Rep. Eric Massa (D-NY) is expected to resign his seat Monday

Rep. Eric Massa (D-New York), author of the Broadband Internet Fairness Act (HR 2902) — legislation that would ban Internet Overcharging, announced he will resign his office Monday.

In a fast-moving series of events, Massa first announced he would not seek re-election because of health reasons — the congressman faces a renewed battle with cancer, but allegations of ethical violations also surfaced earlier this week which have gotten national news coverage.

Massa is a first term congressman in New York’s 29th Congressional district, which has traditionally elected Republican candidates to office.  But as the national Republican party has trended further to the right, northeastern Republicans have become an endangered species in Congress.  Former Rep. Randy Kuhl only held onto the seat for two terms before being defeated by Massa in 2008.  Kuhl himself replaced retired congressman Amo Houghton, a long-serving moderate Republican whose voting record often split with the national Republican party on major issues.

Massa’s decision not to run for re-election surprised voters in his district, which runs from suburban Rochester to the Pennsylvania border along the southern tier.  Friday’s sudden announcement he’ll also resign his office effective Monday shocked voters and started a scramble for who might assume Massa’s seat upon his resignation.

The loss of Eric Massa to the Stop the Cap! cause is a concern for broadband consumers.  Massa stepped up to protect consumers from an Internet Overcharging experiment proposed last April by Time Warner Cable, which serves most of his district.  Massa immediately blasted the cable company’s plan to test usage-based billing on residential customers in the Rochester area, which is the only major city in New York State not served by Verizon and its expanding fiber to the home FiOS system.

Massa’s proposed legislation would have banned such schemes unless a company could demonstrate a clear financial need to adopt consumption billing and usage limits.

Thankfully, New York senator Chuck Schumer (D-NY) remains in office, and is the only senator to protest Time Warner Cable’s experiment, and helped end it, not just for residents of western New York, but for residents of Texas and North Carolina as well.

As to the swirling of allegations surrounding Massa, I have no interest in expanding on them here.  You can get a detailed review of the congressman’s views on these issues by listening to a 90-minute radio show aired today on a WKPQ-FM in Hornell, New York.  Today’s show will probably break news because Massa expands in great detail what’s behind the allegations and the reasons for his retirement.

Eric Massa’s regular Sunday show on WKPQ-FM Hornell, NY today discussed his decision to resign his office in great detail. (90 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

As for his replacement, a number of Democrats from both the southern tier and Monroe County/Rochester are considering entering the race.  Massa’s already-campaigning Republican opponent, former Corning Mayor Tom Reed remains in the race.  The Republican county supervisor for Monroe County, Maggie Brooks, is also considering a run.  But so is the former Congressman Randy Kuhl.  “Randy the Dandy” would be the worst possible option.  His undistinguished record and contempt for his constituents makes my skin crawl.  In his last term, Kuhl refused to hold open town hall meetings, instead shepherding constituents in for ‘five minutes with Randy’ where someone took notes and another escorted you out when your time was up.  Nobody should have bothered to take notes — his ongoing lack of concern about what voters in his district thought helped him lose his seat in the first place.  His lack-of-listening tour would fit perfectly with certain cable companies who don’t listen to their customers.  Hopefully, voters will not contemplate a return of Randy Kuhl.  Four years was more than enough.

We’ll be looking for other members of Congress to take up where Eric Massa left off.  I would like to thank Congressman Massa for his hard work on behalf of our cause, as well as helping make a difference on so many other matters important to the voters in his district.  I wish him good health and best wishes.

[flv]http://www.phillipdampier.com/video/Eric Massa Resigns Monday 3-6-10.flv[/flv]

Several television stations announced Rep. Massa’s decision to resign his office Friday in “breaking news” headlines.  This clip has three reports from WETM-TV Elmira, WHAM-TV Rochester, and WENY-TV Corning. (6 minutes)

[flv]http://www.phillipdampier.com/video/Eric Massa Reactions 3-6-10.flv[/flv]

Residents in the 29th congressional district react to Rep. Massa’s resignation announcement, and local politicians jockey for position to potentially run for Massa’s seat.  Three reports are included from WHAM-TV Rochester, WROC-TV Rochester, and WENY-TV Corning. (6 minutes)

Rogers Communications Monday began their latest Internet Overcharging scheme on Canadian broadband customers — they’ve doubled the maximum overlimit penalty from $25 to $50 for customers who exceed the cable company’s arbitrary broadband usage allowances.

It’s a fact of life for anyone living with a provider that wants to charge too much for broadband service.  Like the credit card industry, the tricks and traps keep on coming as providers seek to monetize everything they can to extract as much money from customers as possible.

For some providers like Bell, the trick is to gradually reduce your usage allowance, exposing more and more customers to overlimit fees (the company even sells an insurance plan to protect you from their audacious pricing).  For others, the fee trap comes from gradually increasing the maximum overlimit fee until there is no maximum.

Rogers has chosen the latter method, effectively passing through massive rate increases for Canadians that dare to use too much.

Originally, Rogers Extreme service was priced at $60 a month for 10/1 Mbps service with a 95 GB cap.  Customers who traditionally exceeded that paid $1.50 per gigabyte in overlimit fees.  With a $25 maximum penalty, many customers just accepted the fee as their ticket to unlimited broadband.  Now, Rogers has conceded a quarter to customers, lowering the per gigabyte penalty rate to $1.25.  But for customers who still regularly exceed their allowance, the charges really add up.  That $60 a month now balloons to $110 per month for exactly the same unlimited service customers used to enjoy for less.

That forces customers like the Globe & Mail’s Michael Snider to make some choices:

1. Reduce usage — a win for Rogers and broadband rationing for him;
2. Upgrade to a higher tier service plan to get a better allowance — a win for Rogers and a higher bill for Snider.  Extreme Plus has an allowance of 125 GB, just a 30 GB difference, for an additional $10 a month;
3. Grin and bear it — a win for Rogers and a future that guarantees him bigger bills indefinitely.

This is the type of move that may force customers who regularly approach or exceed their cap to seriously consider upgrading their service package.If that’s part of Rogers’ plan, it worked.

I just bumped up my service from Extreme to Extreme Plus (if you do the same, inquire about the promotion that offers $20 off Internet for the first six months if you lock in for a year — that’s upgrading only). So now, I’ll be getting 25-Mb download speeds (still a measly 1-Mb upload, though) and a cap of 125 GB a month and, once the promotion ends, will be paying $14 a month more ($10 for the service and $7 for the modem rather than $3).

Call me a sucker, but twice in the past year I have exceeded my 95 GB cap and paid an extra $25 on my bill — once after backing up several gigs on an online backup service and once after downloading a few movies on my Xbox.

But Snider also faces, by design, the one-two punch of Internet Overcharging schemes.  Not only do they fatten provider profits, they also discourage him from using his broadband service, fearing a higher bill.  Even better, they discourage cord-cutting — relying on your broadband service and dropping your cable-TV package.

I am discovering that I’m actually limiting my consumption of some totally legitimate services because I’ve no desire to pay extra on my Rogers bill at the end of the month.

Take for example Microsoft Xbox’s movie service. After waiting for what seemed eons for some kind of a legit movie download service, I finally have access to one that has a list of movies that I’d actually like to see, but it’s proving too expensive to really enjoy it regularly. Reason is, downloading an HD movie eats up more than 11 GB of my bandwidth — more than 10% of my monthly allotment (before I upgraded) for one freaking movie. That goes for games too. It seems as though distributors are leaning more and more to online delivery, but at 6 or 8 GB per game, again, that eats up a lot of bandwidth.

Being the gatekeeper for broadband distribution and also being a content distributor has its advantages.  If the competition starts getting too hot and heavy, locking down the distribution platform guarantees no competitor will ever get the best of you.

Whatever you do, don't turn off this modem, despite the fact you're paying for traffic it receives 24/7. Unplugging a cable modem could "damage it" according to Rogers.

Rogers claims its all about costs from increased broadband consumption, but one look at their pricing scheme proves that wrong.  Rogers reserves the biggest penalties of all for its lightest-use customers.  Those on Rogers Ultra-Lite tier suffer with barely-broadband speeds of 500/256 kbps with a usage limit of just 2 GB for a ridiculous $27.99 per month.  The penalty rate for customers who can hardly be described as “power users” is a whopping $5 per gigabyte.  They pay more because they impact the network more?  How does that work?

The Canadian Radio-television and Telecommunications Commission (CRTC), the agency responsible for oversight of telecommunications services in Canada is no help.  They’ve become a de facto telecom industry trade association, rubber-stamping approval of whatever providers want.  The result is expensive, usage-limited, speed-throttled broadband service across the country.

What can you do to control your monthly broadband bill Rogers wants to raise?  Their advice is basically to use less of the broadband service you paid good money to get.  Oh, and despite the fact whenever your cable modem is powered on you are bombarded with constant traffic which eats into your allowance, whatever you do, don’t leave it unplugged — it will “damage it.”  From Rogers Internet FAQ:

We STRONGLY recommend that you do not turn off your modem when you are away from home. Your cable modem has been designed to remain powered at all times. Regularly turning it off and on may result in damage to your cable modem.

…and damage to our profits.

Oregon's telephone company service areas

Frontier Communications has won approval to assume control of telephone lines serving 310,000 Oregonians.

The Oregon Public Utilities Commission Friday unanimously approved the transfer of service from Verizon to Frontier as part of a 14-state transaction.

“First and foremost we want to ensure that customers are not harmed by this transaction.  That’s why we are requiring more than 50 conditions, all aimed at making sure customers are not harmed by this sale,” Chairman Lee Beyer said. “In addition, we are requiring Frontier Communications to spend $25 million on expanding high-speed internet access to its Oregon customers by July 2013.”

In return for approval, Frontier agreed to PUC demands for customer service protections:

• A commitment that Frontier spend at least $25 million to expand high-speed broadband in Oregon by July 2013;
• No changes in “commission-regulated” retail service plans for at least three years;
• Costs of the transition must not be paid by customers in the form of rate increases;
• 90-day window to change long distance carrier without any fees;
• An independent audit, paid for by Verizon, to ensure Frontier can handle service for those customers affected by the deal;
• An opt-out provision letting Oregon’s FiOS subscribers terminate their contracts without penalty if Frontier reduces Internet speeds or drops any of its television channels.

What is missing from Oregon’s agreement?

• A prohibition of Internet Overcharging schemes like Frontier’s 5 gigabyte “acceptable use” policy that potentially limits customer’s broadband use.  Expanded broadband that customers can only use for basic web browsing and e-mail, without fear of exceeding the limit, indefinitely punishes rural Oregonians with no broadband alternatives;
• A specific definition of what constitutes “broadband” speeds.  Frontier can continue to deliver the 1-3 Mbps it routinely provides to its less urban service areas.  While better than nothing, Oregon regulators could have used the deal as leverage to win 21st century broadband speeds from Frontier, not yesterday’s ‘barely broadband;’
• Fines and penalties that will punish a provider that does not invest appropriately in high service standards to provide quality service, and a trigger to permit automatic cancellation of operating certificates should Frontier go bankrupt.

Too many of these deals offer upsides for Wall Street and little benefit to consumers, especially those dependent on their landline phone company for basic communications services.  By forcing requirements that prove costly for a provider to renege on, investors will understand their gains will only happen when they are assured Frontier is doing right by their customers, as well as their shareholders.

Oregon is the sixth state to approve the sale.

Frontier currently serves only 12,000 customers in the state, mostly in southwest Oregon, including the communities of Azalea, Canyonville, Cave Junction, Days Creek, Glendale, Myrtle Creek, O’Brien, Riddle, Selma, and Wolf Creek.

The company’s new customers will come mostly from Washington County, east Multnomah County, and from several pockets of customers in the northwestern part of the state.  Oregon’s largest telephone provider is Qwest Communications, but the state has numerous smaller independent providers as well.

To listen to some executives cry on their quarterly conference calls about the struggles of the cable television industry during the economic downturn almost makes you want to weep for their misfortune, until you realize some of those voices are getting big salary hikes anyway.  For a select few, economic downturns are for the little people.  Nothing shall stand in the way of substantial salary raises and bonuses.  Don’t have the money to pay?  Just raise your rates!

Take Time Warner Cable’s Chief Operating Officer Landel Hobbs.  Many of y0u will remember him from last April’s controversial Internet Overcharging experiment.  Landel tried to convince consumers their rape and pillage broadband pricing was a good thing, and objections to it were simply a result of you misunderstanding how good of a deal it was.

Hobbs has an all-new employment agreement you can read for yourself.  Sonya Hubbard from footnoted, which reviews SEC filings, notes the company went out of its way to hand Hobbs a new contract a year before his current one expires:

The odd thing about Hobbs’ raise is that, according to the proxy filed April 20, 2009, his 2008 employment agreement wouldn’t have expired until January 31, 2011.  That agreement paid him a base salary of $900,000, an annual discretionary target bonus of 233% of his base salary (nearly $2.1 million), and a discretionary annual equity and other long-term incentive compensation award with a minimum target value of $3,000,000.

The new agreement took effect January 1, 2010 and has the same expiration date… January 31, 2011 as his former agreement.  But now Hobbs gets a minimum annual base salary of $1,000,000 and an annual long-term incentive compensation with a target value of $3,650,000.  The annual discretionary cash bonus remains at $2,100,000 (although now the number is specifically stated, rather than given as a percentage of his salary).

Senior Executive Vice President and Chief Financial Officer, Robert Marcus also gets a new contract, after his old one expired in 2008 (he’s been getting a monthly extension ever since).  Hubbard reports:

The company had given Marcus raises, of course.  In addition to other types of compensation, as of last April Marcus’s base salary was $800,000, his annual discretionary target bonus was 175% of his base salary ($1.4 million), and his discretionary annual equity and other long-term incentive compensation award had a minimum target value of 225% of his base salary ($1,800,000).

The new agreement, which became effective January 1  and runs through December 31, 2012, states that Marcus will now get a minimum Base Salary of $900,000, an annual Target Bonus of $1,500,000, and an annual long-term incentive compensation with a target value of $3,100,000.

While executives surely appreciate a raise as much as the rest of us do, it’s probably a safe bet that investors and especially cable customers may be less enthusiastic about the new agreements.

At those prices, both can afford a lot of pay-per-view, but then, Time Warner Cable often provides free service to its higher level employees and management, so they’re insulated from those pesky rate hikes the rest of us pay year after year, too.

Mark Cuban

Mark Cuban has once again entered the debate over online video, Internet Overcharging schemes, and giant corporate mergers… and mangled it.

Cuban, who owns HD Net as well as the Dallas Mavericks basketball team, occasionally presents cable industry talking points on his blog, but quickly gets into trouble when he strays from them.

This time, Cuban is annoyed with Sen. Al Franken (D-Minnesota) over remarks the senator made about the proposed Comcast-NBC merger.  Cuban seized on comments by Franken that Comcast should put all of its television programming online.  Doing that, Cuban insists, would lead to higher prices for broadband and usage caps on it.

Where has Cuban been?  I realize the man is too wealthy to worry about the relentless rate increases Comcast and other companies force on consumers every year, but he also forgot Comcast already has a usage cap on its service, even before the feared video tidal wave arrives.

I get that no one really cares if Comcast has to spend money on capital improvements to add bandwidth to the home.  They should. Its pretty damn stupid to push consumption in a direction that will raise internet rates  to receive the same content for which there is already a phenomenal digital network in place to deliver that content.

Think about it for a minute Senator Franken. Comcast, and every large TV Provider has a digital network in place that can and does deliver gigabits of tv content perfectly,  every second of every day, to any TV set in any  home that is connected to their network. It works. Well.  What you are asking Sen Franken, is that Comcast duplicate the delivery of theirs and NBCUniversals shows on a network, the internet,  that is not, and has never been designed to handle the delivery of huge volumes of video and tv shows.

Cuban should be arguing that point with the cable industry.  TV Everywhere, the online video platform that will offer consumers access to “hundreds of TV shows and cable programming,” is their invention.  If Cuban’s fears are correct, why would the nation’s largest cable operators launch such an ambitious online video platform?

Cuban has bought into industry propaganda justifying usage caps.  There is always an excuse for rationing broadband service to boost profits.  First it was file sharing, now it’s online video causing the “serious problem” of customers using broadband service for more than just e-mail and web browsing.  Their solution – monetize it.  Usage caps and usage based billing are about preserving high profits, not protecting or increasing network capacity.  TV Everywhere proves that.

Franken does not advocate usage caps, as Cuban suggests.  The senator simply wants to be certain Comcast cannot act as a gatekeeper, determining who gets access to Comcast-NBC programming, and who does not.

Cuban should be welcome to such measures as a victim of Gatekeeper Abuse himself.  Mark, how many subscribers did you lose nationwide when Time Warner Cable unilaterally pulled the plug on your channels?