Kent

Suddenlink president and CEO Jerry Kent sends word that the days of cable companies spending capital on system upgrades are basically over.

Interviewed on CNBC, Kent was responding to concerns about the cable industry’s long history of leveraged buyouts — amassing enormous debt to launch buyouts of small and medium sized cable companies as the march towards industry consolidation continues.

Kent’s own cable system — Suddenlink, was built partly on purchased cable systems from Cox and Charter Cable.  In the changing economy, Wall Street now wants to see cable companies with plenty of free cash flow on hand as part of their balance sheets, not just potential revenue growth through increased numbers of households made possible through debt-ridden acquisitions.

Kent sees Suddenlink, and many other cable operators, performing better as they transition away from making investments in system upgrades to accommodate demand.

“I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” Kent said. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”

Kent told CNBC Suddenlink had the fastest residential Internet service in the country — 107Mbps. (EPB in Chattanooga claims it offers 150Mbps residential service, although we don’t see much about it beyond a June press release on their website.)  Suddenlink’s speeds are one-way only, however.  The upstream speed for that tier of service is considerably slower — 5Mbps.  EPB offers the same upstream and downstream speeds.

Kent appeared on CNBC to discuss the “threat” to cable television company business models by online video.  Kent believes Suddenlink, and the cable industry more generally, is positioned to protect cable-TV profits with the TV Everywhere concept — offer online video of cable programming, but only to authenticated, current cable subscribers.  Those without cable subscriptions can’t watch.

Financial reports submitted by many of the nation’s cable operators confirm Kent’s claim that capital spending is being reduced.  Even among cable systems that claim they need to enact usage caps and other Internet Overcharging schemes to “invest in broadband upgrades,” the financial reports don’t lie — they are not using increased revenue for system upgrades.  They are instead retaining the revenue as free cash – available for other purposes, paying down debt, or returning it to shareholders through dividend payouts.

Click here to view the embedded video.

CNBC interviewed Suddenlink CEO Jerry Kent on how the cable industry intends to cope with invasive online video, threatening to erode cable-TV profits.  (8 minutes)

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Pacific Fibre's planned undersea fiber optic cable set to begin service in 2013. (click to enlarge)

Australia and New Zealand remain the two countries most notorious for Internet Overcharging schemes like usage caps and speed throttles.  The lack of international broadband capacity is routinely blamed for limiting broadband usage for consumers in both southern Pacific countries, and now a major undersea fiber optic cable project seeks to end those Internet Overcharging schemes once and for all.

Pacific Fibre hates usage caps.  The company, which is one of the partners in a planned 5.12 terabits per second undersea cable connecting the United States with New Zealand and Australia, believes limiting broadband consumption is bad for business — theirs and the digital economies of both nations.  Now the company is reportedly willing to put its money where its mouth is, charging broadband providers a flat rate per customer for unlimited access to its backbone network.

The company believes such pricing will force providers into selling more generous, often unlimited broadband service packages for businesses and consumers.  Providers have routinely blamed insufficient international capacity for restrictive data caps.  But increasing capacity, including Pacific Fibre’s new cable set to begin service in 2013, removes that excuse once and for all.

Co-founder Rod Drury believes there will be so much capacity, if providers continue to engage in Internet Overcharging schemes, most of the newly available bandwidth could actually go unsold.

“Why don’t we flip the model around and go to a per-person charging model and then try to give internet providers as much bandwidth as we possibly can for that?,” Drury told BusinessDay.  “The charges could be segmented by customer type; you could do it for mobile connections, home connections, schools, hospitals and businesses, and set a reasonable price.”

Click here to view the embedded video.

CNBC talked with Pacnet CEO Bill Barney, one of the partners in the Pacific Fibre project, about bandwidth needs in Asia and how new undersea fiber cables will meet the growing demands.  (Segment one of the interview was done in June, segment two in July.)  (10 minutes)

Telecommunications Users Association chief executive Ernie Newman said Drury’s idea was long overdue. “The way the world is moving is towards all-you-can-eat-type plans and any move like that has got to be the way of the future.”

But one of Pacific Fibre’s competitors, Southern Cross, which currently provides undersea fiber connections for South Pacific Internet Service Providers, said he wasn’t sure Drury’s idea would work.

Southern Cross marketing director Ross Pfeffer said broadband providers haven’t been justified limiting broadband usage for some time, as newly available capacity has already helped ease the bandwidth crunch.  Instead, critics contend existing providers don’t want to give up the massive profits they are earning limiting usage, maximizing revenue from users who think twice before using high bandwidth services, thus reducing required investments in network upgrades.

“New Zealand internet providers [are] using data caps to segment the retail market and maximize their own revenues,” Pfeffer noted.

Both Australia and New Zealand are embarked on National Broadband Plans to take back some control of their broadband futures from private providers many accuse of monopolizing an increasingly important part of both countries’ digital economies.

Drury’s project, and others like it, may become important components of newly constructed national fiber-to-the-home projects proposed in Australia, and dramatically improved service in New Zealand.

Click here to view the embedded video.

The history of deploying underseas cables is a fascinating one.  Check out this 1936 documentary showing how AT&T made undersea phone cables to connect the San Francisco Bay area.  Back then, companies didn’t use rubber or plastic cable jackets to keep the water out.  They used jute fiber and paper!  Some other companies used gutta percha, which is today best known for root canal fillings, or tar mixtures.  (5 minutes)

Click here to view the embedded video.

Before there was telephone service, the challenges of connecting the far flung components of the British Empire were met by underseas telegraph cables beginning in the 1870s.  A fascinating BBC documentary visited Porthcurno, located at the tip of Cornwall, England, where 14 undersea telegraph cables stretched from a single beach to points all around the globe. Then something called “wireless” arrived and threatened to ruin everything.  (8 minutes)

Click here to view the embedded video.

But what exactly is “fiber optic cable” and how is it made?  More importantly, how do they store thousands of miles of fiber optic cable on a single ship, ready to drop to the bottom of the ocean?  The answers to both are here.  (12 minutes)

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Amazon Prime members may get access as part of their $79 annual membership fee.

Amazon.com is talking to TV show distributors and media companies about launching a new online streaming service comparable to Netflix to provide online television programming, according to sources familiar with the talks.

Amazon already offers $1.99 online access to individual shows and movies, but the new service would charge a flat fee for unlimited access.

Various news reports indicate Amazon has approached NBC/Universal Studios, Time Warner, and CBS/Viacom, among others.

The Wall Street Journal obtained access to one proposal that would bundle the yet-unnamed service with its existing Amazon Prime service, which charges frequent Amazon shoppers $79 a year to get two-day “free shipping upgrades.”

Would Amazon.com have access to current hit shows or find themselves restricted to showing 1970s Wonder Woman reruns?

Analysts say Amazon Prime’s steep annual fee has only attracted a small percentage of Amazon customers who perceive value from it, but including unlimited TV programming would give Amazon a built-in subscriber base and potentially attract new interest among current Amazon customers who want something more than two-day shipping for $79 a year.

Large web players are jockeying for video programming, seen as the next big thing as broadband becomes commonplace in most American homes.  It’s already a huge revenue generator.  Americans spent $340 million dollars watching TV online and another $300 million for online movies in 2009, according to Adams Media Research.

Those familiar with Amazon’s proposed service say the service is likely to find studios amenable to licensing older TV shows and second-run content, similar to what Netflix streams today, but will likely find strong resistance to licensing first-run, current network shows.  Most TV networks and major cable networks reserve those for services like Hulu and the cable industry’s TV Everywhere, which they own and control.

Some studios are concerned that licensing reruns of current shows might be eating into their lucrative deals with cable networks, which license network TV programming as part of cable programming lineups.  But many studios also recognize that viewers blockaded from access will simply pirate the shows online, downloading them from newsgroups, commercial file storage networks, or peer-to-peer services.

Click here to view the embedded video.

Bloomberg News covered Amazon’s video service in this morning’s Business Briefs, which also gave word Sony was dramatically expanding video options on its Playstation console and Motorola was putting $3.5 billion in cash into its mobile phone and set-top box unit destined to be spun-off in 2011.  (1 minute)

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Time Warner Cable subscribers are at reduced risk of losing access to Disney owned channels like ESPN, Disney and local television stations in several major cities now that the two companies are close to an agreement.  But, as usual, regardless of whether Time Warner Cable whittles down Disney’s demands or Disney secures dramatically higher pricing for its cable channels, one thing is certain: Time Warner Cable subscribers will ultimately lose, facing higher cable bills in 2011.

AT&T U-verse customers: your nail-biting has just begun, as AT&T sends home postcards announcing the potential loss of the Hallmark Channel and its companion the Hallmark Movie Channel.  AT&T’s contract expired at 12:01 AM this morning, but Hallmark said it was willing to keep the signals running on U-verse while negotiations continued.

Ultimately, it’s all about who gets a bigger piece of your money.  Be it local broadcasters, cable networks, or programming conglomerates who can darken a dozen channels on your basic cable lineup, all say the cable industry is enriching itself on subscriber fees and all these networks are asking for is a bigger share of the pie.  The cable industry says cable programming fees are the most significant part of rate increases, as the industry is unwilling to absorb most of the programming rate hikes.  Cable wants to continue its healthy returns, so programming rate hikes come out of your pocket, not theirs.

Sometimes the amounts involved come down to pocket change, other times several dollars a month can be involved.

For example, Disney-owned ESPN is typically the most expensive basic cable channels in the lineup.

SNL Kagan, a cable research firm, estimates Disney charges Time Warner $4.08 a month per subscriber to carry ESPN.  The costs are high because ESPN competes with major broadcast networks to secure increasingly expensive television rights to major sporting events.  ESPN’s early days were filled with coverage of volleyball, log-rolling, and billiard sports.  The rights to air these events were affordable.  But with the benefit of increased programming fees, the cable network successfully bid for professional football and other popular sports.  The more money ESPN charges, the more money they can use in bidding wars to secure television rights.

With most cable networks charging closer to 20 cents a month per subscriber, what ESPN charges (and demands) for contract renewals can, all by itself, trigger rate increases.

AT&T and Hallmark are currently arguing over an increase in subscriber fees that currently run around just four cents per month per subscriber.  AT&T argues it doesn’t want to pay the percentage increase Hallmark is demanding, even if it amounts to pennies per month.

ESPN’s rate increase demands often exceed 50 cents, if not higher.

This year a new issue enters the debate — online video programming fees. Disney wants to generate income from a whole new tier of sports programming – that streamed online to Time Warner Cable customers.  The sticking point in Time Warner Cable and Disney’s negotiations seems to hinge on the cable company ponying up for ESPN3, an online network.  The concept of cable operators paying programming fees for online content is highly controversial, especially when broadband customers could face ever-increasing broadband bills blamed on the same “increased programming costs” that have taken basic cable packages from under $20 a month in the 1980s to over $60 a month today.

ESPN3 reportedly wants 10 cents a month from every Time Warner Cable broadband customer, regardless if they have the slightest interest in watching ESPN3.  Some in the cable industry fear once this precedent is set, other cable programmers with online shows could start demanding payments for those as well.

While Time Warner Cable continues to resist, other major cable companies like Comcast Corp., Cox Communications Inc., Charter Communications and phone companies AT&T, Frontier, and Verizon Communications have ESPN3.com agreements with Disney.  Nearly all have also boosted their broadband prices for consumers as well.

Despite assurances from Time Warner Cable’s Roll Over or Get Tough website, the cable industry typically caves in on programming fee increases, often agreeing to split the difference.  Since they simply pass those increases along to consumers, it doesn’t impact their bottom line until customers start canceling cable service.

Subscribers on Time Warner Cable’s blog keep coming up with an innovative idea to solve these problems — allow subscribers to pick and choose (and pay for) only the channels they want to receive.  That novel a-la-carte concept invokes fear in the cable industry like garlic repels vampires.

In the end, even if Disney and Time Warner Cable can’t reach an agreement, should screens darken September 2nd, watch in amazement as a deal is achieved hours after the disruption in programming begins.  Then, just a few months later, the accompanying rate hike will surely follow.

Click here to view the embedded video.

WESH-TV in Orlando notes Bright House cable customers are also potentially affected because Time Warner Cable negotiates on behalf of that cable company, which has a major presence in central Florida.  (1 minute)

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Sen. David Hoyle (D-Time Warner Cable)

After 18 years representing the people of Gaston County, N.C., Senator David Hoyle closed out his ninth and final term in the North Carolina Senate with a disgraceful admission:  He allowed the state’s largest cable company, Time Warner Cable, to draft legislation in his name to thwart competition and allow skyrocketing cable and broadband bills for his constituents.  Worse yet, he admits he’s proud he did it.

Hoyle, who calls himself a “pro-business Democrat,” ignored his own constituents’ interests when he introduced legislation earlier this year that would effectively curtail municipal broadband projects across the state from providing enhanced broadband at significant savings for residents.

Stop the Cap! has covered Hoyle’s water-carrying for the cable and phone companies since he announced his pro-cable legislation and accompanying municipal broadband moratorium.  Our regular reader Tim sent word Hoyle blurted out whose interests he really represented on a Charlotte TV newscast last week.  Not having to answer to voters in a future election gave Hoyle remarkable courage to tell viewers he carried more water for Time Warner Cable than Gunga Din:

When the I-Team asked him if the cable industry drew up the bill, Senator Hoyle responded, “Yes, along with my help.”

When asked about criticism that he was “carrying water” for the cable companies, Hoyle replied, “I’ve carried more water than Gunga Din for the business community – the people who pay the taxes.”

Evidently Hoyle forgot his constituents pay taxes too, along with ever-increasing bills from Time Warner Cable.  With Hoyle’s help, North Carolina’s phone and cable companies hoped to limit competition, guaranteeing future rate increases and higher bills — a Hoyle Tax that consumers across the state would pay indefinitely.

Last December, Hoyle was more high-minded when announcing his imminent retirement from office:

[...]Having had the honor and privilege to serve my community and state in every way that has been asked of me, beginning 45 years ago as mayor of Dallas, it is now the time and the season to welcome the next phase of my life.

After much thought, I have made the difficult decision not to seek re-election to the Senate. While I will not seek re-election, please be assured that I will serve the rest of my term with the same diligence, dedication and integrity with which I have served from my first election. Public service has always been a central part of my life and my commitment to our community and our state remains strong.

Hoyle’s actions prove that his diligence, dedication, and integrity only extend to the businesses that heartily supported him while in office.  That pact protected each others’ interests while trampling yours.

Despite Hoyle’s dogged efforts to place a moratorium on municipal broadband projects in the state, even going as far as to suggest fiber was “obsolete,” several of his colleagues thought better and blocked the attempt.

For consumers in Salisbury, not too far from Charlotte, the good news is fiber optic broadband will outlast memories of a  senator working at the behest of the cable industry.

Fibrant, the city-owned fiber broadband provider, will commence beta testing of its new service in September.  It will deliver broadband service 10 times faster than that offered by Time Warner Cable and AT&T U-verse at highly competitive prices.  Standard 15Mbps service — upstream and downstream — will cost 10 percent less than the competition’s slower services.

Salisbury has spent $50 million to construct the network using bond money that will be paid back from revenue earned by the system.

For Hoyle, spouting traditional industry talking points, that’s a recipe for disaster.  Considering Hoyle raked in substantial contributions from Time Warner Cable, Sprint/Nextel PAC, and telecom lobbyist Parker, Poe, Adams, and Bernstein PAC, among others, voters may wonder whether Hoyle’s anti-municipal broadband declarations were also written by the telecom industry.

Opponents like Hoyle declare earlier municipal broadband efforts have been financial failures for cities.  If so, why the industry fulminates about such “failures” that would hardly threaten them is more than a little curious.

Other opponents claim government cannot do anything right, so they should stay out of the private sector cable business.

This "financial failure" in Dalton, Georgia has cornered 70% of the residential market offering superior service, and keeps $1.5 million in monthly revenues at home in northwest Georgia.

Yet residents in decidedly red-state Dalton, Georgia had more than enough of their free market cable system — Charter Cable.  The community of 38,000 supported a move in 2003 by Dalton Utilities to build a publicly-owned alternative.  They couldn’t install service fast enough, and today Dalton Utilities’ Optilink brings in $1.5 million in revenue every month which stays in Dalton.  The local government option today reaches nearly 70 percent of the residential market and last week was voted 2010 #1 Internet Provider in the Daily Citizen’s Readers’ Choice Awards for the third year in a row.

Opelika, Alabama also rejected the “government can do nothing right” talking point in a referendum to support a fiber to the home network for their community as well.

In reality, although no government is perfect, Americans do trust local government to provide safe drinking water, put out fires, and arrest criminals — all incredibly vital services.  As broadband increasingly joins electricity, gas, phone and water as an essential utility, providing it at unregulated monopoly pricing just isn’t going to cut it any longer.

Hoyle has a future as a paid mouthpiece for the industries he befriends, but more importantly, he’s represents s a teachable moment.  The next time an elected official scoffs at the notion he’s bought and paid for by the companies who write him generous campaign contribution checks, just remember Senator David Hoyle… North Carolina’s first senator from Time Warner Cable, but almost certainly not the last.

Click here to view the embedded video.

WCNC-TV in Charlotte got Sen. David Hoyle’s remarkable admission that Time Warner Cable wrote the bill he introduced to stop cable competition for North Carolina consumers.  (3 minutes)

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Bray Cary -- Frontier's biggest fan in West Virginia

Bray Cary has been falling all over himself again — singing praises for Frontier Communications while many of its customers in West Virginia contend with service problems and outages, sometimes for weeks at a time.

Cary, president and chief executive officer of West Virginia Media, owner of television stations across the state, was a big supporter of the deal to sell Verizon’s landlines in West Virginia to Frontier Communications. This past spring, Cary’s weekly Decision Makers program treated viewers to a softball question and answer session with Frontier’s Ken Arndt, who was forced to “endure” Cary’s contention that opposition to the deal was limited mostly to labor union sour grapes.

With a hard interview like that, Arndt was delighted to be asked back for another edition of Tea-’N-Cookies Breakfast Club With Bray, this time to answer tough questions about how the transition could have possibly gone any better for the independent phone company.

Good morning and welcome to Decision Makers on a weekend when America is discovering the beauty of the great state of West Virginia.  Through the magic of worldwide television [...] we here in West Virginia are on the verge of discovering the power of the Internet across all of our hills and all of our valleys.

With that over-the-top introduction, Cary was off, spending nearly 20 minutes glad-handing Arndt through an interview that could have been produced in-house by Frontier’s marketing department.

Click here to view the embedded video.

Nearly 20 minutes of mutual admiration between Frontier’s Ken Arndt and WV Media’s Bray Cary can be experienced for yourself.  These segments appeared July 31st on the Decision Makers program.  (19 minutes)

Ohio County, WV

More tea?

Meanwhile, in other parts of the state things are not nearly as rosy as Cary and Arndt contend.

Stop the Cap! reader Ralph points us to Ohio Country, located in the Northern Panhandle of West Virginia, where Frontier has subjected some customers to service outages extending into three weeks.  Entire neighborhoods have lost phone and broadband service.  Dela Misenhelder, who lives in Valley Grove says a storm August 4th knocked out service for her and her neighbors.  Misenhelder used her cell phone to call Frontier three different times to no avail.

“My concern is the elderly,” Misenhelder told a local TV station.  “Do they have cell phones — being out in the country, do they even have a signal — and be able to get 911 in case of an emergency or problem.”

Frontier’s regional general manager, William (Bill) Moon said that Frontier was supposed to have contacted all of the neighbors impacted by the outage to make sure service was restored.  In Misenhelder’s case, since her phone line was still not working, she never got that call.

Moon is a name readers will become increasingly aware of, as he features prominently in damage control efforts by Frontier in northern West Virginia when they get negative media coverage.

Click here to view the embedded video.

Dela Misenhelder in Ohio County, W.V., was without her Frontier phone line for three weeks.  She made three calls to Frontier, who ignored her, so Dela called the newsroom of local TV station WTOV-TV in Steubenville, Ohio looking for help.  They achieved results for her, as you’ll see in this report.  (2 minutes)

Hancock County, WV

Matters are even more serious in the northern tip of the state — in Hancock County — where emergency responders are coping with defective T1 data lines that Frontier has failed to maintain properly, causing interruptions in emergency radio traffic.

The problems started when Verizon was in charge, but have gotten considerably worse since Frontier arrived.  Now the backup systems are beginning to fail as well.

When that happens, emergency communications with fire, police, and ambulance can’t happen, forcing first responders to rely on cell phones to communicate with one another.

Frontier called the problems with the T1 lines “odd” and at last check was examining more than 10,000 feet of phone cable looking for problems.

A local TV station witnessed the failure of a Frontier T1 line provided for emergency radio traffic themselves while filming a story on repeated Frontier outages.

On Saturday, another Frontier outage disrupted 911 service across Jefferson, Belmont and Harrison Counties, forcing local media to deliver streams of local direct numbers for emergency officials across all three counties.

Click here to view the embedded video.

Not less than three reports about failures in emergency communications attributed to a defective T1 line maintained by Frontier Communications have run on WTOV-TV in the last two months.  (6 minutes)

Residents in Marshall and Wetzell counties, which complete the Northern Panhandle are no strangers to Frontier service problems.  They were Frontier customers before Verizon sold its landline network to the company.

Stop the Cap! reader Mitch in New Martinsville writes to tell us West Virginia is just becoming acquainted with service on ‘the Frontier.’

“The company delivered lousy service to us long before they’ll deliver lousy service to the rest of the state,” he writes. “We cannot get DSL from Frontier because they won’t spend the money to re-engineer the ancient wiring on our street.”

For Mitch, the outage experienced by his ailing grandmother this past February, which stopped calls connecting from outside of the 686 exchange, was the last straw.

“She couldn’t reach me and I couldn’t reach her,” Mitch adds. “If a phone company cannot even handle basic phone call connections, what good are they?”

Click here to view the embedded video.

A winter storm knocked out Frontier service across parts of the Northern Panhandle this past February.  Customers discovered they could only dial and receive calls from other local residents.  WTOV-TV covered the story.  (2 minutes)

When Mitch tried to cancel Frontier service, he says they tried to stick him with an early termination fee of more than $100.

“I never signed a contract with them,” he writes.

NY State Attorney General Andrew Cuomo

Mitch escalated his complaint to the West Virginia Public Service Commission, which finally got Frontier to relent.

Mitch’s experience with phantom early termination fees charged by Frontier are hardly new.  Last fall, Frontier was slapped with a $35,000 fine and ordered to refund $50,000 in wrongfully charged termination fees by the NY State Attorney General’s office.

That precedent might come in handy in Washington state, where Frontier “accidentally” put former Verizon customer Steve Matheny in Redmond on an annual contract with a hefty cancellation fee.  When Frontier took over for Verizon, Matheny decided it was time to drop service.  Frontier sent him a final bill including a fee of $120 for terminating his service before his contract had ended.

Only one problem — he never had a contract.

“These folks rolled in and added a fee that no one committed to, at least I didn’t commit to,” he said.

Frontier ignored Matheny’s attempts to get the fee off his final bill, so he called KING-TV in Seattle for help.

As with so many other cases, when local TV stations feature Frontier’s mistakes and bad service on the 6 o’clock evening news, doors to a speedy resolution have a tendency to open.  Matheny got his $120 “fee” removed.

Click here to view the embedded video.

Redmond, Washington resident Steve Matheny joins a growing number of Frontier customers who suddenly find themselves on annual service contracts with hefty cancellation fees, despite the fact they never agreed to them.  KING-TV reports their intervention finally cut through Frontier’s red tape to get $120 in early cancellation fees removed from a final bill.  (2 minutes)

For West Virginia residents, the next time you experience a problem with your Frontier landline or broadband service, why not contact Bray Cary and ask him what he’ll do about it.  At the very least, ask him to pass you the plate of cookies.

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The Consumerist covers a minor bungle by Comcast, which sent e-mail to a whole mess of their customers heralding a 50 percent speed increase in huge, bold print that was not to be:

Customers who waded into the text accompanying the festivities discovered the speed increase was only meant for so-called “Economy Service” customers who were getting upgrades from 1Mbps to 1.5Mbps.  A few days later, the requisite “apology for our error” e-mail was headed out — to the wrong customers:

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Broadband for America is the product of the nation's largest phone and cable companies.

Broadband for America has begun assaulting the airwaves with a high-priced advertising campaign claiming that “broadband is leading the [economic] recovery” but is threatened by “1930s telephone regulations,” urging Congress to get involved to stop broadband reform.

The 30 second ads blanketed cable and several Sunday morning news shows yesterday.

What the ads don’t mention is Broadband for America is actually one giant front group backed by large phone and cable companies.  In a study released last fall, Stop the Cap! found virtually every single “coalition” member, including so-called “independent consumer advocacy groups,” do substantial business with, or have received significant financial contributions or board assistance from companies including AT&T, Verizon, and Comcast.

Well-financed by the telecommunications industry it directly represents, Broadband for America seeks further deregulation and wants Congress to stop the FCC from enacting broadband reforms ranging from “truth in marketing” and billing to Net Neutrality.

The “honorary co-chairs” of the group are Michael Powell, the same Bush Administration FCC chairman that badly bungled the FCC’s approach to broadband policy thrown out in the courts earlier this year, and former Congressman Harold Ford, Jr., who left public service for a very lucrative career in “dollar-a-holler” advocacy and working as a lobbyist for the economic-vampire investment bank Goldman Sachs (something Broadband for America left out of his online biography.)

Click here to view the embedded video.

Broadband for America, a telecom-backed astroturf group, is running these advertisements promoting the agenda of AT&T, Verizon, and Comcast to try and stop broadband reform policies.  (1 minute)

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It’s alive.

After a day or so of stumbling, Sprint-owned Virgin Mobile’s prepaid, unlimited Broadband2Go service went live early this morning, and Stop the Cap! gave it a try and has some tips to share to save you time and money.

More importantly, a “hidden soft usage cap” of 400GB a month, visible early this morning, disappeared by this afternoon after we made inquiries about whether “400GB” actually meant “unlimited.”  More on that below.

Buying Advice

Virgin Mobile keeps it simple with two mobile broadband devices — the Ovation MC760 ($79.99), about the size of a USB flash drive and the MiFi 2200 ($149.99), a portable “hotspot” that connects to Virgin Mobile’s wireless broadband 3G network and then converts the signal into standard Wi-Fi to share with up to five nearby computers.

We tested Broadband2Go using the Ovation MC760.

Virgin Mobile's USB modems are about the size of a typical USB Flash Memory device

Our first recommendation is to hurry on down to Radio Shack if you intend to purchase Broadband2Go service.  Best Buy, the other retailer selling the service, inexplicably sells the Ovation MC760 for $99.99, twenty dollars more than Virgin Mobile charges itself.  We didn’t bother to check Best Buy’s in-store price which might be lower because we put together a far better deal at Radio Shack.

You can manage to grab the MC760 for as low as $59.99 by following these steps:

1. If you are new to Radio Shack’s website, your first visit to their homepage should bring a “pop-up” offering $10 off your next purchase of $40 or more (if it doesn’t try clearing out your cookies or launching the site from a different web browser).  Simply supply an e-mail address new to Radio Shack and in a few minutes the coupon will arrive in your inbox.  It can be printed and redeemed in-store or used online.  This cuts the price of the MC760 to $69.99.  But wait, there’s more.
2. Until August 28th, Radio Shack is running a sale offering a $10 instant discount off the MC760.  We first saw this online, but when we visited a local Radio Shack store, we found the same savings in-store.  That brings the price down further to $59.99 because you can combine the coupon with the instant savings, until it expires Saturday night.
3. Many Radio Shack stores insist that you buy at least $10 in “top-up” funds when buying the MC760.  Although this increases your out-the-door price, it’s money you would spend anyway for the $40 a month service.  An incredibly long receipt will print at the register, including your PIN activation number to redeem your “top-up” funds on Virgin Mobile’s website.

Radio Shack offers up to $20 off the Ovation MC760 - $10 off for responding to this pop-up on their website and another $10 instant discount good until Saturday night.

Radio Shack stores stock both the old box-format packaging for the MC760, and a newer plastic security-sealed “clamshell” package (the one you’ll slice your fingers on when trying to get the thing open.)  There is no real difference between the two other than the packaging.

Getting It Activated

Although Virgin Mobile claims the Ovation MC760 works with Windows XP, Vista, Windows 7 and Mac OS X, 10.3 & higher, we found advice for Mac owners using older versions of the OS.  Check out this information for how to bootstrap the MC760 to work with your older Mac computer (your results may vary and don’t expect Virgin Mobile technical support to provide assistance.)  Linux users using Ubuntu found some success installing the MC760 as well from this website and this blog.  Let Google be your friend if you are running an unsupported operating system.

For new Virgin Mobile customers, the activation process is very simple.  You just plug in the device and the included software will automatically load and prompt you for installation.  After the process is complete, you will see a connection manager pop up.  Your first indication of signal strength will also be apparent, but do not be alarmed by the indicator showing only a connection to Sprint’s 1xRTT network.  Users do not access Sprint’s faster 3G EV-DO Revision A network until activation is complete.

Several slowly loading screens will appear during activation asking for your contact information, the zip code of where you intend to use the service the most, and payment details.  At the end, you are assigned a broadband “phone number” which serves as your account number, based on the zip code you provided earlier.

Things get complicated, however, for existing Virgin Mobile customers.  Many of those who anticipated the arrival of the service and pre-loaded their voice accounts with additional “top up” funds will discover there is no way for Virgin Mobile to activate your Broadband2Go service under your existing Virgin Mobile account.  A separate, new account must be established for the broadband service.

However, with the help of a customer service representative, you can transfer funds between your existing voice account and your new Broadband2Go account.  You’ll need to call a special toll-free number which will take you directly to Broadband2Go’s customer service department — 1-877-877-8443.  At the voice prompts, indicate you are a new customer and that you want “tech support.”  Expect at least 10 minutes of hold time and an overseas call center representative to answer.  There is no elevator music on hold with Virgin Mobile either.  You’ll hear plenty of rap and alternative music mixed with greetings from current hit artists.

The tech support representative will handle your Broadband2Go activation over the phone.  Have the device and a pen and paper handy.  Allow 10-15 minutes minimum for the representative to gather information or transfer details from your existing account to the new account.  The tech support rep will then transfer your call to the business office to handle the transfer of funds between accounts.

Our Experience

Phonenews also discovered Virgin Mobile's "unlimited" service had a 400GB usage cap this morning...

After activation, the device reset and we found ourselves suddenly connected to Sprint’s EV-DO network with an average of three bars of signal strength.  Sprint’s nearest tower is about 0.75 miles away from our home in a flat terrain residential area.  Still, we found indoors the signal level could decline to the point the connection fell back to the far slower 1xRTT connection.  Outdoors, the connection manager’s signal level spiked to full strength.

Although Virgin Mobile sells the service as “unlimited,” the website included a usage counter this morning that stated we had just over 400GB of usage remaining.  While extraordinarily generous, that’s still not “unlimited” in our book and we asked Virgin Mobile about it.  Their explanation? It was a “soft usage cap,” and although they didn’t expect anyone to actually hit that level of usage on a relatively slow broadband connection, if they did, customer service would reset it to zero upon request.  We asked why it was included at all on an unlimited service?  We were told it was a software issue — the website was designed for usage-limited broadband measurement.  Considering the performance of 3G wireless networks, it’s not likely many would ever hit it, especially because you would need to be running traffic almost continuously across the connection to reach it.

Nevertheless, we’re pleased to report that as of this afternoon, the 400GB limit is gone, replaced by a usage counter that plainly states “unlimited.”  We applaud Virgin Mobile for rapidly responding to concerns that “unlimited” didn’t actually mean “unlimited.”

...but not for long. As of this afternoon, even that generous usage cap was gone.

One concerned reader dropped a note to Stop the Cap! wondering about something seen in the terms and conditions about “unlimited mobile Internet (but not unlimited downloaded content).”  We couldn’t find those terms and conditions, and if they were included as part of the online activation process, that’s something we missed as we had to activate by phone.  We can only think that may have something to do with the company’s Acceptable Use Policy for data products.  Like other wireless providers, Virgin Mobile does not want customers using their service for “web camera posts or broadcasts, automatic data feeds, automated machine-to-machine connections or peer-to-peer (P2P) file sharing or other systems that drive continuous heavy traffic or data sessions.”  P2P traffic, in particular, is usually a painful experience for both the wireless user and provider.  These kinds of terms and conditions are commonly found in wireless provider agreements.  We’d have a problem with Virgin Mobile if they joined some wireless ISP’s in banning use of online video, but they have not.

So does Virgin Mobile’s marketing of its unlimited Broadband2Go service pass the Stop the Cap! Honest Marketing Test?

The company claims: “Speed varies based on location and coverage with average downlink data speeds between 600 and 1400Kbps. Virgin Mobile does not restrict your speeds based on data usage caps.”

At first glance, we suspected that 600Kbps speed might be a little higher than what real-world users would actually encounter.  Signal strength can steal a lot of speed and if Sprint’s nearest cell tower encounters heavy usage at peak times, speeds can drop dramatically.

We ran several speed tests from different server locations, because results can vary dramatically.  Here is what we found from our location in Rochester, N.Y.:

Speedtest.net recommended a speed test server in the San Francisco area. Our first test showed reasonable 3G speeds.

Interestingly, using a local speed test site showed better downstream results, although upload speeds suffered somewhat.

Finally, a speed test result using a Los Angeles test server that performed well.

Virgin Mobile’s speed and marketing claims do pass the Honest Marketing Test, although we feel they should more openly disclose the ban on P2P traffic.  It’s likely not enforced, if only because most users would grow impatient with the poor results.  Although we have not had a chance to test the robustness of Sprint’s data network and how well it hands off data signals between tower sites or peak usage, the browsing experience was definitely superior to that of the other wireless broadband service we tested — Cricket Wireless.  The speeds were better, too.

There is no way to tell whether Virgin Mobile’s owner Sprint will ultimately be able to sustain the service should a flood of new customers saturate their 3G network.  It’s a shame that although Virgin Mobile uses Sprint’s network, they do not currently allow access to Sprint’s much-faster 4G network.

Our Recommendation

For those lucky enough to have good wireless signal coverage from Sprint and are currently stuck with Hughes or Wildblue satellite fraudband service — your day has come.  Stop the Cap! can heartily recommend Virgin Mobile’s unlimited service as a great alternative to either provider.  We can also recommend this service to those stuck on .768-1.5Mbps DSL, especially if the phone company is charging you more than $40 a month for tortoise-slow DSL service.  For those on the go, this is also a great choice, assuming where you go is within Sprint’s coverage area.  Broadband2Go can even provide an effective backup if your primary Internet provider goes down.  But we do not recommend it as a replacement for higher speed DSL, cable, or fiber delivered broadband.

Because Sprint’s coverage is more spotty than AT&T or Verizon, it is important to consider where you will use the service.  Those on the edge of coverage areas may experience considerably poorer service, or none at all, when indoors.  Sprint locates their towers inside major metropolitan areas and along major highways that connect those communities.  If you are uncertain whether Broadband2Go will work where you want to use it, you can consider buying the MC760 with $10 worth of usage, which will provide 100MB of usage within 10 days.  If it doesn’t work well for you, return the modem and be out only $10 worth of usage.

Those who like the service can either top-up your account automatically to cover the $40 monthly fee with no interruption in service, or just pay for the service when you need it.  There is no activation/re-activation fee.

Overall, our first impressions are positive, although we wished existing Virgin Mobile customers could link the service to their existing accounts.  Over the next few days, we’ll take the service on the road and see how it fares.

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Verizon Wireless customers increasingly confront mandatory data plans costing $10-30 a month even if they don't intend to use their phones to access data services

An increasing number of Verizon Wireless customers at the end of their two-year contracts are suspended in time, unwilling to upgrade their phones because of costly mandated data plans that dramatically boost cellular phone bills, especially if everyone in the family wants an improved phone.

Kathy Vega, who lives in Rotterdam, N.Y., is just one example.

She complained to the Albany Times Union she’s effectively trapped with her old phone, an LG enV, because any upgrade will expose her to new mandatory data plans costing as much as $30 extra per month.

She’s been a satisfied Verizon Wireless customer for years. She also has Verizon Internet service, a Verizon e-mail address and a Verizon land line at home. She’s been a virtual walking, talking advertisement for the company’s products and services.

That’s why Vega was so irked by Verizon’s response when she tried to replace her enV phone and add a second one for her stepfather for free, thanks to a Father’s Day promotion the company was running.

Vega recalls that she was told that she’d have to pay another $30 each month for a “media pack” that would provide Internet and e-mail access.

It’s not clear to her now whether the additional price quoted to her was actually $30 per phone, which was her understanding at the time, or a total additional cost of $30 per month, based on a $9.99 data plan for each phone.

The Maroon enV model like hers on Verizon’s Web site now requires a data package costing “$9.99 or higher.”

The exact amount is almost irrelevant, as far as Vega is concerned. She just doesn’t see why she should have to pay for services she doesn’t use — especially since she wants the same phone she already has with no data charge.

Click here to view the embedded video.

Kathy Vega explains her plight to the Albany Times Union Advocate.  (1 minute)

Good luck.

Verizon Wireless, like AT&T, is increasingly exposing loyal customers like Vega to hidden rate increases in the form of mandatory service add-ons, in this case to cover data usage.  While Verizon’s most basic cell phones are still free from these fees, the phones most popular with consumers these days all come with bill busting add-on requirements.

Vega pays $116 a month for cell phone service now.  Verizon’s salespeople don’t always volunteer the company offers a lower usage data plan for $10, so assuming she follows the path laid before her by Verizon’s in-store staff, she could face quite a rate hike.

Confronted with her options, Vega is toughing it out with her current phone and an expired contract — like many other Verizon Wireless customers.

For those who have been loyal to Verizon for years, it’s galling to find higher priced monthly bills when it’s time to renew a contract and upgrade a phone.

Jen Smith said she was peeved when she learned of the new data program and associated costs.

“It’s sickening. I also hate that they have no customer loyalty. We have been with Verizon since they took over for Bell Atlantic Mobile in the area (~11 years ago). We have six phones and spend about $320 a month for them. You’d think we’d get a little better service for that, or a free accessory or some little perk, or heck, even a polite customer service specialist, but nope,” she writes.

Reader Sarah discovered the same thing, and she headed out the door to Sprint:

“This is exactly why I left Verizon over a year ago. I wanted a Palm. I didn’t want the data plan. Even though you can put a block on the phone to prevent the “unintentional use” of the data plan, they refuse to sell any smart phone without a data plan. So I had to go to Sprint. Can’t say I’m totally pleased with Sprint, but at least I could get what I wanted, and that was no data.”

For Verizon spokesman John O’Malley, it’s all a matter of doing some math.

He told the Times Union’s Cathy Woodruff, who serves as the newspaper’s consumer advocate, mandating data plans actually saves customers from unexpectedly high bills. He described circumstances where many owners of such devices had been racking up unexpected charges, suffering bill shock from Verizon’s punitive charge of $1.99 per megabite of data consumed.

“Customers who purchase these phones tend to take full advantage of the phone’s capabilities for surfing the Web, checking e-mail, etc.,” O’Malley said. “We’ve seen that those customers use an average of 17 megabytes of data per month. At our pay-as-you-go rate of $1.99 per megabite, that would cost them more than $30 a month.”

The $9.99 data feature provides up to 25 megabytes of data per month, which would cost nearly $50 under the old pricing policy, which makes the package “more cost effective,” he said.

Woodruff argued it won’t save any money for customers who don’t use data services.

But beyond that, we contend O’Malley’s math only works when using Verizon’s numbers.

It was Verizon Wireless that set the price of $1,990 per gigabyte of usage for “occasional users.”  Had Verizon chosen pricing more reflective of its actual costs, consumers finding an extra dollar or two on their bill for a piddly 17 megabytes of data would still leave Verizon fat and happy, more than covering their costs.  By inflating accidental and occasional use pricing into the ionosphere, O’Malley has a stronger argument to sell customers mandatory data plans that protect them from data pricing traps created by Verizon itself.

Overpricing data plans for loyal Verizon Wireless customers who can’t or won’t jump for joy at the prospect of spending $100 a month or more for a single cell phone with data service are now shopping around for better deals.  Unfortunately, they won’t find them at AT&T, who generally charges the same prices Verizon does.  But the financially-stressed consumer can find savings if they are willing to explore the second-tier of carriers, ranging from Sprint and T-Mobile and prepaid plans that require no contract.

Sprint promotes itself as a better value than larger carriers AT&T and Verizon

Sprint is banking on Verizon and AT&T overplaying their hand and overcharging their customers.  With Sprint’s newest handset hit — the HTV Evo, which also works on Sprint’s slowly growing 4G network, the company is attracting another look by advanced smartphone users.  Sprint’s latest marketing also targets families weary of tricks and traps from their cell phone provider, especially usage-limits and allowances.  Sprint bundles more services into its unlimited plans than other carriers, and its prepaid unit, Virgin Mobile, is no longer limiting wireless broadband usage on its 3G network.

Sprint’s biggest challenges to regain its top-tier footing come from years of bad customer service which company CEO Dan Hesse now assures is behind them, and a considerably more limited coverage area that simply cannot compare to AT&T and Verizon.

But for customers like Vega, being able to use the phone she wants and not pay gotcha fees for services she doesn’t use may be enough to compel a switch. 

Verizon isn’t fooling her.

Woodruff

As Woodruff observes, “it seems foolish for Verizon to close out options for loyal customers, though, at a time when options can be such a strong selling point.”

“I just think (Verizon’s data package) is their way of building it to create more revenue, which I understand,” Vega told Woodruff, “but the customer should have a choice.”

She is so right.

Cathy Woodruff is known to Times Union readers as The Advocate.  Cathy covers telecommunications issues regularly in her column which appears twice-weekly in the newspaper.  She has covered the capital region of New York around Albany for more than 25 years, becoming The Advocate in July, 2009.  She grew up in Herkimer County in upstate New York. Her column is highly recommended.

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38 Tennessee counties are about to face AT&T price deregulation, something critics contend will bring rate hikes of up to 50 percent for many of the state's most rural residents.

Attention rural residents in 38 counties in Tennessee with AT&T landlines: Start saving your money because AT&T will come looking for more of it soon enough.

As a result of 2009 legislation heavily promoted by the state’s largest phone company, AT&T has easily managed to pass a “competition test” it helped devise, triggering total deregulation of basic phone rates across the state.

Although some of the legislation’s supporters are celebrating the end of rate oversight by the Tennessee Regulatory Authority (TRA), claims that competition has broken out across Tennessee may be an exaggeration.  Critics contend many residents will face relentless AT&T rate increases, especially for the elderly and those living in rural areas — typically the poorest regions of the state.

AT&T’s competition test only required the presence of a potential competitor to meet the definition of “competition.”  Unfortunately, for many residents in the 38 affected counties, that competing cable or wireless provider often can’t or won’t provide reliable service, either because cable lines bypass rural areas or cell phone service offers poor signals.  That leaves many consumers at the mercy of AT&T, who can now charge whatever they like.

It’s a key flaw many state legislators fail to recognize when accepting the phone company’s argument that deregulation will save consumers money.  Documentary evidence suggests the reverse is true, especially in areas not well covered by cable and wireless competition. Those choosing the most basic levels of service typically face the largest rate hikes as telecommunications companies try to drive customers into multi-service bundles often approaching $200 a month.

For now, the first step is to do away with oversight and AT&T wasted no time pulling out provider maps for the 38 still-regulated counties in the state and found cable and cell phone competitors in all of them.  Despite the fact those services are not available to every resident, AT&T lawyer Joelle Phillips demanded the TRA immediately end rate regulation.

Customer Advocacy Lawyer Mary Leigh White warned the TRA AT&T would follow their track record in other states where rates were deregulated and raise prices up to 50 percent. Phillips told the Authority it didn’t matter — the law AT&T helped write and lobby for was clear:

“When a statute includes one thing specifically and doesn’t refer to other things, that the statute must be read to have done that on purpose,” said Phillips.

With that argument, the TRA capitulated Monday and voted unanimously to end rate oversight.

Consumers in the state who do find major price hikes in their future can blame the deregulation bill’s chief sponsors:

• Sen. Paul Stanley, (R-Collierville) (Resigned last August after caught in an extramarital affair with a 22-year old intern.)
• Sen. Dewayne Bunch, (R-Cleveland)
• Rep. Gerald McCormick, (R-Chattanooga)

Click here to view the embedded video.

WSMV-TV in Nashville covered the end of AT&T rate oversight and the implications the change will have on Tennessee phone bills.  (2 minutes)

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Virgin Mobile has hit a roadblock trying to introduce its new $40 unlimited Broadband2Go service that was due to launch today.  It turns out the company cannot figure out how to update its computer systems to accept and properly bill the new unlimited service.

The prepaid division of Sprint issued a sheepish apology on the company’s Twitter feed postponing the introduction of the new service, now promising a launch “within the next two days.”

The launch failure by the prepaid provider comes after considerable press attention about the introduction of the new unlimited plan and yesterday’s press release heralding unlimited mobile broadband that nobody can actually buy.

The result has been customer confusion and accusations of “bait and switch” advertising.

Stop the Cap! has received a number of e-mails that confuse the company’s old pricing, still on the website, with the new pricing still to take effect.  Most believed the company was playing games with the word “unlimited,” thinking Virgin had actually limited the new “unlimited” plan to just 1GB of usage.  But that’s the old usage-limited pricing.

Virgin Mobile customer service has not helped.  Several of our readers called the provider which relies on an overseas call center.  Those customer service representatives never heard of the company’s unlimited service plan and denied they had one.

Virgin Mobile’s social media outlets acknowledge the problems, telling readers their customer service department cannot accept new orders or activations.  That has sparked some negative comments, especially on the company’s Facebook page.

We recommend consumers avoid signing up for the service until the unlimited plan appears on Virgin Mobile’s website.  We also recommend you stay away from phone activations — Virgin Mobile’s overseas customer service agents do not inspire confidence.  Some customers who jumped the gun and “topped-up” their Virgin Mobile accounts now find they are paying for Virgin Mobile’s original pricing.  Customer service will not apply funds to the new unlimited service until after the customer exhausts their current usage-limited plan.

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Verizon Wireless today announced a new 5GB tier for its prepaid mobile broadband service at a steep price — $80 per month.

The new 5GB tier joins several other levels of prepaid data service available from the nation’s largest wireless carrier:

• $15 for 75MB of usage (expires in 24 hours)
• $30 for 250MB of usage (expires in one week)
• $50 for 500MB of usage (expires in one month)

But some critics charge Verizon’s new 5GB data plan is way overpriced.

Current Analysis claims $80 for just 5GB of access, expiring after 30 days, is simply too much to ask from consumers looking for a contract-free, prepaid data plan.  Although AT&T has similar pricing for occasional users, smaller carriers are driving prepaid customers to expect more data for less money.

Cricket Wireless charges $50 a month for 5GB, T-Mobile delivers the same 5GB for $40 a month, and now Virgin Mobile will deliver unlimited access for $40 a month.

The only customers that would likely consider Verizon’s $80 prepaid data plan are those outside of Sprint, Cricket and T-Mobile’s coverage areas who want something more than 500MB of usage and don’t want to be stuck on a two year contract.

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Wendy

Pro-broadband reform groups continue to hit the telecommunications industry’s last nerve.  While the fight for more expansive broadband and Net Neutrality continues, some providers and their water-carrying friends are pulling out all the stops to keep broadband under the firm grasp of a phone and cable duopoly.  Both will say or do just about anything along the way to stop consumer-friendly reform.

Say hello to Mike Wendy.  He’s made it his personal mission to “expose” groups promoting broadband reform as “radicals” and “hardcore entrenched lobbyists.”  Using rhetoric that will resonate with angry talk radio listeners, Wendy is convinced broadband policies that enforce the public interest and Net Neutrality are akin to a Marxist takeover.  While Wendy calls on good Americans like himself to man the barricades protecting AT&T, Verizon, Comcast, and Time Warner Cable, he just doesn’t have time to mention he happens to work for a special interest group funded by Big Telecom.  Maybe it slipped his mind?

Wendy’s ironically named “Media Freedom” blog is chock full of attacks on “Free Press and the radical media reformistas [sic].”  Special guest stars include Venezuela’s Hugo Chavez, Marxism, collectivism, and a whole slew of rhetoric that ultimately tells readers efforts to enact broadband reform are little more than a grand socialist conspiracy.

A real grassroots campaign is run for and by consumers. An astroturf campaign is bought and paid for by corporate interests to push their own agenda.

His visitors’ enthusiasm for such accusations might be diminished a tad had Wendy prominently disclosed his day job: Vice President of Press & External Affairs at the Progress & Freedom Foundation, a “think tank” that ingests money from Big Telecom and then spews forth their talking points.  Among the backers: AT&T, Comcast, the National Cable and Telecommunications Association, Time Warner Cable and Verizon.

That takes the wind out of the proclamation that Media Freedom is a bulwark against those who “threaten to quash speech and economic freedoms.”  Wendy isn’t working for Big Government.  He’s working for the interests of AT&T and Comcast.

Many of the companies supporting the Progress & Freedom Foundation have a vested interest in maintaining today’s barely-competitive broadband marketplace, avoid oversight, and stop reform regulation and legislation dead in its tracks.  They want Progress only on their terms and the Freedom to do whatever they please.

The real chutzpah moment came when Wendy claimed pro-consumer groups like Free Press and Public Knowledge were the ones running high-powered lobbying campaigns.  That’s a pot to kettle moment to behold, especially considering who paid to print Wendy’s business cards.  From a recent blog post:

The “public interest” lobby makes itself out to be the tireless, country-poor underdog for the downtrodden consumer.  But don’t be fooled.  In the technology space, three such groups – Public Knowledge, Media Access Project and Free Press – have few rivals.  Their humble appearance belies their take-no-prisoners, oftentimes shameless, below-the-belt approach to public policy formation and gamesmanship.  How do they do it?  They use all the tools, and then some, to make them every bit as sophisticated as the largest companies they’re trying to undermine.

Shameless and “below-the-belt” might better define Wendy’s last job: “Director of Grassroots” for the United States Telecom Association, a job title that literally defines astroturf-in-action. Who is on the board of USTA?  Among others, corporate executives and lobbyists for AT&T, Verizon, Qwest, and two members who shouldn’t be able to afford the annual dues considering their employers went bankrupt — Hawaiian Telcom and FairPoint Communications.

Wendy’s line of thinking is evident soon enough from his blog’s tag cloud, a regular cocktail of conspiracy:

The ironically named "Media Freedom" blog isn't media and its freedom is limited to carrying water for the nation's largest telecom companies.

• Al Franken (the broadband industry’s ‘Boogie Man’)
• Cyber-Collectivist (the secret link between broadband and Jean-Jacques Rousseau)
• Fairness Doctrine (guaranteed to perk up the ears of any conservative talk radio fan wandering through)
• First Amendment (for corporations)
• Freedom (for said corporations to abuse your wallet)
• Free Speech (for corporations)
• Hugo Chavez (the go-to-guy for lazy smear-by-association rhetoric)
• Marxist (chalkboard time)
• New Deal (broadband users sure want one)
• … and redistributionism (something overheard at the last session of the “Communications Comintern?”)

The rhetoric is two parts AT&T to one part 1970s Radio Tirana, Albania.  A Glenn Beck swizzle stick labeled “Marxism” is included to stir the overheated rhetoric into a hot mess for Verizon and the cable lobby.

All of the “isms” aside, we’ve created a convenient, handy-dandy chart you can use to see which team Wendy and his group really supports:

Distinctions With a Difference – A Telecommunications Issue Checklist

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WMC-TV in Memphis compared rates among providers to check and see if mandatory Comcast service represented a good deal for Mid-America renters.

Mid-America Apartment Communities, a nationwide apartment management company, continues to unveil new mandatory cable service fees on renters — this time for eight Mid-America apartment complexes in Memphis, Tennessee.

Memphis renters began receiving word of the new required $40 a month Comcast cable package late last month and the controversy has sparked additional media attention.

Mid-America earns a significant kickback bonus from Comcast for mandating cable service on all of its renters.  That upsets many renters who choose not to have cable service, or subscribe to a satellite provider like DirecTV or DISH.  The $40 fee doesn’t go away if you don’t want the service.  Earlier in July, Stop the Cap! covered Mid-America’s mandatory cable service introduction in other parts of Tennessee and Texas.

Legal experts say the arrangement is perfectly legal, so long as it is not imposed unilaterally on renters.  Instead, Mid-America includes the mandatory cable clause in its new renter and lease renewal agreements.  If you don’t want to pay the fee, your only option is to move somewhere else.

The $40 Comcast package delivers 100 digital channels, 45 music channels, and one on-demand channel.  That appears to coincide with Comcast’s Digital Starter package, which normally runs $51.50 a month in Memphis.

Some current Comcast subscribers who rent from Mid-America do appreciate the discount and the convenience of paying cable charges as part of their monthly rent.  But others do not want to be compelled to pay for Comcast service they don’t want or cannot afford.  For them, the extra $40 a month charge is effectively a rent increase.

Click here to view the embedded video.

WMC-TV’s ‘Investigators’ Team took a look at Mid-America Apartments’ new mandatory cable charges imposed on its Memphis renters.  (4 minutes)

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Netflix has a big problem.

As it gradually shifts its operations towards more instant, on-demand video streaming of movies and TV shows subscribers want, some well-connected studios and distributors have a vested interest in stopping Netflix in its tracks.

Among the most threatened is Time Warner’s HBO, which has watched premium movie channel subscriptions erode for years as consumers dump pay-TV for lower cable bills and Netflix subscriptions.  For up to five dollars less than what cable systems charge for HBO, Netflix customers get access to unlimited video streaming and can still check out one movie at a time on traditional DVDs.

Netflix is slowly evolving their business towards streaming and away from costly and labor-intensive DVD rentals-by-mail.  Customers enjoy the instant access to programming — no waiting for the mail or getting on a waiting list for popular titles.  Netflix does not have to pay ever-increasing postage rates either, or replace lost or damaged DVDs.

But for Netflix streaming to succeed, the company needs agreements with content producers — Hollywood studios and distributors — for so-called “streaming rights.”

One contract wins the right to obtain and rent out the physical DVD’s, which Netflix has had no problem in obtaining… eventually.  But another, separate agreement is needed win the rights to stream movies or TV show over the Internet.

So far, most of Netflix’s streaming agreements cover older movies and TV shows that have already found their way to Hulu or have been run to death on premium movie channels.  Anyone for Big, Fast Times at Ridgemont High, or Class Action?  These are all listed by Netflix as “new releases.”

Now Netflix wants to expand their library to include additional titles and they’ve run into a roadblock – HBO.

The premium movie channel controls streaming rights not just for its own programming, but also for Warner Bros., 20th Century Fox, and Universal.  Those three movie studios produce an enormous amount of movies and television shows, and without being able to contract streaming licenses, Netflix may be in big trouble.

HBO's Go service streams HBO movies, specials, and series to "authenticated" HBO subscribers

HBO intends to keep those shows, as well as its own, exclusively for itself and its cable and telco-TV partners.  As part of the TV Everywhere concept, HBO will dramatically expand its own streaming movie service — HBO Go, currently only available to authenticated Comcast and Verizon FiOS HBO subscribers.  Everyone else can forget about it.

The pay television industry — cable, satellite, and telco-TV, is more than happy to accommodate HBO sticking it to Netflix.  HBO Go could help sustain the premium movie channel and sell more subscriptions.

The video war means that Netflix will be in the DVD rental-by-mail service for years to come, if only to serve up movies and TV shows from those three studios.  More likely, however, is that Netflix will find a partner to help return fire — denying HBO access to movies controlled by Netflix.

Ultimately, consumers are likely to follow the content.  If Netflix controls it, consumers will sign up for that service.  If the cable industry controls it, they’ll be forced to keep their cable subscriptions.  It’s a high stakes game either way.

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Virgin Mobile, Sprint’s prepaid wireless division, will introduce big changes to their mobile broadband pricing as early as tomorrow, including an unlimited mobile broadband plan for $40 a month.

While the fine print is not yet available for review, if Sprint defines “unlimited” the way dictionaries do, the introduction of unlimited access for $40 a month represents a major departure among carriers who are increasing mobile data pricing or slapping usage limits or speed throttles on customers.

Virgin Mobile noted some of their customers are replacing their home wired broadband connections with the company’s own wireless broadband option, and the new unlimited pricing plan makes that a realistic option for some consumers who can live with Sprint’s current 3G network speeds.  Virgin Mobile customers currently do not have access to Sprint’s Clearwire 4G network.

Virgin Mobile’s new Broadband2Go price plans were leaked on their Facebook page over the weekend:

Virgin Mobile's Broadband2Go Plans have been simplified into one occasional use budget plan and unlimited service for $40 a month

The new pricing departs from old pricing models that included four tiers of service, none unlimited, sold by anticipated data usage:

Virgin Mobile's old Broadband2Go delivered usage limits and forced consumers to guess at how much of a usage allowance they would need.

Virgin Mobile’s new flat rate mobile broadband data plan reflects increasingly aggressive pricing in the prepaid wireless business.  While other carriers place limits of up to 5GB on usage — typically sold for $60 a month, Virgin Mobile’s plan is fully $20 less per month and offers unlimited access.

The service is sold on a month-to-month basis with no contract requirement or credit check.  If the service does not meet one’s needs, customers can just walk away at the end of the month.

Virgin Mobile uses Sprint’s CDMA network, which offers reasonable coverage in metropolitan areas but is much spottier outside of population centers.

In the northeastern United States, Sprint's data network extends to large communities and major highways, but routinely skips smaller towns and isolated areas. For example, Virgin Mobile offers almost no service in northern New England. In upstate New York, service becomes spotty beyond the cities of Albany, Syracuse, Rochester, Buffalo, and the highways that connect them. There's almost no coverage in northern Pennsylvania, West Virginia, or eastern Kentucky either.

Virgin Mobile, formerly a reseller of Sprint’s network but now owned outright by them, has repositioned itself to emphasize “worry-free, unlimited service” for consumers who do not want to count calls, minutes, or megabytes.  Their latest marketing campaign pushes “crazy” low pricing, while calling out larger carriers charging up to $99 a month for the same service as “stupid.”

Virgin Mobile’s new pricing is expected to become effective Tuesday and will create a shakeup in the prepaid mobile broadband sector.  Perhaps no carrier is at bigger risk of losing mobile data customers than Cricket Wireless, which recently increased pricing on its mobile broadband service delivered on a far smaller network.

Virgin Mobile’s new pricing represents a far good deal for consumers and dispenses with usage limits.  The only downside is that Virgin Mobile customers will have to buy new modems — an Ovation MC760 for $79.99 or the MiFi 2200 Mobile Hotspot, which lets up to five users share a Virgin Mobile 3G connection over Wi-Fi, for $149.99.  These are available on Virgin Mobile’s website or in Best Buy stores.

Click here to view the embedded video.

Virgin Mobile’s “The Crazy Life” campaign is certain to be noticed amidst other, more subdued, advertising.  It promotes Virgin Mobile’s embrace of unlimited calling and data plans.  (1 minute)

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Click here to view the embedded video.

Big Corporations Know What’s Best for You (1 minute)

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Verizon has decided Sprint is worth competing with again, so the nation’s largest wireless carrier has started testing unlimited calling plans that deliver Verizon’s network at Sprint’s prices.

So far the unlimited plans are only available in two markets – Los Angeles and San Diego, and represents a $20 discount off regular monthly pricing:

The $99.99 price is no coincidence. That happens to match pricing for Sprint’s Simply Everything and T-Mobile’s Individual Talk + Text + Web plans which both sell for $99.99 per month.

Verizon’s price cut experiment may be a reaction to Sprint’s new marketing that stresses it will not usage cap smartphone customers, and charges a lower price for more services.

Most Verizon customers in the two California cities will learn about the new pricing in Verizon retail outlets and through the company’s website.

Although the new pricing seems attractive, there is a mass of fine print which may temper your enthusiasm:

1. The lower pricing is only good for Individual plans.  You cannot get the savings on a Family Plan.
2. No monthly access discounts, available through many employers, are permitted.
3. There is a $35 activation fee.
4. Tolls, taxes, surcharges and other fees, such as E911 and gross receipt charges, vary by market and as of August 1, 2010, add between 5% and 39% to your monthly bill and are in addition to your monthly access fees and airtime charges.
5. Monthly Federal Universal Service Charge on interstate & international telecom charges (varies quarterly based on FCC rate) is 13.6% per line.
6. The Verizon Wireless monthly Regulatory Charge (subject to change) is 13¢ per line.
7. Monthly Administrative Charge (subject to change) is 83¢ per line.

Thanks to Stop the Cap! reader Scott for the news tip.

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Verizon Hands Out More Money for Lobbying Than Any Other Telecom Company

Verizon spent $4.44 million dollars in the second quarter of 2010 on lobbyist activities designed to influence the federal government on broadband matters and other issues of concern to the telecommunications giant.

Verizon’s lobbying budget routinely exceeds $16 million a year.  It achieved the top spot among all telecommunications companies willing to spend millions to get its views heard in Washington, even as it stops expansion of its fiber optic FiOS project and has reduced spending on network upgrades, especially for landlines.

Verizon’s lobbying activities were disclosed as part of federal reporting requirements.  Verizon’s filing shows the company has several lobbyists working on a number of issues of interest to the company, particularly broadband and wireless phone legislation.

The company’s disclosure form lists the names of some of their top lobbyists.  The revolving door seems to always be turning in Washington, as former members of Congress and their aides leave to accept lucrative positions at Washington-area lobbying firms.  Among Verizon’s:

Shirley Bloomfield: From 2007-2009, she represented Qwest while also working with Rep. David Obey (D-Wisc.).  Bloomfield also lobbied for the National Telecommunications Co-Op and served as a press aide for the House Budget Committee.  From 2009 on, she’s been the VP of Federal Government Relations (read that – lobbyist) for Verizon Communications.  She kept one foot firmly planted at Big Telecom and the other in the halls of Congress.

Frank Cantrel Jr.: He’s been in this lobbying business for a long time.  After serving as an aide for ex-Senator Bob Packwood (R-Oregon), Cantrel worked for MCI’s interests for nearly a decade before moving on to represent Verizon’s from 2006 forward.  You could have spotted him July 20th at the invitation-only “Beers and Burgers” event for Rep. Roger Wicker (R-Miss.) bought and paid for by several lobbyists with campaign contributions in hand.  Would you like some fries with that “compromise” on Net Neutrality?

Bloomfield

Peter Davidson: General Counsel for former House Majority Leader “Darth” Dick Armey (R-Tex.), Davidson learned lobbying and corporate-backed astroturfing from the grand poohbah himself.  He spent time lobbying for US West and Qwest.  While Armey left for FreedomWorks, Davidson spent time as General Counsel at the Office of U.S. Trade Representative before getting paid the big bucks by Verizon.

Brian Rice: Verizon’s newest addition to its lobbying army, Rice comes straight from the office of Senator John Kerry (D-Mass.) where he served as Kerry’s Communications Policy Advisor.  Anyone want to guess what he “advised” the senator to do that helped make him the perfect choice for Verizon’s newest lobbyist?

Representing your constituents’ interests can be a major problem for members of Congress and their staffers who know only too well that riches await them working at lobbying firms after their stint in public service ends.  But few will be offered positions if they spend their time and energy alienating their future employers, which is just another reason why many members of Congress are receptive to industry arguments, especially when accompanied by a generous campaign contribution at an industry-sponsored golf tournament, barbecue, or luncheon.

For too many members of Congress, your needs come second (or third… or don’t even make the list.)

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You've used too much, and now we have to charge you more... a lot more.

No matter where you live, work or play — be it Seoul, Korea, Manchester in England, or Oklahoma City — there is one thing consumers in all three cities will readily agree on: hatred of broadband data usage caps.

Those are the findings of a brand new survey conducted by GfK NOP in association with Reuters News in Britain.

Nearly 1,000 consumers were asked what they would do if confronted with their Internet provider implementing usage limits and other Internet Overcharging schemes.  More than half said they would be shopping for a new provider.

Not surprisingly, regardless of whether a consumer uses wired or mobile broadband, few believe usage caps are anything more than price gouging by providers to rake in additional revenue.  Many of these company’s biggest-spending-customers are unhappy to learn their provider is back looking for more money in return for less service.

The survey found users of smartphones such as the Apple iPhone care more about their mobile data allowance than they do about their choice of operator or even handset brand.

The survey found that users of the iPhone, Google Android phones or Research in Motion’s BlackBerry — typically, those who spend the most — are far more likely to switch operators to find better data deals.

More than half the users of these devices said they would switch to get a higher mobile data allowance.

Adjusted to take account of the fact that consumers do not always do what they say they will, GfK NOP esimated that 24 percent of contract customers using smartphones would actually switch operators.

Such a stampede would ring panic alarms inside any wireless carrier, but one company in particular faces some serious consequences for delivering years of bad service at high prices.

According to market research firm Morpace, nearly one-half of AT&T’s iPhone customers will seriously consider jumping ship if and when Verizon offers their own version of the wildly popular Apple smartphone.

At least 34 percent of current iPhone owners are resisting upgrade offers from AT&T that require a two-year contract renewal.  They’d rather wait until the iPhone is available on any network other than AT&T.

Even worse, should Verizon introduce their version of the iPhone in the coming year, nearly a quarter of AT&T customers (including those without the iPhone) are “somewhat or very likely” to dump AT&T immediately and head for Verizon.

In addition to complaints about lousy network performance, AT&T smartphone owners who spend the most with the carrier absolutely loathe AT&T’s new data usage limits implemented this past June.

“Experienced smartphone users who understand the benefits of using the Internet on the move and use services to help them in their day-to-day lives simply can’t live without mobile data,” says GfK/NOP analyst Ryan Garner, one of the report’s authors.

“They don’t want to be thinking about their data allowance and possible costs of over-running every time they open their browser or click on an app.”

Although AT&T told their customers and the media the new data-limited plans were going to save many customers money and have no impact on the rest, that is not what AT&T’s Chief Financial Officer Rick Lindner told Wall Street bankers and shareholders on a conference call last month.

“We believe over time, based on how much data they use, they will then begin to migrate up to [more costly] higher tiered plans,” Lindner said.

AT&T is well aware customers are already packed and ready to abandon ship, which is why the wireless provider has introduced a series of impediments to keep customers anchored in place.  Waived upgrade rules permitted most iPhone owners to upgrade to the latest iPhone 4 model this summer at the promotional price, in return for a two-year contract extension.  Customers seeking an end to their relationship with AT&T will find divorce an expensive proposition.  The company nearly doubled the contract early termination fee for smartphone owners June 1st.  Your exit price: up to $350.

Why construct more of these if providers can get you to use less and pay more in the process?

Reuters notes the biggest driver towards the introduction of Internet Overcharging schemes like usage caps is the quest for additional revenue.

Most Western carriers have frozen or cut capital expenditure in the last two years as they prioritise maintaining the dividends prized by investors — meaning the modernisation of networks has been largely put on ice.

Meantime, they say they can no longer afford physically or financially to support unlimited data usage, and are banking on the fact that most consumers will barely notice data caps that are in any case far more generous than average data usage.

Stop the Cap! has been reporting that fact for at least two years now.  Usage limits are never about saving money for customers or making consumers pay for what they use.  They are about increasing profits at the same time providers continue to reduce investments to maintain and upgrade their networks.  Providers routinely report they are spending countless billions on network infrastructure, but neglect to mention those investments are not keeping up with subscriber growth and, in many cases, are actually decreasing year-by-year.  The self-perpetuating problem of network congestion that inevitably follows then becomes an excuse to charge customers more money for usage-limited service.

Reuters confirms that many western carriers have business plans that would be familiar to any neighborhood drug dealer – hand out plentiful cheap samples, get customers hooked, and then gradually reduce the supply while also raising the price.

In Europe, Scandinavian operator TeliaSonera is betting that the superiority of its next-generation LTE network, the world’s first, will allow it to offer premium services — at premium prices.

“When a service like this is entering the market, you normally more or less give it away for free, and so we did with mobile data,” Hakan Dahlstrom, the company’s head of mobility services, told investors last month.

“After a while… to meet the customer’s need for cost control; that is when you have flat rate. And then after some time the user understand how these services work and how it suits them, and you start charging for speed and volume.”

Yet not every provider has found success in alienating and overcharging their customers for increasingly important connectivity.

Reuters found Japan and Korea’s more advanced and mature data networks have already been down the road of usage restrictions, and found they didn’t solve network congestion issues — only provider investments in upgrades did:

Japanese operators NTT DoCoMo, KDDI and Softbank have stuck to flat rates — with discounts for months in which customers use less data — while encouraging them to use more Wi-Fi to take pressure off the mobile networks.

In Korea, carriers are returning to unlimited data plans because of heightened competition while investing heavily to upgrade their networks — a move that Western counterparts are unlikely to be able to avoid for much longer.

SK Telecom, South Korea’s top mobile carrier, last month said it would offer unlimited data services and free mobile Internet calls for customers paying 55,000 won ($46.40) and over in monthly service charges.

Of course, both Korea and Japan maintain more oversight by public officials over critical network infrastructure vital to both nations’ economies.  Neither government allows unregulated monopolies or duopolies in their midst — convinced they’ll deliver the least amount of service they can for the highest possible price they can get away with. In other words — today’s marketplace model in much of Europe and North America.

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Shaw's flyer distributed to Novus customers

The Supreme Court of British Columbia has thrown out Novus Entertainment’s 2009 lawsuit against Shaw Cable accusing western Canada’s largest cable operator of predatory pricing and other anti-competitive acts.

Last summer, Stop the Cap! gave considerable attention to the price war that broke out between Novus Entertainment, a fiber provider serving many Vancouver apartment buildings and condos vs. incumbent cable provider Shaw Cable.

Novus, which entered the BC market well after Shaw, faced what it alleged were incidents of fixing prices below cost and false advertising in an effort to drive competition out of the market.

At one point, last summer’s battle dropped prices as low as $30 a month for a package of HD cable, unlimited phone, and 16Mbps broadband service from Shaw.  Novus accused Shaw of recouping their losses in Vancouver from other Shaw cable subscribers across Canada who made up the difference with higher cable rates.

Novus sought relief before The Honourable Mr. Justice Greyell, in the Supreme Court of British Columbia.  Novus argued that under the recently expanded Competition Act, the court could order Shaw to cease unfair competition and face punitive fines for the cable company’s bad behavior.

Novus recited details of the price war:

Commencing February 2009, Shaw began a series of marketing campaigns specifically targeted at Novus’ existing customers in high-rise, multiple-dwelling units (“MDUs”) developments in Vancouver and Burnaby, British Columbia.

In February 2009, Shaw offered very low pricing on its Cable Television Services, Internet, and digital telephone services to certain Novus customers.  Customers were free to take one, two or all three of the services offered.  There were no contracts or commitments required:

• Cable Television Services:  Shaw’s “High-Definition TV” package including over 100 digital and HD channels, plus 1 year free rental of a high-definition personal video recorder (“HDPVR”), free for the first two months, and $9.95 for the next ten months (twelve months in total).
• Digital Telephone:  Shaw’s “Digital Phone Basic” package, which includes local calling and call display, free for the first two months, and $14.95 for the next ten months (twelve months in total).
• High-speed Internet:  Shaw’s “Xtreme-I Internet” package, free for the first two months, and $19.95 for the next ten months (twelve months in total).

In March 2009, Shaw began offering a free HPDVR to keep, plus the first month of service for free, to customers that switch back to Shaw. Customers were only required to commit to six months of pre-authorized payments.

In July 2009, Shaw offered even lower pricing than it marketed in February:

• Cable Television Services:  More than 200 digital channels, including all analogue and digital television channels, 25 high-definition television (“HDTV”) channels, a movie channel package, plus two rental HDTV set-top boxes with personal video recorder (“HPDVR”), free for the first two months, and $9.95 for the next ten months (twelve months in total).
• Digital Telephone:  Shaw’s “Digital Phone” package, including local telephone service, over a dozen calling features including voicemail, call display and call waiting, unlimited calling within Canada and the US, 1,000 International minutes to selected countries per month,”) free for the first two months, and $9.95 for the next ten months (twelve months in total).
• Shaw’s “Xtreme-I” high-speed Internet: with advertised download speeds of up to 16 Mbps, “Powerboost”, 10 personal email addresses and 100 GB monthly data transfer”), free for the first two months, and $9.95 for the next ten months (twelve months in total).

To add insult to injury, according to Novus, Shaw began advertising Internet “now 50 percent faster.”  In Novus’ opinion, the advertising implied Shaw’s Internet service was now 50 percent faster than broadband offered by Novus.

The text from Shaw’s ad read:

Feel the need for extra speed?  Shaw high-speed Internet is now 50% faster that’s fast.  Downloading your favourite music, videogames, and movies will take no time at all.  Plus Shaw high-speed Internet comes loaded with no cost extras like Powerboost, Shaw Secure and much more.  Get Shaw high-speed Internet for the amazing new price of only $19.95 per month for the first three months including modem and installation.  There’s never been a better time to order.  Call 310-Shaw today.

Signs sponsored by Shaw Cable were placed in front of buildings wired by Novus

The decision by Mr. Justice Greyell was carefully watched across Canada as it represented the first test of expanded authority granted by Parliament for courts to impose significant monetary fines against bad actors.  Commentators noted the new authority theoretically granted courts the power to determine anti-competitive activity itself — a power formerly held by Canada’s Competition Tribunal.

Those commentators need not have worried if the BC Supreme Court decision stands intact.

Mr. Justice Greyell dismissed Novus’ claims and ruled that in the absence of a determination of anti-competitive behavior by the Competition Tribunal, the court had no right to declare Shaw guilty of such behavior in the case.

“I conclude that in the absence of an order from the [Competition] Tribunal under s. 79 of the [Competition] Act, those portions of the statement of claim alleging a breach of s. 79 of the Act be struck out,” the chief justice ruled, effectively dismissing Novus’ anti-competitive claims against Shaw.

Mr. Justice Greyell also was unconvinced consumers would be confused by Shaw’s “50 percent faster” advertisement, believing the cable company now delivered faster service than Novus.

“In applying these tests to the ‘Now 50% Faster’ advertisement I am unable to conclude a reasonable person would view the words used as referring to the plaintiff’s business.  I am of the view the interpretation any reasonable person would place on the words is that Shaw is directing the advertisement to its own customers, and anyone else who might be interested, that its services are 50% faster than they used to be.  This fact is made clear by Shaw’s use of the word ‘Now’ – which implies that in the past Shaw’s services were slower and that Shaw has ‘Now’ improved the speed of its services   The advertisement makes no reference to Novus or to any Shaw competitor,” the chief justice ruled.

Novus effectively walks away from the BC Supreme Court empty-handed, and a little lighter in the wallet.  The chief justice also ruled Novus is responsible for Shaw’s legal bills associated with defending itself against Novus’ lawsuit.

Click here to view the embedded video.

Novus released this video as part of an outreach campaign arguing cable customers across western Canada should qualify for the same incredibly low promotional pricing Vancouver residents pay for Shaw Cable. (2 minutes)

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Stevens

Sen. Ted Stevens death last week in a plane crash has shined a light on increasingly cozy relationships between Alaska’s most powerful politicians and the special interests that court their support.  Winning favor with a politician that can control and direct financial resources from Washington can secure your company millions in taxpayer dollars and legislative favors in America’s most rural state.

When he died, the former Alaskan senator was on his way, as an invited guest, to an isolated lodge owned and maintained for the use of executives at Alaska’s largest broadband provider — GCI.  Time alone in the Alaskan wilderness delivered the ultimate captive audience for those the company sought to influence and Stevens was always a company favorite.

Accompanying Stevens on the doomed flight were GCI’s senior lobbyist Dana Tindall and William D. Phillips Sr., a lawyer, lobbyist and former chief of staff for Mr. Stevens.  Both also perished in the crash.

Even after Stevens was voted out of office after being initially found guilty in a federal corruption trial, special interests like GCI continued to court Stevens, who all-too-willingly mixed business and pleasure — including the ill-fated fishing trip sponsored by the Alaskan telecom company.

Stevens didn’t go quietly out of politics after losing to Democrat Mark Begich in 2008.  The New York Times noted he split his time between Washington and Alaska, providing “consulting” services and worked on resource issues.

His close connections to beltway politics kept him in favor among Alaska’s corporate interests, many of whom had supported Stevens financially and rhetorically for decades.

Tindall’s close relationship to Stevens paid GCI dividends in favors and support — both of which they returned in the form of generous campaign contributions, as the Times reports:

Ms. Tindall, 48, did not work for Mr. Stevens, but several people said they had a strong mutual respect and a warm rapport. She is credited with helping the company she worked for, GCI, grow rapidly in Alaska at the same time that Mr. Stevens was influential in telecommunications issues in Congress. He frequently brought members of the Federal Communications Commission to Alaska and helped steer money toward improving communications in rural areas. Another of his former chiefs of staff, Greg Chapados, is a vice president at GCI.

Tindall

“Senator Stevens was instrumental in helping get a satellite project started so that people in Alaska could watch same-day television and live events,” said Mike Porcaro, a radio personality and advertising executive whose clients include GCI. Mr. Porcaro recalled not being able to watch live network television in Alaska as late as the 1970s. “We went from the 1800s to the 20th century in one day, mostly because of him,” Mr. Porcaro said.

Executives at GCI were generous campaign contributors to Mr. Stevens. Since 1994, Ms. Tindall was the most generous, donating $7,100 to his campaigns, records show. But in 2007 and 2008, as the corruption case surrounded Mr. Stevens, Ms. Tindall and other GCI executives gave less. Ms. Tindall initially gave $1,000 that year, though she later reduced the amount to $400.

Roberta Graham, a public relations executive and a close friend of Ms. Tindall’s, said Ms. Tindall and Mr. Stevens were “kindred spirits,” similarly tenacious and dedicated to their work.

GCI can afford to wine and dine Alaska’s politicians from the rate hikes they will visit on their broadband customers with a proposed Internet Overcharging scheme that will limit customers to how much Internet access they can enjoy.

That abusive pricing is something Senator Stevens would have undoubtedly supported, even if he lacked an understanding of its implications.

The late senator embarrassed himself in 2006 when he sought to defend his friends in the telecommunications industry against Net Neutrality.  At one point, Stevens reduced the Internet down to a “series of tubes.”

But then companies like GCI didn’t contribute generously to his campaign for his broadband knowledge — they just wanted to make sure he was a safe vote in their column.

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Broadband customers face dramatically higher prices for Internet service from a telecom company that wants to define for Alaskans an “appropriate” amount of “fair usage” of the Internet.

GCI, Alaska’s largest cable company, is currently embarked on a so-called “education” campaign over the summer telling residential customers it might be time for them to log off, or face the consequences of enormously higher broadband bills.

For one Anchorage coffee shop, that added up for several hundred dollars for just a single month of usage — all because they offer free Wi-Fi to their customers.

“People use it for their second space. Their home office,” Kaladi Brothers Coffee COO Dale Tran told KTVA news. “We’ve always offered an open network in our cafes, and after hours some people come by and park out front.”

Tran says the result was a bill from GCI several hundred dollars higher than expected.

GCI Communications Manager David Morris says at least two percent of their 110,000 customers are using “too much” service and violating the company’s “fair use” policies.  Morris also warned customers with wireless equipment that if they don’t take steps to lock down their routers with passwords and security, they could be exposed to a huge bill from GCI for providing free Internet service to the entire neighborhood.

Morris claims the company wants to specifically define what it considers “fair use,” claiming it will make things more equitable for everyone.

But GCI’s Internet Overcharging scheme will never save a single customer a penny.  Instead, customers will see only skyrocketing bills should they not fit within GCI’s arbitrary definition of “fair use”:

The company’s website states, “For a large majority of customers, normal usage activities are not expected to exceed the plan profiles defined below”:

GCI customers are not happy.  One reader of the AK Community forum provided additional insight:

To add a little dimension to this before I start ranting, here are the respective rates for the above service plans:

Now, those prices are misleading because they are only for the internet service portion of the “bundle.”  What they’re not telling you (anywhere on the web site that I can find, in fact) is that in order to receive that price, data transfer rate, and monthly bandwidth, you must also pay for GCI’s digital cable television service ($57.99 when part of a bundle), local phone service ($15.49 a month), and long distance service ($5.99 a month plus taxes and surcharges).

Without factoring in the various FCC fees and whatnot, the above information brings the total cost of GCI’s fastest, highest monthly bandwidth package to $179.46 per month!  That’s actually the cost they quoted me on the phone, too, so at least we know their “customer service” staff are at least intelligent enough to figure out an adding machine.

Oh, and did I mention that those speeds and transfer rates are not available for standalone cable modem [subscribers]?

[...] What happens when you do go over?  BAM!  $5.12 per gig tacked on to your bill!  I don’t know about you guys, but I’m sick of getting ripped off by GCI.  Those of you who live outside of Alaska can confirm this, but GCI is just about the only cable company that still meters their customers’ bandwidth.  I have friends who tell me that they’re paying $49.00 a month for 8Mb/s transfer rate and unlimited bandwidth!

What GCI is doing is highway robbery.  How are they getting away with it?  I’ll tell you: no competition.  For very high speed broadband internet, they’re the only show in town, so they can charge whatever they want to anybody who wants more than 3Mbps (standard speed DSL service from Alaska’s other big telecom provider, the phone company).

Click here to view the embedded video.

KTVA-TV in Anchorage ran this report about GCI’s plans to force many of their broadband customers to pay more if they enjoy the Internet “too much.”  (3 minutes)

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Jon Stewart spent a few minutes last night making a tentative stab at Net Neutrality on The Daily Show, trying to begin educating viewers about an Internet controversy many net users don’t even know exists. (3 minutes)

From the people who brought you the incredibly creepy computer animation re-enactments of Tiger Woods’ blowout and Lindsay Lohan’s jail stint for Taiwanese television, the Verizon-Google deal is now fair play, right down to devil’s horns for executives at both companies.  (1 minute)

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