Time Warner Cable has lost between 10-15 percent of their analog cable television customers over the past year, according to Time Warner Cable president and chief operating officer Rob Marcus.

Speaking at this morning’s Goldman Sachs Communacopia Conference, Marcus noted the economic downturn has continued to cost the cable operator “single play” subscribers. Marcus noted that roughly 60 percent of the cable company’s customers are now on discounted or retention plans, and the company has no plans to reduce aggressive retention offers and promotions in the immediate future. Time Warner Cable will also exercise caution when customer promotions expire, an allusion to the company’s practice of gradually resetting rates to retail prices over an extended period of time to avoid antagonizing customers into switching providers.

Marcus acknowledged broadband is now a key service for Time Warner Cable, one that the company will continue to exploit to drive earnings. Some investors have complained Time Warner has only managed an increase of 2-3 percent in Average Revenue Per User (ARPU) for broadband, a key metric for Wall Street. Marcus was asked why Time Warner, with its superior market share over telephone companies, was not “exercising the price lever a little bit more” in a marketplace lacking serious competition.

Marcus

“I think it is fair to say that as the utility of the [broadband] product increases in customers’ minds, their willingness to pay for it (assuming they are able) goes up, so I think it stands to reason that we can continue to increase rates on high speed data,” Marcus said.

But even more important to Time Warner Cable is its differentiated broadband speed tiers, which the company is refining to pick up additional revenue and price-resistant customers. Broadband usage caps will be a part of that equation.

Marcus confirmed that Time Warner Cable will provide unlimited broadband packages to its premium tier customers, but will introduce usage-limited service on its budget tiers. Currently, the company only imposes a usage cap of 5GB on its Internet Essentials package, which offers a $5 discount off regular prices. But Marcus seemed to acknowledge that the company plans to experiment further with additional limits.

“We are going to deliver very fast speeds, unlimited consumption, and now mobile capability via our Wi-Fi network to those customers who demand it and are willing to pay premium prices for those tiers of service,” Marcus said. “At the other end of the spectrum we are going to have budget products as we do today that offer lower speeds, more limited consumption like our Internet Essentials product, and those probably won’t have access to our Wi-Fi hotspots. We think that is the best way to drive revenue and profitability.”

Marcus also told investors the company was working on the next generation of the company’s electronic program guide, which he said will be cloud-based. Time Warner Cable continues to signal it is willing to work with third party set top box manufacturers to let customers dump traditional set top boxes, but only so long as Time Warner Cable gets the credit in the minds of customers. The company is also working on rolling out video-on-demand for its online video apps.

CNN faces another challenge to its declining brand as Clear Channel Outdoor Holdings prepares to launch a competing network, viewable only in airports.

Since 1992, CNN has dominated airport televisions with its CNN Airport Network, a live channel showing a custom-programmed feed of CNN that assures it will never televise graphic video coverage of commercial air accidents or incidents to its viewers.

CNN makes its money selling advertising opportunities on the channel, which it claims is seen by nearly 248 million air passengers yearly in more than 40 airports for an average of 47 minutes each.

But much like CNN’s declining ratings, airport travelers have increasingly tuned out the channel, preferring to spend their waiting time with their own mobile devices. As the times have changed, Clear Channel has proposed that airport viewing change with it.

The media conglomerate announced this week it is unveiling a new TV service for airports that will air programming from major television networks and cable channels. With more than 100 content deals signed thus far, ClearVision intends to give CNN a run for advertiser money.

Toby Sturek, Clear Channel’s head of airports, told Reuters the company is in discussions with about 20 mostly medium-sized airports to host the new service. ClearVision has already signed Raleigh-Durham International, where CNN Airport Network is not seen. ClearVision will launch in that North Carolina airport this November.

Sturek said airport owners want a variety of programming to show waiting passengers, and CNN no longer cuts it with advertisers, which he says have shown little interest in supporting CNN’s venture. Sturek says they simply do not see the value of advertising on the airport channel. Still, industry insiders estimate CNN Airport Network earns the Time Warner-owned news channel at least $10 million annually.

ClearVision intends to challenge CNN’s dominance by giving viewers a greater range of programming, and starting next spring, its viewing monitors will also act as Wi-Fi hotspots, letting mobile devices connect and stream the same content for free to enhance a personal viewing experience. Because the service will be available over Wi-Fi, viewers will avoid eating away their monthly data allowance with wireless providers.

Eventually, ClearVision intends to serve up multiple channels of video content. Sturek says that will allow one viewer to watch the latest business news headlines while another watches “America’s Got Talent.”

Time Warner Cable is facing possible prosecution for vandalism over sidewalk graffiti the company used in Redondo Beach, Calif. to advertise its Wi-Fi network — a service the city claims the company has no authorization to provide.

Redondo Beach officials immediately began receiving complaints the morning of July 5 when Time Warner Cable’s blue chalk advertising messages began appearing all over the city’s sidewalks.

City councilman Steve Aspel told the cable operator’s director of government relations that constituents were upset about the large promotional messages.

Time Warner’s Wi-Fi equipment (City of Redondo Beach)

“It really pissed me off and everybody in the neighborhood too,” Aspel told Time Warner’s Steven Sawyer. “Please have your company never do that again.”

Aspel told Sawyer nobody knew the messages were written in chalk, which will likely dissipate in a few days or sooner in any significant rain storm. The thought the cable company might have used blue paint on public sidewalks enraged several local residents.

But city officials were even more concerned about the fact Time Warner Cable has a Wi-Fi service up and running in Redondo Beach, without any permission from city officials to either install or operate it.

Assistant City Manager Marissa Christiansen told the council Time Warner was not allowed to operate any Wi-Fi network inside the city without explicit permission from the council. The city had been negotiating with the cable operator to grant permission to install the necessary Wi-Fi hotspots in the city’s right of way, but the cable company went ahead and installed them anyway, according to city manager Bill Workman.

“When we actually saw the markings on the sidewalk and put two and two together that it had all gone on without all the things we had discussed in those meetings, we, too, were very upset,” Workman said. “Very clearly, this is outside of their state franchise.”

Cable operators also require a building permit to install new equipment on public property.

Sawyer told the city council Time Warner apologized for the sidewalk markings, and the company moved quickly to remove them.

“We’ve done these markings in other cities and have never had an issue,” Sawyer said.

City attorney Mike Webb said there is an active criminal investigation underway to determine if the sidewalk messages are criminal graffiti, and was not in a position to elaborate as to if or when the cable operator would be prosecuted for violating the city’s municipal code.

Discussions about the Wi-Fi service itself are reportedly ongoing.

Time Warner Cable is planning major expansion of its network of Wi-Fi hotspots across southern California and into other service areas nationwide in the coming years.

Wi-Fi access is about to become a lot more ubiquitous if you happen to buy broadband from Comcast, Time Warner Cable, Cablevision, Bright House Networks, or Cox.  All five companies on Monday announced they will open up their free Wi-Fi hotspots to customers of any of these companies nationwide.

The collaborative agreement extends the authentication platforms cable operators use to verify customer accounts when granting access to services like TV Everywhere — the online video streaming services operated by pay television providers. By sharing basic account information, customers traveling outside of their home cable service area can “roam” on free Wi-Fi networks operated by the other providers.

For example, a Cablevision subscriber who lives on Long Island will be able to access Bright House Networks’ Wi-Fi in central Florida or Time Warner Cable’s growing wireless network in Los Angeles.

The cable industry calls it a back door entry into mobile data, and unlike its existing partnership with Clearwire for WiMAX 4G service, Wi-Fi hotspots are available at no additional charge.

“We believe that Wi-Fi is a superior approach to mobile data,” said Kristin Dolan, head of projects at Cablevision. “Cable providers are best positioned to build the highest-capacity national network offering customers fast and reliable Internet connections when away from their home or business broadband service.”

More than 50,000 Wi-Fi hotspots are to be included in the project, all unified under the name “CableWiFi.”

Eventually, the companies hope to unveil automatic log-ins on the network, regardless of where customers access it.

The industry is aggressively expanding Wi-Fi services to give subscribers another reason to stick with their local cable company. Some may require customers to maintain both a cable-TV subscription and broadband to qualify for the service, others will only require a current broadband account. The free add-on may also make subscribers think twice about canceling service if it means losing access.

Comcast, Cablevision, and Time Warner Cable already have a deal in place to share their networks in southwestern Connecticut, New York City, parts of New Jersey and Philadelphia.

Cable operators will target high-traffic areas for Wi-Fi expansion — especially public parks, beaches, malls, eateries, stadiums and convention centers.  Don’t expect cable Wi-Fi to be common in residential neighborhoods, and users will have to temper their expectations. Most provide access suitable for web browsing and e-mail, but often have trouble keeping up with streaming video and other high bandwidth services.

Stop the Cap! has learned Frontier Communications is laying the groundwork to upgrade selected areas of its network to deliver fiber-to-the-neighborhood service to some of its customers, perhaps as early as the last quarter of 2012.  Documents obtained by Stop the Cap! indicate the company is negotiating with AT&T to license U-verse technology to deliver the service.

The documents suggest Frontier’s 2011 negotiations with AT&T to resell mobile phone service to Frontier customers have now expanded to include the development of improved broadband at a cost less likely to antagonize Wall Street and the company’s investors.

Sources familiar with Frontier’s operations tell Stop the Cap! although the company will continue to support Verizon-acquired FiOS fiber-to-the-home networks in Indiana and the Pacific Northwest, Frontier plans to rely on less-expensive alternatives for the rest of its service areas and has no plans to further expand the FiOS branded fiber-to-the-home service.

For the most rural customers, Frontier appears ready to partner with HughesNet to resell a satellite broadband product to customers considered unsuitable for basic DSL service.  Frontier will continue to invest and upgrade its traditional 1-3Mbps ADSL service in rural states like West Virginia, Idaho, Nevada, and South Carolina.  The company is also planning to upgrade selected cities to VDSL — a more advanced form of DSL needed to support a U-verse offering.  Perhaps one major target for such an upgrade is Frontier’s largest service area — Rochester, N.Y., where Time Warner Cable has systematically picked off Frontier’s landline customers for years with offers of faster broadband speeds and better package pricing.

Frontier's headquarters in Rochester, N.Y.

Frontier’s insistence customers don’t need faster broadband speeds, a statement made repeatedly by Frontier Rochester general manager Ann Burr, has cost the company market share, especially for high speed Internet service.  Although Frontier claims to offer speeds up to 10Mbps in Rochester, the company only manages to deliver 3Mbps in some of the city’s nearest suburbs.

An upgrade to U-verse, while not as technologically advanced as fiber to the home service, would help Frontier defend its position in more urban markets, especially as cable companies upgrade their own infrastructure to market faster broadband speeds.

AT&T U-verse sells broadband at speeds of 3, 6, 12, 18, and 24Mbps.  Time Warner Cable, Frontier’s largest competitor in upstate New York, sells speeds of 3, 10, 20, 30, and 50Mbps.

Frontier Communications has been preoccupied integrating its newest customers, acquired from Verizon Communications in 2009, with their existing IT and operations systems.  The company recently touted it completed transitioning former Verizon operations, financing, and human resources with its own information technology network nine months ahead of schedule.

Frontier has been reorganizing some of its internal departments in preparation to launch several aggressive initiatives in 2012, especially in its efforts to roll-0ut more competitive broadband — considered a landline lifesaver —  in areas where the company has lost a lot of business to its cable competitors.  The company also intends to spend tens of millions upgrading its regional and national broadband infrastructure and continue extending DSL service to presently unserved rural areas.

Another planned improvement is an overhaul of Frontier’s website, which has brought complaints from customers for delivering inaccurate information, making online bill payment cumbersome, and being difficult to navigate.

Documents obtained by Stop the Cap! also reveal the company has made progress on its plans to pitch AT&T cell phone service to Frontier customers.

Frontier signed a resale agreement with AT&T last fall and is on track to begin limited trial offers of AT&T cell phones, smartphones, and tablets — with full access to AT&T’s network of 29,000 Wi-Fi hotspots during 2012 with a more widespread rollout in 2013.  Frontier plans to offer customers the option of a single bill for Frontier and AT&T services.

Frontier’s Karen Miller told Stop the Cap! the company had no comment about today’s story.