Back in July, Stop the Cap! shared the story of Mark Williams, an eager new customer for Time Warner Cable in Lee, Massachusetts.  The only thing getting in the way of Williams’ desire to shower the cable company with money for its triple-play Internet, cable, and phone service was the $12,000 fee the cable company sought to install it.

That sparked a major incident with Lee’s Board of Selectmen, who called the installation fee “ridiculous.”  It warned the cable company they were prepared to vote Tuesday night to sanction the company, taking money from the $10,000 Time Warner posted with the town as part of its local license agreement, if it didn’t relent.

At issue was Time Warner’s reasoning for the high installation fee, invoking a “long driveway clause” Malcolm Chisholm Jr., of Lee’s Cable Advisory Committee argued was an incorrect interpretation of the town’s license agreement.  Chisholm told The Berkshire Eagle the contract entitles all homes to cable service if electric and telephone service already are available.

Before the board voted, Williams reported the cable company verbally agreed to reduce the installation fee to $4,000.

“They’ve given me a price, but it’s still not cheap,” Williams said. “I’m looking to find an independent contractor who will do the job cheaper.”

Williams acknowledged the cost would be even lower, but he wants the cable buried between his home and the nearest utility pole, which is 500 to 600 feet away. He has his electricity service underground to his home on Fernside Road, near the Tyringham town line.

Time Warner’s typical installation fee of $35 covers up to 200 feet — above ground — with the rest of any necessary cost borne by the subscriber. Williams said he didn’t seek a cost estimate from Time Warner for an above-ground installation.

[…]In a similar case three years ago, Time Warner agreed to drop its claim that a homeowner on Antelope Drive in Lee pay $1,102 for cable installation. The company’s decision followed the town also threatening the company with financial penalties. However, Time Warner officials said the reversal was based on the individual case, rather than agreeing to the town’s interpretation of the contract regarding installation.

University of Texas students living in a Richardson on-campus apartment complex are stuck paying a mandatory $15 monthly “technology fee” for AT&T-provided Wi-Fi service that works so poorly, many residents are signing up with other providers and paying twice for Internet access.

Residents of Waterview Park have complained about Wi-Fi access inside the complex for some time, but they were never forced to pay for it until May, when the complex’s governing board notified residents that the mandatory fee would be imposed once AT&T took over the service.

Although AT&T doesn’t bill for, or collect the fee, they do provide the service, and students have complained loudly about its weak signals and poor performance.

The Mercury, the university newspaper, ran a story this weak outlining the complaints:

A sample lease agreement obtained from Waterview shows the mandatory technology fee of $15/month.

Computer science junior Kenny Rodriguez said the problems stem from the use of hotspot Wi-Fi as residential internet for students. Hotspot Wi-Fi generally broadcasts an internet signal from a fixed location that becomes weaker the further you move away from it.

“When I was living in building 29, my roommates and I could only pick up a signal by standing in one corner of the living room,” junior Michael Stettler said.

Stettler and his roommates moved to building 31 and are now able to pick up a signal in two of their bedrooms, albeit a slow one.

Rodriguez, who lives in building 8, can only pick up a signal in his living room and sometimes can’t even log on to use it.

“Frequently, the access points are broadcasting but aren’t routing traffic anywhere,” Rodriguez said.

Once a student finds a place in his apartments where a signal can be received, the speed of the connection becomes a problem because the more students who share the available bandwidth the slower the speed becomes.

“It was decently fast at the beginning of this school year, then when everyone came back for fall it crawled to like a tenth or a fifth of a MB per second,” Stettler said.

Waterview’s management has been forced to issue refunds of up to $30 to affected students for poor or non-existent service, but the complex won’t waive the ongoing monthly fee, despite the fact the service can’t deliver much more than 1Mbps on a good day.

Several residents opted to sign up with other providers instead, paying $30 a month or more for service they can actually use.  Stettler and his three roommates decided it was worth it and signed up with Time Warner Cable for 15Mbps service.

The student newspaper took note of another bulletin issued by Waterview management issued August 31 that claimed every resident would have reliable internet within the next 7-14 days or else a non-specific contingency plan would be implemented.

“Nobody has actually stated what will happen if AT&’T doesn’t make their service reliable,” Rodriguez told the paper.” They’ve just vaguely implied that something will happen.”

Twenty-two days later, students report no verifiable improvements have been made in the reliability of the network or the service.

Dolan

Cablevision Systems CEO James Dolan warned cable executives the combination of rate increases and the poor economy could spark a consumer revolt, driving a legislative agenda that could force a-la-carte pricing on cable companies.

“At some point you reach a point where the consumer rebels,” Dolan said. “You’re likely to see that in a reaction in Washington on the government side because it will become a politically easy issue for politicians to jump on and a-la-carte [pricing] is an obvious answer. But the impact of a-la-carte on the programming industry would be devastating. It behooves all the participants to exercise restraint.”

Dolan pointed to high unemployment and a deterioration in earnings among those still employed combined with continuing rate increases as a potentially dangerous combination.  Dolan was especially concerned about payments for local broadcasters and major broadcast networks which have sparked high-profile carriage battles.  Earlier this year, Cablevision briefly dropped programming from ABC and Scripps Networks’ HGTV and Food Network.

Dolan was speaking at the Bank of America Merrill Lynch Media, Communications & Entertainment conference in Newport Beach, Calif.

His comments come at the same time Cablevision is preparing for yet another carriage battle, this time with News Corporation.

On October 15th, Cablevision’s contract to carry FOX’s television stations in New York (WWNY 5 and WWOR 9) and Philadelphia (WTXF 29) will expire. Unless Cablevision renews its agreement with FOX, Cablevision may no longer carry the three over-the-air stations. Also impacted are several FOX Networks’ cable channels: FOX Sports en Español, Nat Geo WILD and FOX Business Network.

News Corporation’s website, KeepFoxOn, turned its attention to the dispute, urging viewers to contact Cablevision.  Viewers are being warned of the potential loss of the channels through advertising messages that began last weekend.

The issue of a-la-carte pricing, which allows cable customers to pick and choose individual channels, has been the nightmare scenario for cable systems and programmers, who fear it would force most niche channels out of business and dramatically cut earnings for cable systems.  The industry also warns it would force every cable subscriber to rent set top boxes to manage channel lineups for every television in the home.

But as programming costs continue to exceed the rate of inflation, relentless rate increases and restrictive contracts that keep most networks out of specialty programming tiers makes cable television a service many Americans are contemplating doing without.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Keep Fox On.flv[/flv]

FOX has begun informing Cablevision viewers they could lose access to their local FOX stations and several FOX-owned cable networks.  (30 seconds)

AT&T is buying newspaper ad space to publish a feel good message about Internet Openness that bears no reality to the company’s multi-million dollar lobbying effort to derail broadband reform, taking guarantees of a free and open Internet with it.

The advertisement’s appearance is remarkable, coming at the same time the company’s “government affairs” team of paid lobbyists and friends are browbeating elected officials and the Federal Communications Commission.  AT&T wants the right to allow preferential treatment of its selected content partners while dumping everyone else on the Internet slow lane.

The only opening AT&T supports is a new way to cash in even further on the Internet.  An “open network” to the phone giant means one that is totally deregulated and open to whatever AT&T wants to do with it.

AT&T’s “innovation” is to monetize the traffic that happens to cross their network on its way to AT&T customers.  By manipulating broadband traffic, AT&T will sell its “selected partners” priority access, shoving uncompensated traffic out of the way to make room for whatever AT&T’s special friends want you to see.  While that’s great news for companies that agree to pay AT&T’s tolls, it’s very bad news for everyone else, because the websites you choose to visit may or may not be available on the second rate “free lane.”  Given the choice between AT&T-backed video streaming or a third party provider like Netflix, guess what traffic will never get stuck “buffering” or face glitches.

Investors love the concept because AT&T can collect revenue just by sitting back and demanding tolls from content they neither produce nor host.  It’s not as if they haven’t been paid already — by their customers — to obtain access to that content.  AT&T wants another payday for their shareholders while sticking you with second-rate service.

The problem with AT&T’s world view is… AT&T’s world view.  Real innovation would mean delivering customers a world class broadband service the envy of anyone, delivered on America’s most advanced communications network, not re-purposed copper wire phone lines.  Then, “traffic management” on a mega-sized information highway wouldn’t have to squeeze the speed of some traffic to make room for “premium content.”  There would be plenty of room for one and all.

AT&T’s proposed answer for broadband reform is all about their interests, never yours.

America already experienced a corporate-sanitized online experience with preferred content partners. It was called Prodigy, and by 2000 it was fed to 77 million SBC (later AT&T) customers.

Some examples:

• Net Neutrality has been a part of AT&T’s corporate life for several years as a condition of its 2005 merger with SBC.  It didn’t harm their ability to provide all of the innovation, service, and speeds they could have, but never did.  Nothing about Net Neutrality protection harms AT&T’s ability to deliver broadband service to more of its customers. Giving AT&T whatever it wants won’t change that fact or deliver service to a single new customer;
• The freedom AT&T writes about is their idea of a Corporate Bill of Rights, which grants them the freedom to exchange their ideas and content, but says nothing about protecting your freedom of speech;
• A robust and secure network should exist regardless of Net Neutrality, considering the enormous amount of cash AT&T harvests from their Internet customers month after month.  AT&T is free to innovate all they like, on a level-playing-field, where customers can choose the best applications at the best prices, not the ones AT&T provides to them on a paid fast lane;
• AT&T’s record on competition is laughable when it spends its free cash on an army of lobbyists and “dollar-a-holler” interest groups.  Their mission?  To oppose potential competitors and enthusiastically support AT&T’s competition-busting mergers and acquisitions that further concentrate their market power;
• For AT&T’s customers, transparency alone is hardly the kind of consumer protection Internet users need.  Yes, it’s nice to be told when you are overpaying for broadband service that is “network managed.” Admitting AT&T seeks to throttle broadband speeds and potentially block websites in a monopoly/duopoly market doesn’t help much when customers can’t find another provider.  Disclosing the fact AT&T is sticking it to you is not the same thing as prohibiting them from trying in the first place.

AT&T has no interest in working with anyone that opposes their corporate interests.

The Internet should not be AT&T’s personal playground, ready and able to be “managed” out of its unique ability to deliver ideas equally — to be judged on their merit — not on the money backing them.

Americans have already experienced a corporate-sanitized online service for pre-approved ideas, products, and services.  It was called Prodigy, and by 2000 it was to become the Internet experience for 77 million SBC (later AT&T) customers. By the time the bottom fell out in 2001, SBC owned 100 percent of the service nobody wanted.  In 2005, SBC tried to sell the Prodigy brand in the United States.  There were no buyers.

That should be the outcome of AT&T’s proposal for “an open Internet.”  No deal.

ivi, which we wrote about last week on Stop the Cap!, has begun receiving the predictable ‘Cease and Desist’ letters from just about every broadcaster and sports association around.  But in a pre-emptive strike, the online TV service filed sued Monday in Seattle District Court against them, asking the court to recognize its right to carry broadcast stations on its online service under existing royalty rules, with or without the permission of the broadcast stations involved.

To date, ivi says it has gotten ‘Cease and Desist’ letters from every major broadcast network, plus Major League Baseball, 20th Century Fox, two public broadcasters, and Fisher Communications, owner of Seattle-based KOMO-TV.  All of them ended up as defendants in ivi‘s suit.

ivi claims its online operations are not governed by the Federal Communication Commission, meaning it does not have to enter into negotiations with stations for carriage permission and retransmission fees.

“The secondary transmission by ivi of the primary transmission of content originating with the Defendants is permissible under the statutory licensing provisions of the Copyright Act,” the lawsuit claims. ivi seeks a ruling that finds the company has not infringed on any copyrights, and to force defendants to pay its legal expenses.

The company issued a statement Monday after filing suit:

“ivi, Inc., remains steadfastly on the side of the consumer, refusing to allow big media to limit consumers’ choice or its technology. Instead, ivi has responded to the C&D letters with both written clarification explaining how its technology works within the parameters of existing law, and offers to meet with broadcasters to begin a constructive dialogue about implementing ivi’s proprietary technology. The ivi technology is a clear reflection of consumer demand and evolutionary forces in the technology marketplace,” the company said.

“ivi is not another Pirate Bay or Napster trying to gain from others’ works. Rather, ivi wishes to work with content owners in helping them to realize new revenue streams and reach more viewers from around the globe,” said Todd Weaver, founder and CEO.  “The ivi team has spent more than three years developing a compelling technological solution that no other company has come close to matching.  ivi enables content owners to protect and monetize their assets while simultaneously giving consumers what they want.  We recognize that it is disruptive to existing cable offerings and remain confident that we have adopted a model that is allowed under all applicable laws. We remain receptive to formal partnerships with broadcast networks and are discussing carriage rights for premium cable, international, and a la carte channels.”

What’s likely to happen next?  One of the named defendants will almost certainly walk into a court and obtain a temporary injunction from a judge that will force ivi to pull its network or station off of ivi‘s lineup.