Tomorrow is election day in the United States. Stop the Cap! has reviewed both presidential candidates’ positions (or the lack thereof) as well as the past voting records and platforms of members of both major political parties. With this in mind, it is time for our election guide for broadband enthusiasts. Regardless of what candidate you support, please get out and vote!

Neither political party or candidate has been perfect on broadband advocacy or consumer protection.

We’ve been disappointed by the Obama Administration, whose FCC chairman has major problems standing up to large telecom companies and their friends in the Republican-led House of Representatives. Julius Genachowski promised a lot and delivered very little on broadband reform policies that protect both consumers and the open Internet. Both President Obama and Genachowski’s rhetoric simply have not matched the results.

Bitterly disappointing moments included Genachowski’s cave-in on Net Neutrality, leaving watered down net protections challenged in court by some of the same companies that praised Genachowski’s willingness to compromise. Genachowski’s thank you card arrived in the form of a lawsuit. His unwillingness to take the common sense approach of defining broadband as a “telecommunications service” has left Internet policies hanging by a tenuous thread, waiting to be snipped by the first D.C. federal judge with a pair of sharp scissors. But even worse, the FCC chairman’s blinders on usage caps and usage billing have left him unbelievably naive about this pricing scheme. No, Mr. Genachowski, usage pricing is not about innovation, it’s about monetizing broadband usage for even fatter profits at the expense of average consumers already overpaying for Internet access.

Obama

Unfortunately, the alternative choice may be worse. Let’s compare the two parties and their candidates:

The Obama Administration treats broadband comparably to alternative energy. Both deliver promise, but not if we wait for private companies to do all of the heavy lifting. The Obama Administration believes Internet expansion needs government assistance to overcome the current blockade of access for anyone failing to meet private Return On Investment requirements.

While this sober business analysis has kept private providers from upsetting investors with expensive capital investments, it has also allowed millions of Americans to go without service. The “incremental growth” argument advocated by private providers has allowed the United States’ leadership role on broadband to falter. In both Europe and Asia, even small nations now outpace the United States deploying advanced broadband networks which offer far higher capacity, usually at dramatically lower prices. Usually, other nations one-upping the United States is treated like a threat to national security. This time, the argument is that those other countries don’t actually need the broadband networks they have, nor do we.

The Obama Administration bows to the reality that private companies simply will not invest in unprofitable service areas unless the government helps pick up the tab. But those companies also want the government to spend the money with as little oversight over their networks as possible.

That sets up the classic conflict between the two political parties — Democrats who want to see broadband treated like a critically-important utility that deserves some government oversight in its current state and Republicans who want to leave matters entirely in the hands of private providers who they claim know best, and keep the government out of it.

FCC Chairman Julius Genachowski’s regular cave-ins for the benefit of Big Telecom brought heavy criticism from us for his “cowardly lion” act.

Just about the only thing the two parties agree on is reforming the Universal Service Fund, which had until recently been directing millions to keeping traditional phone service up and running even as Americans increasingly abandon landlines.

But differences quickly emerge from there.

The Obama Administration believes broadband is increasingly a service every American must be able to access if sought. The Romney-Ryan campaign hasn’t spoken to the issue much beyond the general Republican platform that market forces will resolve virtually any problem when sufficient demand arises.

Republicans almost uniformly vociferously oppose Net Neutrality, believing broadband networks are the sole property of the providers that offer the service. Many Republicans characterize Net Neutrality as a “government takeover” of the Internet and a government policy that would “micromanage broadband” like it was a railroad. Somehow, they seem to have forgotten railroad monopolies used to be a problem for the United States in the early 20th century. Robber barons, anyone?

President Obama pushed for strong Net Neutrality protections for Americans, but his FCC chairman Julius Genachowski caved to the demands of AT&T, Verizon, and the cable industry by managing Net Neutrality with a disappointing “light touch” for those providers. (We’d call it “fondling” ourselves.)

Democrats favor wireless auctions and spectrum expansion, but many favor limits that reserve certain spectrum for emerging competitors and for unlicensed wireless use. Republicans trend towards “winner take all” auctions which probably will favor deep-pocketed incumbents like AT&T and Verizon. The GOP also does not support holding back as much spectrum for unlicensed use.

Republicans have been strongly supporting the deregulation of “special access” service, critical to competitors who need backhaul access to the Internet sold by large phone companies like AT&T. Critics contend the pricing deregulation has allowed a handful of phone companies to lock out competitors, particularly on the wireless side, with extremely high prices for access without any pricing oversight. The FCC under the Obama Administration suspended that deregulation last summer, a clear sign it thinks current pricing is suspect.

Romney

Opponents of usage-based pricing of Internet access have gotten shabby treatment from both parties. Republicans have shown no interest in involving themselves in a debate about the fairness of usage pricing, but neither have many Democrats.

As for publicly-owned broadband networks, sometimes called municipal broadband, the Republican record on the state and federal level is pretty clear — they actively oppose community broadband networks and many have worked with corporate front groups like the American Legislative Exchange Council (ALEC) to ban them on the state level. Democrats tend to be more favorable, but not always.

The biggest problem broadband advocates face on the federal and state level is the ongoing pervasive influence of Big Telecom campaign contributions. While politicians uniformly deny that corporate money holds any influence over their voting, the record clearly indicates otherwise. Nothing else explains the signatures from Democrats that received healthy injections of campaign cash from companies like AT&T, and then used the company’s own talking points to oppose Net Neutrality.

But in a story of the lesser of two-evils, we cannot forget AT&T spends even more to promote Republican interests, because often those interests are shared by AT&T:

• AT&T has spent nearly $900,000 on self-identified “tea party” candidates pledged to AT&T’s deregulation policies;
• AT&T gave nearly $2 million to the Republican Governors Association — a key part of their ALEC agenda;
• AT&T gave $100,000 to everyone’s favorite dollar-a-holler Astroturf group — The Heartland Institute, which opposes Net Neutrality and community broadband.

We’ve received FreedomPop’s “Freedom Sleeve Rocket for iPod Touch” here at Stop the Cap! HQ and are giving it a run.

Originally slated for release in the late summer, the $99 sleeve finally arrived yesterday afternoon. FreedomPop’s attraction is 500MB a month of free Clearwire WiMAX usage indefinitely. After the upfront cost of the sleeve ($99), customers can snap the case-like sleeve on the back of their 4th Generation iPod and be on their way streaming content, making Skype calls, checking web pages/email, or sharing the connection with up to eight devices (or friends).

It could be a fine alternative for usage-capped wireless customers who want an extra 500MB edge every month, and if you’ve ever lost a cell phone while exercising (I have), this is a little less risky (and you will definitely notice because the iPod you are listening to will go missing with it).

Still, FreedomPop is a start-up and “free” wireless data sounds a little too good to be true (or at least long-lasting should the business model go awry).

Customers can earn additional usage allotments “connecting” with “Freedom Friends” or signing up for third party offers. If you like the service and want more, FreedomPop’s real business model kicks in — selling you additional data allowances that range from $7.25-$20/GB above and beyond your initial 500MB each month.

Clearwire’s hit or miss coverage in upstate New York.

So how does the device work? We’re testing it out this week and will report our results in greater detail sometime next week. But up front, some interesting observations:

1. The device seems durable enough. It can recharge from a USB port or from the included power adapter. Charging time initially took several hours, but we’re unsure how long it will run just yet;
2. A web-based control panel offers easy customization of the device, which appears as a Wi-Fi hotspot when the 4G service is enabled. You can reset your password and even manage the power level. The “low” setting proved more than adequate for anyone within 10 feet to connect, and since this was designed to attach to the back of your iPod, signal strength of its Wi-Fi service is no problem;
3. You better have a 4th generation iPod or else it simply won’t fit. I actually discovered I had a third generation unit, which means no luck snapping the iPod to the back of the sleeve. Apple’s newest iPod Touch won’t fit either. But then I discovered it really didn’t matter. I can slip the sleeve all by itself in a pocket and it will still work fine with my iPod, attached or not. FreedomPop also sells a small portable hotspot device that could work equally well if you don’t need a “snap-on” solution;
4. Clearwire, which has a dreadful reputation for reception and speed issues here in western New York, actually worked impressively well in early tests. Indoors we managed a medium strength signal from a cell tower located about two miles away. Clearwire’s very high frequency means outdoor reception free of obstacles like walls and doors will perform even better, and it did. We managed at least 1-3Mbps service at all times, which is better than a lot of cell carrier 3G networks locally;
5. Making and receiving VoIP calls using an earlier generation iPod Touch is a nuisance. We noticed audio dropouts and call dropping, and you need to supply a headset with a microphone to be able to speak to a caller. But who calls anyone anymore? Text messages and Google Talk’s instant message system worked much easier;
6. You can eat usage just browsing web pages. I was astonished to discover I consumed more than 42MB after less than 30 minutes of reading e-mail and web browsing a half-dozen news site web pages. At that rate, I’d be close to my limit after just 10 days. This surprised me because my Verizon Wireless data plan shows my spouse and I manage around 700MB of combined usage every month, and that includes streaming radio every morning on the ride to work. FreedomPop’s usage meter will need some closer inspection because there are indications it counts 1MB of usage for each hour the device is powered on, regardless of whether you are actively using it or not;
7. The second thing we did after unboxing was visit FreedomPop’s website and turn off “automatic top up” under Billing Settings. Otherwise after you reach 400MB (not a typo) of usage, FreedomPop will “conveniently” automatically add 1GB of additional usage for $20, billed to your credit card. Set in the off position, your account will simply stop working for the rest of the month once you hit 500MB.

I had low expectations from FreedomPop’s alliance with Clearwire, the WiMAX network Sprint customers love to hate (and then turn off on their phones to conserve battery life). But so far I am cautiously optimistic.

Readers should be careful before jumping in and check FreedomPop’s coverage map first because Clearwire’s network is notoriously limited. For example, here in upstate New York Rochester, Syracuse, Geneva, and Cortland are covered. Buffalo, Albany, and Binghamton are not. In the Big Apple, New York City has coverage, Long Island east of Valley Stream is out of luck.

We’ll post a more detailed review next week.

This will cost you $10/month in Milwaukee

Stop the Cap! has learned Time Warner Cable is back with another equipment rate increase, this time for television set top boxes that will now cost $10 a month each, beginning in Wisconsin.

Time Warner Cable customers in the Milwaukee area are first getting the notice of the $1.05 rate increase on their latest bill. The new rate takes effect in November.

“Many businesses, including ours, are facing rising costs and have to adjust prices in order to maintain their operations,” explains Time Warner Cable Wisconsin spokeswoman Stacy Zaja. “We also understand that some of our customers are struggling in this economy, and are doing the best to hold the line on our prices.”

The rate increase comes at the same time Time Warner is introducing a $3.95 monthly modem rental fee for its broadband service. Unlike cable modems, however, Time Warner will not allow customers to purchase their own set top boxes, so it represents a rate increase customers can only avoid by canceling service or negotiating a lower rate.

At this time, Time Warner will not increase its prices for cable television service, just the equipment needed to view it.

The Business Journal notes Time Warner may be taking a chance on its latest rate increase, because AT&T’s U-verse service is increasingly available as an alternative choice for Milwaukee residents. Time Warner last raised the set top box rental fee by $1 in 2011, along with a $5 monthly rate hike for its cable television service.

Cohen

Comcast’s chief lobbyist stalled plans to unveil cheaper Internet service for the financially disadvantaged to use as bait to win regulator approval of its 2009 merger with NBC-Universal.

The Washington Post today reports David Cohen’s influence at the cable operator as its chief of lobbying has helped the cable company achieve its status as America’s largest cable operator and entertainment conglomerate.

Cohen has friends in high places thanks to his status as a Democratic Party money bundler. A self-styled “consigliere” to the Roberts family that controls the company, Cohen has overseen a transformation of Comcast from one cable operator among many into a high-powered force not to reckoned with in Washington or Silicon Valley.

Comcast’s growth into a mega-corporation with $58 billion in annual revenues came, in part, from dealmaking that won regulator approval in D.C. Maintaining good relations with those regulators is a Cohen specialty. It did not take the Post too long to find former FCC officials giving Cohen high praise:

• “Every meeting with David is incredibly substantive,” Eddie Lazarus, former chief of staff to the FCC told the newspaper. “He always comes with a willingness to find solutions.”
• “David loves politics, he loves government and he has incredible situational awareness — a 360-degree view of business,” said Blair Levin, a former senior adviser to FCC Chairman Julius Genachowski. “He’s just so good at what he does.”

Under Cohen’s leadership, Comcast has spent lavishly on its corporate lobbying and legal team. Today, 20 full time lobbyists work under Cohen’s direction, with dozens of others available on retainer. The company spent $8.3 million of its subscribers’ money solely on lobbying. The Post reports that makes Comcast the ninth biggest K Street spender, above Verizon.

The poor and disadvantaged had to wait for Comcast to seal the deal on their $30 billion acquisition of NBC-Universal before affordable Internet could become reality for them.

In 2009, Comcast insiders were hard at work on a discount program for the disadvantaged who could not afford Comcast’s regular prices for broadband service. But the program was stalled at the direction of Cohen, who wanted it to be a chip with regulators to win approval of its acquisition of NBC-Universal. The program, sure to be popular among advocates of the digitally disadvantaged, was a key part of approving the $30 billion deal.

“I held back because I knew it may be the type of voluntary commitment that would be attractive to the chairman [of the FCC],” Cohen said in a recent interview.

Regulators promoted Comcast’s “concession” to offer the discounted Internet service as a win for consumers as part of the final approval of the deal. In reality, Comcast was planning to offer the service anyway and finally introduced it in 2011 — two years after first being proposed inside the company.

That fact is a slight embarrassment to current FCC chairman Julius Genachowski, who has told audiences the discounted Internet program was partly to his credit.

“This particular program came from our reviewing of the Comcast NBC-U transaction,” Genachowski said in a speech. “Comcast embraced it as good for the country, as well as good for business. And I’m fine with that.”

Cohen defends Comcast’s lobbying expense as part of the company’s effort to combat scrutiny and challenges to its all-or-nothing video business model, denying customers access to a-la-carte programming.

Comcast’s scope has now grown so large, it has become a force few companies are willing to challenge, and those that try are quick to run into a blockade of Comcast lawyers, lobbyists, and carefully constructed contracts that protect the company’s bottom line from would-be competitors.

Deep pockets like Verizon, Apple, Netflix and Google have all tried… and failed to recast the cable television experience with on-demand programming, a-la-carte channels, and cord-cutting technology.

In response, Comcast has kept competitors tied down to the same cable packages that require subscribers to pay for everything, even if they seek only a few channels. Comcast leverages its broadband network with usage limits that effectively curtail cord-cutting among consumers looking to skip the TV package. Anyone seeking a place in today’s entertainment industry ends up dealing with Comcast sooner or later.

“They are hugely important because they can singlehandedly sink or swim multiple businesses that rely on the Internet ecosystem by virtue of controlling the dissemination of information through their pipes and now by supplying so much of the content,” said Joel Kelsey, a policy director at consumer interest group Free Press. “So many companies have come to us and ask we fight their battles for them because they are afraid of retribution.”

Cohen is well-compensated for his effectiveness. His latest three-year contract makes him one of the highest paid corporate lobbyists in Washington, with a $15 million annual compensation package and $3 million in bonuses, not including his ample stock holdings in Comcast.

His influence extends to the highest levels of the Obama Administration. Last summer, the family hosted a $1.2 million campaign fundraiser for President Obama, and the Cohens have separately contributed $877,000 to various campaigns. Comcast itself has spent $3.3 million in campaign contributions so far this year.

Telling Time Warner customers to get rid of the cable company’s phone service.

Best Buy employees in upstate New York are advising Time Warner Cable customers to dump Time Warner phone service and buy their own cable modem to completely avoid any additional monthly fees.

“We don’t have modems that will support Time Warner’s voice services, so basically any customer that has that bundle either has to make the decision to get rid of that service or deal with paying for that service every month,” said Syracuse Best Buy employee Drew Cacciola.

Cacciola told a Syracuse television station Time Warner’s supplied equipment is “old and refurbished” and that if customers purchase their own equipment, they will have the latest technology and won’t have to worry about ending up with another refurbished cable modem if the current modem fails.

“If [a new modem] breaks down you can get a new one you don’t have to send it back to them and you won’t get another refurbished one – you get a new one,” said Cacciola.

In fact, Time Warner phone customers do not have to cancel their phone service to avoid the modem fee, but they will be stuck with two pieces of equipment — a Time Warner-supplied eMTA that manages the phone service (with its Internet ports disabled) and the customer’s own purchased cable modem. For now, Time Warner is not charging customers for eMTA equipment used exclusively for its phone service.

Best Buy does not carry some of the models on Time Warner’s approved modem list, and the cheapest one WSYR reporters could find cost around $60, meaning it will take just over a year to recoup the cost of the modem.

Motorola cable modem

Time Warner Cable’s modem fee continues to create consternation for customers, especially when they learn the same piece of equipment used for both Internet and phone service costs $3.95 a month when used for broadband, but is free when used only for phone service.

Stop the Cap! reader Ben argued with a Time Warner representative trying to understand the reasoning.

“So, let me get this straight about the modem fee: If I have phone there is no fee but if I use the same modem to also get Internet, there is a fee?,” Ben asked.

Yes, came the answer. The explanation:

“About the modem fee: Our costs for Internet equipment keep increasing and unfortunately we could not continue to absorb the costs related to their purchase, maintenance and repair,” wrote a Time Warner employee named ‘Paul-E.’ “Leasing a modem ensures you have the most up to date and capable equipment to take advantage of our services as we offer faster speeds and additional functionality. These events sometimes require that we replace your current equipment to give you the best experience.”

Time Warner’s explanation for the new modem fee sounds plausible, but unfortunately for “Paul-E” (and the company),  much of it is demonstrably false.

Investors Business Daily reports the new $3.95 computer modem leasing fee could raise up to $500 million a year for the cable company.

“I would look at this as a price increase,” Bryan Kraft, an analyst at Evercore Partners, told IBD via email. “There are some questions that need to be answered before the impact on ARPU (average monthly revenue per user) can be reasonably estimated.”

Stop the Cap! took a look at Time Warner Cable’s financial reports and discovered the company’s capital expenses for its high speed Internet service (and cable modem equipment) have dropped for the third year in a row:

Time Warner Cable’s capital expenditures on customer premise equipment, including cable modems, has dropped for three years in a row.

Capital spending (as a whole) so far this year has decreased as a percentage of revenue to just 12% for residential customers. Time Warner has spent money primarily on extending service to potential business customers.

The need to charge you more for a cable modem is questionable when residential Internet service rate increases and customers gravitating to more expensive, higher speed services already deliver the company higher average revenue per customer without spiking their costs.

When the station relayed complaints about long hold times and busy signals for customers trying to activate their purchased cable modem, the response from Time Warner — don’t call on Monday or Friday or around morning or dinner time unless you are prepared to wait on hold.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WSYR Syracuse Time Warner Cable modem charge 10-24-12.mp4[/flv]

WSYR in Syracuse covers the ongoing controversy with Time Warner Cable’s new modem fees, and a Best Buy employee tells Time Warner customers to get rid of the company’s phone service.  (3 minutes)