Speaking at an investor conference in San Francisco this week, Time Warner Cable chief operating officer Landel Hobbs told attendees that the carrier raises broadband prices not because they have to -- but because they can. "Consumers like it so much that we have the ability to increase pricing around high-speed data," noted Hobbs. You might recall Mr. Hobbs from the Time Warner Cable metered billing fiasco, when he tried to convince consumers that they wanted low caps and high per gigabyte overages. Not only did Hobbs think low caps and $2 per GB overages were "only fair," he tried to argue that they'd "actually encourage more use of broadband overall." Consumers didn't agree.

"Consumers like it so much that we have the ability to increase pricing around high-speed data," -Time Warner Cable COO Landel Hobbs

So what allows Mr. Hobbs to ignore reality, his customers, and raise prices without worrying about consumers running to other carriers or an overall negative consumer brand reputation? Competition, or more accurately, a lack thereof.

Limited competition means Time Warner Cable also hasn't had to rush toward DOCSIS 3.0 upgrades. Comcast, the nation's largest carrier, is quickly approaching 90% DOCSIS 3.0 coverage across its larger footprint. Even smaller, less profitable carriers like Suddenlink and Mediacom have been working at a faster pace than Time Warner Cable. According to recent cable industry data, DOCSIS 3.0 upgrades now read 43% of the nation's 120 million homes served by cable. Time Warner Cable? 2,000 users in select portions of one market.

Verizon FiOS is available in roughly only 10% of Time Warner Cable's overall markets, and Time Warner Cable doesn't have to try very hard to lure subscribers that have grown tired of sluggish DSL and high landline prices. Time Warner Cable's also helped by the fact that Verizon's all but giving up on rural DSL service, either selling or simply ignoring many of these Time Warner Cable markets. In many instances the companies that are buying them take on so much Verizon debt, they can't afford to upgrade.

Penetration of AT&T U-Verse is actually higher in Time Warner Cable markets -- approaching 20%. But AT&T's top broadband speeds max out around 24 Mbps at shorter loop lengths, and AT&T's been struggling to get line-bonded VDSL service working. Both AT&T and Verizon have put their next-gen expansion plans in hibernation mode, so Time Warner Cable has the luxury of time. With expensive last-generation DSL most of their subscribers' only alternative, they also have the luxury of high prices.