would not treat independent Spanish language networks like Univision as well as NBCUniversal-owned Telemundo network. Falco noted Comcast has refused to carry Univision’s sports network. Time Warner Cable does.

“Either Comcast doesn’t understand that soccer is a passion point for Hispanics or they don’t support competitors who have competing services,” Falco said. “My fear is that the latter is the case and this type of anti-competitive conduct would continue.”

Falco is among the first media executives to publicly criticize the merger. Critics of the deal say programmers are keeping quiet fearing future retaliation from Comcast.