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Cable Companies' $46+ Billion Robbery -- Subscribers Have Been Ripped off for $5 a Month Since 2000

The cable companies are diverting money that is intended to improve infrastructure, creating a perpetual cash machine for greedy execs.

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Since the Social Contract went into effect, numerous state and local legal challenges have been raised about its imposition. For example, in 2000, Massachusetts’ Division of Cable Television conducted a hearing to determine whether Time Warner propose rate structures for the communities of Athol, Orange, Dalton, Pittsfield and Richmond. It determined that Time Warner did not meet the criteria established by the FCC under the provisions of the social contract, and denied its request. In 2009, Hawaii’s Dept. of Commerce, Cable Television Division determined that Time Warner had “opted out of certain rate regulation provisions under the 'Social Contract'."

Further clarification was revealed in a 2009 class action suit against Time Warner brought by Patricia Crumley in Minnesota. She charged Time Warner overcharged or double billed its customers in Minneapolis for network upgrades that it made to its cable systems. According to the suit, Time Warner had agreed to commit $4 billion for upgrades and “the Social Contract allowed Time Warner to charge its customers a surcharge of up to $180 each over a five-year period between 1996 and 2000 to cover the cost of the upgrade.” In addition, the suit contended that the company was also collecting for the same upgrades through the franchise agreement, thus double billing the customer. What happened? “The district court dismissed the suit under Federal Rule of Civil Procedure, concluding that the claims were barred by the filed rate doctrine.” So much for determining whether Time Warner engaged in double billing. The unasked, and unanswered, question is whether other cable companies throughout the country engaged in such double billing over the last 15 years.

Since the social con came into effect, no thorough analysis of monies raised by cable companies appears to have taken place or an accounting as to how the monies have been spent. The commitments made by Comcast in 1997 to provide free online service to schools and libraries is representative of the commitments made by Time Warner and other cable operators for the Social Contract. Have the operators fulfilled these commitments? It's time we found out, especially as Comcast attempts to acquire NBC-Universal.

David Rosen is author of Off-Hollywood: The Making & Marketing of Independent Films, and a regular contributor to CounterPunch, Z-magazine and other publications. He can be reached at drosen@ix.netcom.com. Bruce Kushnick is a telecommunications industry analyst who serves as the broadband and telecommunications expert for the Nieman Watchdog. He can be reached at bruce@newnetworks.com.