The dollar-a-holler crowd that takes “charitable” contributions from Comcast is enjoying an abundance of riches thanks to your cable bill payment and their corporate agenda to get the NBC-Comcast merger approved. Everyone is coming out to celebrate the deal — from the United Way in Denver to a Texas sheriff and a group opposing grave desecration.  Regular Stop the Cap! reader Bones sent word Comcast’s Money Party is just getting started.

The Wrap notes Comcast has donated $1.8 billion in cash and in-kind largess to non-profit organizations since 2001, many of which will helpfully throw 44 cents back in the form of supportive letters to the Federal Communications Commission telling them to do whatever America’s largest cable company wants.

It’s all a part of the dirty little game some non-profits play with corporate benefactors to work against your consumer interests.  Even worse, many of these same groups will also ask -you- for a donation as well.  If Comcast keeps raising its rates, perhaps the best option in response to those playing on Comcast’s side is to tell them you already sent a donation… to Comcast.

This year’s circus of money has generated a torrent of correspondence to the FCC that is often nothing less than absurd.

The Wrap found one letter from the president of the Washington, D.C.-based Cherry Blossom Festival.  Did you know cherry blossoms were deeply committed to seeing Comcast and NBC get married?

“Over the past few years, Comcast has generously donated services and sponsorship to our events,” Diana Mayhew, president of the Washington, D.C.-based Cherry Blossom Festival, wrote to the Federal Communications Commission in July. “I believe as Comcast teams up with NBC, it will continue to be a great partner for the Cherry Blossom Festival.”

But it gets much sillier.

Stop the Cap! has compiled just a sampler of comments from several interest groups all in a hurry to get their letters into the public record.  Most were bad, but we also include an example of a letter from a group that didn’t simply applaud the deal.  Our comments are in italics:

National Puerto Rican Coalition: “In our view, […] this joint venture will lead to valuable benefits and unprecedented advances in media diversity for Hispanics and other people of color.”

Do you think the fact NPRC also received valuable funding from the Comcast Foundation might have had something to do with their cheerleading letter?

Cuban American National Council
Hispanic Federation
League of United Latin American Citizens
National Council of La Raza
National Hispanic Media Coalition
SER-Jobs For Progress National, Inc.: “We strongly believe that the Memorandum of Understanding between Comcast and NBCU and the Hispanic Leadership organizations seeks to promote the goals of expanding economic opportunity for Hispanic families and preserving and enhancing programming for Hispanic audiences, and view these commitments as stepping stones to a more responsive and responsible corporate citizenry.”

These groups, many of which also receive direct funding from Comcast, went over the top cooking up a “Memorandum of Understanding” (or is it a shakedown agreement) to land positions on Comcast’s “Advisory Councils.”  These Latino groups managed to get their travel and other expenses paid for by Comcast to attend twice-yearly meetings to discuss diversity issues.  Their agreement also allows this coalition to empower itself, by getting Comcast to agree to call them when looking for “qualified” Latino law firms, suppliers and vendors, and even top management.  That provides these groups power and influence as interested candidates appeal to them to gain a spot on the “qualified” list.  But it goes even further — Comcast has to add several “qualified” (identified with the help of these groups) Latino-owned cable channels to the lineup whether subscribers want them or not.

This agreement was marked “confidential,” but you can read a copy right here.  By the way, it’s no surprise the League of United Latin American Citizens is on this list.  They’ll peddle themselves out to any Big Telecom company that comes with a check in hand, especially AT&T.

Gay & Lesbian Alliance Against Defamation (“GLAAD”): “Given the weight and significance of the Comcast/NBCU merger, GLAAD urges the FCC to ensure that the community of lesbian, gay, bisexual and transgender Americans are not forgotten in its calculus of diversity, and that the stories and visibility of LGBT people and their families are held up as part of the valued diversity in its discussions, analysis and recommendations in this merger.

GLAAD’s filing was an example of a respectable comment letter filed by a minority interest group.  They didn’t take a strong position for or against the merger.  Instead, they shined a light on the issues that concern the LGBT community and said the FCC should take a closer look.  That’s fair and appropriate.

Hmong New Life Radio Broadcasting
Hmong Women’s Heritage Association
Hmong Report At 7
Lao Family Community of Fresno
Sacramento Asian-American Minority, Inc.
National Hmong Grave Desecration Committee: “We believe Comcast’s sensitivity to our need for such programming speaks extremely well of them as a company. It is a clear indication that they will continue to exhibit their sense of the responsibility to underserved communities such as ours subsequent to a merger with NBC-Universal.”

These six groups must be new to the influence game because they each sent nearly identical (often word for word) letters to the FCC in support of the merger.  On the ludicrous scale, nothing beats the National Hmong Grave Desecration Committee finding itself compelled to write a formal letter to the FCC on a multi-billion dollar cable-broadcast merger.

Here's something to remember us by....

Mile High United Way: “Comcast has provided sizeable foundation grants for DRH projects and other meaningful financial donations to other United Way programs. In addition to philanthropy and volunteerism, the company has also provided us with top notch communications support. The company has helped us create video presentations for our key fundraising efforts; it has placed public service announcements on its cable stations in an attempt generate attention and attendance for our events; it has also provided time on its Comcast Newsmakers public service broadcast to publicize our events, our programs and our people.”

That’s all wonderful, but none of it justifies or even argues for a merger between a cable and television network.  This is nothing more than dollar-a-holler advocacy at work — United Way gets goodies from Comcast and now they are returning the favor.  What United Way won’t get from our family is another nickle.  After all, our contributions to United Way pay for this group’s time and effort peddling Comcast’s corporate agenda to the FCC.  And I thought the United Way was supposed to be a charitable organization, not a lobbyist advocating for Comcast.

Sheriff Adrian Garcia – Harris County (Tex.): “Comcast is not just a business operating in Harris County, it is a partner in our effort to be a better and safer community. I hope the FCC will keep all that Comcast does in mind and permit the NBC Universal partnership to move forward.”

Voters in Harris County might want to keep this letter in mind come election time.  This shockingly inappropriate involvement by a law enforcement agency willing to stick its nose in a corporate merger is inexcusable.  Perhaps Harris County needs a sheriff that will spend time fighting crime, not typing up letters to benefit the cable company.  Oh, and by the way Sheriff — Comcast really is just a business.

The National Zoo: “In sum, Comcast has proven to be a reliable partner that cares about our work here at the Zoo in promoting innovative science, educating children, and ultimately establishing a beautiful urban park offering families excitement as well as a welcome place to enjoy nature. We deeply care about our engagement with our local friends and families here in Washington, D.C. and appreciate the fact that Comcast shares our commitment to serving the local community.”

That’s grand, but has nothing to do with a corporate merger proposal.  Comcast’s subscribers are the ones who ultimately care about the Zoo.  It’s their money that paves the way for all those good works.

Center for the Homeless: “I hope you will consider this testimony in favor of Comcast and its strong sense of involvement in American communities and service to those who need it most. Comcast is a true partner in the important work that we do.”

Another group whose mission should be helping the homeless is devoting time and resources to sending love notes to the FCC on behalf of a giant cable company.  By the way, none of the clients your group serves can afford Comcast’s prices.

Partnership for a Drug Free New Jersey: “I look forward to our continued partnership with Comcast and am excited to welcome NBC onto their team. We will continue to reach teens all over New Jersey to help ensure that they remain drug-free and continue to bring the message of hope to so many of our state’s residents.”

The excitement is even greater when you recognize Comcast and the national umbrella group Partnership for a Drug Free America can’t thank each other enough.  The non-profit explained it all in a newsletter: “At the Partnership’s third annual Making A Difference gala held this winter in the Grand Ballroom of the Waldorf-Astoria Hotel, more than 850 guests gathered to honor Ralph J. Roberts, founder and chairman of the executive and finance committee for the Comcast Corporation, and his son, Brian L. Roberts, chairman & CEO of Comcast. Chairing the gala were Geraldine B. Laybourne, chairman & CEO of Oxygen Media and James B. Lee, Jr., vice chairman of JPMorgan Chase & Co. […] The evening generated over $2.1 million to support the Partnership’s programs for children, parents and families.”

The accolades should have stopped at a “thank you” card, not with the unseemly way this group returns the favor by advocating for a merger deal involving one of their benefactors.

"It's your high prices," Americans tell subscription television companies.

For the first time in the history of the subscription television industry, more Americans disconnected their cable-TV, satellite and telco IPTV service than signed up.  The reason?  Americans have finally reached their limit on what they’re willing to pay to Comcast, Time Warner Cable, DISH, AT&T, and others for subscription television.

At first, only premium movie channel subscriptions for networks like HBO and Showtime took the hit, but now Americans are cutting cable’s cord at an accelerating pace.  SNL Kagan, which has tracked the cable industry for decades, reports cable and phone companies saw their worst second quarter in history — losing 216,000 subscribers who canceled their basic cable subscriptions.  If the same losses continue in the third quarter, the pay TV industry will see their total number of households decline to below 100 million subscribers nationwide.

SNL Kagan notes the losses have little to do with online video viewing.

“Although it is tempting to point to over-the-top video as a potential culprit, we believe economic factors such as low housing formation and a high unemployment rate contributed to subscriber declines in the second quarter,” said Mariam Rondeli, an SNL Kagan analyst.

Another factor is the continued decline in wages for America’s middle class.  Despite long working hours and maxed out productivity, Americans take home pay began declining in 2003 and continues its downward slide, now made worse by the housing crisis and high unemployment.

Under these conditions, subscription TV is becoming a luxury.

Looking closer into the numbers, there are a few companies that managed to add subscribers, mostly at cable’s expense.  Verizon FiOS did best of all, adding 414,000 new customers.  DirecTV managed to add 81,000 new subscribers in the second quarter.  Most of those gains came because of promotional pricing which gave consumers a break on their monthly bill for up to a year.

The cable industry is where most of the bleeding is taking place.  Six out of eight major cable operators broke records in subscriber losses in the spring and early summer, cumulatively losing 711,000 customers.  Their overall share of the pay TV market dropped from 63.6 percent in 2009 to 61 percent today.

That’s why cable operators are telling their retention departments to make deals with customers threatening to leave.  Many subscribers are scoring new customer promotional pricing for up to a year in return for a commitment to stay with the cable company.  All customers have to do is call and threaten to cancel and negotiate.

Stop the Cap! recommends not taking their first offer.  Check your cable operator’s website and start with new customer pricing as a negotiating tool.  If they only offer a few dollars in discounts, tell them you will think about it and then call back and speak with someone else.  Avoid committing to “price protection agreements” or other contract terms that hold you in place for a year, unless they give you new customer pricing.

Sometimes the best offers are reserved for those who show up at the cable office with set-top boxes and cable modem equipment in hand, ready to turn in.  When they ask why you want to terminate service, make it clear it’s all about the prices they are charging.  Hint that you’d stay if you could receive the same pricing a new customer gets.

Share your experiences in negotiating and what kind of deals you scored in our comments section.

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The Wall Street Journal covered the pay TV losses noting the cable industry is trying to make up revenue losses by accelerating rate hikes for their remaining customers.  (3 minutes)

Apple TV returns in a convenient "fun size."

When Steve Jobs throws a stone in a pond, the ripples are felt by just about everyone.  One day before the unveiling of a new, slimmed-down version of Apple TV, the rest of the Internet TV industry reacted.  From some came price cuts, for others a defense of their business model relying on higher-priced boxes.

First to Apple.  Yesterday, Apple’s Steve Jobs unveiled the latest version of Apple TV, a product Apple has ignored for years.  Jobs once dismissed the set top box as an afterthought intended for “hobbyists.”  Considering the product’s enormous number of limitations, he may have been right.

The latest version of Apple TV bears little physical resemblance to the original, except for the square shape.  What used to look a lot more like a Mac Mini now looks like an oversized A/B switch.  The unit’s mini-me size comes with a mini-me price — $99.  For that, Apple dispensed with the hard drive and turned TV watching into a streaming-only affair.  HDMI remains the preferred method to connect with your television — component video connections are gone on the new version.  Optical-digital output is included for audio.  The new version of Apple TV also loses the coffee-warming capabilities of the original, which routinely heated up to 111 degrees.

For Netflix fans, Apple includes support for Netflix video streaming, which is the most welcome change from the dreary everything-iTunes/YouTube limitation that handcuffed the original.

The new Apple TV continues to have plenty of limitations however.  There is no Gigabit Ethernet connectivity, there’s no support for 1080p, the micro-USB port is locked down preventing native support of external hard drives, and you are still stuck using iTunes for much of Apple TV’s functionality.

Apple’s control-freak mentality also remains on full display, banning you from watching Hulu or watching shows from most of Apple’s competition (Amazon, network TV websites, overseas TV streaming sites, etc.)  No audio streaming from sites like Pandora is allowed, either.

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Bloomberg News delivered extensive coverage of Apple’s latest product announcements, with many taking a positive tone about their impact.  Several reports are included covering every angle.  (20 minutes)

Boxee, built by D-Link

Current Apple TV owners cannot benefit from the software upgrades that are a part of the new Apple TV.  The two products are not compatible.  That probably won’t bother many current Apple TV owners who long abandoned Apple’s awful software, jailbreaking their units and installing XBMC, Boxee, or atvusb-creator.  All of these remain superior even to Apple TV’s newest software because they offer owners the opportunity to stream virtually any content from any source.

In fact, Boxee’s developers were relieved after watching Steve Jobs unveil Apple TV 2.0.  Boxee will release its own set top box in November for $199.  They defended Boxee’s $100-more price point on their blog, noting that Boxee will offer a completely open viewing experience, and delivers a more compelling set of features than Apple TV will offer:

We think people want to be able to watch anything that they can watch on their computer, only on their big screen TV.  There is an overwhelming consumer expectation that the content we can consume in our cubicles, our dorm rooms, and in our laps should be available in our living rooms, in full 1080p with a gorgeous interface.  It’s a simple premise, but the challenge is to do it in a way that makes sense in that space, so you can put your feet up, grab a remote and start watching. No keyboards, mice, windows or labyrinthine menus. It should be calm and it should be beautiful. And it *must* be open.

We all watched the Apple announcement. We walked away feeling strongly confident about the space it left for Boxee to compete. We have a different view of what users want in their living rooms.  We are taking different paths to get there. The Boxee Box is going to be $100 more expensive than the Apple TV, but will give you the freedom to watch what you want.

Those investing $99 in the new Apple TV might have a shot of getting the best of both worlds.  It’s a safe bet Boxee’s creators will be working on a version of their software to replace what comes with Apple TV, potentially providing a Boxee experience at an Apple TV price.

The Roku set top box

For those counting every penny these days, the arrival of Apple TV’s budget-minded update forced some companies to start cutting prices.  Roku, which has been around since 2008, was the first player to officially support Netflix video streaming.  Today, most Roku owners use their boxes for that purpose, but because Roku is also an open platform, anyone can create “channels” for the box to open up new viewing possibilities.  As a result, Roku has come a long way from its days as the “Netflix Video Player.”

Now it’s $20-30 cheaper, too.

Coinciding with the launch of Apple TV, Roku cut prices on its three boxes:

• The standard-definition Roku SD is now $59.99 (down $20), but currently out of stock.
• The popular Roku HD is $69.99 (down $30).
• The Roku HD-XR, which adds Wireless-N capability and will support 1080p video after a firmware upgrade due later this year is now $99.99 (down $30).

Roku is running a promotion with Netflix that includes 50GB free on MP3tunes.com for a year to stream your iTunes music to your television if you buy any Roku HD player through this promotional link: www.roku.com/GetOne

Of course, still looming in the background is Google TV, due this fall on some new Sony TVs and Blu-ray players and the Dish Network satellite TV service.  Logitech is also bringing out its own standalone set-top box version — the Logitech Revue.

Although pricing for both Google TV and the Logitech Revue have not been announced, analyst Andy Hargreaves of Pacific Crest Securities thinks the Revue will cost between $250 and $300, which he believes is more than consumers would spend. “It’s a cool concept, but a tough sell,” he told USA Today.

Logitech is banking a lot on its new Revue box, as Logitech’s core business selling replacement computer mice and keyboards continues to falter — from $2.3 billion in 2007 to $1.9 billion in 2009.  As consumers replace $1,000 desktops with $400 laptops or web-ready smartphones, many aren’t interested in splurging for top of the line accessories Logitech includes in its product line, and webcams are already built-in to many laptops and phones.

Many more don’t want another box on their TV set.

James McQuivey, an analyst with Forrester Research likes the concept of Google TV, but believes it will succeed best if it’s already built-in to television sets or DVD players.

“It will change TV viewing forever,” he told the newspaper. “[But] you’d have to be a very technically oriented and TV-obsessed person to go through the pain of an additional box.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Google TV and Logitech Revue.flv[/flv]

An introduction to Google TV and three amusing ads from Logitech for the Revue: TV Misses You.  (6 minutes)

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Apple’s other new products, including their iPod line, was covered by KGPE-TV in Fresno and KWGN-TV in Denver.  (5 minutes)

Kent

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

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

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

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

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

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

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

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

[flv]http://www.phillipdampier.com/video/CNBC Internet v. Cable 8-20-10.flv[/flv]

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

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

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

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

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

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

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

[flv]http://www.phillipdampier.com/video/CNBC Interview With Pacnet CEO June-July 2010.flv[/flv]

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

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

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

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

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

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

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

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

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

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/Fiber Optic Cable.flv[/flv]

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