Monday, March 3, 2014

Time-Warner Raising Rates Next Month: Now Is The Time to Resist Them

Time-Warner HQ in NYC


Isn't it time to stand up and fight against the current #2 cable provider in the country, second only to Comcast, who BTW: has offered to pay $45 billion to buy TWC, and thus become the planet's #1 cable provider. I am basing this post on my Time-Warner cable bill just received today. Needless to say, I am outraged. What follows explains why I am outraged – are you?

First this short history of TWC: Time Warner Cable Inc. (TWC), formerly Warner Cable Communications and sometimes colloquially referred to as simply Time Warner, is an American cable telecommunications company that operates in 29 states and has 31 operating divisions.

It is the second largest cable company in the U.S. behind only Comcast, which as I said, has agreed to acquire TWC pending regulatory approval. TWC corporate headquarters are located in New York City. It has other corporate offices in Stamford, CTCharlotte, NC; and Herndon, VA. TWC serves customers in 29 states.

In February 2014, as noted, Comcast agreed to acquire 100% of Time Warner Cable for $45.2 billion. The deal still requires regulatory approval. In the meantime, TWC remains an independent company operation.

So, what's the bottom line here? Wait that is the bottom line: Cha-ching or Ker-ching (take your pick) it’s all about more huge profits and more tax breaks. Or in some cases, more outright tax avoidance and all the subsidies along the way it can handle. Some are based on stories like this:

WASHINGTON:  A five-year study of 288 highly profitable Fortune 500 companies found that 111 of them paid no federal corporate income tax in at least one of the last five years while one-third paid a U.S. tax rate less than 10 percent over the same period — including 26 that paid nothing at all — Citizens for Tax Justice and the Institute on Taxation and Economic Policy have reported about.  Both Progress Energy and Time Warner Cable are among companies featured in the report that are headquartered in North Carolina

That report (CTJ) found that several North Carolina-based companies have paid no income tax, had tax rates under 3 percent, or are sheltering large portions of their profits from taxation in the U.S.

Duke Energy (now owned by Time-Warner), and which earned $9 billion in profits over the last five years, not only paid no income tax but also received a rebate of $300 million from the federal government. It is common for utility companies to receive a large federal rebate back from the federal government, despite seeing 10-figure profits, thanks to the deduction for accelerated depreciation, which allows firms to deduct from their taxes the cost of wear and tear on their physical plant at an accelerated rate.

So, what’s in your wallet after all this kicks in? I suspect your wallet will look a lot like mine: fewer dollars for the same TWC service. And, that service they now say they are expanding and thus need the new rate hikes to help pay for the new equipment to provide that new service (at new rate packages that is). What a gimmick.

New equipment and for better service and improvements? Give me a break. I have not changed one element of my plan and don’t intend to. In fact I will be seeking ways to cut the ties with TWC unless they back off this insane idea and return to normal rates and service that I signed up for and not anything new – that choice will and should be mine; not theirs. Do you agree?

I wish there can be an anti-TWC national movement to do just that: get them to back off new rate hikes. 

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