The sequel to this story could be written from a jail cell.

The guilty pleas just keep on coming in a two-year old prosecution of a wireless broadband scheme that never delivered much service, but ripped off taxpayers to the tune of more than two million dollars.  This week, the president of Mountain State College, who has been employed there for more than 35 years, owned up to hiding facts from prosecutors in his role as chairman of the board of the now-defunct Sequelle Communications Alliance, Inc.

Alan Michael McPeek of Parkersburg, 63, plead guilty Wednesday to obstruction of justice charges in federal court, admitting he misled a criminal investigation reviewing fraud allegations against the company.

Sequelle, a publicly funded project to establish wireless Internet service in the mid-Ohio Valley region, received a $3.295 million loan in 2002 from the U.S. Department of Agriculture, a $600,000 grant from West Virginia’s Development Office and another $400,000 in loans from the Mid-Ohio Valley Regional Council and a bank.

For that funding windfall, the mid-Ohio Valley got several towers ready for wireless antennas, a website that didn’t get updated much beyond the fall of 2000, some software to administer the project, and nothing else.

Instead, federal prosecutors charged some of Sequelle’s officers and several Ohio-based subcontractors of laundering loan and grant funds as seed money and salaries for a new for-profit venture designed to market an “Internet in a box” concept to other rural areas seeking wireless Internet service.

Prosecutors particularly focused on the USDA loan, which required the money “to be used solely for the project specifically described in the application to furnish or improve broadband services in rural areas … in the states of Ohio and West Virginia.”

Like many federal grants and loans, this one prohibited using the money to pay salaries, utilities, and basic office expenses.  Prosecutors would later learn Sequelle’s principal founder and former CEO Heidi Ditchendorf Caroline Laughery laundered loan money through a sub-contractor who kicked back at least $250,000 she used as a salary. McPeek’s guilty plea came in part because he knew about it.

Another grant from Ohio was paid on the promise Sequelle would provide at least 45 high paying jobs within three years.  That never happened.

Laughery

Worst of all, many of the grant and loan applications asked whether any officer in the company had been convicted of a felony or was a defendant in any criminal case.  Laughery answered no to both.  Had government officials verified that information they would have discovered Laughery was previously convicted in 1987 on two counts of felony wire fraud — based on her embezzlement of more than $130,000 of customer funds and securities during her employment at Merrill Lynch.

Laughery didn’t want to bring up those bad memories, so she left her Merrill Lynch years off Sequelle’s website documenting her prior experience.

Prosecutors have been successful in bringing those responsible for this caper to justice:

• Laughery was sentenced in April to 18 months in prison and ordered to pay $850,000 in restitution.
• Sub-contractor R. Scott Truslow plead guilty to conspiring to commit money laundering and is now spending six months under home confinement and ordered to pay nearly $550,000 in restitution.
• Charges are still pending against a second sub-contractor.

McPeek faces up to five years in prison when sentenced in October.  He was released on a $10,000 unsecured bond pending sentencing.

Laughery’s attorney, Michael Callaghan, claimed in 2008 that the project failed because technology marched ahead of the project.

“All the money that the government is alleging was stolen actually went into the development of Internet (infrastructure),” he told a West Virginia reporter. “My client worked for a year-and-a-half without pay because she believed in this project. The concept was great, but the technology developed faster than the project did. Technology moves fast. Technology businesses fail every day.”

Tapdancing your way around money laundering charges can move fast as well.

[flv]http://www.phillipdampier.com/video/WTAP Parkersburg McPeek Enters Plea in Sequelle Investigation 6-30-10.flv[/flv]

WTAP-TV Parkersburg has this report on McPeek’s plea.  (1 minute)

[The article was updated at 10:30am to include promotional and coverage information not available when the article was published late last night]

Clearwire today announced the launch of its 4G mobile broadband service for businesses and consumers in Rochester and Syracuse, New York.  Designed to deliver the Internet at speeds four times faster than 3G, CLEAR is priced comparably to many wireless broadband plans, but has no usage caps.

Pricing from their website offers customers stay-at-home and mobile service plans (or both).  Customers choosing month-to-month service have to buy the equipment up front, starting at $70 and pay a $35 activation fee.  Those who commit to a two-year service contract can lease the equipment for $4-6 a month and skip start-up fees.  Packages start at $40 a month for 6/1Mbps service.  At $55 a month, they take the speed limit off, providing occasional bursts of wireless speed up to 10Mbps.  Another $15 on top of that buys you nationwide 3G roaming.  Sales tax is not included.  Customers get a 14 day trial period to evaluate the service and can cancel within that window with no obligation, although our Jay Ovittore reports they’ll drag you through the cancellation process.

At $40 for unlimited use, CLEAR’s 4G service beats Cricket, which charges the same price for 3G speeds, but limits consumption to 5GB per month before they start throttling your speed to dial-up.  Other mobile broadband services typically charge up to $60 for 5GB of usage at 3G speeds.  Ironically, while 4G service from Clearwire is unlimited, the slower 3G speed service is not — there is a usage limit of 5GB per month on the 3G network, and then overlimit fees of five cents per megabyte kick in.

A statement from the company released early this morning talks up the fact CLEAR does not burden their 4G customers with Internet Overcharging schemes like other wireless broadband providers.

“Our residents now have a fast Internet connection that’s as mobile as they are,” said Jerry Brown, regional general manager for CLEAR. “And we’re thrilled to offer affordable rate plans with no limits on the amount of data customers use. No caps on usage, no penalties – our customers just use the Web as much as they want wherever they go – it’s that simple.”

Clearwire's coverage area in Rochester & Syracuse

In Rochester, CLEAR covers approximately 560 square miles and more than 600,000 people with service extending as far north as Lake Ontario, as far south as Canandaigua and Geneva (Ontario County), as far west as Spencerport, and as far east as Webster.

In Syracuse, CLEAR covers nearly 230 square miles and more than 265,000 people with service extending as far north as Brewerton, as far south as Nedrow, Auburn, and Cortland; as far west as Village Green, and as far east as Fayetteville and Manlius.

However, the company’s 4G coverage area is spotty in many areas in both cities.  Verifying coverage from their website is essential before considering CLEAR.  Anecdotal reports from some of our readers and others suggest 4G service from Clearwire is not nearly as robust as 3G service from some other providers, and dead zones and slow speeds have caused some to cancel service.  Here’s an example of their coverage in my part of the town of Brighton, just southeast of Rochester:

Clearwire's coverage of the 12 Corners/Elmwood Avenue area of Brighton, N.Y.

Some minor gaps in coverage are apparent near Commonwealth Drive, and if you were getting gas at the 12 Corners Mobil station or visiting Citizens Bank behind it, you’d be out of luck, but otherwise coverage looks fairly good to the west of Interstate 590.  However, a very strange gap pops up between Valley Road and South Grosvenor Road, also impacting a few apartment buildings at Elmwood Court Apartments, 3100 Elmwood Avenue.  That’s odd because although that part of Elmwood slopes slightly downwards, it’s still much higher than the homes on Valley Road or the apartments further back in the complex.  A major service gap opens up on Elmwood at Clovercrest Drive and extends into the very tony neighborhoods around Ambassador Drive and Clover Street.  But the country club set will do fine browsing away on the golf course at the Rochester Country Club further east.

In short, service can vary dramatically street by street, block by block, from nothing at all to full speed ahead.  Be sure to check your area before you commit to keeping the service, much less sign a two year contract for it.

For the rest of Rochester, if you live in the city or an inner-ring suburb, coverage is generally available.  Those further out in towns like Henrietta, North Chili, southern Pittsford, Honeoye Falls, Avon, Scottsville, Churchville, Brockport, Penfield and Perinton face significant gaps or no coverage at all.  Things improve dramatically in Ontario County in towns like Farmington and Victor and the cities of Canandaigua and Geneva.

For the greater Syracuse area, coverage pops up in Auburn and then disappears eastward until reaching Camillus.  Generally, coverage in Syracuse is not nearly as dense as in Rochester, with large gaps opening between suburbs and the city itself.  Mattydale is solidly covered, for instance, while Minoa isn’t.

Now that CLEAR has launched 4G service in Rochester and Syracuse, Road Runner Mobile, which is simply CLEAR rebranded as a Time Warner Cable service (they partly own Clearwire) will also soon be on the way.  Pricing in other Time Warner Cable cities wasn’t much different than from Clearwire direct, and some cable plans really push service contracts, which you really do not want on a service this new.  Do not commit to one unless you are satisfied with the service where you plan on using it.

Clearwire’s 4G Network in 2010

CLEAR 4G service is currently available in 44 markets across the United States, including: Syracuse and Rochester, N.Y.; Atlanta and Milledgeville, Ga.; Baltimore, Md.; Boise, Idaho; Chicago, Ill.; Las Vegas, Nev.; St. Louis and Kansas City, Mo.; Philadelphia, Harrisburg, Reading, Lancaster and York, Pa.; Charlotte, Raleigh, and Greensboro, NC; Honolulu and Maui, Hawaii; Seattle, Tri-Cities, Yakima and Bellingham, Wash.; Salem, Portland and Eugene, Ore.; Merced and Visalia; Calif.; Dallas/Ft. Worth, Houston, San Antonio, Austin, Abilene, Amarillo, Corpus Christi, Killeen/Temple, Lubbock, Midland/Odessa, Waco and Wichita Falls, Texas; central Washington, D.C.; Richmond, Va.; and Salt Lake City, Utah.

In the summer of 2010, CLEAR 4G will launch in Tampa, Orlando and Daytona, Fla.; Nashville, Tenn.; Modesto and Stockton, Calif.; Wilmington, Del.; and Grand Rapids, Mich. By the end of 2010, CLEAR 4G will also be available in major metropolitan areas such as New York City, Los Angeles, the San Francisco Bay Area, Boston, Denver, Minneapolis, Miami, Cincinnati, Cleveland and Pittsburgh.

You can read a company-provided tutorial about the service below the jump.

… Continue Reading

Frontier Communications today announced it was keeping a commitment to use only American-based call centers to provide customer service.  That will be a welcome change for former Verizon customers who often found their customer service calls transferred to overseas help desks and representatives.

“In addition to voice customer service, our broadband Internet help desk jobs will continue to be staffed by a 100 percent U.S.-based workforce. This will include the creation of 500 new US-based jobs replacing work that Verizon sent overseas,” said Maggie Wilderotter, Frontier’s Chairman and CEO.

Many calls for assistance with Frontier’s Internet service end up in Henrietta, New York — near Rochester.  A good deal of Frontier’s general customer service assistance is provided from a large call center in DeLand, Florida — midway between Daytona Beach and Orlando.

Frontier is also pr0mising its customers appointment windows within two hour blocks, making it easier to know exactly when a technician will arrive.  If Frontier keeps its appointments, it means customers don’t have to take an entire day off from work waiting for someone to show up.

Hulu has announced a new premium service that will deliver entire seasons of network TV shows at 720p high definition resolution for $9.99 per month (plus applicable taxes).

The concept of Hulu Plus has been around for months now, as Hulu’s owners (Disney, NBC Universal, News Corp and Providence Equity Partners) contemplate the increasing cost of delivering video to millions of Americans during an advertising industry crisis.  Advertising revenue no longer covers the costs, so Hulu hopes paying subscribers will.

The free version of Hulu isn’t going anywhere — in fact the service has just signed agreements with CBS and Viacom to bring shows that formerly were seen on Joost over to Hulu.  Time Warner (the entertainment company, not the cable operator) is also bringing some of its shows to Hulu.

But free viewers will continue to find access to the latest shows limited, typically to the last four to five episodes.  If you want to catch up on an entire season, you’ll need to pony up ten bucks.

The prospect of watching nearly every network show from ABC, CBS, Fox, and NBC over your home computer, television or other devices including the iPhone, iPod Touch, iPad, PlayStation 3, Xbox 360, and Blu-Ray players from Samsung, Sony, and Vizio would give you more than 3,000 viewing options to choose from.  But before getting too excited, there are some downsides to Hulu Plus:

1. You’re still going to watch commercials. Just like basic cable, you are going to pay to watch commercials on Hulu Plus.  That will be a deal-breaker for many who believe if you pay a monthly fee for it, you shouldn’t have to watch advertising.  Netflix offers online viewing as part of its $9.99 monthly service and there is no advertising.
2. You still have to wait to watch shows. There is no live streaming of network shows.  You’ll have to wait until the next day like everyone else on Hulu to catch the latest episode.
3. Don’t you dare watch on your smartphone. With Internet Overcharging schemes in place at AT&T and presumably on the way at Verizon, nothing eats your allowance faster than online video.  Paying $10 a month for Hulu Plus will be dirt cheap compared to the overlimit fees you’ll pay if you exceed your usage allowance.

The cable industry still thinks it could have a better product in the end.  TV Everywhere’s variations from Comcast and other cable operators are provided free of charge to existing cable subscribers (although the advertising load may end up being greater).  Many cable network shows are better received than some of the swill served up by the networks, and cable could be free to provide season passes right from the outset.

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An introduction to Hulu Plus. (2 minutes)

Don't touch this -- Bridging the gap (circled) can drive your iPhone's signal bars into a ditch

The long lines are over.  The hype that drove some Apple fanboys to wait hours in line, even with an advance reservation for the phone, has died down.  The people in the office you irritated bragging about your conquest have moved on with their lives.  For a growing number of early iPhone 4 buyers, that exhilaration is now being replaced with a realization: you are a beta tester for a new product that has some nagging design problems and defects.  And you are still stuck with AT&T, the nation’s least favorite wireless carrier.  Only now, it’s not just AT&T dropping your calls — it’s the iPhone itself.

A growing number of buyers have discovered a flaw so obvious even the most rudimentary testing, even from the drunk guy who left his phone in that California bar, should have picked up — if you hold the phone in your hand a certain way to make a call, the iPhone has a tendency to drop it.  That problem has grown so significant, Apple had to lock the message thread discussing the matter because it was crashing the browsers of support forum visitors.

You didn’t buy the iPhone to actually make calls, did you?

Sorting out whether the dropped calls are Apple’s fault or just business as usual at AT&T is now underway.

Apple’s answer to this particular problem is to turn the potential marketing crisis into an opportunity — by selling you a $30 “bumper”-case to keep your hands from actually touching the phone’s side, which is part of the antenna system.  The case’s odd design, which only covers the sides of the phone, has some speculating Apple knew about this problem all along and designed a case to mitigate the problem, and pocket the proceeds.

A leaked memo from Apple includes talking points to calm customers who have concerns Apple thinks are non-issues.  Apple even insists its representatives take a moment to summon up the proper “tone” when dealing with customers:

1. Keep all of the positioning statements in the BN handy – your tone when delivering this information is important.

• The iPhone 4’s wireless performance is the best we have ever shipped. Our testing shows that iPhone 4’s overall antenna performance is better than iPhone 3GS.
• Gripping almost any mobile phone in certain places will reduce its reception. This is true of the iPhone 4, the iPhone 3GS, and many other phones we have tested. It is a fact of life in the wireless world.
• If you are experiencing this on your iPhone 3GS, avoid covering the bottom-right side with your hand.
• If you are experiencing this on your iPhone 4, avoid covering the black strip in the lower-left corner of the metal band.
• The use of a case or Bumper that is made out of rubber or plastic may improve wireless performance by keeping your hand from directly covering these areas.

2. Do not perform warranty service. Use the positioning above for any customer questions or concerns.

3. Don’t forget YOU STILL NEED to probe and troubleshoot. If a customer calls about their reception while the phone is sitting on a table (not being held) it is not the metal band.

4. ONLY escalate if the issue exists when the phone is not held AND you cannot resolve it.

5. We ARE NOT appeasing customers with free bumpers – DON’T promise a free bumper to customers.

The yellow blotch problem

This week, even more problems are showing up:

• The Glitchy Proximity Sensor: PC World covers the iPhone’s sudden activation of the menu screen while talking on the phone.  With one’s face next to the screen, customers are reporting calls suddenly switched to speakerphone mode, muted, or throwing blasts of touchtones at callers.
• AT&T “Still Sucks”: Customers in San Francisco and Los Angeles, among other large cities, report “Bermuda Triangle” reception zones where calls regularly drop and cannot be made.  Randomly dropped calls are also still a major problem, and some customers believe the latest iPhone is more prone to showing “no service” than earlier models.
• Yellow Screen Blotches: Yellow-tinted blotches are visible on several owners’ iPhone screens.  Apple claims this is residue from the manufacturing process to bind the glass to the screen and will disappear with use as the adhesive fully dries.  Gizmodo reports these phones were likely rushed through manufacturing and shipped in time for the iPhone release day.  While some customers confirm the blotches do seem to be fading, others have been instructed by Apple to return yellow-tinged phones for replacement.
• Easily-Scratchable: Despite the hype about breakthrough glass technology making the phone more scratch resistant than ever, folks on Engadget found it was quite easy to tear up the phone when placed in a pocket with keys or other scratchy things.

Engadget received photos of scratched iPods hours after being unboxed (click to enlarge)

A Sacramento law firm, Kershaw, Cutter & Ratinoff has already started looking for customers experiencing poor reception quality and dropped calls, presumably to consider a class action lawsuit against Apple, AT&T, or both.  As of now, the law firm has received more than 400 complaints.

The signal loss problem has the prospect of becoming the most notorious — for both Apple and AT&T — especially when it is easily reproduced by reporters on the local evening news (see below).  But Steve Jobs thinks the complaints are overblown, writing back to one complainer, “Non issue. Just avoid holding it in that way.”

Despite that,  Gizmodo launched a petition urging Apple to give free cases to all iPhone 4 owners.

Every product launch has its bugs. We’ve seen a lot this time. Many issues, like the yellow screens, will go away as manufacturing fine tunes and adjusts to solve the problems. But the antenna issue is a fundamental one, a design flaw, that won’t go away as easily without adjusting the product in a deeper way.

So with all these great things, it’s terrible that buyers should have this excellent phone ruined for them because of a single, but serious, design problem. And even worse that Apple should suggest users use their phones in unnatural ways or shell out $30—for what is essentially a double wide livestrong armband—to fix it.

According to some Apple-watchers, the company plans a software fix, suggesting the signal meter displayed on the phone is the real issue, not the actual quality of reception from AT&T.  If the software fix only re-calibrates the signal meter and consumers still see dropped calls and reception problems, additional complaints are likely.

After a week of made-for-TV-lines outside of Apple stores across the country, reality has set in and several stations are now turning their attention to the iPhone 4’s pesky problems.

We have a number of videos for you to watch below the jump!

… Continue Reading