AT&T U-verse customers may have to do without these shows if an agreement cannot be reached with Rainbow Media

AT&T U-verse customers may lose access to three basic cable networks in less than two days if a dispute over how much money AT&T should pay for the networks isn’t settled.

Rainbow Media’s AMC, We TV, and the Independent Film Channel are all threatened with removal from AT&T’s nationwide U-verse lineup as a two week extension of carriage negotiations appears to be going nowhere.

In an ironic “now the shoe is on the other foot” twist, Rainbow Media is a wholly-owned subsidiary of Cablevision Industries — the cable system serving parts of downstate New York, New Jersey and Connecticut.  AT&T is using some of the same language Cablevision used earlier this year in a dispute over fees charged by Scripps’ Food Network and HGTV, as well as Disney-owned WABC-TV in New York.  Rainbow even borrowed a page from Scripps and launched an AT&T protest site, Facebook page and Twitter account.

“AT&T is acting in an aggressive manner that puts their corporate interests ahead of their customers,” AMC said in a statement. “We are negotiating in good faith with AT&T and are hopeful that we can reach an agreement as soon as possible so that our viewers don’t lose out.”

Meanwhile, AT&T is publicly insulting Rainbow’s cable networks.

“Based on aggregate data we obtained from third party industry sources and our own subscribers, some of the Rainbow channels are among the least-watched and most overpriced per viewer compared to other major programming providers,” an AT&T spokeswoman told Deadline. “They’re also trying to force the renegotiation of a contract for one of their other channels that is not yet expired and force us to carry a new channel that wasn’t even formally presented to us until after the recent July 1 contract extension. We want our customers to know that we can’t and won’t give in to unreasonable deals that unfairly disadvantage our customers.”

Despite AT&T’s bravado, Rainbow may have the upper hand with a more aggressive outreach campaign.  AT&T’s website for U-verse has not mentioned the dispute — a potential PR mistake if it wants to argue its position about programming costs.

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Bresnan Communications, the nation’s 13th largest cable operator with 308,000 customers in Colorado, Montana, Wyoming, and Utah, has been sold to Cablevision for $1.36 billion dollars — $4,300 a subscriber — well above the asking price of one billion dollars, including the company’s debt obligations.

Providence Equity Partners Inc. of Providence, Rhode Island, majority owner of Bresnan unloaded the cable company to help boost its earnings for clients.  Private equity firms like Providence have been suffering in the current economic climate, turning in their worst returns since 2000.  Many are selling off holdings to pay investors.

Bresnan spokesman Shawn Beqaj said the sale had nothing to do with founder William Bresnan’s death last November at age 75.

Bresnan, 30 percent owned by Comcast, today specializes in providing service in the sparsely populated mountain west states that have been ignored by larger companies.  At least 44 percent of Bresnan’s business is in Montana, where 688 of the company’s 1,300 employees work.  But the company’s founder, William Bresnan didn’t start out providing service in any of the states where the company operates today.

The acquisition by Cablevision, known mostly for its suburban New York City-area cable systems, would bring Bresnan’s current owners a considerable bonus over the asking price, and Cablevision (and the debt-financing banks) will pay in cash.

Other bidders included Suddenlink and a company controlled by former cable czar Dr. John Malone.

Cablevision managed to leverage the deal with less than $400 million of its own equity, financing the remaining $1 billion dollars between Citigroup and Bank of America Merrill Lynch in non-recourse debt.  That means if Cablevision’s buyout of Bresnan falters, the banks can only recoup their losses by seizing and selling the acquired Bresnan systems.  They can’t go after Cablevision’s other cable systems or sports ventures to make up the difference.

Considering Bresnan subscribers in the Northern Rockies face little prospect of robust competition, and Bresnan cable broadband can easily exceed broadband speeds offered by telephone rival Qwest, most analysts expect few problems from the deal.

Click here to view the embedded video.

CNBC explains the Bresnan-Cablevision Deal.  (3 minutes)

Bresnan Founder’s Story Is Echoed Across the Entire Cable Industry

The late William Bresnan -- Founder, Bresnan Communications

Bresnan’s journey through the cable industry over several decades tells the story of the often-ruthless deal-making, horse-trading, and customer-financed  mergers and acquisitions starting after cable deregulation in 1984.  Rates spiked to pay ever-increasing sums to buy and sell cable properties.  To own a cable system, it was said in the late 1980s, was a license to print money.

Bresnan’s involvement in the cable industry began with a job in the engineering department of a midwestern cable company and moved into management at a number of companies, most now long-gone after waves of consolidation.  Those with cable television dating back to the 1970s may even recall some of the names:

H&B American Cablevision: Operator of rural cable systems, most with around 12 channels, offering residents clear reception of over-the-air television signals.  They had a loyal customer base, stable earnings, but little potential for growth.

TelePrompTer: The nation’s largest urban and suburban cable operator through much of the 1970s, but a 1972 bribery scandal for a cable franchise agreement in Trenton, N.J., lead to bribery and perjury charges for TelePrompTer’s principal owner, Irving Berlin Kahn.  The famous songwriter’s nephew ordered the company to spend nearly everything to help mount his defense.  The TelePrompTer scandal would ultimately force the company to sell itself to…

Group W Cable: Westinghouse acquired the financially-troubled TelePrompTer in 1981.  Group W itself would exit the business by 1986 with an acquisition feeding frenzy among four other cable operators — American Television and Communications Corp.; Tele-Communications Inc.; Comcast Corp. and Daniels & Associates Inc.  Ironically, only Comcast would survive merger-mania intact.  ATC systems eventually became a part of Time Warner Cable.  TCI systems were acquired by Comcast.  Daniels was itself a buyer and seller of cable systems.

Bresnan Communications was founded in 1984, not in the mountain west, but in the upper peninsula of Michigan where Bresnan acquired and ran several small cable systems thanks to the help of cable czar Dr. John Malone, CEO of Tele-Communications, Inc., (TCI).  Millions of Americans are familiar with TCI’s own journey through consolidation, first becoming AT&T Broadband and then later as a part of Comcast.

Over the next 14 years, Bresnan expanded operations with Malone’s help.  At one point Bresnan jointly operated cable systems with TCI in northern Michigan, Wisconsin, Minnesota, Nebraska, Georgia and Mississippi serving approximately 660,000 customers. The company even bought cable systems in post-Communist Poland and in Chile, the latter eventually sold outright to TCI.

Bresnan Customers Benefit from Founder’s Technical Background

What set Bresnan Communications apart from the rest of the smaller players in the industry was the founder’s in-depth understanding of cable technology.  Bresnan understood where the industry was going, and had an insatiable appetite for new technology that would also leverage additional growth in the business.

Bresnan spent heavily to upgrade his cable systems, deploying the hybrid fiber-coaxial cable architecture (HFC) in 1997 which is still in use at most cable systems today.  HFC would set the stage for Bresnan to compete with satellite television’s multi-hundred channels, and would let him sell telephone and broadband service to his customers.

That was unprecedented for smaller cable operators.  In the 1990s, it was still common to find small cable systems running only a few dozen channels.  If these legacy cable systems didn’t upgrade, DISH and DirecTV could eat them for lunch.  For those that would raise the necessary money, upgrades were performed.  For those that couldn’t, many would exit the business, selling their cable systems to larger, better-equipped enterprises.

Buy Low, Sell High

Beyond anything else, Bresnan was a businessman.  He had a track record of acquiring cable systems at fire sale prices and selling them for a tidy profit.  So during the height of the dot.com boom, he could hardly ignore a 1999 call from Microsoft co-founder Paul Allen.  Flush with cash to spend, Allen saw cable systems as a key component of his dream for a “wired world.”  Cable companies owned dozens of networks brimming with content that he believed could help drive people to broadband.  Owning both the content and the pipeline to deliver it could drive up the value of both, and Allen could control both.  He had already established himself as owner of Charter Communications, itself a medium-sized cable operator.

Allen’s cable acquisition shopping spree inflated values of cable systems to all-time highs, finally reaching nearly $5,000 per subscriber in crazed bidding wars.  Allen offered $3.1 billion dollars for Bresnan’s small cable empire.  Bresnan sold.

Bresnan Communications Recreated

By 2003, the dot.com boom was well over and done with, and those high-spending online tycoons saw the value of their acquisitions and enterprises erode away.  For Allen, his much-treasured vision had become a cash-sucking albatross.  Charter Communications’ stock by then had lost 95 percent of its original value.  Consumer protection regulation had also arrived in 2003, putting a stop to subscriber rate increase-fueled bidding wars.  Cable rates had risen 61 percent from the time the industry was deregulated in 1984 until legislative relief took effect in early 2003.  When the Money Party ended, stock prices for cable operators crashed.

Bresnan saw the deflation in the industry as an opportunity to buy his way back in, and started shopping.  That year AT&T Broadband, formerly TCI, found itself considering an acquisition offer from rival Comcast.  AT&T owned cable systems large and small, several of which were in the Northern Rockies, hardly cable’s fast lane.  While Comcast had big plans for AT&T cable systems in larger areas, it would be willing to part with smaller systems acquired as part of the deal.

By the time Bresnan arrived with an offer in hand, cable system values dropped further, and his bid for the roughly 300,000 subscribers that comprise today’s Bresnan Communications would be accepted at the fire sale price of $2,100 per subscriber.

Since the acquisition, Bresnan upgraded its systems, offering speeds up to 15/1 Mbps in its rural service area and maintains a reputation in the industry for running well-managed cable operations.

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As predicted, Cablevision and Disney-owned WABC-TV New York reached a settlement of their dispute over retransmission fees, returning WABC-TV to more than three million Cablevision subscribers minutes after the start of the Academy Awards telecast.

WABC released a statement indicating a tentative agreement had been reached:

“ABC7 and Cablevision have made significant progress and have reached an agreement in principle that recognizes the fair value of ABC7, with deal points that we expect to finalize with Cablevision. Given this movement, we’re pleased to announce that ABC7 will return to Cablevision households while we work to complete our negotiations.”

Details of agreement were not released, but many expect WABC-TV will be paid 50-60 cents per month per Cablevision subscriber.

“It is a deal that is fair to our customers and in line with our other programming agreements,” Cablevision spokesman Charles Schueler said. “We are very grateful to our customers for their support and pleased to welcome ABC back.”

WABC-TV officially returned 8:43 pm Sunday, Cablevision said. The awards show began at 8:30 pm.

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Cablevision characterizes the dispute as a "TV tax" on its subscribers

More than three million Cablevision subscribers in New York, New Jersey and Connecticut are without their local ABC station as another retransmission fee dispute reached an impasse late Saturday night.

WABC-TV, the top-rated television station in New York went dark on Cablevision customer screens Sunday morning, potentially depriving cable customers access to tonight’s Academy Awards telecast.

“If Cablevision is serious about doing right by their customers and returning ABC7 and its programming to them, then they need to act now. The ball is in their court,” WABC-TV president and general manager Rebecca Campbell said in a statement.

The station says it sent Cablevision a new proposal earlier today, but Cablevision had not yet responded.

Cablevision argues it already pays $200 million dollars a year for Disney-owned cable networks like ESPN, and WABC’s request for what the company characterizes as $1 per month per subscriber is too much.

Cablevision is telling subscribers “it is wrong for ABC to demand $40 million in new fees to help pay the salaries and bonuses for top ABC executives” and characterizes the additional fees as a “TV tax.”  That argument might have some sway had Cablevision not recently agreed to some hefty pay raises and bonuses for its own management, while customers faced another rate increase.

Coming just two months after another high profile dispute between the cable operator and Scripps’-owned Food Network and HGTV, some Cablevision subscribers have had enough.

Stop the Cap! reader Jen said she ordered Verizon FiOS for her Long Island home as soon as she heard about the dispute.

“We’ve been here before and I just knew these guys would not get serious about negotiations until after the station was pulled, and I’m tired of them playing with my lineup arguing over who gets my money,” Jen writes.  “Verizon FiOS had a great sign-up offer and they don’t have these bull-headed disputes that drag customers into the middle of the ring to get repeatedly gored.”

Jen’s service was installed Friday, so she’s enjoying tonight’s Oscar telecast while her neighbors might not.

“Maybe we’ll have them over so they don’t have to play around with rabbit ears,” she adds.

Cablevision has been hounded by politicians who are also annoyed with programming disputes.  Cablevision says it would agree to binding arbitration and wants the Federal Communications Commission to intervene.  Both possibilities are highly unlikely, however.

What is likely is the high profile Academy Awards broadband will act as a de facto deadline for the two sides to hammer out a final agreement in time to allow WABC back on the lineup.  Most likely, both sides will settle around the 50-60 cent range for New York’s channel seven.

Click here to view the embedded video.

WABC-TV New York tells viewers Cablevision dropped channel 7 early Sunday morning after negotiations failed to resolve a dispute over fees. (2 minutes)

Click here to view the embedded video.

Cablevision is running this message for subscribers explaining the loss of WABC-TV from the cable lineup. (3 minutes)

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Cablevision subscribers: Just two months after facing the loss of HGTV and the Food Network, get ready to lose WABC-TV — the ABC affiliate in New York, just hours before the Oscars telecast is set to begin.

Cablevision’s contract with Disney-owned WABC-TV will expire March 7th, and both sides have not reached an agreement.

The dispute centers around retransmission rights fees.  Currently, WABC permits Cablevision to carry its channel on their lineup for free.  But now the station wants to be paid.  WABC claims Cablevision earns $18 million a month from its broadcast basic lineup of mostly-local channels, and it’s time to share a portion of that with the station.

Cablevision has so far not agreed to the asking price.

“Cablevision’s position is that ABC7 is worth little to nothing to its business and its proposed offers have been consistently unreasonable and unrealistic,” said Rebecca Campbell, president and general manager of WABC-TV. “We think these shows are valuable, and your bill shows that Cablevision must agree since you already pay for ABC7 as part of your Broadcast Basic Tier – a service for which, as a Cablevision customer, you pay as much as $18 each month.  Cablevision charges you for ABC7 and then keeps all the money.”

WABC has started a website to educate customers how to drop Cablevision and switch to a competitor such as Verizon FiOS, or get access to the station over-the-air.

Cablevision fired back accusing ABC of asking consumers to pay a TV tax amounting to $40 million that would have to be passed onto subscribers in another rate increase.

“It is not fair for ABC-Disney to hold Cablevision customers hostage by forcing them to pay what amounts to a new TV tax,” said Charles Schueler, Cablevision executive vice president.

Both sides indicate negotiations are continuing, and some compromise may still be reached before the deadline.

Click here to view the embedded video.

WABC-TV is running this 30-second ad telling viewers about the dispute with Cablevision, along with stories on their newscasts. (4 minutes)

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While the United States argues over broadband speeds, pricing, and usage limits, a broadband speed war is breaking out in Mexico which could deliver millions of Mexicans better broadband service at lower prices than what providers in the United States and Canada offer many of their customers.

The first shot came from Telmex, owned by media tycoon Carlos Slim.  They announced a more than doubling of their company’s DSL speed from the current 2-4Mbps to more than 10Mbps.

Telmex is Mexico’s leading Internet Service Provider, and typically bundles its broadband service with a calling package.  Telmex currently sells up to 5Mbps service, bundled with a phone line with unlimited local and long distance calling, plus 200 minutes of free calling to the United States, other calling features, free wi-fi access in more than 120,000 locations, and a free wireless modem/router for approximately $78 a month.  New subscribers get a bond worth approximately $39 when they sign up for service.

Televisa’s Cablevision, a cable provider, announced over the weekend it would match Telmex.

“Cablevision will offer this year more than 10Mbps service across Mexico City and surrounding areas at very affordable prices,” Televisa Executive Vice President Alfonso de Angoitia tweeted.

Televisa has been playing catch-up to Telmex, but the cable company’s “triple-play” phone, broadband, and video package has been attracting considerable attention.  The Mexican authorities currently prohibit Telmex from offering video to customers because of market domination fears.

Cablevision standalone pricing for their current 2Mbps service is about $23 a month with a term contract.  Additional discounts are provided for bundled service — $40.33 a month for both broadband and telephone service.

The price war broke out because of anemic growth in the landline telephone business, and the potential revenue expanded broadband service packages could bring Mexican providers.

Click here to view the embedded video.

A selection of ads from Cablevision and Telmex. (3 minutes)

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The battle between Cablevision and Scripps over the carriage of two popular cable channels has been resolved, but customers in New York, New Jersey, and Connecticut are now wondering where their refunds are for three weeks of interrupted viewing.

“Why are we paying for two channels they’re not delivering,” asks Stop the Cap! reader Alvira in New Jersey.  Many others are wondering the same thing, now that Cablevision is billing customers for January service that delivered an incomplete cable lineup.

The town supervisor of Ramapo, in Rockland County, New York, is demanding rebates for customers.

“We want a refund,” said Christopher St. Lawrence.  “We have over 10,000 [customers] right here in the town of Ramapo.”

Click here to view the embedded video.

WABC-TV New York reports on customer demands for refunds from Cablevison. (2 minutes)

The resolution over the carriage dispute came last week, after negotiations finally achieved an agreement restoring the channels.

“This is the resolution everyone wanted, and to have achieved anything less would have been a profound disappointment,” said John Lansing, executive vice president of Scripps.

Scripps had demanded about 75 cents per month from each subscriber for the two networks.  Cablevision formerly paid 25 cents per month.  In the end, industry watchers suggest the two companies ended up agreeing on about 45 cents per month.

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A Torrington man wants a law empowering consumers to charge their cable companies “rent” for allowing their unwanted cable boxes to stay in customers’ homes.

“I’ve got to keep it warm, I’ve got to feed it electricity. If anything happens to it, I’ve got to pay $175,” Stephen Simonin shared with the regulatorily-toothless Litchfield County Cable Television Advisory Council.  “It’s absolutely insane,” he said before being elected chairman of the Council.

The Republican-American covered the converter box debacle, and the ongoing dispute between Cablevision and Scripps-owned HGTV and Food Network, thrown off the cable lineup on New Year’s Day.

The growing variety and intensity of disputes between consumers and largely deregulated cable operators may signal a growing backlash against the cable industry and its potential for a more regulated future.

In the absence of regulation, Simonin said, “it is like the wild west.”

Simonin lodged official complaints about his converter box long before his wife began griping about the absence of Food Network from the family television. State regulators are equally powerless to force cable companies to provide content without converter boxes, or specific channel offerings, as are the various cable advisory councils.

Attorney General Richard Blumenthal, now a candidate for the U.S. Senate, said he opposed the federal law that deregulated the cable television industry in 1996, and continues to oppose it.

“I have said again and again and again over the years, Congress not only stripped states of their power to effectively protect consumers, but also failed to provide for federal protections,” Blumenthal said. There “really is no effective oversight or scrutiny.”

Telecommunications company-owned equipment, and the rental fee income earned from it, can occasionally be a source for profit-padding, especially when providers don’t allow customers to purchase and own their own equipment.  Television sets were supposed to be designed to accommodate digital cable transmissions without a required converter box as the country adopted new digital television-capable sets, but consumer experiences with a cable-box-free CableCARD plug-in cards have been mixed.

“The situation is infinitely more complicated than that suggests,” said Andrew Jay Schwartzman, president and CEO of Media Access Project. Schwartzman said about 90 percent of the televisions currently in use do not have the capability Simonin describes, though he agrees “companies like Cablevision are, in fact, monopolizing the set top box to their benefit.”

Schwartzman said the FCC has promised prompt review of a petition filed two weeks ago that demands consumers be allowed to purchase a converter box from a third party, rather than be forced to rent a box from their cable provider.

“This is a very active issue right now,” Schwartzman said.

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Negotiations between Scripps and Cablevision continue to drag on in the northeast as New York, Connecticut, and New Jersey Cablevision cable subscribers go without their HGTV and Food Network.

Progress has been incremental at best as Cablevision continues to refuse to accept paying the increased fees Scripps wants.  Cablevision’s declaration that is expects to never carry Scripps programming again doesn’t help.

Meanwhile, Food Network president Brooke Johnson has been running from one news channel to another to talk about Scripps’ position on the dispute, and that “hundreds of thousands” of viewers have complained about the loss of their two networks, a number Cablevision disputes.

Pali Research analyst Richard Greenfield, who covers the cable industry, defended Cablevision, giving credit to the Dolan family that owns Cablevision for standing up to Scripps’ rate increase request.

Greenfield accused Comcast and Time Warner Cable of “essentially rolling over” in their negotiations with Scripps, agreeing to price hikes for their networks, an allusion to Time Warner Cable’s campaign to fight back against programmer price increases.

If those cable companies “had taken a far harder stance with Scripps, Cablevision’s pushback may actually have forced Scripps’ hand,” Greenfield wrote.

Still, most viewers could care less about the power plays between cable and the programmers.  They just want their HGTV and Food Network back.

Click here to view the embedded video.

WCBS-TV New York ran these two reports during their 6pm and 11pm newscasts describing the battle between Scripps and Cablevision, and consumer reaction.  (4 minutes)

Click here to view the embedded video.

Same story, different city as WTNH-TV viewers in New Haven, Connecticut share their views on the dispute.  (2 minutes)

Click here to view the embedded video.

Food Network president Brooke Johnson appeared on CNBC to take questions about the dispute and changing business model of cable TV and programmers.  (5 minutes)

Click here to view the embedded video.

Johnson also turned up on Fox Business News to discuss the dispute, how negotiations are going, and how viewers are reacting.  (6 minutes)

Click here to view the embedded video.

…And Johnson also appeared on Bloomberg News accusing Cablevision of paying themselves top dollar for AMC, a network they own, while refusing to negotiate over a price increase for the “more popular” HGTV and Food Network amounting “to pennies per subscriber.”  (6 minutes)

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Cablevision, the nation’s fifth largest cable operator, yanked Food TV and HGTV from suburban New York cable systems early this morning in another fight over programming fees.

The two popular cable channels, owned by Scripps Networks, were “no longer authorized” to be shown to Cablevision customers after the two companies failed to reach an agreement over what the cable operator should pay per month for the two networks.

Perhaps overshadowed by the bigger profile Time Warner Cable-Fox dispute which impacts cable customers across the country, the fight between Cablevision and Scripps has been nasty even by the standards of knockdown, drag-out fights characterizing most of these contract spats.

Cablevision characterized Scripps as “financially troubled” in its own account for the press this morning:

“We are sorry that Scripps’ current financial difficulties are making it impossible for them to continue our relationship on terms that are reasonable for Cablevision and our customers,” the company said in a statement. “We wish Scripps well and have no expectation of carrying their programming again, given the dramatic changes in their approach to working with distributors to reach television viewers.”

That’s about as final as it gets, as the cable operator signals it’s done haggling over prices, at least for now.

Cablevision has a website of its own to explain the decision to drop the two networks

As usual, customers are caught in the middle in an advertising and PR war back and forth.

Click here to view the embedded video.

This morning, Cablevision customers found this message running on the channels formerly occupied by HGTV and Food Network.

Scripps has set up websites for consumers to get their take on the matter, and has also taken to running some 30-second ads of its own, along with network personalities giving their testimony about why the channels are going to be missed.  I Love HGTV and I Love Food Network largely mirror each other’s content in a blog format.  Scripps argument for Food Network, which basically also applies to HGTV:

1. Food Network is among the most popular brands on television, consistently ranking among the Top 10 networks in cable and satellite. In fact, Food Network attracted record numbers of viewers in 2009.
2. Cablevision does not pay Food Network comparably to what it pays other Top 10 networks; yet it pays some networks that deliver substantially smaller audiences significantly more for their programming.
3. The rates currently paid to Food Network by Cablevision are among the lowest in the industry. In 2009, Food Network is 75^th of the 79 Nielsen-rated cable and satellite networks in terms of average rates received from distributors per subscriber. (Source: Kagan Research)
4. Cable subscribers on the whole, responding to the 2009 Beta Subscriber Study, said Food Network is worth $1.03 per month, which is considerably more than Cablevision is paying for the network’s programming and more than Food Network is asking in the current contract negotiations.
5. Cablevision customers pay an average subscription rate of $83 per month. The monthly fee Cablevision pays for Food Network is a small fraction of that figure.

Click here to view the embedded video.

Scripps fires back with its own ad alerting Cablevision subscribers to call and ask for HGTV and Food Network back on their lineup.

Judging from the comments left on both of Scripps’ sites, consumers know they are stuck in the middle and many are not thrilled with either party.  Some of the comments:

Each of you blames the other, but it’s probably a lot of both, and we, the viewers, are the real losers.  Thanks a lot to both Cablevision and Scripps. You’re just like the Republicans and Democrats — neither side seems to understand the meaning of or necessity for compromise to benefit the masses. Have a wonderful New Year.

You guys are schmucks. You waited until the very last minute, on New Years Eve, to tell everyone about this before launching your stupid campaign. You are using your customers to fight your battles, and are ultimately punishing all of them at the end of the day. And that’s pathetic.

YOU guys are the scumbags! You’re so greedy, I hope Cablevision snubs you. If Cablevision picks you back up at your hiked rate, we’ll be the ones paying an even higher bill, you idiots.
Thanks loads and happy new year to you, too. Greedy morons.

Whatever the disagreement is on funding, ultimately, it is us as the consumer who are paying the bill. My wife LIVES for the Food Network and would be willing to pay for it as a Premium channel. If that’s the road both sides want to take, both will lose out. Only a few like myself would be willing to pay extra for it……there will be other subscribers that could care less either way.

I turned on my TV this morning to watch the Rose Parade at 11 am and found an obnoxious rotating statement from Cablevision instead of the channel. I then went online to the web address they provided on screen and read their say -nothing statement that put the entire blame on Scripps networks. Instead of telling the customers there was a problem and asking what we would want to pay for these networks, they just yanked them. They are the most customer-unfriendly company I have seen, and it is not just from this action where I form this opinion.

We have enjoyed the FoodNetwork and HGTV but you deserve to be off Cablevision, there is no way your combined networks are worth almost $2 a month, 25 cents is about right. My cable bill is too high now, 2 bucks for what you have? Forget it, I will have to do it the old fashion way. We lived without you before and will live without you again.

To Cablevision, I have had my rates raised countless times over the past 10 years, and have nothing to show but more CRAP channels. I can’t watch NFL channel, I don’t get my hard to find football games because I am a fan of an out of area team, and now, I can’t watch the ONE CHANNEL that I regularly follow, FOOD Network. The fact that companies like you have spurned the “a-la-carte” system that would allow me to choose and pay for the channels I want (which I would gladly do for Food Network and HGTV) and instead want to keep your profit margin as large as possible is a testament to the corporate GREED that you embrace instead of a value based system. You can talk tough and try to put all of the blame on Scripps, but the truth is, you are both to blame.

Somehow, I don’t think this was the kind of reaction either company expected from customers who have wised up to who will ultimately pay to resolve this in the end.

Click here to view the embedded video.

HGTV’s Vern Yip speaks to Cablevision customers about how to get HGTV back on their cable lineup.  (30 seconds)

Click here to view the embedded video.

Food Network’s Guy Fieri is “blown away” with Cablevision’s decision to drop Food Network from the lineup. (30 seconds)

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Cablevision serves communities surrounding the metropolitan New York region

Despite the tight economy for most Americans, executives at some of the nation’s largest cable players will enjoy millions from their contract extensions, bonuses, and eye-popping stock options that could net upwards of $10 million more for a select few.  And you thought your rate increase was due to “increased programming costs.”

Cablevision is where the real Money Party has just gotten started.  The top three executives alone could receive a combined $50,000,000 next year… that is fifty million dollars, just for running a regional cable company with just north of three million subscribers.

Here is the breakdown:

Dolan

Cablevision CEO James Dolan: Cablevision has always been under the control of the Dolan family, who own a controlling interest in the stock.  James Dolan gets a five-year extension in his contract, with a base salary of $1.5 million per year plus a bonus of up to four times that amount.  In 2010, Dolan is also entitled to an additional bonus package in cash and equity worth around $7 million.  He is also on track to get that same bonus each of the next five years, but only if the company does well.  Dolan is also CEO of Madison Square Garden/MSG/Radio City Music Hall.  For managing those assets, he’ll receive an extra $500,000 in salary, a bonus up to four times that amount, and an extra cash and equity bonus expected to be about $1.75 million per year.

Dolan founded Cablevision in 1973.

Ratner

Cablevision Vice Chairman Hank Ratner: Ratner gets a base salary of $500,000 a year, an annual bonus up to four times that salary, $1.2 million annually for his role with MSG, and extra cash and equity around $1.4 million annually.  And just because he’s a great guy — a one-time stock award worth $1.75 million due on March 31, 2010.  But wait, there’s more.  He also deserves extra cash and equity as MSG’s chief, targeted at $5.4 million in 2010 and each year thereafter.

Ratner joined Cablevision in 1987.  Ratner helps to set corporate direction and strategy, and is the primary executive overseeing major business partnerships and transactions.  Prior to being appointed Cablevision vice chairman, he served as vice chairman of Rainbow Media Holdings, the company’s programming subsidiary.

Rutledge

Tom Rutledge, Cablevision’s chief operating officer: He’ll get $1.63 million annually in salary, plus an annual bonus up to four times that amount.  He’s a special guy, so he also gets a “special payment” of $7.75 million within ten days of putting his ‘John Hancock’ on the new contract.  Call it a signing bonus.  But he also gets extra cash and equity compensation aiming at $6.8 million in 2010.

Cablevision isn’t alone is spreading around the walking around money.

Liberty Media, one of those programmers that keeps upping the rates charged to cable and satellite providers, who in turn pass those increases on to you, have a reason for doing so.  Their salary costs keep going up for the special few on the top floor.

Maffei

Greg Maffei, prexy-CEO of the company, just got his own five year contract renewal taking effect January 1st.  He’ll earn a base salary of $1.5 million per year, with a guaranteed 5 percent raise every year and an annual bonus amounting around $3 million.  But he’ll also get more than 10 million options of Liberty’s three stocks, most in the high-tech Liberty Interactive, which is developing online applications and services.

What do you get?  A rate increase and programming you don’t want but have to pay for, and now you know why.

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Phillip "He Who Shall Not Be Named" Dampier

I’ve tangled with Todd Spangler, a columnist at cable industry trade magazine Multichannel News before.  This morning, I noticed Todd suddenly added me to the list of people he follows on Twitter.  Now I see why.

Todd is back with another one of his cheerleading sessions for Internet Overcharging schemes, promoting consumption-based billing schemes as inevitable, backed up by his industry friends who subscribe and help pay his salary and a guy from a company whose bread is buttered selling the equipment to “manage” the Money Party.

GigaOm’s Stacey Higginbotham and Broadband Reports’ Karl Bode don’t pay his salary, so it’s no surprise he disagrees them.  Oh, and I’m in the mix as well, but not by name.  Amusingly, I’m “the StoptheCap! guy, who’s making a career directing his bloggravation at The Man.”

Todd doesn’t consider himself “an edgy blogger type because, as everyone knows, I am The Man,” he writes.

Actually, Todd, you are Big Telecom’s Man, paid by an industry trade magazine to write industry-friendly cozy warm and fuzzies that don’t rock the boat too much and threaten those yearly subscription fees, as well as your paid position there.  I’ve yet to read a trade publication that succeeds by disagreeing with industry positions, and I still haven’t after today.

Unlike Todd, I am not paid one cent to write any of what appears here.  This site is entirely consumer-oriented and financed with no telecom industry involvement, no careers to make or break, and this fight is not about me.  I’m just a paying customer like most of our readers.

This site is about good players in the broadband industry who deserve to make good profits and enjoy success providing an important service to subscribers at a fair price, and about those bad players who increasingly seek to further monetize their broadband offerings by charging consumers more for the same service.  As one of the few telecom products nearly immune from the economic downturn, some providers are willing to leverage their barely-competitive marketplace position to cash in.

It’s about who has control over our broadband future – certain corporate entities and individuals who openly admit their desire to act as a controlling gatekeeper, or consumers who pay for the service.  It’s also about organizing consumers to push back when industry propaganda predominates in discussions about broadband issues, and we know where we can find plenty of that.  Finally it’s about evangelizing broadband, not in a religious sense, but promoting its availability even if it means finding alternatives to private providers who leave parts of urban and rural America unserved because it just doesn’t produce enough profit.

Let’s derail Todd’s latest choo-choo arguments.

“The idea of charging broadband customers based on what they use is still in play.” — That’s never been in play.  True consumption billing would mean consumers pay exactly for what they use.  If a consumer doesn’t turn on their computer that month, there would be no charge.  That’s not what is on offer.  Instead, providers want to overcharge consumers with speed -and- usage-based tiers that, in the case of Time Warner Cable, were priced enormously higher than current flat-rate plans.  Customers would be threatened with overlimit fees and penalties for exceeding a paltry tier proposed by the company last April.  The ‘Stop the Cap! guy’ didn’t generate thousands of calls and involvement by a congressman and United States senator writing blog entries.  Impacted consumers instinctively recognized a Money Party when they saw one, and drove the company back.  A certain someone at Multichannel News said Time Warner Cable was “taking one for the team.“  At least then you were open about whose side you were on.

“Verizon just wants to make more money by charging more for the same service. What an outrage! It’s not like the company spent billions and billions to build out their network and needs to recoup that investment.” — Recouping an investment is easily accomplished by providing customers with an attractive, competitively priced service that delivers better speed and more reliability than the competition.  Provide that in an era when fiber optic technology and bandwidth costs are declining, and not only does the phone company survive the coming copper-wire obsolescence, it also benefits from the positive press opinion leaders who clamor for your service will generate to attract even more business.  Stacey’s comments acknowledged the positive vibes consumers have towards Verizon’s fiber investment — positive vibes they are now willing to throw away.

Verizon FiOS already gets to recoup its investment from premium-priced speed tiers that are favored by those heavy broadband users.  Most will happily hand over the money and stay loyal, right up until you ask for too much.  Theoretically charging your best customers $140 a month for 50Mbps/20Mbps service and then limiting it to, say, 250GB of usage will be an example of asking for too much.  Verizon didn’t get into the fiber optics business believing their path to return on investment was through consumption billing for broadband.

“Today’s broadband networks — not even FiOS — are not constructed to deliver peak theoretical demand and adding more capacity to the home or farther upstream will require investment.” — Readers, today’s newest excuse for overcharging you for your broadband access is “peak theoretical demand.”  It used to be peer-to-peer, then online videos, and now this variation on the “exaflood” nonsense.  It sounds like Todd has been reading some vendor’s press release about network management.  Peak theoretical demand has never been the model by which residential broadband networks have been constructed.  The Bell System constructed a phone network that could withstand enormous call volumes during holidays or other occasional events.  Broadband networks were designed for “best effort” broadband.  If we’d been living under this the peak demand broadband model, cable modem service and middle mile DSL networks wouldn’t be constructed to force hundreds of households to share one fixed rate connection back to the provider.  It’s this design that causes those peak usage slowdowns on overloaded networks that work fine at other times.

No residential broadband provider is building or proposing constructing peak theoretical demand networks that are good enough to include a service and speed guarantee.  Instead, cable providers are moving to affordable DOCSIS 3 upgrades, which continue the “shared model” cable modems have always relied on, except the pipeline we all share can be exponentially larger and deliver faster speeds.  Will this model work for decades to come?  Perhaps not, but it’s generally the same principle Time Warner Cable is using to deliver HD channels quietly ‘on demand’ to video customers without completely upgrading their facilities.  You don’t hear them talk about consumption billing for viewing, yet similar network models are in place for both.

“Is it fairer to recover that necessary investment in additional capacity from the heaviest users, who are driving the most demand?” Apparently so, because providers already do that by charging premium pricing for faster service tiers attractive to the heaviest users.  But Todd, as usual, ignores the publicly-available financial reports which tell a very different tale – one where profits run in the billions of dollars for broadband service, where many providers Todd feels urgently need to upgrade their networks are, in reality, spending a lower percentage on their network infrastructure costs, all at the same time bandwidth costs are either dropping or fixed, making it largely irrelevant how much any particular user consumes. What matters is how much of a percentage of profits providers are willing to put back into their networks.

Do people like Todd really believe consumers aren’t capable of reading financial reports and watching executives speak with investors about the fact their networks are well-able to handle traffic growth (Glenn Britt, Time Warner Cable CEO), that consumption based billing represents potential increased revenue for companies that deny they even have a traffic management problem (Verizon), or that broadband is like a drug that company officials want to encourage consumers to keep using without unfriendly usage caps, limits, or consumption billing (Cablevision.)

“From 7 to 10 p.m., we’re all consumption kings,” Sandvine CEO David Caputo told Todd. “Bandwidth caps don’t do anything for you.” The implication of this finding is that “the Internet is really becoming like the electrical grid in the sense that it’s only peak that matters,” he added. — I would have been asking Todd to pick me up off the floor had Caputo said anything different.  His bread and butter, just like Todd’s, is based on pushing his business agenda.  Sandvine happens to be selling “network management” equipment that can throttle traffic, perhaps an endangered business should Net Neutrality become law in the United States.  His business depends on selling providers on the idea that sloppy usage caps don’t solve the problem — his equipment will.  Todd has no problem swallowing that argument because it helps him make his.  The rest of us who don’t work for a trade publication or a net throttler know otherwise.

What would actually be fair to consumers is to take some of those enormous profits and plow them back into the business to maintain, expand, and enhance services that deliver the gravy train of healthy revenue.  In fact, by providing even higher levels of service, they can rake in even larger profits.  You have to spend money to earn money, though.

Technology doesn’t sit still, which is why provider arguments about increased traffic leading to increased costs don’t quite ring true when financial reports to shareholders say exactly the opposite.  That’s because network engineers get access to new, faster, better networking technology, often at dramatically lower prices than what they paid for less-able technology just a few years earlier.  With new customers on the way, particularly for the cable industry picking up those dropping ADSL service from the phone company, there’s even more revenue to be had.

Or, do you think spreading the cost across all subscribers, thereby raising the flat-rate pricing for everyone, is the better option? Note that Comcast did this to an extent when it raised the monthly lease fee for cable modems by $2 (to $5), citing costs associated with its DOCSIS 3.0 buildout.

The industry already thinks so.  As we’ve documented, cable broadband providers like Time Warner Cable and Comcast (and Charter next year), are already raising prices across the board for broadband customers in many areas.  Does that mean the talk about Internet Overcharging schemes can be laid to rest?  Of course not.  They want their rate increases -and- consumption based billing for even fatter profits.

If, on the other hand, you want to pretend that all-you-can-eat plans are sustainable at today’s price tiers, you’d be kind of clueless.

Every ISP maintains an Acceptable Use Policy that provides appropriate sanctions for those users who are so far out of the consumption mainstream, they cannot even see the rest of us.  Slapping consumption based billing on consumers with steep overlimit fees and penalties punishes everyone, and the provider keeps the proceeds, and not necessarily for network upgrades.

If Todd believes consumers will sit still for profiteering by changing a model that has handsomely rewarded providers at today’s prices, with plenty of room to spare for appropriate upgrades, he’ll be the clueless one.  The cable industry’s ability to overreach never ceases to amaze me.  Every 15 years or so, legislative relief has to put them back in their place.  It’s what happens when just a handful of providers decide it is easier to hop on board the Internet Overcharging Express and cash those subscriber checks than actually engage in all-out competitive warfare with one another – keeping prices in check and onerous overcharges out of the picture.

Nobody needs to know my name to understand this.  But some of his provider friends already know the names of our readers, because PR disasters do not happen in a vacuum.  They are also acquainted with two other names: Rep. Eric Massa and Sen. Charles Schumer.  If they want to go hog wild with Internet Overcharging schemes, that list of names will get much, much longer.

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The Great Wall of Pay

Newspaper, broadcasting, and cable magnates have had enough of online web visitors accessing all of their content for free.  Free is naughty.  Free must be stopped.  Free threatens to devalue everything.

For the last few years, content producers have been looking for ways to recoup investments in online publishing.  Newspapers publish articles online and fear that causes people to stop paying for the printed edition.  Studios and networks make their shows available on Hulu, and people find on-demand viewing more convenient than watching ad-packed live television.  Cable magnates worry about people dropping cable subscriptions and watching all of their video online.

Broadcasting & Cable generated a firestorm late last week when it quoted one of Hulu’s partners — News Corporation’s Deputy Chairman Chase Carey telling the B&C OnScreen Summit “it’s time to start getting paid for broadcast content online.”

“I think a free model is a very difficult way to capture the value of our content. I think what we need to do is deliver that content to consumers in a way where they will appreciate the value,” Carey said. “Hulu concurs with that, it needs to evolve to have a meaningful subscription model as part of its business.”

CNN picked up the story in one of their news blogs, and promptly generated more than 700 responses, most hostile to paying for anything on Hulu, and that included the blog’s author:

“I certainly won’t be pulling out my credit card if the service puts up a subscription pay wall. And I doubt many other customers will be happy to start paying money for a service they previously received for free.”

Most comments indicated they’ll go back watching online TV shows and movies the old fashion way – downloading them from peer to peer torrent networks or newsgroups.

“The Internet abhors a content vacuum, especially one created artificially by a subscription wall,” Stop the Cap! reader Jake writes.  “Just like what happened with digital rights management schemes and viewing rights blockades, enterprising net users will always find a way around them and distribute the content a few don’t want us to have.”

The quest for control is increasingly becoming more contentious among super-sized corporate entities that create and distribute content.  Comcast seeks ownership of NBC-Universal, a content creator and partner in Hulu, which currently gives away content for free Comcast charges customers to watch.  A newly constructed Great Wall of Pay could help stop these business model challenges.

When online content was successfully monetized by advertising, few cared about handing it out for free.  In fact, providers like AOL abandoned many of its ‘subscriber-only’ walls to “go free” and attract a larger audience, and corresponding increased ad revenue.  In a post-bailout recession era, ad dollars have become scarce and no longer pay all of the bills Hulu’s owners want paid.  Advertising industry consultants say Hulu cannot simply increase the number of advertisements to make up the difference.  Even though Hulu users confront far less advertising than traditional broadcast television, research has shown online TV watchers resent a lot of the advertising they see now.  Many Hulu viewers actively develop a form of ad blindness based, in part, on the resentment those ads bring to the experience.  Hulu occasionally offers viewers one extended ad at the start of a show, instead of having them seeded throughout the program.  Many take Hulu up on the offer and use that 90 seconds to grab a snack.

Interestingly, the shorter a web ad, the more viewers retain information contained within it.  Some web ads run only 10 seconds, and are sold to clients with this in mind, and at a budget price to boot.

For web-ad haters, the worst of all worlds would be a Hulu that retains its limited commercial interruptions -and- charges a subscription fee.  For many, that would be the equivalent of “basic cable on the web.”  Many will drop Hulu “like a rock” should this happen.

A day after the hue and cry was raised by the Broadcasting & Cable article, skeptics said it was unlikely Hulu would entirely abandon free programming.  It may provide a premium pay service offering extra episodes, or perhaps remove commercials entirely for premium customers, a proposition at least some were willing to entertain, depending on the price.

“I would consider paying a very small (less than $3.00) monthly fee to watch Hulu if, and only if, they removed the commercials. Otherwise there are other alternatives,” one commenter wrote on CNN’s blog.

Newspapers are also feeling the bite, even more than online video sites.  The printed “dead tree format” of the daily paper has become anathema to the under-30 crowd, despite valiant efforts by some publishers to appeal to younger audiences with feature stories and even free weeklies that mix light news with entertainment features.  The only answer has been to take the paper online.  For years, concepts like online subscriptions, micropayments (paying a few cents per story), free access only for print subscribers, and charging per story for access to week-old and beyond news archives have been considered, tried, abandoned or ignored when web visitors flee or simply skip the pay content.  The daily local newspaper is not what it used to be, and when the “pay here” box pops up, many web visitors simply take their news reading business elsewhere, thanks to the near-universal access to wire service reports and competing media covering stories of interest for free.

Newsday, the Long Island newspaper owned by Cablevision, abandoned its “freeloading” audience yesterday with a new Great Wall of Pay charging a steep $5 a week for those who do not subscribe to either the newspaper or have a broadband account with Cablevision.

The newspaper’s Wednesday edition teased non-subscribers with stories that suddenly drifted off into ellipsis… with an invitation to open your wallet to read more.

Sports media blogger Neil Best, who writes for Newsday, seemed resigned to the fact he was losing a lot of his audience in his farewell-to-free column published Tuesday:

The inevitable decline in my national visibility (and page views) mostly is an ego thing. More to the point, Long Island advertisers understandably have little interest in readers in Dubuque.

For those readers who won’t be coming along for the ride – especially those outside Cablevision territory who in many ways are innocent bystanders in all this – thank you for your readership, input and support.

You will be missed.

Best realistically assessed the number of web visitors he’d see post-Wall, particularly from outside of the immediate area.  Best and his readership seemed to collectively sense this project was destined to fail, another bad experiment from aloof and out of touch management to the realities of the web world.  One commenter lamented the real victim would probably be Best himself:

What’s most frustrating of all, though, is that everyone knows this venture will fail. It’s never succeeded before and there’s truly no reason it will now. Pay for blogs? Are you kidding me? Even the pay-for-columns model is a one-in-a-million risk. But blogs? We all know this is not just you and I missing Neil, it’s Newsday destroying a commodity that could have helped it promote its other products. So Newsday loses– this has no chance– none– to succeed. And Neil loses –immediately– the majority of his followers. He will suffer the most immediate and quantifiable of harms. His readers, his fans, the people who support him and have helped him grow. Now his bosses shut us out and help him dwindle. And we lose. We lose our beloved journalists– we lose their thoughts and every day muses– things that dont even belong in a newspaper.

The use of the word “commodity” would no doubt cause much consternation among Newsday’s management and Wall Street types.  It is the “commoditization” of the news business, with endless debt-laden mergers and acquisitions and the cost-cutting that followed, that trained readers to realize that with the decrease in unique, local content in many newspapers, and their increasing reliance on partnerships with broadcast news operations, wire services, and syndicated feature content, why pay when you can get nearly the same (if not the same) content for free on the next website in the Google results list?

The big believers in the Great Wall of Pay fear what happened to newspapers could happen to their cable, broadcasting, or video rental operations.  The commoditization “crisis” is largely self-made: cable and phone companies with their “dumb pipes,” the cost-cutting local broadcaster that dispensed with nightly news, or the alienating video rental chain store made obsolete by Netflix or the Redbox ‘Tardis’ positioned in the entrance to your local supermarket.  When companies extract maximum revenue through minimal devotion to quality, uniqueness, and integrity, and either overcharge or irritate customers, why be surprised when consumers rebel when being asked to pay or pay more?

One of the rare success stories in pay content has come from Consumer Reports, which charges an annual fee for access to its online reviews.  Consumers notice the dramatic difference between a publication that accepts no advertising and keeps its integrity because of it, and other news sites contemplating pay schemes that are so cluttered with online advertising, autoplaying loud video ads, pop-ups and unders, they can barely find the content they are now being asked to pay for.

Consumers can and will pay for quality content, but many will not be forced into doing so with a corporate blockade on content from “walled gardens” and other “pay me to watch this, right after this ad” schemes.  Online, there is more than one way around the Great Wall of Pay.

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I realize this is a bit off topic for us, but I was bemused to learn Cablevision, the cable operator in suburban New York (and elsewhere), has launched iO TV Quick View, three new channels that display nine different kids, sports and news networks all on one screen.

Who is this for?  I suppose the carpel tunnel-suffering channel surfer that has worn his finger out moving up and down the cable dial looking for something to watch and never making it all the way to the end of the lineup.

Cablevision says these three channels will let viewers highlight each window showing a network and, with one button press, jump to the channel they want to see.

No doubt these three channels will be part of the pointless bragging rights cable companies play over the number of channels they offer customers, as if most are still concerned with counting them.

The 500 channel universe already threatens to become littered with networks like Cat Fur Entertainment, Dorm Room Cooking Channel, Log Rolling 24/7, Uncle Fred’s Aquarium TV, and the Uighur News Network, before someone came up with this.

Channel 670 (like you’ll find that):  Kids Quick View channel features box views of Disney Channel, Cartoon Network, Nickelodeon, Boomerang, Discovery Kids, Disney XD, Nicktoons, Nick Jr. and Kids Thirteen.

Channel 671: News Quick View channel features News 12, News 12 Traffic & Weather, MSNBC, CNBC, CNN, Fox News Channel, CNN Headline News, Bloomberg TV and BBC World News.

Channel 672: Sports Quick View, featuring MSG, MSG+, YES Network, ESPN, ESPN2, Speed Channel, Golf Channel, SportsNet NY and Versus.

Versus TV

I can already guess there will be some clashing between Cartoon Network’s more-adult oriented cartoons and Nick, Jr., among others.  Putting channels with Glenn Beck, Nancy Grace, and Ed Schultz all on one channel will blow a hole in the fabric of space on 671, and few will pay attention to actual sports on 672 when the scantily clad ladies on Versus turn up… regularly.

“Our focus in the development of iO TV Quick View has been on discoverability and helping our customers find the perfect program to watch,” Cablevision’s SVP of strategic product development, Patrick Donoghue, said in a prepared statement.

“With so many channels to choose from, this new enhancement allows us to present current options in a number of popular programming categories, literally at a glance. And the end result is a visually beautiful presentation with easy navigation both within the mosaic and to the specific channels being spotlighted.”

Yeah, you’re going to pay for it.

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Be Sure to Read Part One: Astroturf Overload — Broadband for America = One Giant Industry Front Group for an important introduction to what this super-sized industry front group is all about.

Members of Broadband for America

Red: A company or group actively engaging in anti-consumer lobbying, opposes Net Neutrality, supports Internet Overcharging, belongs to an astroturf group, or is an astroturf group itself.
Blue: An equipment supplier whose bread is buttered by the telecommunications industry, but doesn’t go out of their way to actively engage in anti-consumer activities.
Purple: A telecommunications company providing broadband service.
Black: A group or organization about which there is insufficient evidence to connect them to a specific astroturfer, lobbying firm, telecommunications provider, or other aligned special interest.  That doesn’t mean there aren’t ties yet to be uncovered.  Considering the overwhelming majority of BfA members have a vested interest towards the broadband industry, you can draw your own conclusions.

Actiontec Electronics, Inc. — Actiontec is an equipment provider selling high speed Internet modems and routers. Their customers include Verizon, Qwest, TDS, MTS and hundreds of smaller carriers throughout North America. More importantly, it is a member of the notorious anti-regulatory, anti-Net Neutrality “Hands Off the Internet” group run for and by the telecommunications industry. Actiontec is also a member of TV4Us, a group Common Cause called the very definition of Astroturf. It advocates for franchising reform (taking away local government oversight) and hates Net Neutrality. Actiontec took even more action by signing a letter by Netcompetition opposing Net Neutrality.

ADC Telecommunications, Inc. — ADC sells broadband network infrastructure products and services that enable the profitable delivery of high-speed Internet, video, data, and voice services to residential, business and mobile subscribers. Among their clients: AT&T, British Telecom, Comcast, Sprint Nextel, Qwest, T-Mobile, and Verizon. They are also listed as a member of “Hands Off the Internet” and signed a letter by Netcompetition opposing Net Neutrality.

Advanced Digital Broadcast — ADB provides digital set-top boxes for including cable, IPTV, satellite and terrestrial providers.

Alloptic — Sells central office and customer premise equipment to deploy Fiber-to-the-Business and Fiber-to-the-Home.

American Agri-Women — A national coalition of farm, ranch, and agri-business organizations, AAW’s involvement in telecommunications issues is not prominent on their website. The group’s 2009 position statement has one sentence about telecommunications issues: “AAW supports a full range of ownership of telecommunications infrastructure including entrepreneurs, large corporations, municipalities, and other units of local government.”

American Association of People with Disabilities — AAPD gets major donations from both Verizon and the Verizon Foundation, and put a Verizon VP, Richard T. Ellis – on its board (2005). It participated in multiple Verizon-based campaigns, including part of a group put together by Issue Dynamics, a Washington DC public relations firm, that jointly signed an ex parte letter to the FCC, explaining why the Bell companies should not have to open their fiber-optic networks to competition. (Source: Harvard Nieman)

American Council on Renewable Energy — What do C. Boyden Gray, big industry lobbyist and ex-aide to former President George Herbert Walker Bush, and Amory Lovins, alternative energy guru, agree on? The need for a big-bucks trade association that can “bring renewable energy into the mainstream of America’s economy and lifestyle” and otherwise spread the gospel about solar, wind, hydro, geothermal, biomass, biofuels, waste energy and hydrogen energy systems. (Source: Sourcewatch) Their position on telecommunications and broadband issues is not clear from their website.

Americans for Technology Leadership — Americans for Technology Leadership was founded by Jonathan Zuck in 1999 as a “grassroots” organization for concerned consumers who want less regulation in the technology sector.  It also campaigns on general tech issues such as spam.  It has been frequently described as a Microsoft front group.  ATL’s domain name, techleadership.org, is registered to the Association for Competitive Technology.  The site is hosted by Thomas E. Stock and Thomas J. Synhorst’s LLC, TSE Enterprises.  Synhorst is a founding member of the DCI Group, a Washington DC-based strategic consulting and lobbying firm which has counted Microsoft as a prime client for a number of years. (Source: Sourcewatch)

ARRIS — ARRIS provides broadband technology for the cable industry. ARRIS products help cable operators provide cable TV and telephony, high-speed Internet and data access. The ARRIS product line includes cable modem and wireless broadband products, infrastructure for digital video and IPTV, and a Fixed Mobile solution.

AT&T — Broadband provider

BendBroadband — Broadband provider

BeSafe — BeSafe Technologies uses broadband to provide real time information to emergency first responders, including contact information, aerial photos, video feeds and building plans. It’s interested in advocating emergency preparedness issues that leverage broadband infrastructure as part of the FCC’s National Broadband Plan.

BigBand Networks, Inc. — BigBand Networks provides infrastructure and support for moving, managing, and monetizing video.

BTECH Inc. — A backup battery provider which oddly finds the need to involve itself in a variety of astroturf groups.  In addition to signing a letter by Netcompetition.org opposing Net Neutrality, BTECH also belongs to “Hands Off the Internet” and TV4Us.

Cablevision Systems Corporation — Broadband provider

CBM of America, Inc. — A network solutions provider for IP networks, CBM is also a member of astroturf group “Hands Off the Internet” and signed a letter by Netcompetition.org opposing Net Neutrality.

CenturyLink — Broadband provider

Charles Industries, Ltd. — Provides cable wiring protection and products that help expand DSL service to hard to reach areas. What wasn’t hard to find was their membership in the astroturf group TV4Us.  They also signed a letter by Netcompetition.org opposing Net Neutrality.

Child Safety Task Force — Part of the Robert K. Johnson astroturf machine, including Consumers for Cable Competitive Choice and Consumers Voice. Only involvement in telecommunications comes from “child safety on the Internet” issue.

Cisco — An equipment manufacturer that has ties to several astroturf and public policy groups, including Arts+Labs and is a major advocate of the alarmist “The Internet is full/exaflood/zettabyte era” rhetoric providers use to justify Internet Overcharging schemes, while Cisco’s self-interest is served by selling the equipment to manage the ‘data tsunami.’  They also signed a letter by Netcompetition.org opposing Net Neutrality.

CoAdna Photonics, Inc. — Sells a variety of products to maintain optical networks, and signed a letter by Netcompetition.org opposing Net Neutrality.

Comcast — Broadband provider

CommScope, Inc. — Designs and produces cables for cable broadband and other providers.

Condux International, Inc. — Condux is a manufacturer of aerial and underground cable installation equipment and tools. Also belongs to TV4Us and “Hands Off the Internet” and signed a letter by Netcompetition.org opposing Net Neutrality.

Consumers First — A group that receives corporate contributions from both AT&T and Verizon, Consumers First often turns up belonging to other astroturf groups, including Robert K. Johnson’s now-defunct Consumers for Cable Choice.

Corning Incorporated — A manufacturer of fiber optic cable, among other things. Verizon is a very important customer.  Corning helped launch the Fiber to the Home Council, which pals around with astroturfers and doesn’t like Net Neutrality. Corning keeps more distance between itself and direct anti-consumer astroturf campaigns, but still signed a letter by Netcompetition.org opposing Net Neutrality.

Cox Communications — Broadband provider

CTIA The Wireless Association — The trade association for the wireless industry, includes AT&T and Verizon.

DC-Primary Care Association — A group advocating for health care reform, telemedicine, and affordable care in the District of Columbia. Its primary interest in broadband may be to leverage stimulus money for health-care related broadband applications.

Dominican American National Roundtable — A group that claims to represent the interests of Dominican-Americans, they spend a lot of time involving themselves in telecommunications issues like mergers involving Verizon. That could be because the group receives substantial support from both AT&T and Verizon Wireless. On behalf of Verizon in 2008, DANA wrote the Federal Communications Commission with a dubious argument in favor of the Verizon Wireless-Alltel merger, claiming “Verizon Wireless also has the scale and scope to invest in network facilities in [...] areas in which there is a dense Dominican population.” They fell all over themselves praising Verizon: “Verizon Wireless is well known for having one of the largest and most reliable national wireless networks in the country, so Alltel’s customers will benefit from its size, reach and quality [and] customers will benefit from ever-greater choices – in plans and phones – [and] one of the most advanced broadband networks.”

Enhanced Telecommunications Inc. — Enhanced Telecommunications, Inc. was founded in 1992 to provide software for the converging broadband technologies of television, telephone and internet communications. They are also are believers in converging astroturf campaigns, as a member of “Hands Off the Internet” and a co-signer of a letter by Netcompetition.org opposing Net Neutrality.

Fiber to the Home Council — An industry trade group that promotes fiber optics broadband. The FTTH Council was established in July 2001 by Alcatel-Lucent, Corning Incorporated and Optical Solutions. If an issue could lead to more fiber optics deployment, FTTH Council is often involved. Since consumers are often pro-fiber, there are times they do share a common interest in expanding fiber optic broadband. But the Council hates Net Neutrality. Full Frontal Scrutiny also exposed some credibility problems with the Council: “The FTTH Council is comprised of “approximately 800 company member delegates,” most of which represent businesses that provide equipment and/or services related to fiber optic systems. Nonprofit institutions can apply to join the FTTH Council, but their membership must be approved by the Board of Directors. Moreover, nonprofits allowed to join the FTTH Council can not serve on the Board or vote on Council issues.” The group also promotes the “exaflood – Internet is going to get overloaded” scare-mongering, unsurprising since they believe fiber deployment will fix it.

FiberControl — Designs and manufactures fiber based polarization stabilizers, polarization controllers and polarization-state scramblers for fiber optic networks. They will polarize our readers against them as a member of the “Hands Off the Internet” astroturf group and their signature on a letter by Netcompetition.org opposing Net Neutrality.

Global Crossing — A telecommunications service provider.  As a consumer who lived under Global Crossing’s ownership of Frontier Communications, I hope BfA made sure the check cleared before sending them membership stickers.

Hispanic Leadership Fund — A conservative Hispanic political group that generally opposes regulation and government involvement in private business. Mario Lopez, group president, spent most of his summer at tea party rallies criticizing Obama Administration policies. Insufficient information available to know where the money comes from, but this group opposes regulation generally, so Net Neutrality is definitely a thumbs-down with them.

Independent Technologies Inc. — Independent Technologies is a communications technology research and development company. They also independently decided to join forces with both “Hands Off the Internet” and TV4Us astroturfers and signed a letter by Netcompetition.org opposing Net Neutrality.

Independent Telephone and Telecommunications Alliance (ITTA) — An industry trade group of independent mid-size telephone companies. Their members, which usually provide DSL broadband service, include CenturyLink, Comporium Communications, Consolidated Communications, FairPoint Communications, Frontier Communications, Iowa Telecom, Qwest Communications, TDS Telecom, and Windstream Communications. The group actively opposes Net Neutrality and wants a hands-off policy on telecommunications regulations.

International Association for K-12 Online — iNACOL, The International Association for K-12 Online Learning, is a non-profit organization that facilitates collaboration, advocacy, and research to enhance quality K-12 online teaching and learning.

Intertribal Agriculture Council — IAC was founded in 1987 to pursue and promote the conservation, development and use of Native American agricultural resources for the betterment of Native Americans. Oddly, one of the priorities for IAC in 2008 was being a full-throated supporter of the Sirius-XM Radio merger. It also joined forces with the Alliance for Aviation Across America (along with other BfA members including the National Grange of the Order of Patrons of Husbandry and the U.S. Cattlemen’s Association) to oppose a proposal to shift some of airline carriers’ federal tax burden to small-jet operators.

Itaas Inc. — Founded in 1999, itaas is a privately held, Atlanta-based company with experience in digital cable television technology.

"This may be an attempt to trick you." -- The error message received when visiting the apparently defunct jewishenergyproject.org website

Jewish Energy Project — Appears to be defunct or inoperative. Website jewishenergyproject.org launches a prompt to log onto group founder Brian H. Davis’ Gmail account! Davis is an environmental lawyer whose firm uses a “team approach [to] support “harmonizing of business and environment.”

Latinos in Information Science & Technology Association — LISTA claims it is a national organization of Latino professionals and role models from the information science, telecommunications, and technology industry. “By working together and showcasing the talented Latinos in these sectors, the community as a whole could reach higher goals in order to conquer the digital divide. Today, LISTA remains committed to excellence and providing a wide spectrum of resources to members, corporate sponsors, businesses, educational institutions and the community.” Somehow, it accomplishes that by advocating the merger of Sirius and XM Radio and attacking Google’s “search monopoly.” LISTA has a corporate sponsorship program that, among other things, “link LISTA strategic initiatives to the objectives of the corporation.” Now we’re getting somewhere. LISTA’s membership in BfA may strategically link the objectives of these sponsors: AT&T, National Cable and Telecommunications Association, Microsoft, Comcast, Verizon, and RCN Communications.

Livestock Marketing Association — The Livestock Marketing Association is committed to the support and protection of the local livestock auction markets.  Their website says, “auctions are a vital part of the livestock industry, serving producers and assuring a fair, competitive price through the auction method of selling.” The best way to assure that is to join Broadband for America?  Perhaps the livestock have Facebook pages.

LookBothWays – From their website: “LOOKBOTHWAYS, Inc., founded by internationally recognized online safety expert Linda Criddle, provides free consumer education in online safety through their Web site, ilookbothways.com. We are currently building K-12 online safety curriculum which will be available to everybody at no charge, and teach a college course in Internet Safety for Educators through two US universities. LOOKBOTHWAYS also has a software division developing technology solutions for online safety. In addition we consult and train companies, governments, and law enforcement agencies worldwide and are available for speaking engagements on a wide variety of safety topics. Criddle spent 13 years at Microsoft where she was a pioneer in online safety.”   Criddle also heads the “Safe Internet Alliance” which is absolutely infested with astroturf groups and providers, many of them also AfB members: AT&T, US Internet Industry Association, National Black Chamber of Commerce, National Cable & Telecommunications Association, RetireSafe, Stop Child Predators, Verizon, MANA (A National Latina Organization), and Consumers First. Her organization’s name is lent out to Saferdates, which charges a fee to do background and fingerprint checks on you to “verify” your identity to people who might want to date you.  Perhaps Criddle should perform a background check on BfA to know who she’s hanging around with.

MANA (A National Latina Organization) — Formerly the Mexican American National Association, MANA today claims to empower Latina women through leadership development, community service, and advocacy. They are also empowered by support from AT&T and Verizon. MANA’s National Corporate Partnership Council will put your company logo on their home page for a $50,000 contribution (AT&T is the first logo shown). MANA’s Advisory Council has Emilio Gonzalez, Verizon’s director of public policy and strategic alliances on it. Gonzalez also serves on the boards of two other BfA members:  the United States Distance Learning Association and the US Mexico Chamber of Commerce.  Even more impressive, from as astroturfing perspective, is their Vice-Chair, Bridget Gonzales, who used to be “Assistant Vice President for Issue Dynamics, Inc., a public affairs firm in Washington, DC, where she led the firm’s Strategic Alliances Group. “Ms. Gonzales was instrumental in planning and executing public affairs and consumer education campaigns for Fortune 500 clients such as Verizon Communications, BellSouth, SBC Communications, Corning, Novartis, and others. This included preparation of press releases, op-eds, speeches and consumer education materials as well as coordination of issue briefings, congressional advocacy activities, workshops and media relations. Critical to her success was the effective working relationships she established with high profile national organizations such as League of United Latin American Citizens, U.S. Hispanic Chamber of Commerce, NAACP, National Grange, Gray Panthers and others.”

Motorola — An equipment manufacturer, among its biggest customers are AT&T, T Mobile, and Verizon.  They signed a letter by Netcompetition.org opposing Net Neutrality.

MRV Communications, Inc. — MRV Communications is a supplier of communications equipment and services to service providers. “Today’s telecommunication networks are evolving to support growing network traffic due to the demand for high-bandwidth applications such as IPTV, streaming video, peer-to-peer networking, and content-rich websites. Service providers are attempting to differentiate their offerings from their competitors and strive to provide many new capabilities. The growth in these applications is driving the need for additional bandwidth capacity in the Internet infrastructure.” They don’t differentiate themselves much in their membership in the usual astroturf groups “Hands Off the Internet” and TV4Us. They also co-signed a letter by Netcompetition.org opposing Net Neutrality.

National Association of Manufacturers — This trade association, which counts AT&T and Verizon among its members has this policy towards telecommunications: “Fostering an environment where manufacturers and consumers alike can obtain the services and content they want, when they want it and regardless of medium, is of primary concern. To achieve this goal, policymakers should remove barriers to entry that prevent broadband providers from offering high-speed information services to homes and businesses, balance the need for regulations against the potential to dampen private industry’s incentive to invest in broadband technology, encourage federal and state regulators to monitor the rollout of broadband services, and adopt a federal framework and to the extent necessary, lightly regulate only to ensure fair, technology-neutral competition for all providers.” They are members of both “Hands Off the Internet” and TV4Us.

National Association of Black Telecommunications Professionals — Appears defunct. The last time the nabtp.org website was updated and captured by Archive.org was on May 13, 2008. Their telephone number has been disconnected. Among their last features was a promotion for a speech by Larry Irving, who himself works for an astroturf group – the Internet Innovation Alliance. Some history on this group and others like it, was written by the National Community NETwork of AT&T.

National Black Chamber of Commerce — This group’s stated purpose: “To economically empower and sustain African American communities through entrepreneurship and capitalistic activity within the United States and via interaction with the Black Diaspora.” Their website hides their membership list, stating: “The National Black Chamber of Commerce does not distribute information about our members to protect their privacy.” Uh huh. We can take a wild guess however, based on their extended reach into the astroturf diaspora with memberships in both “Hands Off the Internet” and TV4Us. Back in December 2007 before the corporate sponsors were removed from the website for ‘their privacy,’ the group noted it had AT&T, Comcast, and Verizon among its members. Here they were towing the telecom industry line in a press release back in May 2007.

National Cable & Telecommunications Association — Everyone’s favorite super-sized trade association and lobbyist for big cable.

National Caucus and Center on Black Aged — “Throughout its 39 years history, the National Caucus and Center on Black Aged, Inc. (NCBA) has worked to eliminate obstacles to fairness and equal access for one of the most underserved and vulnerable groups in our society – low-income black and minority senior citizens. NCBA’s programs have focused on three of the most critical needs: housing, employment and health promotion/disease prevention.” Actually, four needs — the fourth suddenly being broadband. This group has several telecommunications industry connections, as explored in part one of this report.

National Disease Cluster Alliance — A real mystery why this group belongs to BfA. This group is dedicated to identifying and responding to emerging disease cluster/anomalies. Founding member Floyd Sands passed away in May after a lengthy battle with cancer. In August, the group advertised for a new executive director and is engaged in fundraising. The stated purpose of the organization is noble, but their sudden interest in broadband issues as part of an astroturf effort is concerning.

National Grange — “The National Grange is the nation’s oldest national agricultural organization, with grassroots units established in 3,600 local communities in 37 states. Its 300,000 members provide service to agriculture and rural areas on a wide variety of issues, including economic development, education, family endeavors, and legislation designed to assure a strong and viable Rural America.” The organization claims to be particularly interested in rural telecommunications issues.  Coincidentally, it often finds itself getting involved in telecommunications issues that directly impact or involve Verizon. That’s ironic, considering Verizon is abandoning many rural communities altogether and selling them off to Frontier Communications. Over the years, the National Grange has thrown its view in on to Verizon vs. the RIAA, a request for Congress to support industry friendly legislation, a merger between Verizon and NorthPoint Communications, and universal service fund issues that brought them into a coalition with … the corn growers LawMedia Group loves to work with: The Keep USF Fair Coalition was formed in April 2004. Current members include Alliance for Public Technology, Alliance For Retired Americans, American Association Of People With Disabilities, American Corn Growers Association, American Council of the Blind, California Alliance of Retired Americans, Consumer Action, Deafness Research Foundation, Gray Panthers, Latino Issues Forum, League Of United Latin American Citizens, Maryland Consumer Rights Coalition, National Association Of The Deaf, National Consumers League, National Grange, National Hispanic Council on Aging, National Native American Chamber of Commerce, The Seniors Coalition, Utility Consumer Action Network, Virginia Citizen’s Consumer Council and World Institute On Disability. DSL Prime helps define the friendly circle.

National Puerto Rican Coalition, Inc. — NPRC’s mission is to systematically strengthen and enhance the social, political, and economic well-being of Puerto Ricans throughout the United States and in Puerto Rico with a special focus on the most vulnerable. AT&T is a major sponsor of the group. The organization signed a letter in 2006 concerning itself with, of all things, cable television set-top box integration. It took the vulnerable industry position. It supported the Sprint Nextel merger in 2005 with another letter.

NDS Limited — NDS Group Ltd is a private company owned by the Permira Funds and News Corporation. It creates technologies that allow pay-TV operators to generate revenues by securely delivering digital content to TVs, set-top boxes (STBs), digital video recorders (DVRs), PCs, portable media players (PMPs), removable media, and other mobile devices.

Net Literacy — This company’s mission “is to increase computer access by creating public computer labs, teach computer and Internet skills, and educate youth and parents about Internet safety.” “Senior Coalition Partners” include Verizon, Bright House Networks, Comcast, and the US Internet Industry Association.  Net Literacy co-released a report with the USIIA advocating AT&T and other provider views about broadband adoption, including government investment in broadband, and potentially supporting industry-sponsored Internet education and child safety efforts.

NSG America, Inc. — “As creator of the SELFOC Lens, Nippon Sheet Glass (NSG) manufactures and distributes more gradient-index lenses than anyone else in the world. Developed over 25 years ago, the SELFOC Lens has revolutionized the industries of fiber optic communications.” They signed a letter by Netcompetition.org opposing Net Neutrality, and are also members of “Hands Off the Internet” and TV4Us.

Occam Networks, Inc — Occam Networks develops and markets the BLC 6000 multi-service access platform (MSAP), an Ethernet and IP-based loop carrier platform that enables our customers to profitably deliver a variety of traditional and packet voice, broadband and IP services from a single, converged all-packet access network.

OFS Fitel, LLC — OFS manufactures and markets fusion splicers, optical fiber, optical cable, fiber to the home (FTTX), connectivity, optical components, and specialty photonics products and optical components. They are also members of “Hands Off the Internet” and signed a letter by Netcompetition.org opposing Net Neutrality.

On Trac, Incorporated — On Trac, Inc. is a telecommunications subcontractor that specializes in fiber to the home installations. Municipalities sometimes contract with them to do installations. On Trac is a member of “Hands Off the Internet” and signed a letter by Netcompetition.org opposing Net Neutrality.

PECO II, Inc. — PECO II designs and manufactures DC power systems and provides engineering and support assistance. They also support and assist “Hands Off the Internet” as a member and signed a letter by Netcompetition.org opposing Net Neutrality.

People & Technology — Insufficient information to identify which group or company this represents.

Preformed Line Products, Inc. — Preformed Line Products (PLP) is a worldwide designer, manufacturer and supplier of cable anchoring and control hardware and systems, fiber optic and copper splice closures, and high-speed cross-connect devices.  They signed a letter by Netcompetition.org opposing Net Neutrality.

Prysmian Communications Cables and Systems USA, LLC — A player in the industry of high-technology cables and systems for energy and telecommunications. They are members of both “Hands Off the Internet” and TV4Us and also signed a letter by Netcompetition.org opposing Net Neutrality.

Quanta Services, Inc — Quanta Services is a provider of specialized contracting services, delivering end-to-end network solutions for the electric power, telecommunications, broadband cable and gas pipeline industries.  They signed a letter by Netcompetition.org opposing Net Neutrality.

Qwest — Broadband provider

RetireSafe — “RetireSafe is a grassroots advocacy and educational organization dedicated to preserving the options and protecting the benefits of America’s seniors. RetireSafe believes in a government that keeps its promises, protects our nation, and maintains the safety of its citizens. We believe in free markets, lower taxes, limited regulations, and the virtues of personal freedom and personal responsibility that provides true retirement security for all.” The American Prospect called the group “strange” because it doesn’t identify up front who runs it or pays the bills: “Many of these other groups exist as little more than letterheads and Web sites.”  There are suspicions RetireSafe is run by DCI Group, a Washington DC lobbying firm, on behalf of one of its corporate clients. Oddly, RetireSafe has usually been the domain of big pharmaceutical companies. What they are doing on Americans for Broadband’s member list is a mystery. DCI’s other clients have included AT&T and Microsoft, although there is no certain evidence who is behind the new interest in broadband.

Seachange International — SeaChange International is a provider of software applications, services and integrated solutions for the management and monetization of Video on Demand (VOD), digital advertising, and content acquisition.

Sheyenne Dakota, Inc. — Custom Cable Harness Manufacturing. They also signed a letter by Netcompetition opposing Net Neutrality.

Silver Star Communications — Broadband provider

Sjoberg’s, Inc — Broadband provider

Small Business & Entrepreneurship Council — The Small Business and Entrepreneurship Council (SBE Council) works to educate elected officials, policy makers, business leaders and the public to advance initiatives that enhance the environment for entrepreneurship, business start-up and growth. Member of TV4Us, which TV Technology described: “The roster of Coalition members includes The National Taxpayers Union, the Latino Coalition, the Small Business & Entrepreneurship Council, the Women’s Presidents Organization, the Construction Industry Foundation, the Citizenship Foundation–and, oh yes, a dozen telecom manufacturers, the National Association of Manufacturers and AT&T. You can probably guess correctly whose money actually paid for the coalition’s ads.”

SNC Manufacturing Company, Inc. — SNC is a manufacturer and worldwide marketer of transformers, coils, high frequency magnetics and value-added assemblies.  They are a TV4Us member, and although their logo has changed, it appears they also signed a letter by Netcompetition.org opposing Net Neutrality.

Stop Child Predators — If your cat was a member of the Democratic Party, it would hiss the moment the people behind this group entered the room. Cary Katz, Chairman and President – Founder/CEO College Loan Corporation is a major Republican donor. Board member Viet Dinh was on the Board of Directors of Murdoch’s News Corporation, although he’s better known for his key role in producing the USA Patriot Act. One blogger investigating the group complained: “The Stop Child Predators Partnership doesn’t actually seem to do anything.” The group’s focus seems to be on developing stronger legislation for child predator crime prosecutions and sentencing, with suggested legislation for online safety as well. Insufficient information to tell if there is any telecommunications industry money in the group.

Sumitomo Electric Lightwave — A manufacturer of optical fiber and optical cable, cable assemblies, fiber management systems, etc. Member of “Hands Off the Internet,” they also signed a letter by Netcompetition.org opposing Net Neutrality.

Sunrise Telecom Inc — Sunrise develops test and measurement solutions for telecom, cable, and wireless networks that ensure network performance, speed deployment, and reduce the cost of network operations. Sunrise is a member of “Hands Off the Internet” and signed a letter by Netcompetition.org opposing Net Neutrality.

SureWest Communications — Broadband provider

Suttle Apparatus Corporation — Suttle is a manufacturer of communication connectivity products to major service providers and installers.  Suttle was not subtle about their willingness to advocate against consumer interests when they signed a letter by Netcompetition.org opposing Net Neutrality.

Telecommunications Industry Association — “The Telecommunications Industry Association (TIA) is the leading trade association representing the global information and communications technology (ICT) industries through standards development, government affairs, business opportunities, market intelligence, certification and world-wide environmental regulatory compliance. With support from its 600 members, TIA enhances the business environment for companies involved in telecommunications, broadband, mobile wireless, information technology, networks, cable, satellite, unified communications, emergency communications and the greening of technology.” TIA members are extensive within the broadband industry. Filed comments with the FCC objecting to Net Neutrality in 2008.

Telework Coalition — The Telework Coalition brings together a diverse array of organizations, companies, and individuals with the common interest of promoting awareness and adoption of existing and emerging Telework and Telecommuting applications including telemedicine and distance learning, as well as addressing access to broadband services that may be needed to support these applications.

The Latino Coalition — TLC’s agenda is to develop initiatives and partnerships that will foster economic equivalency and enhance overall business, economic and social development of Latinos. The bottom of the website indicates “TLC Website presented by AT&T.” Both AT&T and Verizon are corporate partners of The Latino Coalition, which also belongs to astroturf group TV4Us. The Latino Coalition likes to involve itself in a lot of cable and broadcasting industry business. More details on this group can be found in part one.

Time Warner Cable – Broadband provider

United States Distance Learning Association — Serves the distance learning community by providing advocacy, information, networking and opportunity. Board member Raymond E. Hartfield works for AT&T. Emilio X. Gonzalez, director of public policy and strategic alliances at Verizon sits on their Advisory Board. He also sits on the board of MANA and the US Mexico Chamber of Commerce, both BfA members. Verizon is a 21st Century Benefactor of USDLA, which could explain why USDLA went out of its way to submit positive comments about the merger proposal between Verizon and NorthPoint Communications. More recently, in June, USDLA submitted comments to the FCC calling for a deregulatory approach to a national broadband plan, and went out of its way to oppose Net Neutrality.

United States Telecom Association — The trade association of broadband service providers, the organization doesn’t hide its opposition to Internet-related regulation. “Today’s calls for greater government intervention are to “fix” a problem that simply does not exist as far as today’s consumer of broadband services is concerned. This unnecessary intervention would slow broadband deployment and the arrival of a wide variety of pro-consumer advances.” They have a history of running astroturf campaigns, such as ‘The Future… Faster‘ which claimed to be a “coalition” that represents both “industry leaders” and “individual Americans.” If they put they period after ‘leaders,’ they would have been correct. Consumers were nowhere to be found. USTA has a history with Issue Dynamics, a DC lobbying firm and astroturf campaign creator.

US Cable Corporation — Broadband provider

US Cattlemen’s Association — The United States Cattlemen’s Association is a membership organization working for the grassroots cattle producer. Another major oddity in the BfA membership, the USCA’s focus on cattle seems to be completely non germane to broadband issues. Jon Wooster, president, wrote a letter to the FCC urging them to approve the merger between Verizon and Alltel: “We believe the merger between Verizon Wireless and Alltel will boost competition in the cell phone industry while bringing broadband and its innovations to all Americans – whether they live in downtown or on the farm. As an established wireless carrier, Verizon Wireless has the breadth and depth to make the significant investment in rural infrastructure that is so desperately needed. It has already poured billions into a new portion of the wireless spectrum just to deliver new high-speed (broadband) service to more Americans.” The group also signed their name to a Connected Nation letter to Congress saying, in part: “We believe Congress should adopt legislation this year that provides federal government support for state initiatives using public-private partnerships to identify gaps in broadband coverage and to develop both the supply of and demand for broadband in those areas.” The letter was also signed by AT&T, Time Warner Cable, Verizon, and a whole host of astroturf groups and industry-affiliated organizations.

US Chamber of Commerce — Their slogan is “fighting for your business.” The nation’s largest industry trade association, they are always, by definition on business’ side.

US Internet Industry Association — The US Internet Industry Association (USIIA) is the North American trade association for Internet commerce, content and connectivity. Most USIIA members are broadband service providers. Works with Issue Dynamics, a Washington, DC public relations firm that engages in astroturf campaigns.

US Mexico Chamber of Commerce — The organization’s mission is to promote business between the United States and Mexico. How that relates to Americans for Broadband is an open question, although Emilio Gonzalez, Director of Public Policy & Strategic Alliances at Verizon who serves on the Board of Directors of this group might provide a possible answer. Gonzalez also serves on the boards of two other BfA members: MANA and the United States Distance Learning Association. Verizon’s logo also appears on the group’s home page. They are one of four listed sponsors.

Verizon — Broadband provider

Vermeer Manufacturing Company — Farm machinery and trenchless and trenching equipment from a construction equipment manufacturer. Also harvested was the fact Vermeer belongs to “Hands Off the Internet” and signed a letter by Netcompetition opposing Net Neutrality.

Windstream Corporation — Broadband provider

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“Comcast isn’t looking to make a $50 billion purchase.”

Stephen Burke, Comcast Chief Operating Officer

Now that Comcast has been freed from that pesky provision of the 1992 Cable Act, authorizing the Federal Communications Commission to set a maximum size for large corporate cable operators, the nation’s largest cable operator is now considering breaking out the checkbook and going on a shopping spree.  That is likely to spark a merger and acquisition frenzy among several players in the industry which could dramatically reduce America’s choices for telecommunications services.

Bloomberg News this evening quotes Stephen Burke, Comcast’s Chief Operating Officer, that it will consider buying other cable operators at a “good price.”

“If there is a way to acquire cable systems for what we consider a good price, ones that are well managed, we would certainly look at whatever is out three,” Burke, 51, said today at a Bank of America Corp. conference in Marina del Rey, California. Still, the company “isn’t waking up every morning” evaluating how it can become bigger, he said.

The Wall Street Journal calls the decision by the U.S. Court of Appeals in Washington, freeing Comcast from its limits, the start of “the coming cable consolidation.”

Martin Peers, writing for the Journal, said that when the dust settles, phone companies might own satellite TV providers and cable companies might end up consolidating into one or two super-sized providers blanketing the entire country with service.

Consumers would be left with a handful of providers for all of their communications needs, from telephone to broadband to television, if the courts open the door with more decisions favorable to the industry and antitrust reviews aren’t aggressively undertaken.

Starting with Comcast, Burke thinks Comcast’s first priority might be to buy up more programmers.  Comcast already has ownership interests in several cable networks, and Burke feels “content channels are good businesses, and we wouldn’t be doing out job if we didn’t try to figure out a way to get bigger in those businesses.”

With Comcast and Cablevision joining forces to sue their way out of the cable network exclusivity ban, owning and controlling those networks, and what competitors get access to their programming, could be an important asset in an ever-consolidating marketplace.  Imagine if U-verse or FiOS was denied access to ESPN, The Weather Channel, CNN, and other popular cable channels.  Would subscribers be compelled to switch providers if they could no longer get the channels they want to watch?

The Journal ponders the coming consolidation frenzy:

Comcast and other cable companies will probably need to consider more consolidation — if not now, in the next couple of years. They are still losing market share to satellite and phone rivals. Comcast lost nearly 700,000 basic subscribers in the year to June. Time Warner Cable has fallen to No. 4 among TV providers, behind satellite firms DirecTV Group and Dish Network.

Cable operators are more than offsetting video losses by selling phone and Internet-access. Eventually, though, those opportunities will peter out. And phone companies’ competitive threat in video could be enhanced by a combination with satellite TV.

The newspaper speculates about this kind of marketplace in the near future:

Today's pay television marketplace

AT&T DirecTV: The Journal ponders an AT&T buyout of DirecTV resulting in a reduction in AT&T’s investment in U-verse, pushing consumers to its newly-acquired satellite service and redirecting investment into the overburdened AT&T mobile phone network.

VerizonDISH: A Verizon buyout of DISH would allow the phone company to push more rural customers to DISH satellite service, and reduce the expense of wiring all but the nation’s largest cities with fiber optics.

Comcast (formerly Comcast & Time Warner Cable, if not others): A supersized Comcast absorbs Time Warner Cable and becomes an even more dominant cable operator, leveraging its investment in Clearwire to offer a  wireless data option to stay competitive with the mobile phone companies like AT&T and Verizon Wireless.

That would leave most Americans with just three choices for telecommunications services capable of bundling multiple products together.  Wouldn’t such a merger-mania trigger antitrust implications and government review?

The Journal doesn’t think so:

Would such a deal pass antitrust scrutiny, even absent the ownership cap? There is a good chance, say several antitrust lawyers. A major focus of antitrust law is whether a merger reduces competition in a way that could raise prices or otherwise hurt consumers. As cable operators generally don’t compete with one another, merging wouldn’t cut competition.

But what kind of benefits would be found for consumers?  If one resides in a city too small to be judged worthy of fiber optic deployment, consumers could be told to get the satellite television service and live with the copper wiring the phone companies provide today.

Cable operators would be in a fine position to compete, as they traditionally have, against satellite television because of the technical limitations of satellite service, ranging from consumer objections to having a dish on their home, to a limit on the number of sets that can be wired, to the inability to get a clear view of the satellite because of nearby trees or other obstructions.

Who pays for the debt likely incurred from a bidding war during a merger frenzy?  Guess.

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Back in the mid-1980s, I first got involved in the fight against the cable television industry’s consumer abuses.  Cable had gotten cocky, and began to use their monopoly position to extract ever-increasing amounts of money from consumers, providing lousy service and engaged in anti-competitive abuse all over the marketplace.  Back then, competition for the overwhelming majority of consumers came from just one place – giant 10-12 foot satellite dishes.  These were the days before Direct Broadcast Satellite providers like Echostar/DISH and DirecTV (and PrimeStar, the cable industry’s own satellite provider that claimed to ‘compete’ with cable) provided competition to cable.

In the mid and late 1980s, your choice was a giant TVRO (TV-Receive-Only) satellite dish in the backyard or you hooked up to cable.  A tiny handful of communities had wireless cable, a service that was supposed to compete with cable but was seriously limited in channel capacity (in many communities, wireless cable ended up providing access to ‘adult’ content that cable wouldn’t carry as their biggest selling point) and quickly faded from view by the mid 1990s.

The abusive practices were all over the place back then:

• Cozy arrangements between cable companies and local governments resulting in outright bans of satellite dishes for aesthetic reasons, using zoning laws either prohibiting their installation or requiring landscaping to hide them from view (to the neighbors and to the satellites they were trying to receive, making them useless), or requiring expensive permit fees;
• A rush to scramble/encode satellite signals and then require consumers to purchase, outright, a costly descrambler from General Instruments called the VideoCipher II for $399 (or have it incorporated within a satellite receiver that typically cost $800-1000 and was available only for purchase), only to be replaced a few years later by the VideoCipher II+ (which consumers were also forced to purchase).
• Cable companies, which had ownership interests in most cable networks (which was nearly a pre-condition for getting your network on cable systems), often had exclusive rights to sell that programming, and frequently provided it “only on cable” or to satellite customers who could not subscribe to cable.  Some networks refused to sell to competitors, including dish owners, at any price.
• Anti competitive pricing was by far the biggest problem.  Prices for programming packages encrypted on satellite were sold to consumer dish owners in small or large bundles at pricing comparable or above what cable subscribers paid, despite the fact all of the costs to provide, install, and service reception equipment were borne by consumers.  No cable TV company overhead, no infrastructure or staffing and support costs, yet satellite dish owners were expected to pay the same high costs that cable subscribers paid, and also purchase their own equipment.  That was quite an investment: a 12 foot dish, satellite reception equipment, decoder, and installation routinely ran well over a thousand dollars, depending on the equipment and installation complexity, and that was before programming costs were factored in.

Rural consumers really got the short end of the cable stick, not able to buy cable even if they wanted to, and forced to spend big money, upfront, just to get satellite TV.

That inspired the consumer groundswell of support for legislation to stop the abuses, which overrode a White House veto by President George H.W. Bush.  Among other things, the Cable Act of 1992 put a stop to exclusive programming contracts which denied competitor access to cable networks.

Without that legislation, there would be no DirecTV or DISH today.

Now the cable industry is back, high-fiving over their victory to have the 30% ownership cap dispensed with, and are now taking on the next provision of the 1992 Cable Act they don’t like — the ban on exclusive programming contracts.

That’s right, it’s Back to the Future as Comcast and Cablevision take their legal business to the same friendly DC Court of Appeals that savaged the 30% cap, now seeking an immediate repeal of the exclusivity ban as well.

Oral arguments start September 22nd.

Most amusing of all is the argument made by Comcast and Cablevision, who claim despite the time and attention they are spending on overturning the law, not to mention the legal expense, the practical effect of an end to exclusivity bans would be… absolutely nothing.

“Widespread withholding is now implausible,” said the attorneys in the filing. “[T]here are proportionally fewer services to withhold. The limited withholding that may still occur will not threaten competition: most vertically integrated services have closely similar substitutes, and, when competitive MVPDs [multichannel video programming distributors] have sunk massive investments, withholding can no longer cause market exit.”

That’s right.  Big cable companies throw money away on attorneys who will presumably fight this case and the inevitable appeals for the next few years for no practical change whatsoever in the current competitive landscape.  The believe people will accept that an industry that had to be forced by regulation to compete on a level playing field will continue to respect that playing field once they plow it up.

Just trust us.  We’re your cable company.  You love us.

So it could be “nothing” as they suggest, or it could be a defensive response to challenges of their business plans from telephone company TV and online video competition.  Would you subscribe to a competitor that didn’t offer the networks you wanted to see because they were “exclusively” available only from the cable company?

Be it usage caps, consumption billing, exclusive contracts, “price protection agreements” that hold customers in place for 12-24 months (or longer), the war to keep consumers from choosing when, where, and how they access content is becoming fully engaged.

Satellite television in the mid-1980s was highlighted by Granada Television

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Argentina's largest cable operator wants to get even larger

The Argentine government recognizes market concentration when it sees it, and has overturned a decision by the Argentine Supreme Court to approve the merger of two giant cable conglomerates in Argentina — Cablevisión and Multichannel, both owned by Grupo Clarín.  Combined, they would control more than half of the nation’s cable television marketplace.  The decision to block the merger, announced by Federal Broadcasting Committee Chairman Gabriel Mariotto  in testimony before the Argentine Congress, came out of concerns that a combined company would abuse its market position.  But Mariotto also expressed concern that the single company would have a stranglehold over soccer coverage, something Argentina’s citizens could never accept.

Mariotto said Argentina’s new media law to combat market concentration would  “do away with the status of dominant market position.”

“With the control these two companies would have over popular television programming like football, which would likely only be available on their cable systems, competitors could never get off the ground,” argued Mariotto.

Gabriel Mariotto, Chairman of the Federal Broadcasting Committee - Argentina

Cablevisión executives immediately condemned the decision by the government of President Cristina Fernandez de Kirchner, and questioned why the transaction, approved by the former government run by President Kirchner’s husband, Nestor, was now suddenly off the table.

“Cablevisión is at 47% market share nationally, far from the telephone companies as they reach over 95%,” according to Cablevisión officials.

Cablevisión’s statement added: “It is very striking that Chairman Mariotto made the decision without ever notifying Cablevisión of the reasons, and never gave the company a chance to respond.  Cablevisión strictly complies with all Argentine laws, in regards to our franchise agreements, programming contracts and corporate governance.”

The company accused Mariotto of playing politics, accusing him of “misleading” lawmakers and the public, and grandstanding through his very visible public announcement.

Ironically, Argentina’s challenge of big cable operator mergers comes just one week after a federal judge in Washington threw out an FCC-mandated maximum limit of 30% market control for America’s cable operators.  A legal challenge, brought by Comcast, resulted in the cap being tossed.  Comcast, the nation’s largest cable operator, is already nearing the former 30% limit and is now free to exceed it with additional mergers and acquisitions.

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When Verizon FiOS is moving in on your turf, one way to preserve customers is to hand out free Wi-Fi service for your customers on-the-go.  Cablevision’s Optimum Wi-Fi service aims to do just that, with thousands of Wi-Fi hotspots installed across metropolitan New York, Connecticut and New Jersey.  Many hotspots can be found at shopping centers, on main streets and train platforms, in parks, marinas, and at sports fields.  The company claims Optimum WiFi, running for a year now, is already available at nearly 96% of commuter rail platforms and station parking lots serving Long Island and Westchester County.

Now the company wants to extend access into the trains commuters across the area ride every day and evening.  The New York Metropolitan Transportation Authority has been seeking proposals to provide Wi-Fi to customers.  Cablevision has filed a proposal to provide the service in partnership with the MTA, providing access to Cablevision customers at no charge, and perhaps sharing revenue with the MTA for non-Cablevision customers signing up for temporary access.

“As one of the nation’s leading telecommunications providers and a well-established local company that has already made a significant commitment to deploying Optimum WiFi across the New York metropolitan area, Cablevision is uniquely positioned to quickly and seamlessly deliver a high-quality WiFi network across the LIRR and Metro North railroad system,” said Kevin Curran, Cablevision’s senior vice president of wireless product development. “We have delivered a proposal that would provide significant benefits to all parties, and are excited and encouraged by the prospect of providing Optimum WiFi service to the MTA and its ridership. We look forward to participating in a process that will result in the availability of fast and reliable WiFi service on the railroads.”

Click here to view the embedded video.

Cablevision’s Introduction to Optimum WiFi

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Opponents of Net Neutrality regularly dismiss concerns about providers blocking, interfering with, or rejecting content as little more than scare-mongering.  Even in the case of competitors, they assure us, no provider would ever consider getting between the customer and the services they choose to use.  Therefore, we don’t need Net Neutrality provisions enacted into law.

Wouldn’t you know, Cablevision-owned Newsday, a newspaper on Long Island, just unknowingly illustrated what happens when a company puts its own competitive and ownership interests ahead of not only the customer, but also newspaper common sense.

As any newspaper reader knows, the local cable and phone companies are not shy about advertising their products.  For years, Verizon has been spending several hundred thousand dollars a year to run full page ads touting its FiOS service on Long Island.  Such regular advertisers are hard to find these days in the ailing newspaper industry.  Last year, Newsday itself was put up for sale, acquired by Cablevision for $650 million dollars.

Now that the local cable company owns Newsday, they’ve decided to reject advertising from Verizon for its FiOS service. Verizon is now Cablevision’s biggest competitor, providing fiber optic service for television, broadband, and telephone service across Long Island.

The New York Times reports that Newsday has basically told Verizon “don’t call us, we’ll call you” when the phone company inquired about advertising space.

Newsday won’t comment about the reasons why Verizon’s ads were rejected, other than issuing a generic statement:

“We do not comment on specific ads except to say that Newsday, like every other media company, including The New York Times, accepts or rejects advertising at its own discretion,” said Deidra Parrish Williams, a Newsday spokeswoman.

Eric Rabe, a senior vice president of Verizon, told the Times that was fine with him, noting that’s money from Verizon’s pockets not going to feed Cablevision’s pervasive presence across Long Island.

The Dolan family, which runs Cablevision, dominates Long Island, running the cable system, a popular news channel – News 12, and is still the primary place consumers go to acquire broadband service.  Now they also own the biggest newspaper on Long Island as well.

This hasn’t been the first instance that Cablevision-owned Newsday has gotten embroiled in ethical controversy.  The Times notes:

In January, the top three editors at Newsday did not report for work for a few days amid reports that they had been fired or had resigned in a dispute with Cablevision over the paper’s coverage of the New York Knicks basketball team, which is also owned by the company. The editors returned to duty, and neither they nor the company offered a full explanation of what had happened.

Newsday also recently rejected advertising from the Tennis Channel, which is upset with Cablevision because it will not carry the channel.  The Tennis Channel was rebuffed by Newsday when it tried to buy ads inviting viewers to find the network on Verizon FiOS or satellite.

Kelly McBride, the ethics group leader at the journalism foundation Poynter Institute, was troubled by Newsday‘s antics.

“Newspapers accept ads at their own discretion, but they generally set the bar pretty high for rejecting advertising, because they don’t want to be seen as denying access to free speech,” she said. She added that appearing to deny an ad for competitive business reasons, rejecting an ad that is not obviously offensive or failing to explain the rejection, could undermine a paper’s credibility.

Could a company that considers it has the discretion to reject competitors’ access to its properties also extend that notion to its broadband service?  If a competing video provider used broadband to deliver access to its channel lineup, would a competitive threat like that be welcome on Cablevision’s Optimum Online?  How about criticisms of the company or its assets?

Newsday has chosen loyalty to its owner over lucrative advertising revenue to help sustain the paper.  That has disturbing implications for the broadband world as well.

Enacting Net Neutrality protections into law guarantees a company never finds itself in a quandary over where loyalties lie.  These protections guarantee that providers do not hamper, block, or interfere with the online services customers want to utilize.  No “competitive reasons” need ever be used as an excuse to block service from consumers.

Cablevision has not engaged in any online bad behavior to date, but why wait around to find out what the future holds?

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Less than half of Americans surveyed by PC Magazine report they are very satisfied with the broadband speed delivered by their Internet service provider.

PC Magazine released a comprehensive study this month on speed, provider satisfaction, and consumer opinions about the state of broadband in their community.

The publisher sampled more than 17,000 participants, checking their actual broadband speeds, and questioned them about their overall satisfaction with their online access.

The findings indicate consumers live with what provider they can get.  Even lower rated providers scored “satisfactory,” in part because consumers don’t have many choices with which to compare.

Click to enlarge

In the war between coaxial cable modem vs. copper wire DSL technology-of-the-1990s battle, PC Magazine declared the cable industry the winner, consistently delivering faster speeds more reliably than possible with telephone company DSL.  Overall, the average cable speed was “688 Kbps, while the average DSL lets you surf at just 469 Kbps—cable connections, on average, are 47 percent faster.”  Those speed measurements are based on actual web page and content delivery, not on marketed available speed.

In fact, users rated DSL an unsatisfying service, with only 20% of rural and suburban customers very impressed with DSL.  But for many who have no other choice, 50% think it’s good enough.

Or better than nothing.

One DSL provider did extremely well speed-wise in PC Magazine‘s survey, however.  Frontier Communications was rated as the fastest DSL provider in the nation, averaging “real-world” speeds of 724 Kbps, according to the survey.  But even they could only score a 20% customer satisfaction rating, with 30% dissatisfied.

There was one technology that did much, much worse.  Satellite broadband, the last possible choice for many Americans between dial-up and going without, is provided by companies like HughesNet and WildBlue, and they are unmitigated disasters in consumers’ eyes.

Just 6% of Hughes customers were satisfied, with a whopping 74% dissatisfied.  That’s because satellite broadband is extremely slow, averaging just 145 Kbps, heavily capped, and very expensive.  But for some rural Americans who live too far away from their local phone company central office, and will never see cable television, it’s likely their only choice.  Even mobile broadband signals won’t reach many of these consumers.

So what is the good news from all of this?  There is one technology that, hands-down, beats all of the rest — fiber optics to the home.  The nation’s top-rated ISP in PC Magazine’s survey is Verizon FiOS, with 71% satisfied, and just 6% dissatisfied.  Other fiber optic providers, mostly smaller local, regional, or municipal systems, scored 61% satisfaction.  Just one cable company matched that rating – Cablevision’s Optimum Online.

AT&T, with a combination of DSL and their newer U-verse platform, did considerably worse, with 38% satisfied and 24% dissatisfied.

Clearly, subscriber satisfaction comes highest from fiber optic broadband.

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In statewide rankings, it all boils down to where you live.  The more populated states and those with large cities often scored higher than those with lots of wide open rural areas.  The larger the community you live in, the better the chance for fast, quality service.  In states like Wyoming or South Dakota, where more than 57% of customers reported dissatisfaction, it’s more about living with what you’re stuck with.

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DirecTV wants people out of reach of its satellite service to enjoy unlimited viewing of NFL football games, and today announced it would test providing them over broadband connections.  For $100 more a year than subscribers pay now for the satellite-delivered football game coverage, DirecTV will will offer New York City viewers as many NFL games they can watch over their broadband connection for $349 a year.

DirecTV claims it will sell the service only to those who cannot obtain satellite service from the company, which presumably will limit the broadband content to apartment dwellers and other urban residents who can’t mount a satellite dish.  But in a city like New York, that can easily mean tens of thousands of potential new customers, all watching video content delivered by Cablevision, Time Warner Cable, RCN, or Verizon’s broadband services.  USA Today covered the story this morning:

DirecTV has few customers [in New York City] because skyscrapers block signals coming from satellites orbiting the equator. Also, many landlords and co-op boards don’t allow residents to get a satellite service.

“A lot of the buildings (that can’t get DirecTV) we already have in databases because they’ve got exclusive contracts with cable guys,” says Derek Chang, executive vice president for content strategy and development.

To see the games, broadband customers will download a special video player and punch in a code. Users can install the software on multiple computers, but only one will be able to stream the games at any particular time.

Games with New York’s Jets and Giants, which air on broadcast TV, will be available only when the customer’s computer is outside the New York area.

Cable operators won’t just play defense in the battle for football fans. Comcast will announce today that it will offer the NFL Red Zone Channel to customers of its Sports Entertainment Package. On Sundays, the channel will display football statistics with audio from Sirius XM Radio‘s program “Around the League” — and go live to certain games when the ball is within 20 yards of the goal.

While Cablevision, RCN, and perhaps even Verizon may not express concern about the prospect of carrying NFL games across their networks without “compensation,” Time Warner Cable, which continues to express an interest in Internet Overcharging schemes, may not be so tolerant, especially if the test is successful.  ISPs who support Internet Overcharging routinely use online video growth as a justification for usage caps and consumption pricing.  Will the NFL become part of the Re-education of their customers?

Another question to ponder – would such a service even launch in a broadband marketplace infested with usage caps and limits?

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Despite continued financial pressure on cable companies’ core cable television business, Cablevision Systems was able to grow its broadband service, and retain broadband customers.  The company also announced it will spin off its Madison Square Garden unit into an independent entity, still owned by Cablevision shareholders.  Madison Square Garden includes the arena of the same name as well as ownership of two sports teams – the New York Knicks and New York Rangers.

The spinoff will create two distinct entities for Cablevision – an entertainment company comprised of Cablevision cable systems and Rainbow Programming, which runs several basic cable networks, and MSG, which will be sports-oriented.

In its earnings report, Cablevision said the Madison Square Garden unit had an operating loss of $8.4 million, and according to cable analyst Craig Moffett of Sanford Bernstein, will likely face a $500 million dollar charge for renovation of the arena in the coming years.  Cablevision said it earned $87 million, or 29 cents per share, in the most recent quarter, compared with $94.7 million, or 32 cents per share a year ago.  The decline in earnings was attributed to pressure from MSG losses and a drop in the number of basic video subscribers, as well as losses from its Newsday newspaper operation.

Cablevision’s broadband service retained strong customer loyalty.  It also stands out as being free of Internet Overcharging, and proud of it.  The company has made it clear it appreciates broadband growth in the United States and considers broadband usage “addictive,” and wants to be certain it remains so.

Cablevision is also considering introducing additional features to its Wi-Fi service, including the provision of a wireless voice service available to customers in New York and New Jersey.

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Richard Greenfield, Pali Research

Wall Street media analyst Richard Greenfield of Pali Research is telling investors that the era of quick cash from “digital phone” service customer additions is probably coming to an end.

Greenfield penned a research note last week pointing out that despite the blizzard of postcards, mailers, and wall-to-wall advertising cable operators do to promote their “digital phone” services, it’s getting tougher to sign up new customers.  Mike Farrell in Multichannel News condensed the marketspeak down:

In a research note, Greenfield noted that industry-penetration leader Cablevision Systems, which has telephony in 40% of its homes passed and more than 60% of its basic-video base in a triple-play bundle, took six years to reach those milestones. Time Warner Cable after five years has about 15% penetration (27% of subs in a bundle); Comcast, four years into telephony, has 13% phone penetration and 24% of its subs in a triple-play bundle.

The year 2008, the analyst noted, was the first that net telephony additions fell for both Comcast and Time Warner Cable.

“While Cablevision is way ahead of its peers in telephony, the question is now becoming, will its peers be able to get to even 25% penetration, let alone the 40%-plus levels Cablevision has achieved or is the opportunity to further cement the bundle simply dwindling by the day?” Greenfield asked.

For the uninitiated:

• “Homes passed” refers to homes where cable service is available;
• “Triple play bundle” refers to customers who take three services – cable TV, Internet, and telephone service in a bundled package from a provider;
• “Penetration” refers to market share.  In the case of Time Warner Cable, only 15% of their subscribers sign up for “digital phone” service, but the number is higher for those with a bundled package.

Greenfield, who often annoys cable companies and instigates angry press releases from some cable trade associations, represents the Wall Street investor types, who are not pro-company or pro-consumer.  They are simply pro-money for investors.

Investors are very concerned this year about cable company stock value.  They worry customers are starting to cancel cable television packages (or at least downgrade their service to get fewer channels), and are now also concerned telephone revenue will not grow at the traditional rate it has since “digital phone” service was introduced.

Broadband service is the exception.  It remains highly profitable and is continuing to grow even during hard economic times.

Stop the Cap! believes that cable operators will look more and more to broadband profits to help prop up their stock price, making it imperative that broadband service deliver as much profit as possible, while operators crack down on costs.  Internet overcharging schemes, such as limiting and discouraging access, raising prices, or a combination of both can reduce costs even further while maximizing profits, particularly in markets where limited or no competition exists.

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Frontier Essentially Accuses Time Warner Cable of Being a Shakedown Artist

Early indications of a more challenging second quarter of 2009 may be what’s behind the sudden speed increases and new promotions being run by providers, who are also counting on signing new customers, now that moving season is in full swing.  A roundup of promotions and service adjustments customers may find enticing them:

AT&T

U-verse Internet Max customers received free upgrades last week in most areas, boosting broadband download speeds from 10Mbps to 12Mbps.  AT&T previously announced a slowing of U-verse deployment for economic reasons.  AT&T competes with cable operators offering video, voice, and broadband service.

Cablevision

Cablevision Systems continues to offer new customers taking at least a combined broadband and phone package a $200 American Express gift card through June 30.  The company already announced major increases in premium speed levels, and promises no limits on consumption.

Comcast

Reduced pricing in highly competitive Washington, DC market for premium 50Mbps service to under $100, for customers signing up for at least two Comcast services (video, voice, and/or broadband)

Frontier

A substantial mailing offering discounts and giveaways was sent through postal mail to consumers in many Frontier service areas.  Frontier is using a cable-critical mailer depicting their cable competitor as “Rob” and “Bill.”

Rogers (Canada)

Rogers, which earlier increased rates for subscribers, announced a “free speed increase” to its “Hi Speed Internet Express” package, from 7Mbps to 10Mbps, and “Internet Lite” from 1Mbps to 3Mbps.  Rogers limits its customers typically to 60GB of consumption per month for standard levels of service.  Much lower limits are placed on economy packages.

Time Warner Cable

Time Warner Cable is continuing to mail customer postcards and other mailings promoting its existing service packages, but this week also attempts to pick up customers trapped in Frontier term contracts by agreeing to cover early contract termination penalties, up to $200.  Time Warner Cable is also hinting that cable customers will soon be able to use Tivo software for their Digital Video Recorder (DVR) boxes, which permit customers to record programming.

Verizon

Verizon announced substantial speed increases throughout their service area. The company also has engaged in a price war with Cablevision over gift cards. Verizon offered $150 gift cards to new customers signing up for a service bundle (although Cablevison beat their offer by $50).  The company also began promotional giveaways to customers signing a contract agreement.

To date, AT&T continues tests limiting consumption to as low as 20GB per month in Beaumont, Texas and Reno, Nevada.  Comcast has a straight limit of 250GB of consumption per month for residential customers nationwide.  Frontier defines “acceptable use” at 5GB consumption per month, but does not enforce it at this time.  Rogers limits consumption based on the level of speed selected by the customer.  Most customers face a 60GB monthly limit.  Time Warner Cable tested, but temporarily shelved, tiered pricing and consumption limits.  Other providers not listed have no Internet Overcharging schemes in place.

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