Master conspiracy theorist Glenn Beck should have written the last episode of The X Files.  To think I waited nine seasons to find what truth was out there only to have screenwriter Chris Carter rip me off with a chain smoker sitting in a Native American pueblo hearing the date when “they” arrive to begin colonization.  Imagine what Glenn Beck could have conjured up given the same nine years.

The problem with wildly-spun conspiracy theories is that you usually end up tangled in one, and Beck proved when he managed to tie his boss, Rupert Murdoch, into both a ‘Maoist -and- Marxist plot.’

To Beck, Net Neutrality and its supporters come straight out of Marxism. Beck warns “if you sit down and work with these people (Net Neutrality proponent Free Press), you might as well just go out and purchase your own blindfold and cigarette for the firing squad, because I don’t see the difference here.”

Beck slammed a Federal Trade Commission workshop he tied to Free Press, a pro-consumer advocacy group Beck considers Maoist (I didn’t realize they had the power to run government agency workshops — oh wait, they don’t), accusing the whole affair of being a conspiracy to silence free speech.

But here comes the “oops.”  It turns out this very same workshop which ran Tuesday, “From Town Criers to Bloggers: How Will Journalism Survive the Internet Age,” had among its participants none other than News Corporation CEO Rupert Murdoch, who was one of the featured speakers.

Just a few weeks earlier, Beck’s attempt to slam Fox News enemy MSNBC (and its owner NBC) brought a broad indictment against too-similar-sounding messages promoting volunteerism from President Obama and the Entertainment Industry Foundation (EIF), which Beck likened to “living in Mao’s China right now,” noting NBC executive Mitch Metcalf is an “EIF board member.”

How inconvenient for Glenn that Murdoch sits on EIF’s honorary board of governors, and Fox Broadcasting is a participant in the group’s initiatives.

Meanwhile, over on RedState, the blog that bans you for fact-checking their nonsense, writer Neil Stevens just discovered the Obama Administration is working on a National Broadband Plan.  That is like missing a train… that left the platform January 20th, 2009:

Mark A. Jamison

Stop the Cap! reader Joe sends along news of another one of those guest opinion hit pieces on Net Neutrality that pop up regularly in the media.  This one, The Internet is Never Neutral, printed in today’s Sun-Sentinel in south Florida, comes from Mark A. Jamison and Janice Hauge, a dynamic duo who have co-written several papers that always manage to turn up favorable conclusions for big telecommunications companies, including these page-turners:

• “Bureaucrats as Entrepreneurs: Do Municipal Telecom Providers Hinder Private Entrepreneurs?”
• “Subsidies and Distorted Markets: Do Telecom Subsidies Affect Competition?”
• “Dumbing Down the Net: A Further Look at the Net Neutrality Debate.”

The two are also working on other papers purporting to study regulatory policy and competition issues.  Let me illustrate my psychic powers by guessing they’ll find regulatory authorities to be obstacles to the well-oiled telecommunications machine and competition will be most hearty if there are no pesky regulations to hamper it.  We’ve seen how well that has worked so far for consumers in North America.

Remember Al Gore calling the Internet the information superhighway? The metaphor wasn’t and isn’t perfect, but it is instructive. Suppose we applied net neutrality to our transportation system — there would be no high-occupancy vehicle lanes during rush hour, no car-only lanes on interstates, and no toll road as an alternative to I-95 in South Florida. Transportation would be more costly and provide less value.

Forcing net neutrality would have similar results. Time-sensitive information, such as stock market transactions, would wait in line behind football game highlights.

Jamison, who is a former manager at Sprint Communications, and Hauge miss the entire point of the Internet’s biggest strength: its equal treatment of traffic from the smallest blog to Amazon.com.  Assuming providers, earning billions in profits even as their costs decline, invested appropriately in those networks, there would be no need for high-occupancy vehicle lanes and toll roads.  These kinds of “traffic management” techniques are proposed because provider dollars don’t keep up with consumer demand.  Social engineering tries to throttle traffic downwards by discouraging it with toll fees or manage it with special high cost lanes reserved only for those willing to pay or follow arbitrary rules governing their use.  More often than not, those premium lanes go underutilized while the rest of us remain stuck in the slow lane.

Net Neutrality would not impede network management that enhances the efficiency of traffic, except when it comes at the expense of someone else’s traffic. Net Neutrality also throws up a roadblock against providers who would plan to cash in with enhanced connectivity services that cannot exist unless  a market is created to sell them.  It’s similar to providers in Canada limiting your access to broadband, then throwing a penalty fee on your bill… unless you sign up and pay for their “insurance” plan to protect you from those charges.

Want to run a video streaming application on the Internet?  Pay for a broadband provider’s deluxe delivery insurance, and customers will be able to watch that video without buffering.  The alternative is to be stuck waiting because your video is being delivered on an artificial “slow lane.”

If you are thinking that it sounds like net neutrality restricts innovation and hurts customers, you’re right. Our research has shown that net neutrality limits innovation, contrary to the claims of the net neutrality proponents. How can this be? Imagine a one dimensional network — one that does nothing but carry information from point to point, which is how the old Internet has worked. What kinds of content providers flourish in that context? Those big enough to distribute their software across the net and those whose software takes advantage of the great bandwidth that they don’t have to pay for.

Their research makes numerous assumptions that might prove accurate in a laboratory environment, but simply discounts provider mischief in their efforts to maximize profits and minimize costs.  Providers have earned countless billions providing this “one dimensional network” to consumers.  It’s the one bright spot in a lackluster telecommunications sector.  Those who innovate new broadband applications have flourished.  Some providers who have not want to innovate in a different way – by inventing new Internet Overcharging schemes to profit from the service without actually improving it.  When their interests are at stake in owning and managing their own content services, bandwidth suddenly becomes plentiful.  The TV Everywhere project will potentially provide a value-added service to cable and telco TV providers, all made possible in marked contrast to their argument that other producers’ video content is clogging their networks.

Another naked fallacy in the authors’ argument is that content providers don’t pay for the bandwidth to host and distribute their content.  They do — to the companies that host their content and provide connectivity to the Internet.  That’s the job of web hosting companies.  Internet service providers simply want to be paid extra for doing their job – providing connectivity to consumers who pay $4o or more a month Free Press found costs about $8 to provide, and then also charging content creators a second time to facilitate delivery of that content.  That’s akin to charging a phone customer for placing a long distance call and also demanding to bill the person who answers.

Now, suppose that the network can offer enhancements that improve customers’ experiences. Content providers whose sites would not benefit from such enhancements could ignore the offering. But there will be some content providers who could improve their services by buying the enhancements, such as priority packet delivery. These sites become better without net neutrality and offer customers more service. In other words, there is more innovation and greater customer welfare without net neutrality than with it.

Promises, promises.  Just getting these providers to upgrade broadband speeds to consumers has been a never-ending quest.  Many consumers are willing to pay for “improved service” in the form of faster connections to the Internet.  Consumers are not willing to pay more for artificially limited service, be it through throttled speeds or usage caps.

At the conclusion of their study, which assumes providers will not leverage their duopoly in most American markets to increase pricing/revenue and reduce costs by limiting demand on their networks, they readily admit they did not take into account several possible scenarios:

One issue is how the offering of premium transmission might affect the network provider’s incentive to change the standard transmission speed. At least AT&T has committed to not degrade service for any network user, but it is unclear how such a commitment would be enforced.

Secondly, we do not analyze the effects of peer-to-peer communication, which is growing in importance on the Internet.

Thirdly, we do not consider the effects of vertical integration by the network provider and whether this would provide an incentive for foreclosure.

The PURC is part of the University of Florida, but also receives private corporate funding

Because the broadband industry fights any attempt to regulate their service, it is unlikely any such promise from AT&T would be enforced.  What AT&T defines as “degraded” service is open to interpretation as well.  As broadband demand is dynamic and growing, should AT&T leave standard transmission speeds exactly as they are today, that non-premium service would be degraded through inattention to broadband growth.  Peer to peer communication is largely a story from the first round of the Net Neutrality debate in 2006-7.  A more significant amount of traffic is now attributed to online video.  Finally, not considering vertical integration in the cable and telephone industry is a fatal flaw.  The history of telecommunications regulation has largely been written during periods when the cable and telephone industry abused their market position to overcharge consumers for service, lock up content distribution channels, and forestall competition wherever and whenever possible.

Frankly, Jamison and Hauge’s world view only innovates new, even fatter profits for providers like AT&T.  Perhaps some of those profits can go towards even greater funding for the Public Utility Research Center, where Jamison serves as director and Hauge as a Senior Research Associate.  The PURC, part of the University of Florida, just happens to have, among others, AT&T and Embarq Florida as sponsors, and both companies have seats on the PURC Executive Committee.

Sun-Sentinel readers don’t have that information because it’s not included in the disclosure at the bottom of the piece.  Following the money would shed a lot more sun on this important debate.

Glenice Maclellan, Telstra's point person on broadband, has recently discovered Australians don't just want to browse the web and read e-mail on their broadband service.

Telstra, Australia’s largest telecommunications company, has responded to customers leaving their broadband service over its fraudband speeds and paltry usage caps by increasing both, but not nearly enough to change perceptions that Australian providers still serve up slow, overpriced and restrictive service.

Telstra’s CEO David Thodey, who replaced the oft-despised Sol Trujillo, told investors what every Australian contemplating broadband service already knows: “In some parts of the market we’ve gone too far out of line and we need to come back. We must focus on our core business and our customers, this is where we create value for shareholders. At its simplest, the next stage in Telstra’s long-term strategy is to focus on satisfying customers, invest in new capabilities, and drive growth in new businesses.”

Thodey’s approach is to do away with the company’s downright lousy “broadband” service in many rural areas of Australia.  More accurately called “fraudband,” there are still many Australians suffering with Telstra BigPond service that tops out at a ridiculously slow 256kbps.  And because company officials suspect you’ll even use that too much, they slapped a usage cap as low as 200 megabytes on the service, with a war crime overlimit fee of $0.15 per megabyte thereafter.  Your low price?  $27US a month.  For that.  But you can double your allowance to 400 megabytes for a mere $9US more per month.  Grab the bargain.

Effective December 1st, Telstra will move its rural customers to 1996-level broadband service, offering 1.5Mbps minimum to those doing their web surfing over DSL lines.  For those paying $27 a month, they’re increasing your usage allowance to a still-paltry 2 gigabytes per month, and leaving the $0.15/mb overlimit fee in place.  Most DSL customers stuck on these plans will be herded up to the $36 a month plan which is “generous” in comparison with a new download quota of 12 gigabytes per month and no overlimit fee.  Instead, once you hit your limit, they cut your speed to 64kbps for the rest of the month.

Oh but wait, there are some more gotchas:

• Unless you are bundling your molasses-slow Internet service with a phone line package that brings Telstra at least $81US per month in revenue, add $9 to these plan prices.  You wouldn’t want Telstra management to go home hungry, would you?
• Uploads are also a part of your usage allowance.
• Many of their plans lock you in with a 24-month service commitment.  They’ve got you right where they want you.

If you find Telstra’s Oliver Twistian-usage allowances leave you hungry for more, no worries.  Telstra will happily upgrade your service to a higher usage plan, with correspondingly higher prices, by the following day.  That’s good to know if Microsoft obliterated a good part of your usage allowance for the month with critical Windows updates.

Or you could always take your business elsewhere, as many budget conscious Australians have.  Thodey’s fear about out-of-touch broadband pricing is real when considering Telstra’s competitor iiNet offers 4GB (2GB peak/2GB off peak) for just about the same price Telstra charges for its $27 a month/200 megabyte plan.

The company has also recently discovered that Australians want to use their broadband service for more than just web browsing and e-mail.  That’s apparently news to Telstra management, who threw this into their PR push:

“Telstra’s new plans cater for the changing ways Australians use broadband for communications and entertainment at home.  Gone are the days when broadband was used only to check email or internet surf. Australian families now also use broadband to download videos, play online games, or check social networking sites all at the same time”. — Glenice Maclellan, the Acting Group Managing Director of the Consumer division, Telstra

Thanks, Glenice.  The only problem here is that Australians didn’t get to do those things much because of your rationed broadband plans which either overcharged them if they tried, or speed throttled them back to dial-up as a reminder not to be a naughty data hog.

Now, Australians can at least feed at the trough… for a little while.

Telstra offers other plans, which vary on whether you qualify for ADSL 1 service (original DSL) or live in an urban/suburban area upgraded for ADSL 2 or cable modem service.  All prices hereafter are in Australian dollars – $10AUD = $0.91US at time of writing):

New Broadband Pricing for full service fixed phone customers

Those prices are enough to give North American providers dreams of Money Parties in their heads forever.  Only Time Warner Cable came close with their infamous $150 unlimited usage plan they tried to stick customers with in several cities this past April.

That platinum-deluxe BigPond Liberty 200GB plan bundled with a TV package will cost you more than $4,560US over the life of the 24-month contract.

Australians continue to wait for a National Broadband Network plan that the government says should finally free Australians from a life of being told you have to spend more… a lot more, to save just a little from companies like Telstra.

A spoof on Telstra’s BigPond Internet Support Call Center (1 minute)

Phillip "But I Don't Even Want The Golf Channel" Dampier

Time Warner Cable unveiled a new website this afternoon, RollOverOrGetTough, asking customers whether they want the company to “roll over” and pay the prices cable programmers demand or “get tough” and threaten to drop channels that demand too much.

This, of course, is rich coming from the company that loves to raise your rates every year, overcharge you for your broadband service with experimental usage caps and “consumption billing,” and has had a long history of owning and/or controlling many of those ‘greedy cable networks.’  Oh, and they won’t give you the choice of paying for just the channels you want to watch, either.

Want to send a message to the cable network bad-boys that demand too much?  Give your customers the right to opt out.

The cable industry has fought a long-running battle with cable programming networks over the fees they pay on a per-subscriber basis to carry those channels.  The revenue earned by those networks helps them acquire programming that is attractive to potential viewers, and the advertisers that follow.  Back in the 1970s and 1980s, most cable subscribers spent their time watching local broadcasters, “superstations” — imported TV stations from cities like New York, Chicago, Atlanta, and Los Angeles, and premium movie channels.  The basic cable networks back then didn’t run off-network TV shows.  Most ran cheaply produced documentaries, talk shows, imported shows from overseas, limited interest cultural programming, or music videos.  Sports programming rarely involved major teams, or major sporting events for that matter.

By the early 1990s, virtually every basic cable network was either owned outright or in part by one of the major national cable or broadcasting companies.  NBC and ABC dabbled in cable themselves, while CBS steered clear after being burned by a terrible experience with CBS Cable in the early 80s.  Launched as a cultural network devoted to opera, theater, and dance, it shut down a year after launching, having attracted minuscule audiences.

The lesson learned — create or buy programming viewers will actually want to watch.  That takes money, and the fees charged to cable operators for cable networks began rising rapidly.  Suddenly, off-network TV shows viewers used to watch on WPIX, WGN, WWOR, KTLA, or WTBS suddenly started showing up on basic cable instead.  The biggest turning point came when sports networks like ESPN started bidding for, and winning the rights to televise major league sporting events.  Nothing costs more than sports, and broadcast and cable networks have been bidding up prices ever since.

As basic cable networks became popular with viewers, their ability to make demands on cable operators grew exponentially.  Suddenly, certain cable networks demanded they be given low channel numbers, that cable companies had to also carry affiliated spin-off cable networks if they wanted access to their primary service, and that programming must always be carried on basic cable — not on some digital cable tier or other similar extra-cost tier.

For years, cable operators didn’t care too much as they just passed the increases on to customers.  Where could viewers go except to the cable company?  I recall the sticker shock customers had when basic cable first exceeded $20 a month, then $30.  Today it’s headed for $60 a month in many areas.  Cable companies attempted to placate angry customers by adding several new channels to the lineup just prior to the rate hike letter, telling them they were now receiving greater value than ever from their cable company.  The following year, those new channels wanted more money, too.

The “500 channel universe” that sounded promising a decade ago is now a nuisance for many subscribers, irritated they are paying for hundreds of channels they never watch.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WIVB Buffalo Report on TWC Campaign 11-25-09.flv[/flv]

WIVB-TV Buffalo reported on Time Warner Cable’s fight against programming prices, but itself (along with sister station WNLO-TV) was thrown off Time Warner Cable’s cable lineup over a contract dispute for most of October, 2008.  LIN TV Corporation, owner of both stations, had reportedly demanded 25 cents per month per subscriber for permission to carry the stations on cable. (1 minute)

In a difficult economy, justifying a $150-200 cable bill for television, broadband, and phone service is harder than ever.  Consumers want new options.  Satellite television provided limited competition, and a few large phone companies are set to deliver a bit more.  But some subscribers have decided paying this kind of money for television every month is outrageous, and they have finally jumped off the merry-go-round.  Some younger people are never getting on, relying entirely on their broadband service to watch television programs and movies on demand.

Time Warner Cable’s attempt to enlist customers in their sudden war on programming rate increases is likely to be seen by many as a classic pot to kettle cable quandary.  The company that still wants to force Internet Overcharging schemes on their broadband subscribers and is now raising rates in many areas has some chutzpah asking customers to fight for them:

You won't have this logo to kick around any longer.

AOL (the forgettable part of Time Warner) is desperately trying to rebrand itself in an effort to stay… relevant.  The shortened namesake of America Online, which began life as QuantumLink in 1985, peaked with 30 million subscribers before merging with Time Warner in 2001.  It was all downhill from there.  The once-enormous Internet Service Provider has now become far lesser known as a content producer and distributor, although the company still has almost six million legacy dial-up account users paying between $9.99 and $25.90 a month for access.  They discontinued broadband service several years ago, which was a shame because it offered an Internet access alternative to whatever one’s phone or cable provider had on offer.

This week, with details finalized for December’s AOL severance from Time Warner, the “all-new” Aol. was previewed with a new image branding campaign.

Aol. It's capital "A" and lowercase "ol" with a period.

Yup… that’s it.  There’s now a period in there.  The old triangle, which never meant anything to me either, is gone for good.  Instead, a simple sans-serif logo with a period replaces it, designed to blend into one of hundreds of background images the service will introduce to its new look this December.

“Our new identity is uniquely dynamic. Our business is focused on creating world-class experiences for consumers and AOL is centered on creative and talented people – employees, partners, and advertisers. We have a clear strategy that we are passionate about and we plan on standing behind the AOL brand as we take the company into the next decade,” said Tim Armstrong, Chairman and Chief Executive Officer of AOL.

Unfortunately for all concerned, there are going to be a lot fewer employees doing the work to create that “world-class” experience.  More than 2,500 employees, one-third of the company’s workforce, will be offered buyouts to get out.

The Associated Press reports on AOL’s plans to shed 2500 workers.  (1 minute)

The company is showcasing the all-new pretty wrapping paper for its December relaunch.

“Historically brand identity has been monolithic and controlling, little more than stamping a company name on a product.  AOL is a 21st century media company, with an ambitious vision for the future and new focus on creativity and expression, this required the new brand identity to be open and generous, to invite conversation and collaboration, and to feel credible, but also aspirational. We’re delighted to have worked so closely with the AOL leadership team to create something bold and exciting that sets AOL apart,” said Karl Heiselman, CEO of Wolff Olins.

The question is, do most consumers actually associate AOL with a 21st century media company, or a distant memory of dial-up access days gone by?  Aspiring to be the next best thing when your company formerly was the ISP tens of millions of Americans said goodbye to when broadband service arrived is a challenge.  The Internet is filled with yesterday’s sensations whose glory days are long since passed.  Just ask Yahoo!, AltaVista, Ask Jeeves, Napster, or GeoCities.

[flv width=”640″ height=”405″]http://www.phillipdampier.com/video/aol_brand-H.264.flv[/flv]

A video reel showcasing some of AOL’s new branding.  (1 minute)