Customers of Vistabeam in Nebraska and Wyoming who subscribe to the company’s rural Wireless Internet Service are about to discover their online activities are about to be capped… for real this time.

Matthew Larsen, who runs the Wireless Cowboys blog, includes some illustrative examples of Internet Overcharging schemes in action and what they’re all about.  He writes about his experiences at Vistabeam, which serves rural Nebraska and Wyoming with wireless broadband service.  The company started operations with an admittedly-unenforced 3GB usage limit, backed up with a stinging $25/GB penalty overlimit fee to underscore the point.  Today that cap is described by Larsen as “a joke” — too low to be taken seriously.  [Note to Frontier: Are you reading this?]

But the company was determined to monitor and measure its customers’ online activities and developed an in-house tool that is providing daily insights into customer usage, and gives Vistabeam the ability to begin penalizing customers who exceed the limits established by the provider.

Wireless providers, known as WISPs, often provide the only Internet access in rural areas that are too sparsely populated to deliver DSL service and where cable television is a financial impracticality.  For Nebraska and Wyoming residents bypassed by cable and underserved by DSL (if at all), it’s often a choice between dial-up, satellite fraudband service barely capable of 1Mbps service with a punitive “fair access policy,” or an independent WISP.  A number of customers have chosen the latter.

Vistabeam offers service plans for its 2000 customers ranging from 384kbps for $29.95 a month to 4Mbps service for $99.95 a month, with a discount for paying in six month increments.  That’s not cheap by any means.  But rural Americans routinely face higher broadband bills because of the inability of providers to achieve economy of scale.  Fewer customers have to share the expenses to construct, operate and maintain the service.

But those bills could soon grow even higher if customers exceed the new harder-line Vistabeam will take on usage cap offenses.

Larsen’s measurements identified what their customers were doing with their broadband connections and identified Vistabeam’s biggest users:

Out of 2000+ customers, 80 used more than 10 gigs for the month.

One customer – a 1 meg subscriber at the far eastern edge of our network, behind seven wireless hops and on an 802.11b AP – downloaded 140gig.

Another one, on the far western side of our network, downloaded 110gig.   We called them and found out that they were watching a ton of online video.

We discovered a county government connection that was around 100gig – mostly because someone in the sheriff’s department was pounding for BitTorrent files from 1am to 7am in the morning, and sometimes crashing their firewall machine because of the traffic.

One wonders what the sheriff’s department was grabbing off BitTorrent, but the question itself opens the door as to whether or not your provider (and by extension, you and I) should know what they are doing with their broadband connection in the first place.

Larsen says the other subscribers on his list were watching lots of online video, had a virus, or had “mistakenly” left their file sharing programs running.

Larsen’s solution is usage caps and overlimit penalties for his subscribers.

Package                                                               Monthly Download Cap

384k                                                                       10 gigabytes

640k                                                                       10 gigabytes

1 meg                                                                    20 gigabytes

2 meg                                                                    40 gigabytes

3 meg                                                                    50 gigabytes

4 meg                                                                    60 gigabytes

8 meg                                                                    80 gigabytes

Additional capacity over cap                        $1 per gigabyte over the cap

Although Larsen claims the cap and the overlimit fee isn’t “a profit center,” it would be disingenuous to suggest it isn’t about the money (underline emphasis ours):

I feel that these caps are more than generous, and should have a minimal effect on the majority of our customers.   With our backbone consumption per customer increasing, implementing caps of some kind became a necessity.    I am not looking at the caps as a new “profit center” – they are a deterrent as much as anything.    It will provide an incentive for customers to upgrade to a faster plan with a higher cap, or take their download habits to a competitor and chew up someone else’s bandwidth.

Customers upgrading to a faster plan have to pay a correspondingly higher price for that service and taking their “download habits to a competitor” reduces the cost for the provider no longer encumbered with serving the higher-usage-than-average customer now heading for the door.  Among his 2,000 customers, the end effect will be what Larsen himself hopes is a deterrent for customers using increasingly common higher bandwidth applications like online video, file backup, and uploading and downloading files.  Larsen himself admits that one of his customers was a little bit upset to be told he was using too much.

Rural providers do face higher costs to provide service than their urban counterparts.  But before they enjoy any benefits from Universal Service Fund reform or other government-provided stimulus, customer-unfriendly Internet Overcharging schemes should not be part of the deal.

The maneuvering over Apple’s leaked iPhone prototype continues behind the scenes even after the story itself has become yesterday’s news.  Taking time out from our usual coverage, the intrigue surrounding the iPhone leak caper is worth pondering.

For the players directly involved, the legal expenses continue to mount.  On Friday, a San Mateo, California county judge ordered the release of the search warrant (and its supporting affidavit) that led to the seizure of equipment at the home of a Gizmodo reporter who broke the story of the prototype-iPhone-gone-missing.

The documents are a fascinating read into a drama ready-made for a first season episode of the forthcoming Law & Order: Los Angeles.

The Players

Apple Engineer Robert “Gray” Powell — There’s No App to Fix This

The hapless victim.  On March 25th, his life would change after leaving a prototype Apple iPhone behind at the Gourmet Haus Staudt restaurant in Redwood City, California. This would be slightly more stressful for him than if you or I left our keys or cell phone at a restaurant.  It was, after all, a product from one of the world’s most secretive tech companies — Apple.

But who hasn’t left a phone, keys, glasses, or some other personal property behind in a public place at one time or another?

Brian Hogan — The Guy You Don’t Want Finding Your Lost Cat: He’d Sell Chairman Meow on eBay

Unfortunately for Powell, the guy who found his missing phone was the less-than-honorable Brian Hogan, 21.

According to the affidavit, the story of what happened next comes from his roommate Katherine Martinson:

Martinson said [Hogan] told her he found an iPhone while visiting the restaurant.  Hogan told her that he was drinking with friends when an intoxicated male tried to give him an iPhone that was left on a stool, incorrectly believing it belonged to Hogan.  Hogan told Martinson he remained at the bar “a little longer,” but no one claimed the phone.

Let’s stop at this point at ponder what Hogan’s options were.

1. He could have told the intoxicated individual the phone did not belong to him and to give it to a restaurant employee to secure.
2. He could have turned the phone in before leaving when nobody claimed it.

Did he do either?  No.

According to the affidavit, he instead took the phone home with him and began playing with it.

But Hogan was less interested in ascertaining the ownership of the phone than he was discovering the phone’s apparent secrets, evident from a new forward-facing camera.  The following afternoon, Hogan was trying to impress Martinson with his technical knowledge — this was no ordinary iPhone he told her.  The night before, Hogan learned the phone’s true owner was Powell, whose Facebook page was on the phone.

By then, the phone had stopped working and both believed Apple had remotely wiped out the contents of the phone and disabled it.  Why would Powell have a prototype iPhone they pondered.

They both began searching for more information about who Powell was, quickly discovering from his LinkedIn page that he was an Apple engineer.

Confident that he now possessed a goldmine, the affidavit notes Hogan began a bidding war between Gizmodo, Engadget, and PC World over who would pay him the most to own what police officials would soon describe as “stolen property.”

Katherine Martinson: The Roomate That Thought Twice

The police document states that Gizmodo’s Jason Chen offered Hogan $10,000 for the phone, a fact that stunned Martinson.  As a deal appeared imminent, Martinson decided the entire affair had some real world consequences and began urging Hogan to drop the plan.

Martinson and several of Hogan’s friends urged him not to proceed because it would ultimately “ruin (Powell’s) career.”  Hogan was unimpressed with those arguments.

According to Martinson:

Hogan’s response was, “Sucks for him. He lost his phone. Shouldn’t have lost his phone.”

Martinson said Hogan later showed her a camera box stuffed with $5,000 in $100 Treasury bills.  He claimed an additional bonus would be forthcoming if and when Apple released the next iPhone.

Martinson, confronted with a roommate showing her a wad of money stuffed clandestinely into a box, decided that was the last straw.

Earlier, she had learned Hogan connected the prototype iPhone to her computer without permission.  Martinson was convinced that action would eventually allow Apple to track their missing phone back to her, based on her Internet connection’s IP address.

Martinson called Apple’s director of Information Security, Rick Orloff.  She wanted to clear the air, in part to protect herself from being considered an accomplice in the scheme.

When Hogan got wind of the investigation, the affidavit alleges, both he and his other roommate Thomas Warner are alleged to have started removing evidence from their residence, reportedly to dispose of it.  Martinson phoned the detective who was preparing to serve a search warrant on their home to inform him of the hasty retreat to remove potentially incriminating evidence.

Police would later discover evidence scattered across the area, ranging from Hogan’s computer left in front of an office door at an area church, flash memory cards thrown into bushes, and an iPhone identification sticker found at a gas station parking lot.

Gizmodo: Is Buying Stolen Property for a Story Journalism?

The story of Apple’s newest iPhone was broken by Gizmodo April 19th in a story that didn’t explain to readers they paid a hefty finder’s fee to Hogan after the bidding ended.

Even in an accompanying article explaining the “find,” only after Gizmodo’s parent company Gawker exposed the payment did they tell readers a $5,000 payment made it all possible.

Pundits and journalism experts questioned the propriety of Gawker’s methods. Denton has acknowledged that he agreed to pay US$5,000 to the person who possessed the phone after it was reportedly lost in a San Francisco Bay Area bar by an Apple employee. One publication has even noted that Gawker may have violated California laws on the buying of “stolen property.”

Denton acknowledges paying for the phone, knowing that he knew the person he was handing the money to wasn’t the owner. “That’s what the media ethicists are focused on,” Denton told CNET. “Most of the readers are either excited about the new iPhone or angry on behalf of the unfortunate Gray Powell [the Apple employee who Gizmodo said lost the phone].”

The journalism experts appear to be right.

There are some open questions about the propriety of the entire transaction, but documents released Friday also expose some additional questions about whether or not Gizmodo maintains a firewall between itself and the subjects and companies it writes about.

Included in the revealing documents were two e-mails represented as originating from Gizmodo’s own staff.

Brian Lam, editorial director, actually appears to be suggesting media strategies to Apple’s Steve Jobs about how to handle the inconvenient revelation about the prototype iPhone, a basic Journalism 101 no-no.  He even writes that Apple’s PR department had given Gizmodo the cold shoulder recently, and that hurt his ability to report on the company.  While not directly appealing for a quid-pro-quo, it absolutely raises ethical eyebrows when an editor complains about access while also negotiating the return of a stolen prototype iPhone, a product of what he calls “very aggressive” reporting.

Some excerpts:

• “Maybe Apple can say it’s a lost phone, but not one you’ve confirmed for production — that it is merely a test unit of sorts.”
• “Gizmodo lives or dies like many small companies do.  We don’t have access, or when we do, we get it taken away.”
• “Right now we have nothing to lose.  The this is, Apple PR has been cold to us lately. It affected my ability to do my job right at iPad launch.  So we had to go outside and find our stories like this one, very aggressively.”
• “I want to not hurt your sales when the products themselves deserve love.”
• “I want to work closer with Apple, too.”

Law enforcement did not consider Gizmodo’s exclusive revelations the online equivalent of 60 Minutes.  San Mateo police promptly served a search warrant on Gizmodo’s Jason Chen, indicating there was evidence to believe he possessed property gained from the commission of a felony, and that he purchased stolen property, which was subsequently damaged.

A search warrant executed April 23rd resulted in the seizure of 22 items at Chen’s home, mostly computer related.

Apple’s Legal Team Begins Adding Up the Damages

Meanwhile, Apple’s legal team commenced their strategy to suggest the premature release of information about the next generation iPhone seriously wounded Apple.

George Riley, a lawyer from the O’Melveny and Myers, which represents Apple:

By publishing details about the phone and its features, sales of current Apple products are hurt wherein people that would have otherwise purchased a currently existing Apple product would wait for the next item to be released, thereby hurting overall sales and negatively affecting Apple’s earnings.

When asked to assign a dollar figure to Apple’s losses, Riley said he couldn’t, but it “was huge.”  When asked if the stolen iPhone was worth at least $8,500, Riley told investigators it was.

Of course, the costs in lost PR from the forthcoming Steve Jobs’ media splash introducing the newest iPhone probably hurt most of all.

Apple will survive this drama.  But the affair suggests that new media needs to consider the ethical implications of paying for news and readers deserve to know the details along the way.

[flv width=”600″ height=”358″]http://www.phillipdampier.com/video/KGO San Francisco Apple iPhone Caper April-May 2010.flv[/flv]

KGO-TV in San Francisco ran the most comprehensive coverage over the course of the entire iPhone caper.  In this video, running 18 minutes:

• Pictures of purported next-gen iPhone reach Web (4-20-2010)
• What iPhone prototype bar snafu means for Apple (4-20-2010)
• Exposing next-gen iPhone online leads to investigation (4-27-10)
• Apple IDs person who found iPhone prototype (4-28-10)
• Young man who found lost iPhone has regrets (4-30-10)
• Another iPhone prototype surfaces (5-12-10)
• Judge unseals warrant in lost iPhone investigation (5-14-10)

See more video below the jump.

… Continue Reading

Hollywood studios have a proposition to make.

How would you like to gain access to the latest Hollywood releases on your cable, satellite, or broadband connection even while those movies are still playing in area theaters?

The Motion Picture Association of America says it’s willing to let you watch first-run Hollywood blockbusters from home, but in return, they want the right to control what you can do with your television set.

Time’s up for you to make up your mind.  The Federal Communications Commission has decided you were going to say “yes” to this proposition anyway, so they went ahead and approved it on your behalf.

Specifically, the MPAA appealed to the Federal Communications Commission to get approval for its proposed Selectable Output Control technology.  You probably never heard of that, but the concept actually has been around for a few years now.  When movie studios float trial balloons about enabling the technology, public interest and consumer groups start hollering and it typically gets shelved for awhile.  Not this time.

While the public policy debate continued, chances are the manufacturer of your television set or monitor manufactured after 2004 has probably already included some support for SOC — just waiting to hand over control of your television to Hollywood studios, cable, satellite, or IPTV companies.  On May 7th, while we were debating Net Neutrality, the FCC released its order approving the Hollywood Remote Control Confiscation Act (my name sounds far better than the FCC’s — Petition for Waiver of the Commission’s Prohibition on the Use of Selectable Output Control.)

Here’s how it works:

Let’s say your cable company wants to offer you Iron Man II through pay-per-view starting today.  It’s a movie currently playing in many theaters nationwide.  The MPAA believes there is compelling demand among the elderly, the home-bound, and the too-lazy-to-haul-themselves-to-the-Movieplex to make it available in the comfort of your own home on early pay per view.  However, Hollywood and your local cable company don’t want you making copies of the movie to hand out to all your friends.  With SOC technology, that becomes less of a problem because the cable company can selectively disable the outputs on the back of your television that don’t use copy control technology.  That means old fashioned analog outputs can be disabled for up to 90 days during SOC-enabled programming, making sure you cannot record any of the content without the approval of the studio or your cable company.

Certain digital outputs will still function, as long as they support robust anti-recording/copying technology.  No more time-shifting SOC-protected content on digital video recorders to watch later, no more analog VCR taping of shows the industry doesn’t believe you have a right to record anyway.

For decades, Americans have fought for fair use rights that permit home recording and copying for personal use.  The entertainment industry has never fully accepted that, and have eroded away the ability for consumers to make legitimate personal use of content they have already purchased with digital rights management schemes, copy protection, region coding, and other limiting technologies.

SOC technology effectively forfeits all of your rights.  The only consumer protection the FCC provides is a requirement that your cable, satellite, or broadband provider warn you when they are employing SOC anti-recording technology.  At least you’ll know when your home recording rights are being trampled.

If your television set doesn’t have support for SOC built-in, the FCC just made your television set obsolete.  Write and thank them.  While initial deployment of SOC is only expected to be used for “early pay per view,” don’t believe for a moment such powerful controlling technology available to entertainment companies won’t be used in the future for other types of content they don’t want you recording.  Premium movie channels like HBO or Cinemax would be obvious examples.  TV networks that would like to sell you their network shows on DVD or through online services might find it worth their while to disable your ability to record your favorite shows.  If you don’t have an SOC-capable set, it’s likely you won’t be able to access protected programming at all.

With the ongoing convergence of broadband, television, and other forms of home entertainment distribution, SOC is a foot in the door to permit third parties to make decisions about how you can view or use content you’ve already paid to receive.  That’s a bad precedent.  The FCC approval of this gift to the entertainment industry is a travesty that needs to be reversed.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/KCTV Kansas City FCC Ruling Could Bring New Movies Into Homes 5-16-10.flv[/flv]

KCTV-TV in Kansas City ignored the consumer’s loss of control over their own television set to focus instead on the implications for theater owners, who may become natural allies with consumers in opposition of SOC.  (1 minute)

[flv]http://www.phillipdampier.com/video/Public Knowledge – Selectable Output Control.flv[/flv]

Public Knowledge developed this web-ready video that takes a less formal look at SOC and its impact on your consumer rights.  (3 minutes)

West Virginia residents are assured of an indefinite future with 1-3Mbps usage-capped “broadband” as Frontier won conditional approval of its plan to assume control of the majority of the state’s landlines.

Frontier Communications, the phone company with the 5 gigabyte monthly acceptable usage allowance, won approval from West Virginia’s Public Service Commission after nearly a year of opposition from several unions and consumer advocacy groups.  The opposition, led by the Communications Workers of America, charged that Frontier’s balance sheet made it impossible for the company to fulfill promises to deliver quality phone and broadband service to the majority of the state’s residents.  Consumer groups, including Stop the Cap!, argued Frontier’s DSL broadband service is inadequate for the state’s needs, because it typically only provides 1-3Mbps speed and is usage-limited for residential customers.

Verizon’s history of bad service in the state helped drive some to believe Frontier can do better

Verizon’s West Virginia division has frequently achieved a poor rating among many West Virginians upset with the company’s service record and broadband deployment.  Last Monday, the PSC announced that Verizon’s service in the state was so poor, it ordered the company to place $72.4 million in an irrevocable escrow account to be used to improve the quality of service.  The PSC found Verizon’s disinterest in delivering service in West Virginia had resulted in the deterioration of Verizon’s essential infrastructure.

The PSC-ordered escrow account will be used to maintain and improve everything from restoring copper wiring to vegetation control and pole replacement.

With a history of complaints like that, it comes as no surprise West Virginians are ready to wave goodbye to Verizon, hoping for better times with Frontier Communications.

Bray Cary, a TV station owner in West Virginia, has hosted editorials on his network of local stations across the state promoting the transaction, believing it will bring a better future for the state’s telecommunications needs.  Just two weeks ago, he demanded the PSC make a decision on the proposed merger, claiming the state needs a “modern, cutting edge communication system that will bring high-speed Internet to every corner of this state.”  Unfortunately for Cary, there is nothing from Frontier that comes close to “cutting edge,” with the exception of the company’s brazen Internet Overcharging scheme now being tested in Minnesota that threatens to bring $250 monthly broadband bills to some residents.

[flv]http://www.phillipdampier.com/video/WOWK Charleston State Must Act on Verizon-Frontier Deal 5-4-10.flv[/flv]

WOWK-TV’s Bray Cary criticized the West Virginia Public Service Commission for stalling on a decision to move forward the Verizon-Frontier landline transfer in the state.  Just about ten days later, the PSC conditionally approved the deal.  [Video problems were a part of the original clip] (Aired: May 4, 2010 — 1 minute)

Frontier specializes in delivering slow-speed DSL service to most of its rural service areas, usually less than 3Mbps in speed.  Even in its largest service area, Rochester, N.Y., the company’s broadband options are an also-ran against the far faster and more reliable cable modem service from Time Warner Cable, which also beats Frontier’s out-the-door price.

Unfortunately, West Virginian media has never given important details to residents about the specific services Frontier is willing and able to offer residential customers.  It also never informed customers about the important limitations the company attaches to its “high speed Internet” Cary hopes to see available in every corner of the state.

Sometimes change for change’s sake is not an improvement.

The PSC attaches conditions to its approval

The Commission did not grant blanket approval to the transaction.  The PSC is requiring that Frontier:

• Honors all existing obligations of Verizon following the close of the sale, including the currently effective Retail Quality Service Plan approved by the Commission to continue through at least July 2, 2011.
• Makes capital investments in Verizon of $30 million during the second half of 2010, $75 million in 2011 (including $12 million targeted at service quality), $63 million in 2012 and $63 million in 2013.
• Makes additional capital investments of at least $48 million to increase broadband deployment and subscription in the Verizon service territory.
• Expands broadband availability in Verizon service areas so that by no later than the end of the fourth year following the close of the sale, access to broadband service will be available to no less than 85 percent of the households within Verizon service areas.
• Locates its Southeast regional headquarters in Charleston, WV, after closing the sale. Charleston will be Frontier’s Southeastern regional headquarters, and will be a major employment center for Frontier in the region. It will be the hub for engineering, technical, operation and executive personnel for Frontier’s operations in West Virginia, Tennessee, North Carolina, South Carolina, Mississippi, Alabama, Georgia and Florida.
• Adopts all of Verizon’s tariffs, price lists and contracts, including long distance, under the same terms and conditions at closing.
• Caps all regulated rates subject to jurisdiction of the Commission for one year after close of the transaction.
• Provides E-911 functionality provided by Verizon prior to close.
• Waives early termination fees for current Verizon customers participating in a Verizon bundled service package for the first 90 days after closing.

Reactions from all over

“We’re pleased the commission has approved the transaction. The record developed in this case provides comprehensive evidence and assurances that the transaction with Frontier Communications is in the public interest and will provide many benefits to West Virginia residents, including increased investment and broadband availability in the state, while protecting jobs and promoting employment.”

— Verizon-West Virginia President B. Keith Fulton

“We’re in the process of evaluating the order. After full review we’ll look at what we can do that will best serve West Virginia consumers and CWA members. Of course, we’re disappointed but we’re heartened by the fact that at least one person on the three-member commission agreed with us and more than 80 legislators, several county commissions and a broad coalition of consumer, union and first responder organizations that this deal is too risky and not in the public’s interest. The split decision shows our arguments about the deal had validity.”

— Communications Workers of America, District 2 Vice President Ron Collins

“There are many areas of West Virginia that will always be dependent on landlines, absent some sea of change in technology. Those are the people I’m most concerned about. They’re the truly captive customers of now Verizon and, in the future, Frontier.”

— West Virginia Public Service Commission’s consumer advocate Byron Harris

“We’ve seen how Wall Street’s investments can backfire. Like Frontier today, Wall Street once put its confidence in Global Crossing and that led to a disastrous bankruptcy. We’re concerned that the Rochester-area and other existing Frontier properties may be starved to fund this expansion.”

— John Pusloskie, President of CWA Local 1170 in Rochester, N.Y.

“Today’s approval is a welcome and important step. Our goal is to gain the approval of the FCC so that we can close the transaction and begin bringing its benefits to consumers and businesses.”

— Maggie Wilderotter, Chairman and Chief Executive Officer of Frontier

West Virginian media covers the conditional approval

A handful of television stations covered the conditional approval, most without much depth.  West Virginian newspapers covered the fight between Verizon and Frontier and the unions and consumer groups, but no paper really provided in-depth coverage into the challenges of West Virginia broadband and what precisely Frontier is capable of providing to solve it.  Consumers will discover soon enough that West Virginia has yet again gotten the short end of the online stick.  Only this time, they better not wave it around too much — it might exceed your monthly stick-waving allowance.

[flv width=”500″ height=”395″]http://www.phillipdampier.com/video/WOWK Charleston Union – Verizon-Frontier Deal Bad for W.Va., Verizon Responds 5-14-10.flv[/flv]

WOWK-TV in Charleston delivered the most substantial report on the sale, including this brief interview with PSC spokeswoman Sarah Robertson.  (2 minutes)

[flv]http://www.phillipdampier.com/video/WTAP Parkersburg Verizon-Frontier Deal Approved 5-14-10.flv[/flv]

WTAP-TV in Parkersburg ran this brief in-studio report about the Verizon-Frontier approval.  (1 minute)

[flv]http://www.phillipdampier.com/video/WDTV Bridgeport Verizon Sells Land Lines to Frontier 5-14-10.mp4[/flv]

WDTV-TV in Bridgeport explained the requirements of the conditional approval.  This was the only report on the approval that included the opposition’s perspective.  (1 minute)

Stop the Cap! already deals with a variety of ISP-invented Internet Overcharging schemes, but that doesn’t mean there aren’t more profit-making schemes out there.  For 50,000 movie downloaders who grabbed copies of Steam Experiment, Uncross the Stars, Gray Man, Call of the Wild 3D, or Far Cry, chances are a letter like this sent to Verizon customers was in the mail a few weeks ago, warning your identity was about to be disclosed:

Dear Customer:

This is to notify you that Verizon has received a deposition subpoena requiring the production of records associated with the following IP address:

(xx.xx.xx.xxx)

Verizon has no information as to the purpose of the deposition subpoena or has the nature of the action or investigation being undertaken. Any questions you have should be directed to the party who issued the deposition subpoena.

Please be advised that, unless Verizon is served with a motion for a protective order or a motion to quash by 12:00pm on May 13, 2010, Verizon intends to produce the records by the date specified in the deposition subpoena. Motion papers can be served upon Verizon via fax number xxx-xxx-xxxx.

If you are a Time Warner Cable customer, chances are your letter never arrived.  That’s because the Internet Service Provider is fighting back against what it considers requests that have grown “out of control.”

A group of Washington, D.C. lawyers calling itself the U.S. Copyright Group has developed a profit-making business scheme seeking quick cash settlements from those accused of downloading copyrighted movies created by independent producers.  The group has filed thousands of requests for identities of those behind the IP addresses logged while downloading movies produced by its clients.  While this isn’t new — the record industry used to file lawsuits to discourage piracy — the U.S. Copyright Group is among the rare breed that treats the offense of copyright infringement as a for-profit business opportunity.

Only the Group’s methods may in fact cost every consumer, pirate or not, higher broadband bills as providers deal with tens of thousands of demands for identification.

Time Warner Cable is among the ISP’s that have had enough.

They’re upset after being included in the U.S. Copyright Group’s latest trawling effort against those who downloaded Uwe Boll’s Far Cry.  Critics say the only real crime was the movie itself.  But Time Warner Cable faces combing through 809 IP addresses identified as theirs in hopes of identifying the presumed-guilty offenders, who will later receive U.S. Copyright Group’s legal threats and offers for a settlement.  For a provider that says it receives only 567 IP identity requests a month, almost entirely from law enforcement officials, the prospect of dealing with 809 more over a single obscure movie is daunting.

Time Warner wants the requests quashed — telling the court if it has to reply to this volume of requests, it will not be able to fulfill urgent law enforcement requests that pertain to suicide threats, child abduction, and even terrorism.  Besides, at an average cost of $45 per request, someone will have to pay.  That someone is eventually you — all to fulfill the profit motivations of a group of DC lawyers.  Even worse, the group demanded compliance within 30 days, quite a demand for four full-time workers (and one temp) who make up the ISP’s Subpoena Compliance team.

For those receiving advance warning that their identity is about to be disclosed, the settlement offer package that is certain to follow weeks later leaves little doubt about what outcome the Group wants for these cases — a quick settlement and no time inside an actual courtroom.

The group even offers an online, easy-to-complete PDF settlement form with spaces to enter your Visa, Mastercard, or Discover card number to pay the $1,500 settlement.  You don’t even have to admit you did anything wrong, as long as they get their money.  If you regret your decision later on, however, look out.  If you open your mouth in public or online to disparage the agreement or your participation in it, you automatically owe a $15,000 penalty (plus costs) for breaching confidentiality.  You also sign away your rights to challenge the group in court, even if it later turns out you were wrongly identified.

While the U.S. Copyright Group cashes settlement checks they only had to ask to receive, the group doesn’t seem to mind increasing everyone else’s costs.

Ars Technica notes Time Warner thinks the entire approach to these lawsuits may be invalid:

Filing lawsuits can be expensive; Most federal courts charge a $350 filing fee per case, along with a new set of paperwork. Each case also creates another docket to keep track of, making thousands of cases an administrative nightmare.

Instead of going this route, plaintiffs have gone the RIAA route, simply filing mass lawsuits against groups of “John Does,” in some cases by the thousands. But, says TWC, channeling its inner Ray Beckerman, “It is not evident from the complaint in this case that there is anything common to the 2,094 defendants that would justify joining them in a single litigation… Courts facing these identical circumstances have repeatedly held that a plaintiff may not join in a single action multiple defendants who have allegedly downloaded or facilitated the download of copyrighted material at different times and locations.

“Thus, if the plaintiff wants to sue these 2,094 defendants, it owes this court 2,094 separate filing fees, and it must file individual actions. Plaintiff then would be unable to combine together a single, massive discovery request with which to burden non-party ISPs such as TWC.”

Third, plaintiff lawyers keep expanding the scope of their subpoenas. The first complaint filed alleged 426 infringing IP addresses belonging to TWC subscribers. But when the company finally received a subpoena, it found requests for 809 IP addresses.

Taken together, said TWC, these “discovery abuses” mean that the judge should quash the subpoena. Alternately, the judge should limit the plaintiff to 28 TWC subpoenas each month.

Regardless of your views on piracy, compliance on the terms the U.S. Copyright Group demands raises the prospect of increased costs for providers like Time Warner Cable — the same increased costs used repeatedly as justification for rate increases.  Turning copyright compliance into a for-profit business may enrich a select group of DC lawyers, but ultimately every broadband customer could pay the price.