Jim Kraft (D-District 1)

A proposal to add a monthly $4 fee to every Baltimore cable subscriber’s bill to raise money for the fiscally-challenged city has been withdrawn after the city solicitor’s office warned the legislation would violate federal law.

City councilman Jim Kraft (D-District 1) proposed the city extend the existing telecommunications tax levied on telephone lines to cable television service in a bid to raise up to $5 million dollars annually towards the $50 million required to restore funding for curtailed fire, police, and recreational facilities.

Kraft’s proposal was an alternative to a controversial four cent bottle tax on beverages that could have driven some shoppers out of the city for cheaper untaxed alternatives available in the suburbs.

Kraft called his cable TV tax proposal “a fair tax.”

“Employed or unemployed, property taxpayer or exempt from property tax — this fee is borne by all,” he wrote in a mailing to constituents.

But the proposed tax ran into the Internet Tax Freedom Act, currently extended until 2014, which bans any taxation on broadband service, a major component of today’s cable systems.  The city’s lawyers also warned Baltimore could not tax home satellite service either: “Congress has specifically exempted providers of direct-to-home satellite service from collection or remittance of any tax or fee imposed by a local taxing jurisdiction.”

America’s cities continue to face unprecedented budget challenges in light of the distressed economy.  Some cities are slashing services, others are raising taxes and fees to make up the difference.  Baltimore in in the latter category with wide-ranging proposals to up fees and taxes for everything from the hotel room tax rate, outdoor billboard advertising, and energy to new higher fines for parking and civil violations.

The bottle tax bill is likely back on the agenda as well.

[flv]http://www.phillipdampier.com/video/WJZ Baltimore New Taxes 5-2010.flv[/flv]

WJZ-TV in Baltimore delivered this rundown on the city’s large number of tax and fee hikes to close a $50 million shortfall.  (3 minutes)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WBAL Baltimore Cable TV Tax Proposal Pulled 5-28-10.flv[/flv]

WBAL-TV ran this report over the demise of the telecommunications tax for cable television.  (2 minutes)

Los Angeles County's cable franchise map dating back to 2005 shows the county divided between Adelphia, Comcast, and Time Warner. Today, Time Warner Cable controls most of the county's cable service but still relies on some legacy equipment in place from the days of Adelphia and Comcast. Calabasas was formerly served by Adelphia. (click to enlarge map)

Some southern California residents continue to express anger and frustration at some poor business and customer service practices provided by Charter Cable and Time Warner Cable, both of which provide service in the community of Calabasas.

Unfortunately, city officials had their hands tied in resolving consumer complaints because California is one of several states that abandoned local cable franchising in favor of less accountable statewide cable franchises that carry few terms and conditions that protect California consumers.

The Calabasas Communications and Technology Commission dealt with several complaints raised by residents during its May meeting, often echoed by the commissioners themselves.

From the Calabasas Patch:

Resident Alvin Lindenauer spoke about his dissatisfaction with Charter.

“Charter has a long history of being less than competent in providing cable service,” he said.

Lindenauer’s complaints with Charter included misleading advertising, poor customer service and, most prominent, “improper billing practices.”

He said he received several erroneous notices of past due payments that resulted in forced late fees.

Lindenauer referred to Charter as “corrupt and deceptive” in its business practices.

He proposed that the commission hold Charter Cable more accountable for its service and reduce the city’s long-term contract with the company.

Charter Cable officials denied the company was either corrupt or deceptive, stating the company will work to address any customer service or billing complaints.

Cable commissions like those in Calabasas actually hold almost no power over incumbent cable or competing phone company video offerings.  The federal government deregulated the vast majority of cable operations as part of the 1996 Communications Act.  While many municipalities have cable boards or commissions, most are little more than venting stations for frustrated residents who feel their local provider is unresponsive.  Sometimes appeals like those by Lindenauer can get the attention of company executives and “guilt them” into intervening with intransigent customer service agents, especially when the media is watching.

Calabasas residents were also upset with Time Warner Cable — primarily because of its set-top boxes and a recent “upgrade” to its program guide software.

Customers are upset with the company’s legacy Motorola cable boxes still used on the part of the system originally owned by Adelphia.  Some residents inquired about why Time Warner doesn’t use the “more reliable” Scientific-Atlanta converters used in other parts of Los Angeles county.

Calabasas residents also complained Time Warner’s cable signals are intermittently plagued by “tiling,” an irritating digital artifact that appears like a series of small boxes that appear frozen or moving across a digital picture.  Company officials responded that the problems are in software, not in the set-top boxes, and they would work on them.

Time Warner’s Los Angeles county cable system is actually configured of several different cable systems acquired from Comcast and bankrupt Adelphia Cable a few years ago.  Those systems still have important differences in technology and channel lineups.  Despite those differences, Time Warner Cable collectively controls most of Los Angeles county’s cable systems.  Charter has most of the rest.

[You can watch the commission’s proceedings from their video archive.  Start watching at 17:35 to view Mr. Lindenauer’s complaint and follow-up.]

Greenwood, Miss.

Although the days of frenzied buying and selling of cable systems is behind us, smaller cable operators are still in the market for system swaps and buyouts.

Some 8,200 Windjammer Cable customers in Greenwood, Miss. and surrounding areas are about to become Suddenlink customers.  For many residents in Greenwood, located north of Jackson, this will be their third cable provider in two years.

Originally owned by Adelphia, Greenwood’s cable system was acquired in 2008 by Time Warner Cable as part of a bankruptcy sale of Adelphia’s cable properties.  Time Warner Cable ponied up an estimated average $3,500 per subscriber to purchase Adelphia’s cable systems, even though many were badly in need of upgrades.

Time Warner merged many Adelphia systems in larger communities into its own operations, but sold most of the smaller, more rural systems deemed strategically unimportant to the company.  In total, more than 125 cable systems in 25 different states, many serving just a few hundred subscribers each, were dumped overboard at a loss of $45 million by Time Warner.  Greenwood, like 124 other communities, would now receive cable service from a company nobody ever heard of before — Windjammer Cable.

Windjammer was created in 2008 to handle the 80,000 Adelphia customers Time Warner cast-off.  Owned by private equity firm MAST Capital Management, Windjammer is run by Jupiter, Fla.-based small cable operator Communications Construction Services, which is mostly known for providing cable service to more than 200 military bases across the country.

For Greenwood customers, the welcome letter from Time Warner Cable ended their cable relationship with Adelphia.  But it was a relationship never destined to last.

Just one year later, another welcome letter arrived, this time from Windjammer Cable:

Welcome to the Windjammer Cable family!

We have recently acquired the former Time Warner Cable system in this area, and are proud to be your new cable services provider.

We’re more than just a cable company. Windjammer Cable brings a whole world of entertainment and communications to the place it matters most…your home.

As a way to make the transition easy from one cable company to another, you will see very little change in how you receive your cable and communications services.

We will be updating your High Speed Internet, Digital Phone, and E-mail services beginning in the early morning of January 12, 2009. This conversion may take up to 10 days. We will only be working on your service between 1:00 am – 6:00 am local time. During this time, you may experience slight service interruptions, so please be patient.

To those of you who currently use the Time Warner Road Runner email service, there will be changes to your email account. Please visit our new website where you will find information about setting up a new Windjammer email account. We encourage you to do this as soon as possible. Your existing Road Runner email account will continue to work the same for at least the next two months.

If you do not use the Time Warner Road Runner email service, but use another service, like Gmail, you will not need to make any changes.

If you are a Time Warner Digital Phone customer, you should not notice any significant changes to your phone services. If you use the voice mail service, you will have to re-record your message. Instructions for doing this can also be found on our website.

Our customer service representatives are available 24 hours a day to answer any questions you may have about the transition. Consider us your new friend and neighbor, and know that we are only a phone call away.

We look forward to serving all your cable and communication needs!

Windjammer Cable

Now, one year and some months later, customers can prepare for their next welcome letter from Suddenlink.

What Suddenlink paid to acquire the Windjammer system has not been disclosed.

Suddenlink has experience providing service in Mississippi — its nearest system is in Greenville, about 50 miles west of Greenwood.

Suddenlink is the nation’s seventh-largest cable operator, with customers primarily located in Arkansas, Louisiana, North Carolina, Oklahoma, Texas and West Virginia.

North Carolina Legislature

We collectively sighed last Wednesday when the Senate Finance Committee temporarily pulled S1209, but the victory is short-lived.  Sources tell us S1209 is scheduled to return this Tuesday, one day after the long Memorial Day weekend.

We are not happy with some of the rumors that have been circulating around the Legislative Building in Raleigh.  One suggests S1209 will be modified into a one year, renewable moratorium on municipal broadband while a joint task force ponders questions about financing of municipal broadband, broadband adoption and speed, and overall competition in North Carolina.  Without a clear sunset provision, the legislature can renew the moratorium indefinitely, assuring incumbent phone and cable companies of a continued easy ride into our wallets.

Much has also been said by Sen. Clodfelter regarding the legality of municipal broadband in North Carolina.  Some of his earlier comments suggest he’d be a proponent for a moratorium while the state legislature thrashes out the legal questions.

But the courts have already effectively dealt with this question and handed victory to municipalities.  Why bother with a moratorium when in 2005, Laurinburg, North Carolina won its court battle against big telecom companies.  The judge ruled:

“Laurinburg’s network is run over fiber optic “wires or cable,” providing a “system” for “transmit[ting]” and “receiv[ing]” electronic signals capable of being converted to “audio” and/or “video” streams of information. See N.C. Gen. Stat. § 160A-319(b). We believe this fits within a broad construction of the definition of a CTS. Therefore, we hold that Laurinburg is acting within its municipal authority to run its network, and was not acting ultra vires in contracting with School Link to provide the network’s ISP service.”

Doesn’t the legislature have better things to do than to spend all of this valuable time doing work for big phone and cable companies?

We need you to again write and call your legislators. We have been told by numerous sources that your input has been very effective in pushing back S1209.  The more North Carolina consumers speak out against this anti-consumer bill, the less likely it will ever become law.

Here are the points you need to raise in your next letter or phone call:

1. Why is the legislature still spending time on this unnecessary, anti-consumer legislation?  S1209 is wanted by large phone and cable companies.  You want your town or city to have every option open to deliver better service if a consensus is reached for it in your community.  The current system already provides effective checks and balances.  We don’t need S1209.
2. Studying broadband issues is fine, but placing a moratorium on municipal broadband projects in the meantime is completely unacceptable.
3. Corning’s plant in Hickory, North Carolina produces 40 percent of the world’s supply of fiber optic cable.  Passing S1209 impedes fiber projects in North Carolina, hurting our own workers and state economy.
4. North Carolina needs all the broadband expansion it can get.  We are ranked 41st out of 50 states.  Passing S1209 preserves mediocre broadband service in our state indefinitely.

For some of you, this will be your third or fourth call or e-mail.  Perhaps it’s time to remind legislators you are becoming increasingly concerned that measures like S1209 continue to be debated.  While Time Warner Cable and CenturyLink/Embarq’s legislative priorities continue to get plenty of time and attention in Raleigh, they don’t get a vote in the next election.  Remind them you do, and your continued support hinges on whether you can feel confident members represents your interests, not those of big cable and phone companies.

Remember the three rules when contacting your legislators:

• Be polite.
• Be persuasive.
• Be persistent.

Well-informed constituents who can defeat industry talking points represents the nuclear option against bad telecommunications legislation.

Now get on the phones and e-mail and get busy.  Remember — one e-mail message per address.  No carbon copies!

Here is the list:

Latvia is celebrating today with the news it has the world’s second fastest broadband service, now beaten only by South Korea.

According to Ookla, which released speed measurement test results this week, the Baltic state in northeastern Europe achieved second place with a speed index of 24.41 Mbps, ahead of Moldova (21.63 Mbps), Japan (20.43 Mbps) and Sweden (19.95 Mbps).

Latvia has come a long way from its former days as a Soviet Socialist Republic.  The country declared its independence March 3, 1991 and adopted a parliamentary democracy.  Latvia maintains close economic ties with the United States and Scandinavian countries, and has rapidly sought its future within the European Community, distancing itself from Russia.  Today Latvia is a member of both the European Union and NATO.

Like other Baltic republics Lithuania and Estonia, Latvia has undergone a complete telecommunications transformation.  Out went the old Soviet-era telephone exchanges with antiquated copper wire, and in came optical fiber, especially in the nine major cities within Latvia’s administrative divisions.  Latvia’s economic planning heartily endorsed broadband service as a major economic driver, and the country and its citizens depend heavily on its broadband networks for entertainment, banking, business, education, and facilitating health care.

As a result, broadband is plentiful, fast, and remarkably inexpensive, especially in cities.  In rural communities, parts of Latvia still rely on older DSL technology delivered over traditional phone lines, but the country has plans for universal optical fiber as finances allow.  Meanwhile, widespread wireless mobile networks provide Europe’s least expensive cell service, with a charge averaging just four cents per minute to make and receive calls.

Latvia’s dominant broadband provider is Lattelecom, co-owned by the Latvian government and Sweden’s TeliaSonera AB.  Its broadband packages stun the rest of Europe and North America.

For customers in Riga, Jurmala, Jelgava, Daugavpils, Valmiera, and Ventspils districts, fiber optic broadband delivers service up to 200 Mbps upstream/downstream for just under $26.02 per month.  At that price, they also include a guarantee that speeds will always be above 30/20 Mbps.

Lattelecom's broadband tiers. In order, in U.S. dollars -- $13.80, $17.29, $20.78, and $26.02, all without a service contract.

Lattelecom is also introducing a 500Mbps service shortly.  There are additional substantial discounts for expectant mothers, educators, and the disabled.  For those too distant to access the fiber network, a DSL package up to 10Mbps with unlimited telephone calling (including international long distance) costs $37.45 per month.

The Baltic press has run with the success story of the region’s broadband providers, especially in light of the continued decline in scores for broadband in the United States, which has now fallen to 26th place (10.15 Mbps), and the United Kingdom, 33rd (7.71 Mbps).  Canada came in at 32nd (7.92 Mbps).

The most dramatic improvements in broadband continue in eastern Europe, particularly in the Republic of Moldova, its next door neighbor Romania and Bulgaria.  South Korea maintains its world-leader status.

Among the worst performers: Haiti, Lebanon, El Salvador, Afghanistan, Guatemala, Zimbabwe, Yemen, Mali, and Sudan.