Promises, promises.  The one thing you can always count on with mergers and acquisitions: the promise what they’ll bring you tomorrow is better than what you have today, but only if you approve the deal.  The concept of forward momentum from change is very compelling when it comes to technology.  The lesson people have to learn is that not all change is good, and not all promises are always kept.  For New Englanders drawn into the transfer of their telephone service from Verizon to FairPoint Communications, the allure of faster broadband certainly sounded good, with promises made in July 2008 that 75% of Vermont would have access to FairPoint DSL service by the end of that year.

This report, aired on September 30, 2008 on WPTZ Plattsburgh (viewable in Vermont) also displayed a company-made sign promising that 100% of Vermont would have broadband service available from FairPoint by 2010.  But the numbers were already in dispute when another station serving Vermont, WCAX in Burlington, reported that same day that just 80% of customers would have access by that time:

Why the discrepancy?  After all, the visual material on display at the town hall meeting covered by both stations clearly showed a map claiming 100% coverage.

With the benefit of time, the answer turns out to be that promises made by one company official were not always repeated by others.  Indeed, FairPoint has a history of tempering enthusiasm.  Enthusiasm that sometimes originated from the company itself.

Watch in amazement as the numbers drop and the excuses mount.  As the Bennington Banner quoted a FairPoint spokesman in 2008, the numbers and scope of the actual rollout was considerably smaller than the sweeping improvements being promised:

“By 2010, we hope to have at least 80 percent of households in the state with DSL access,” Fastiggi said. “We hope to have every customer in half of our exchanges to have access by 2010 as well.” According to Fastiggi, though, the expansion does not mean that every house in these towns will receive access to the service. “We’re doing certain areas in each town — nothing we’re doing encompasses the entire town,” Fastiggi said. “I don’t want to say we’re expanding bit by bit, but we are moving neighborhood by neighborhood.“

New Englanders, at the time of these announcements, were hopeful, but skeptical whether or not the company would meet its goals.  They were right to be.

As for those wireless connections promised to the most rural areas of the state, the company did sign a contract with Nortel Networks and Airspan Networks to construct a network based on the aging fixed wireless 802.16d standard. Known as “fixed WiMAX,” the technology is largely being abandoned by many providers in favor of the newer mobile WiMAX standard IEEE 802.16e, which has a lot more bells and whistles.  But the technology FairPoint wants to deploy will function for a basic wireless fixed “broadband” service, albeit a comparatively slow one, operating at 1-3Mbps.

So how is the company doing with its DSL “improvements?”  Not so good.  Since these announcements, the company has fallen behind schedule on virtually everything, and was one of the few providers to actually lose broadband DSL customers during the second half of 2008 as many switched to another provider or simply gave up.  They are set to lose MANY more in 2009, for reasons that will become obvious soon enough.

Relax today because the work begins again tomorrow.

Starting this week, we will begin some carefully coordinated pushback against Time Warner Cable’s changes to their Subscriber Agreement, because despite company claims that they’ve not implemented any Cap ‘n Tier system at this time, the writing is on the wall in 1000pt type, readable from space.  No company changes their legalese “just because,” and CEO Glenn Britt’s public statements late last week make it patently obvious which way this road is heading.

Here are the things YOU need to do today so you are prepared to act when we need you:

1. Bookmark this site and check it daily.  A Call to Action is most effective when everyone starts moving on it around the same time.  It’s less helpful to arrive here a week after the fact.  Everytime an article is posted here, our Twitter channel sends out a tweet.  You can follow us on Twitter from the stopthecap channel.  Just insert the text stopthecap in the box on that link and you’ll find us.  I am still working on finding a good e-mail notification system that will let you subscribe and be notified in e-mail when new items are published.
2. You will be asked to write, phone, and e-mail elected officials.  In all such communications, remember the three P’s rule: Be polite. Be persistent.  Be persuasive. I will, when time allows, provide you with sample letters or talking points to use.  Elected officials are wise to pre-formatted, automated contact campaigns, so I do not use them here.  You will always be expected to communicate in your own words, because elected officials will pay attention to those.  They toss out those online petitions, automated pre-written letters, and other communications that look automated.  It will literally take less than five minutes to follow through on most Calls to Action.  If you leave it to someone else, and they leave it to you, nobody picks up the phone or writes the letter.
3. Get educated.  A great deal of information and background material is already here.  You can follow specific company actions, cities, or policies from the menu options along the top of the screen, as well as in the search box.  If you have a question about an article, write it in the comment section.  I try and read and reply to many of them, along with others here.
4. Continue to pass along news tips, suggestions, or other pertinent material through our Contact form.  I try and credit people as often as possible, and some story ideas may appear later on, so don’t be discouraged if yours doesn’t turn up as an article in short order.
5. If you find value in what we do, consider making a contribution.  I am going to begin crediting our contributors (first names by default) here to thank them.  Your contributions pay for server expenses, a post office box, software expenses (this WordPress theme for example), and will also go towards mailing and printing expenses as we start educating elected officials on our issues.  Telecom companies just spent nearly a half million dollars in North Carolina alone to stop municipal broadband there through campaign contributions.  We have to rely on actual facts and a substantially lower budget to fight back!

Back on April 28th, I e-mailed the Mayor of Greensboro, Yvonne Johnson, requesting that the City of Greensboro look at the resolution that Raleigh passed opposing HB1252/S1004 and pass a similar resolution.  I am quite aware of what goes on in my city, but this slipped past me.  At the  May 5th City Council meeting the following transpired:

Assistant City Manager Denise Turner reviewed the resolution of the City of Greensboro opposing SB1004/HB 1252, inaccurately captioned “The Level Playing Field Act” with Council.  Councilmember Perkins moved adoption of the resolution. The motion was seconded by Councilmember Bellamy-Small.

Assistant Manager Turner provided an explanation for the basis of the bill, the incentives of the bill, affects on the City on offering broadband usage throughout the City, the funding utilized, restrictions of the bill and stated that the bill would prevent municipalities from offering and providing broadband services as an incentive to incoming businesses. Assistant Manager Turner provided information as to Economic Stimulus funding for broadband usage and access for a municipality to provide.

The resolution was adopted on the following roll call vote: Ayes: Barber, Bellamy-Small, Groat, Johnson, Matheny, Perkins, Rakestraw, Wade and Wells. Noes: None.

133-09 RESOLUTION OF THE CITY OF GREENSBORO OPPOSING SB 1004/HB 1252, INACCURATELY CAPTIONED “THE LEVEL PLAYING FIELD ACT”

WHEREAS, Senate Bill 1004 and House Bill 1252, both captioned The Level Playing Field Act, have been introduced in the 2009 Session of the General Assembly of North Carolina, and referred to the Senate Commerce Committee and House Committee on Science and Technology, respectively; and

WHEREAS, broadband is communications infrastructure that is as important to the City of Greensboro’s economy as are the interstate and state road systems; and

WHEREAS, high-speed broadband is an indispensable part of competition both between businesses and between global, state and local jurisdictions to attract businesses; and

WHEREAS, high-speed broadband is vital to the future economic development, educational outreach, and community growth necessary to replace lost textile, tobacco, furniture and manufacturing jobs in Greensboro and in North Carolina; and

WHEREAS, cities are organized to provide public services in the local community and their governing boards generally decide what and what level of services the city will provide; and

WHEREAS, the courts in North Carolina have already determined that local governments are authorized by the General Assembly to provide the communications services addressed in the playing field bills; and

WHEREAS, if the City of Greensboro should at any time in the future decide that it needs to provide or encourage the development of broadband communications systems to meet unmet needs, these proposed bills would greatly hinder the City’s ability to provide such needed services, especially advanced high-speed broadband services; and

WHEREAS, the bills do not in actuality require a “level playing field” with regard to provision of broadband and information services but instead seek to saddle cities and towns with several onerous duties, proscriptions and mandates that do not apply to private providers and that cities have never had to meet with respect to other enterprise businesses; and

WHEREAS, there is no justification for treating public communications enterprises differently from other public enterprises that are essential for a sound economy; and

WHEREAS, government dollars were used to fund much of the current corporate telecommunications infrastructure in the United States and to develop the Internet; and

WHEREAS, private providers have made the business decision not to provide and offer broadband to residents and businesses in North Carolina at the high speeds that are readily available in competing locations such as Poland, Canada, South Korea, Japan, and Wilson, North Carolina, despite having received favorable regulatory and tax treatment from government to enable them to make upgrades and investment to broadband; and

WHEREAS, while private broadband providers declare that it is cost prohibitive to provide top quality service in the United States, Japan and other countries (many of which traditionally have been considered to be third world nations) continue to outpace our country in broadband access, cost, and growth in the number of users—Japan has lower cost internet access that is at least 500 times faster than what is defined as high-speed in the United States; and

WHEREAS, the United States Congress has provided funds in the American Recovery and Reinvestment Act (federal stimulus) to reverse our country’s broadband decline by making local and state governments, directly eligible for $4.7 billion in federal grants to provide affordable access to high capacity broadband services where needed; and

WHEREAS, because the proposed playing field bills would prohibit government from using funds other than those generated by the enterprise broadband communications systems themselves, NORTH CAROLINA AND ITS POLITICAL SUBDIVISIONS WOULD NOT BE ABLE TO USE THE BILLIONS OF FEDERAL STIMULUS GRANT FUNDS SET ASIDE FOR BROADBAND INFRASTRUCTURE IMPROVEMENTS, while cities in other states would have access to these funds and gain a competitive economic advantage over North Carolina cities—job opportunities for local residents would be negatively impacted by the funding restrictions in the proposed bills; and

WHEREAS, local businesses and suppliers will create jobs and spur the local economy with federal stimulus dollars used to build and improve broadband infrastructure, but will lose such opportunities if the legislature adopts the proposed bills depriving North Carolina of the opportunity to bring broadband stimulus dollars to our economy; and

WHEREAS, the bills are counter to the North Carolina Local Development Act of 1925 which allows local governments to aid and encourage economic development in communities throughout North Carolina.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF GREENSBORO opposes Senate Bill 1004 and House Bill 1252 and urges all members of the North Carolina General Assembly to vote “no” in committee and, if necessary, on the floor of the General Assembly.

(Signed) Robert V. Perkins

The City of Greensboro joins several other cities in NC that have passed resolutions opposing HB1252/S1004, including Chapel Hill and the state capital of Raleigh.  City staff really did their homework from the content of the resolution, pointing out places with higher speeds like Poland, Canada, Japan and South Korea.

I am proud to live in this city.  Our people won’t take the garbage that Time Warner throws at us and our council listens to it’s people on this issue.  More good news on broadband in Greensboro will be coming in the next few weeks.

Time Warner Cable CEO Glenn Britt, attending a conference sponsored by Sanford “He Who Loves Cable & Fat Profits” Bernstein, made it be known he still loves the concept of consumption based billing for the Internet, and what he sees as potentially fat profits that come from it.

“Clearly, we didn’t handle the public relations very well and had a bit of debacle to be honest,” said Britt.  “I still think the use-less-pay-less and use-more-pay-more model can work.”

At their prices?  Wasn’t one backlash enough for them?

Britt also repeated that their experiment in Beaumont, Texas, which they have apparently considered an appropriate test for the entire Time Warner Cable service area nationwide, was “successful.”

Meanwhile, investors don’t think the company performance has been all that successful.

Shares of TWC are declining after company Britt admitted that the company is seeing a continued slowdown in subscriber growth.

Perhaps their antagonistic policies and abusive behavior against their customers might be part of the reason.

Britt is convinced that 40GB per month, as delivered in Beaumont, was more than enough for the average user, and those who consume more should pay more.  Indeed, up to 300% more for the exact same level of service customers get today.

He dismissed notions that speed-based pricing is appropriate, claiming most customers find speeds meaningless.  Britt feels all the action, and the big profits, will come from turning a meter loose on customers and billing them for consumption of online video and other high bandwidth applications.

While Britt continues to claim that heavy users should bear the expense of upgrading Time Warner’s network, he also announced they would not be making any significant upgrades to that network, because what they have now is good enough for the next 10 years.

“I’m very comfortable with our plant,” he said. “I don’t see a need for a massive upgrade.”

In fact, the company is seeking ways to reduce their infrastructure spending further.  They plan to explore utilizing less powerful set top boxes to cut their costs, for example.

Time Warner Cable is finding the broadband component of their service offerings more and more important to customers as time passes.  For a growing number, it is the key component.  Leveraging that value, particularly in markets that aren’t as competitive, could bring massive new profits to the company.  Time Warner Cable acknowledges it has just two big competitors for broadband – Verizon FiOS and AT&T U-Verse.  Everyone else, wireless or copper wire DSL, just don’t have that great of an impact.  Cities that have or will have fiber or AT&T’s hybrid network, will force the company to keep service levels high and prices competitive.  In markets where those competitors don’t exist, it could become a profit free-for-all, as customers will find few, if any alternatives.

In yesterday’s story, FairPoint Communications learned that the state utility commissions in Vermont, New Hampshire, and Maine, were underwhelmed by their proposal to take control of telephone service formerly provided by Verizon.  The regulatory authorities in all three states felt state residents would bear most of the risk, and too few rewards in return for approving the deal.  New Hampshire was among the most skeptical.

http://www.phillipdampier.com/video/WMUR Manchester FairPoint and Verizon Plan to Refile Proposal 12-21-07.flv

Vermont wasn’t overwhelmed with what it saw either:

http://www.phillipdampier.com/video/WCAX Burlington FairPoint's New Plan.flv

But FairPoint returned to the negotiating table to make additional promises and concessions.  But would they ultimately keep them?

… Continue Reading

Dr. John Malone

Dr. John Malone, who formerly presided over TeleCommunications, Inc., (TCI, which became AT&T Cable, which then merged with Comcast) has decided that the Internet video free-for-all is too confusing and chaotic for Internet users, and told The Wall Street Journal‘s “D7: All Things Digital” conference attendees that online video needs a “content aggregator” to control and package online video for consumers.  Oh, and by the way, they also need to charge for watching it.

Malone, who now runs Liberty Media, a programming distribution and entertainment company closely aligned with the cable and satellite television industry, said his company would be perfect for the job.

“We’d love to be the aggregator; so would the cable industry,” he said.

Malone also said the traditional model of television is changing, where networks and channels are becoming less important than individual programs.  The worst mistake, in his view, is that content providers are giving it all away for free online when they should be charging a fee instead.

“Clearly advertising has proven to be insufficient, particularly in cycles we go through, to create robust product creation and distribution,” he said.

He pointed to Hulu as a failed model, because it doesn’t have enough ads to generate revenue to produce new content, and relies mostly on reruns and older shows that have been seen on television for years.

Malone compares the online video world to the early days of cable television, before cable programmers began exponentially increasing their rates in order to produce or purchase more “valuable” programming.  Malone claims he understands the dilemma of subscribers who are used to getting content for free, but feels that has to change, and customers will pay for programming they want to see.

He pointed to sports programming in particular, noting the success of the $300 annual fee for the NFL’s Sunday Ticket package, which offers every pro football game to viewers.

Malone has a controversial history, however, being called the head of a “Cable Cosa Nostra” mafia-like family of industry executives and “cable’s Darth Vadar” by then Sen. Al Gore (D-TN).  That was because Malone was a proponent of maintaining strict and unyielding control over programming, and extracting top dollar for the right to view it.  Turning John Malone loose on broadband Internet video has every indication of becoming a repeat performance, where content is served through an online portal controlled by him or other industry executives, and at a price every American should refuse.

Following the Money: Cable's Best Friends in North Carolina Get a Payday

In this second installment of “Follow the Money”, I will look at the sponsors and co-sponsors of HB1252 (Protect Cable Monopolies Act). The bill has a host of legislators involved here in North Carolina.

The sponsors are Rep. Ty Harrell (D-Wake Co), Rep. Marilyn Avila (R-Wake Co), Rep. Earl Jones (D-Guilford Co) and Rep. Thom Tillis (R-Mecklenburg Co).

First the good news: Not as much money was thrown around in the House as was in the Senate. Rep. Earl Jones took no money from individuals or PAC’s related to the cable/telecom industry. Rep. Marilyn Avila took $500 from Embarq and $500 from AT&T, along with $100 from an engineer for Verizon.

Rep. Thom Tillis took a total of $3500 from PAC’s ($500 from Embarq, $1000 from Time Warner, $1000 from AT&T PAC and $1000 from AT&T Mobility PAC).

Rep. Ty Harrell took a total of $2750 from PAC’s ($500 from Embarq, $750 from Time Warner, $1000 from AT&T, and $500 from Electricities PAC). He also took $4600 from industry related individuals ($250 from James K Sexton – President of Telephone Strategies Group, $250 from Anthony Copeland – former lobbyist for BTI Telecommunications and FiberSouth, $4000 from Jim Goodman – CEO of Capital Broadcasting, which owns the Raleigh area’s biggest TV and radio stations, and $100 from Lynn R Holmes, who three months after making the donation became one of the current lobbyists for the NC Cable Telecommunications Association).

For the Primary Sponsors a grand total of $7250 from PAC’s and $5600 was given from individuals related to the cable/telecom industry.

The co-sponsors and amounts are as follows:

• Rep. Larry Bell - $500 from Embarq
• Rep. Nelson Cole - $4250 from PAC’s ($2500 from Embarq, $750 from Time Warner and $1000 from AT&T NC PAC).  Cole also received $100 from Charles W Pickelsimer – VP/General Manager of Citizens Telephone Co.
• Rep. James W. Crawford Jr. - $3000 from PAC’s ($2000 from Embarq and $1000 from Time Warner).  He also took $200 from James Pratt Wilson, a retired telecommunications worker and $50 from Richard Reese, an executive from Lexcom Communications.
• Rep. William A. Current Sr - $1500 from PAC’s ($750 from AT&T and $750 from AT&T NC PAC) – Oddly he was given $250 from Embarq and then returned it the same quarter he received it.
• Rep. Nelson Dollar – $3250 from PAC’s ($1000 from Embarq, $750 from Time Warner and $1500 from AT&T)
• Rep. Beverly M. Earle – $1750 from PAC’s ($250 from Embarq and $1500 from AT&T)
• Rep. W. David Guice - took no PAC money from the cable/telecom industry. He did receive $300 from Charles Pickelsimer III- VP Citizens Phone, $1000 from CW Pickelsimer Jr- VP Citizens Phone and $1000 from Senator Tom Apadaca who took a lot of money ($12500) from the industry.
• Rep. Jim Gulley - $500 from PAC’s ($250 from Embarq and $250 from Time Warner)
• Rep. Mark Hilton – $500 from Embarq. He took nothing else.
• Rep. Hugh Holliman - $11500 from PAC’s ($1500 from Embarq, $2000 from Time Warner, $4000 from AT&T, $500 from NC Cable PAC, $2000 from ElectriCities and $1500 from the NC Assn. of Broadcasters). He also took $550 from Richard Reese who is an executive for Lexcom Communications. You should know that the amounts are generally bigger for Holliman because he is the House Majority Leader.
• Rep. Linda P. Johnson - $750 from PAC’s ($250 from Embarq and $500 from AT&T).
• Rep. Carolyn K. Justus - $500 from Embarq.
• Rep. Marvin W. Lucas – $1000 from PAC’s ($500 from Embarq and $500 from AT&T)
• Rep. Wil Neumann - $1000 from PAC’s ($500 from Embarq and $500 from AT&T)
• Rep. Efton M. Sager - $250 from Embarq
• Rep. Fred F. Steen – $3000 from PAC’s ($1000 from Embarq, $1000 from AT&T and $1000 from ElectriCities)

There is one more House Representative I wanted to bring to your attention, Rep. Harold Brubaker. Brubaker is a former Speaker of the House. He is also on both the House Public Utilities Committee and the Joint Committee for Revenue Law. Brubaker took a grand total of $16250 from industry related PAC’s ($5500 from Embarq, $2750 from Time Warner, $6000 from AT&T, $1000 from Sprint/Nextel and $1000 from the Verizon Good Government Club). He also took $300 from CW Pickelsimer – VP Citizens Telephone.

The way I see it, following the money trail, Rep. Harrell introduced HB1252 for Time Warner’s attorneys and lobbyists. Rep. Holliman can use his powerful position to help secure votes and Rep. Brubaker sits on the committee that decides the bills fate. The cable/telecom industry seems to be getting what it has paid for. They spent a grand total of $463,699 for campaign contributions to legislators in the North Carolina General Assembly in 2008. That’s nearly a half-million dollars! I assure you that if we contributed a half a million dollars collectively as a consumer rights PAC, we would have quite a bit more influence in the legislative process. We have the ability to derail this money train from buying its legislation. We have shown this before. We must remain vigilant in our approach to beating back a greedy industry and keeping our legislators honest (or tossing them to the curb come election).

Here we go again.  Stop the Cap! reader Oscar noticed a tiny message on his most recent bill from Time Warner Cable stating the company had ‘updated’ their Subscriber Agreement.  Oh yes they did:

6. Special Provisions Regarding HSD Service

(ii) I agree that TWC or ISP may change the Maximum Throughput Rate of any tier by amending the price list or Terms of Use. My continued use of the HSD Service following such a change will constitute my acceptance of any new Maximum Throughput Rate. If the level or tier of HSD Service to which I subscribe has a specified limit on the amount of bytes that I can use in a given billing cycle, I also agree that TWC may use technical means, including but not limited to suspending or reducing the speed of my HSD Service, to ensure compliance with these limits, and that TWC or ISP may move me to a higher tier of HSD Service (which may result in higher monthly charges) or impose other charges and fees if my use exceeds these limits.

(iii) I agree that TWC may use Network Management Tools as it determines appropriate and/or that it may use technical means, including but not limited to suspending or reducing the Throughput Rate of my HSD Service, to ensure compliance with its Terms of Use and to ensure that its service operates efficiently. I further agree that TWC and ISP have the right to monitor my bandwidth usage patterns to facilitate the provision of the HSD Service and to ensure my compliance with the Terms of Use and to efficiently manage their networks and their provision of services. TWC or ISP may take such steps as each may determine appropriate in the event my usage of the HSD Service does not comply with the Terms of Use.  I acknowledge that HSD Service does not include other services managed by TWC and delivered over TWC’s shared infrastructure, including Video Service and Digital Phone Service.

This language, for the first time, creates the foundation for TWC to introduce usage caps, tiered usage rate plans, overlimit fees, disconnecting and/or throttling the speeds of those the company determines exceed their internal limits, and exempts their Digital Phone Service from any usage/metered billing.

The impact of this legalese is profound, because it now also closes the window for new customers to avoid Cap ‘n Tier plans by signing on to a price protection agreement.  Since the terms and conditions have now fundamentally changed, new customers must now agree to these new terms, allowing the company to force you into any metered billing scheme even if your current level of service doesn’t provide for that.  Formerly, price protection contracts would protect you from being forced into such plans until your contract expired.

It compels subscribers to retroactively agree to whatever overlimit fees the company may choose to impose.  It permits the company to suspend or reduce your speed, at their discretion, if you exceed any given cap.  It permits the company to automatically bill you for a higher tier of broadband service at their discretion, and is silent about your right to downgrade back to a lower level.

It specifically exempts their phone service from any metered billing, which now gives the company’s voice-over-IP phone service an automatic competitive advantage, because using one of their competitors may be counted against your usage allowance.

As Stop the Cap! has predicted since TWC temporarily shelved their scheme, they’d be back with more, and here is another piece of evidence to prove that contention.

(image courtesy: B Tal)

[Update: June 7 2009 -- The Los Angeles Times' Business columnist David Lazarus covered the Time Warner Cable cap issue suggesting Stop the Cap!'s reports about their contract language changes represented a "bum rap" for TWC.  Lazarus contends that the "Time Warner tips, tweets and blog posts illustrate how easily bogus information can be passed off as legitimate online -- and how quickly the brush fire can spread across the electronic ether."  He then pointed to several additional reports about the Subscriber Agreement changes and decided: "Problem was, nobody had it right."  Lazarus then printed TWC's position, which claims Cap 'n Tier language has been a part of TWC's Subscriber Agreement for "several years," a premise he seems to accept at face value. His piece then moved into how online companies deal with "brush fires" once they get started online by quoting a "leader in corporate crisis management."

Lazarus ignores the fact it was Time Warner Cable in San Antonio that specifically notified customers that "Your Subscriber Agreement with Time Warner Cable has been amended.  The new version is available at http://help.twcable.com/html/policies.html" Nobody here made this up.

Although he tells readers the story of the premise of our article, namely Stop the Cap! reader Oscar finding the aforementioned notification on the bottom of his May 2009 bill, he never bothers to challenge TWC's representative about why that notice would appear on customers' bills, and essentially dismisses the impact and scope of those changes.  If my bill had language like that on it, I'd certainly explore the "amended" Agreement.  Why tell subscribers in at least one city that a "new" Agreement is up and available for consideration they now claim isn't new at all?

The opinion piece also edited the one line from our original report detailing what this contract language introduces for the first time.  That seems unwarranted, particularly when his piece seeks to dismiss those changes as "bogus."

His edited version: "...warned that "for the first time" the company had laid the groundwork "to introduce usage caps, tiered usage rate plans, overlimit fees" and other customer-unfriendly moves."

Our original: "This language, for the first time, creates the foundation for TWC to introduce usage caps, tiered usage rate plans, overlimit fees, disconnecting and/or throttling the speeds of those the company determines exceed their internal limits, and exempts their Digital Phone Service from any usage/metered billing."

Readers can decide for themselves whether or not this kind of language has been part of past Subscriber Agreements for "several years."  The prior one is still linked at the bottom of the page on the Oceanic division of TWC's Around Hawaii website.  Another version prior to the transition to the centralized Road Runner website is also available for review in PDF format.

The scope of the changes in the latest TWC Subscriber Agreement is unprecedented.  No earlier Agreement I am aware of addresses all of these important issues: usage caps, tiered usage rate plans and the implications for exceeding them (including their right to move you into a new tier automatically), the specific exemption of their digital phone product from them, and throttling speeds for consumers who exceed the company's internal limits.

Although he acknowledges our willingness to amend original stories as new information comes to light (several updates in reverse order appear below), the premise of an accompanying poll, entitled, "Is there any way to separate fact from fiction online?" is part of the traditional media's challenge to the web they rarely impose on themselves.

My view is that honest online sites are prepared to allow updated information, even if it challenges an assertion within a piece, to be included. Nobody here has any fear or second thought about amending the record, adding the findings of others, including Lazarus' own piece.  We trust readers to be intelligent enough, looking at the entire record, to decide for themselves who has really gotten the "bum rap."  In our view, none of this changes the fact it will be the consumer that ultimately gets it in the end.

[Update: June 3 2009 -- Alex Dudley (a/k/a our old friend, TWCAlex) told Information Week today that the Terms & Conditions on TWC's website were last changed in "August 2008" and that customers are notified when they are changed.  I don't recall seeing any notice last summer/fall on my TWC bill.  Another Time Warner Cable spokesperson in the same article said that "that the company's terms are always changing and they are updated regularly."  The confusion continues. Also, why are customers in San Antonio being notified they have been amended on a bill for May 2009?  Regardless of all of this, the real issue remains the wording and its implications.]

[Update: June 1 2009 -- It's always the policy of Stop the Cap! to bring you as much information and detail as we can find, as well as issue clarifications, corrections, and any additional details we receive, even if it might call into question one of the facts originally published in an article.  Earlier today, I began to receive word that there was a dispute regarding the exact timing of the introduction of the revised language on TWC's website.  Time Warner Cable representatives told another reporter that the language we reported on was published earlier than "implied" in this article.  In their eyes, this represented "nothing new."  Our emphasis has always been about the language itself, and it certainly was new to our readers.  The timing issue, while not unimportant, was not the primary focus of this article.  What was the focus?  More evidence the company is marching full speed ahead to consumption based billing, and have made sure to lay the legal groundwork to implement it.

To help readers understand how this piece was assembled, I am going to walk you through the "process," as well as bring you the latest information, including TWC's positions, so you may have a clearer picture and draw your own conclusions.

Stop the Cap! Reader Oscar finds this notification that his Subscriber Agreement had been amended on his latest bill. (Click to enlarge)

The original idea for this article came from our reader Oscar in San Antonio who was prompted to visit TWC’s website because of a message printed on his May 2009 bill:

Your Subscriber Agreement with Time Warner Cable has been amended.  The new version is available at http://help.twcable.com/html/policies.html

To our readers, the new language which we reprinted above, was hardly a shocking surprise. The old language it replaces is still online. Our position has always been that TWC has a very clear agenda, which they have been public about, to “educate” customers about usage and move back towards a consumption billing system.  It’s something CEO Glenn Britt vocalized just last week in his preference for this kind of billing.

Our focus, therefore, was on the language of the Subscriber Agreement.  Our assumption has never been that this was introduced just a week ago on the website.  The lead time alone for a revision announcement to appear on a bill precludes that.  Our assertion was that TWC changed the Agreement, and Oscar was among the first to notice the changes and report them.

After our report, several other blogs and websites picked up this story.  Some of them emphasized the timing of the changes, not the wording of the changes.  That planted the seeds for a side dispute about the exact date these revisions went online.  It has been a matter of debate apparently within the company as well, because there were three different contentions shared with me today:

• “the changes were made ‘months ago’ and there is nothing new here”;
• “the changes were made awhile ago at an undetermined time;”
• the changes were made and here is why…

When we called TWC about the Subscriber Agreement for our area, we were told what was online was written by the national corporate office and accurate after the termination of the “experiment.”  Earlier today, Chloe Albanesius writing for AppScout got a confirmation the Subscriber Agreement was changed as well, and why:

Time Warner said the update was simply a means of keeping its customers in the loop.

“Time Warner Cable believes that our terms of service should be a document that allows a customer to decide whether or not they’d like to purchase our service based on full disclosure of the techniques we are or may use to manage our network and improve service,” the company said in a statement. “In a dynamic and constantly changing business like high speed internet access, we believe that, while we are not legally obligated to provide such detailed terms before we implement a new technique or product structure, it is the best way to ensure that customers have all of the facts before they purchase the product.”

Do those facts include consumption-based billing in the future? “We have announced no change to our plans surrounding consumption based billing at this time,” the company said.

Bottom line, there is an open question about the exact date the changes were made, but not about the substance of those changes and their implications.  TWC doesn’t time stamp their Subscriber Agreement revisions either.  Although the latest developments today illustrate we have some room for improvement in trying to tie down these side issues with more clarity, we stand by our report regarding the language itself, its implications for metered billing, competition, and net neutrality issues.]

Concluding that all rural Americans must have the opportunity to reap the full benefits of broadband services, Acting Federal Communications Commission Chairman Michael J. Copps released a report today providing a starting point for the development of policies to deliver broadband to rural areas and restore economic growth and opportunity for Americans residing and working in those areas.

Recognizing that the need for broadband in rural America is becoming ever-more critical, Congress in the 2008 Farm Bill required the FCC Chairman, in coordination with the Secretary of the Department of Agriculture, to submit a report to Congress describing a rural broadband strategy. Entitled “Bringing Broadband to Rural America: Report on a Rural Broadband Strategy,” the report by Acting Chairman Copps identifies common problems affecting rural broadband, including technological challenges, lack of data, and high network costs, and offers some recommendations to address those problems.

Broadband “is the interstate highway of the 21st century for small towns and rural communities, the vital connection to the broader nation and, increasingly, the global economy,” Acting Chairman Copps said in the report. “Our nation as a whole will prosper and benefit from a concerted effort to bring broadband to rural America.”

According to Secretary of Agriculture Tom Vilsack, “Providing broadband access to rural communities will not only enhance farmers and ranchers’ ability to market goods and enhance production, it will help residents in rural communities obtain needed medical care, gain access to higher education, and benefit from resulting economic activity and job growth.”

Consistent with the statute’s provisions to make recommendations concerning improving inter-agency coordination, the report includes a number of recommendations, including: enhancing coordination among and between federal, Tribal, state, and community agencies, governments and organizations; reviewing existing federal programs to identify barriers to rural broadband deployment; coordinating broadband program terminology consistent with current laws; coordinating data collection and mapping efforts at the federal, Tribal, and state levels to better inform the public and policymakers; supporting consumer education and training initiatives to stimulate and sustain broadband demand; and identifying important policies and proceedings that support further broadband deployment such as universal service and network openness. The report also recognizes that the new administration has already taken important steps to improve coordination efforts and to prioritize broadband initiatives.

In the report, Acting Chairman Copps notes that Congress has provided new direction and support for federal broadband policies and initiatives, in particular through the American Recovery and Reinvestment Act of 2009. In addition to providing $7.2 billion for broadband grants, loans and loan guarantees administered by the Agriculture and Commerce departments, that law charges the FCC with developing a national broadband plan by next February.

“I view this report as a prelude to, and building block for, the national broadband plan, which will address in greater detail and on a vastly more complete record, the input of all stakeholders and the steps the nation must take to achieve its broadband goals,” Acting Chairman Copps said in the report. Although the national plan will be broader in scope and will focus on bringing broadband to all Americans regardless of where they live, the Rural Broadband report released today “provides another, critical step in the Commission’s efforts to develop an effective, efficient and achievable national broadband plan.”

If you’re a broadband provider throwing a money party by charging top dollar for usage based Cap ‘n Tier rationing plans, why not spread some of that money around?  One company that wants a piece of the action is Highdeal, a German owned company that wants to sell providers the billing system to extract pay-per-byte-bucks from customer wallets.

Highdeal’s chief technology officer, Fergus O’Reilly talked to Telephony Online about how they’re going to market their products for usage based billing.

On moving beyond flat-rate broadband: Operators are realizing that the flat-rate model we had for broadband is no longer tenable. It’s hard to roll out [usage-based models] when subscribers don’t know how much a gigabyte is or what the term bandwidth means. Some [providers] have done better than others. In the Canadian market, for example, it’s getting to be accepted. Rogers has done a good job informing customers about their usage and charging them for overage with cap-and-overage-type schemes. In the US, it’s been a little more difficult. Time Warner Cable let slip that they were doing something and got negative press for it. It became difficult for them to roll that out — one step forward, two steps back. But overall throughout the market, pretty much everyone is equipping themselves with the policy management systems they need to measure and qualify bandwidth usage. The flat-rate model for broadband will change, and we will pay depending on usage, whether that’s measured in [quality of service], absolute bandwidth or a number of those factors.

The system that exists today (that is already very profitable) is always defined as ‘yesterday’ and something ‘we need to move beyond,’ while the highway robbery of overpriced tiers and overlimit fees is the ‘only tenable way forward.’  Not really, of course.  But this is an example of a company with a vested interest in that outcome — namely, a product/solution to sell that would not exist without these kinds of billing schemes.  They garner favor in industry circles by helping to throw the ball around, hopefully establishing the premise that usage based billing is conventional wisdom.

It’s tougher to sell cap-and-overage schemes. Unfortunately many of the charging systems operators have in place are relatively simplistic. And moving to these more sophisticated schemes — time-shifting and proposing a bandwidth boost — many times the blocking factor is, ‘Well, I don’t know how to do that.’ So we propose a very flexible charging system that makes that easy so you can have these dynamic business models that will make more sense for the consumer.

Actually, developing a billing system that pilfers the wallets of consumers, no matter how complex or simple, will not make any sense for customers.  What Highdeal proposes is a billing system that allows providers to rob customers in a sophisticated way, instead of the street mugging wallet extraction approach.  But whether it’s the Bernie Madoff system of billing, or the guy with the bat in the dark alley, consumers are still going to be victimized, and they’ll know it every time they get the bill.

Is Highdeal a raw deal entirely?  No.  Some of their models might actually represent some real world solutions to network congestion, particularly one that could communicate with bandwidth providers and software to schedule bandwidth intensive, but non-critical applications during off-peak usage times.  One such proposal would signal an online backup program to launch when network congestion is reported low by a provider.  Another model might allow consumers to pay more for faster connections to complete individual tasks.  Paying reasonable prices for reasonably faster speeds is not an issue for Stop the Cap!

But companies that buy into industry theories and claims in order to help score a sale have a considerable conflict of interest in being considered a credible source on what consumption and billing models are workable and which are not.