One of the chairs of the North Carolina House Finance Committee abruptly resigned his chairmanship on the House floor Wednesday, submitting a letter read aloud in the chamber that accused fellow Republican House Speaker Thom Tillis (R-Mecklenburg) of having an unexplained business relationship with Time Warner Cable.

Rep. Robert Brawley (R-Iredell) wrote Tillis burst into his office demanding to know about a bill Brawley introduced that would have weakened the 2011 law Tillis strongly supported that severely restricted publicly owned broadband networks in the state.

“You slamming my office door shut, standing in front of me and stating that you have a business relationship with Time Warner and wanting to know what the bill was about,” Brawley wrote in his resignation letter. “You and I both know the bill stifles the competition with MI Connections in Mooresville. MI Connections is being operated just as any other free enterprise system and should be allowed to do so without the restrictions placed on them by the proponents of Time Warner.”

Tillis’ office described the resignation of Brawley’s chairmanship as “a mutual decision.”

Tillis was honored in 2011 as ALEC’s “Legislator of the Year” and received an undisclosed cash reward. Time Warner Cable is a corporate member of ALEC.

House Bill 557, introduced by Brawley, would have permitted an exception under state law for the community-owned MI Connection cable system to expand its area of service to include economic development sites, public safety facilities, governmental facilities, and schools and colleges located in and near the city of Statesville. It would also allow the provider to extend service based on the approval of the Board of County Commissioners and, with respect to schools, the Iredell County School Board.

The bill died in the Committee on Government earlier this month.

MI Connection is the publicly owned and operated cable and Internet system serving the towns of Mooresville, Davidson and Cornelius in the counties of Mecklenburg and Iredell. It was originally a former Adelphia-owned cable system that fell into disrepair before it was sold in a bankruptcy proceeding. MI Connection has proved financially challenging to the local communities it serves because the antiquated cable system required significant and costly upgrades, faces fierce competition from AT&T and Time Warner Cable, and lacks the technological advantage fiber to the home offers other public networks like Greenlight in Wilson and Fibrant in Salisbury. Despite the challenges, MI Connection has successfully upgraded its broadband infrastructure with the fastest speeds available in the area — up to 60/10Mbps.

Tillis helped shepherd into law the 2011 bill that Time Warner Cable helped write and sponsor designed to stop public networks like MI Connection from expanding and new public networks ever seeing the light of day. The legislation places strict limits on public broadband network deployment and financing. The bill Brawley introduced would have chipped away at the law’s limits on network expansion. Brawley’s letter suggests Tillis had direct involvement stopping his bill from getting further consideration.

Brawley

Both Brawley and Tillis represent portions of the MI Connection service area.

Time Warner Cable has a long history pushing for community broadband bans in North Carolina, but the bills never became law when the legislature was still in the hands of Democrats. But in late 2010, Republicans took control of the state house for the first time in more than a century. Time Warner Cable’s fortunes brightened considerably under Republicans like Rep. Marilyn Avila (R-Wake). Avila willingly met with Time Warner Cable’s top lobbyist to coordinate movement on the community broadband ban legislation she introduced and after it became law was honored by the state cable lobby at a retreat in Asheville.

Tillis, who became speaker of the house in 2011 under the new GOP majority, received $37,000 in telecom contributions in 2010–2011 (despite running unopposed in 2010), which is more than any other state lawmaker and significantly more than the $4,250 he received 2006–2008 combined. AT&T, Time Warner Cable, and Verizon each gave Tillis $1,000 in early-mid January, just before he was sworn in as speaker on January 26. Tillis was in a key position to make sure the anti-competitive bill moved along the legislative pipeline.

Last summer, Time Warner Cable returned the favor inviting Tillis to serve a prominent role at a media event inaugurating its Wi-Fi network in time for last year’s Democratic National Convention, held at the Time Warner Cable Arena.

Despite all that, newspapers in the state are having trouble determining exactly what ties Tillis has to Time Warner Cable. The Raleigh News & Observer noted, “It’s unclear what relationship Tillis might have to Time Warner. His financial disclosure lists no connection.”

The Greensboro News & Record published a non-denial denial from Tillis spokesman Jordan Shaw: “Shaw said he doesn’t know of any business relationship between Tillis and Time Warner.” The paper added, “a regional Time-Warner spokesman said Tillis has no ties to the company.”

“Not knowing” is not a total denial and a legislator need not have direct ties to a company to be influenced by their agenda through lobbyists like the North Carolina Cable Telecommunications Association, the statewide cable trade association that includes Time Warner Cable as its largest member. Then there are third-party groups.

A May 7 editorial in the News & Observer pointed out Tillis does have close ties to the American Legislative Exchange Council (ALEC), a group financed in part by Time Warner Cable and cited by CEO Glenn Britt as a useful asset to the cable operator because it was “particularly focused on telecom matters.” The commentary, “ALEC’s Guy is Thom Tillis,” reminded readers Tillis wasn’t just a casual member of the corporate-funded group, he’s a national board member. In fact, Stop the Cap! has learned he was ALEC’s 2011 Legislator of the Year. On hand at the 2011 New Orleans ALEC event to applaud Tillis were more than two dozen fellow North Carolina Republican legislators, including Reps. Marilyn Avila and Julia Howard.

Among the model, corporate ghost-written bills ALEC maintains in its extensive database is one that restricts or bans publicly owned broadband networks, similar to what passed in North Carolina in 2011.

The fortunes of ALEC (and the corporations that underwrite its operations) have continued to improve in North Carolina this year. The News & Observer notes:

ALEC, as it’s known, has provided language for bills that [have been] used this session in North Carolina, ranging from creating an independent board to take charter school governance away from the State Board of Education to protecting a Philadelphia-based company from lawsuits involving asbestos exposure to installing an anti-union amendment in the state constitution. Closer to home, the Civitas Institute, a conservative group, used ALEC literature in an indoctrination…er, training…session for freshman lawmakers.

“I wish you’d turn the camera off now because I am going to get up and leave if you don’t,” said Rep. Julia Howard

Uncovering the corporate influence and pay to play politics pervasive in North Carolina’s legislature on broadband matters has proved historically scandalous for members and ex-members alike, as Stop the Cap! has reported for more than four years:

• In 2009, Rep. Ty Harrell (D-Wake) ran away from his own bill to ban community broadband after he admitted he ran into a hornet’s nest of controversy over the legislation, which was introduced because Time Warner approached him and asked for it. Later that same year he ran into another hornet’s nest over allegations of misused campaign funds and resigned his office;
• In 2010, Sen. David Hoyle admitted he introduced a community broadband ban in the North Carolina Senate that the cable industry wrote with his help. When asked about criticism that he was “carrying water” for the cable companies, Hoyle replied, “I’ve carried more water than Gunga Din for the business community – the people who pay the taxes.” He decided not to run for re-election;
• In 2011, life became uncomfortable for Rep. Julia Howard (R-Davie, Iredell), who became so upset over scrutiny she received from Raleigh’s NBC affiliate over the bill to ban community broadband, she threatened to flee the interview if the cameras were not shut off.

Tillis is following in others’ footsteps and is suspected of having even bigger political ambitions for 2014 — challenging the U.S. Senate seat now held by Democrat Kay Hagan.

The News & Observer thinks Tillis is forgetting about the people who elected him to office:

For North Carolinians of any political philosophy, however, the larger concern here is that laws are being written by those outside the state with only an ideological interest. ALEC, except for advancing its agenda, likely could care less about issues specific to North Carolina, things of intense, day-to-day concern to North Carolinians.

And not only are bills being influenced by ALEC, the speaker of the House is on the group’s board.

Thom Tillis and his Republican mates on Jones Street weren’t elected to march to orders issued by some national organization. Perhaps if they kept their eyes and ears open for constituents, their legislative agenda might be more about them and less about doing ALEC’s bidding.

Brawley himself is not free from controversy. In addition to attending the aforementioned ALEC event in New Orleans with Tillis, Avila, and Howard, earlier this year Brawley introduced House Bill 640, legislation that would roll back ethics reforms and allow lobbyists to once again give gifts to state lawmakers without any public disclosure.

Brawley told WRAL-TV that required ethics classes on gifts and disclosure requirements “are useless for anyone without internal ethics anyway. They only tell you the law. They do not guarantee integrity. What makes you think a person without ethics is going to obey a law anyway?”

The laws were enacted after a major 2006 scandal involving then-House Speaker Jim Black.

Corrections: In the original article, we mistakenly identified the News & Observer as a Charlotte newspaper. It is actually published in Raleigh. We also wrote that House Bill 557 died without being assigned to any committee for consideration. We received word the bill was actually referred to the Committee on Government on Apr. 4, 2013 where no further action was apparently taken. We regret the errors.

Phillip “I don’t have $1 million in AT&T and Verizon stock” Dampier

Before Tom Wheeler, President Obama’s pick to head the Federal Communications Commission, can find his seat at the federal agency overseeing the nation’s telecommunications industry, he will need time to sever the extensive ties he maintains as an ex-lobbyist and investor in the companies he will soon oversee.

To avoid an even bigger appearance of a conflict of interest, Wheeler has agreed to dump at least $1 million in personal stock in AT&T and Verizon, as well as divest himself of holdings in 76 other media and tech companies including Time Warner, Comcast, Google, Sprint, Deutsche Telekom and News Corp.

Wheeler is also submitting his resignation from the board of Earthlink, an Internet Service Provider, and will also sell off his shares in that company. He will also have to step down from Core Capital, a venture capitalist investor firm with extensive holdings in the telecom industry.

In our view, Wheeler has shown he couldn’t be more of a telecom industry insider unless he also served on the board of AT&T. Wheeler’s extensive holdings depict someone who has maintained a direct financial interest in the industry for years, even after ending his leadership at the National Cable Television Association and leading the nation’s biggest wireless industry lobbying group, the CTIA.

These kinds of deep industry ties are a serious concern for the average consumer. As we’ve reported before, Tom Wheeler has said almost nothing on his blog about consumer interests, writing views from the perspective of an industry lobbyist and investor. Watching him disgorge well over a million dollars in direct investments in AT&T and Verizon — companies he’d oversee in his new role — does not ease our concern he remains a consummate insider. He is well-positioned to move back through the D.C. revolving door at the end of the Obama Administration to reinvest in the companies his tenure at the FCC could potentially make or break.

Wheeler’s appointment represents another broken promise from the Obama Administration:

“No political appointees in an Obama-Biden administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years. And no political appointee will be able to lobby the executive branch after leaving government service during the remainder of the administration.”

Not allowing Wheeler to oversee regulations or contracts with the companies who helped pay his salary and earn him a fortune from his investments would leave the new FCC chairman little to do beyond opening the mail. But of course, that campaign promise from the Obama-Biden campaign has long since been broken and forgotten by most.

Despite the clear conflicts of interest, President Obama remains fully behind his new FCC chairman pick.

“Tom knows this stuff inside and out,” Obama said.

No doubt.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Real News Obama Nominates Cable Industry Lobbyist and Campaign Bundler New Head of FCC 5-12-13.mp4[/flv]

Former FCC commissioner Nicholas Johnson blasts the nomination of Tom Wheeler, an ex-industry lobbyist and insider, for the role of new chairman of the FCC. (From: TheRealNews) (16 minutes)

Wireless Industry: We’re running out of spectrum!
Wireless Industry: We’ve got plenty to room for unlimited ESPN!

America is on the verge of a wireless traffic data jam so bad, it could bring America to its knees.

Or not.

Stop the Cap! notices with some interest that while wireless carriers continue to sound the alarm about a spectrum crisis so serious it necessitates further compressing the UHF television dial and forces other spectrum users to become closer neighbors, the same giant phone companies warning of impending doom are negotiating with online video producers to offer customers “toll-free,” all-you-cat-eat streaming video of major sports events that won’t count against your usage allowance.

ESPN is in talks with at least one major carrier (AT&T or Verizon Wireless) to subsidize some of the costs of its streamed video content so that customers can watch as much as they want without running into a provider’s usage limit. Both Verizon and AT&T have signaled their interest in allowing content producers to pay for subscribers’ data usage. In fact, they don’t seem to care who pays for the enormous bandwidth consumed by streaming video, so long as someone does.

At a recent investment bank conference Verizon Wireless chief executive Dan Mead explained the next chapter in monetizing data usage will allow the company to rake in more revenue from third parties instead of customers already struggling with high wireless bills.

“We are actively exploring those opportunities and looking at every way to bring value to our customers,” said Mead.

Content producers are increasingly frustrated with the stingy caps on offer at AT&T and Verizon Wireless because customers stop accessing that content once they near their monthly usage limit. One large provider admitted to ESPN that “significant numbers” of customers are already reaching their cap before the end of their billing cycle, after which their online usage plummets to limit the sting of overlimit charges.

Offering “toll-free” data could dramatically increase the use of high bandwidth applications and increase profits at wireless providers based on new fees they could collect from content producers. Customers would still be subject to usage limits for all non-preferred content, a clear violation of Net Neutrality principles.

The buffet is open.

But in case you forgot, wireless carriers won exemption from Net Neutrality, arguing their networks lack the capacity to sustain a Net Neutral Internet experience. These same companies claim without more frequencies to handle the massive, potentially unsustainable amount of wireless traffic, the wireless data apocalypse could be at hand in just a few years. It was also the most-cited reason AT&T and Verizon discontinued their unlimited use data plans.

But unlimiting ESPN video? No problem.

In January 2010, Verizon Wireless was singing a very different tune to the FCC about the need to control and manage high bandwidth applications like the “toll-free” streaming video service ESPN proposes (underlining ours):

Wireless broadband services face technological and operational constraints arising from the need to manage spectrum sharing by a dynamically varying number of mobile users at any time. Thus, unlike, for example, cable broadband networks, where a known and relatively fixed number of subscribers share capacity in a given area, the capacity demand at any given cell site is much more variable as the number and mix of subscribers constantly change in sometimes highly unpredictable ways.

Are wireless carriers now part of the problem?

For example, as a subscriber using a high-bandwidth application such as streaming video moves from range of one cell site to another, the network must immediately provide the needed capacity for that subscriber, while not disrupting other subscribers using that same cell site. Of course, the problem is magnified many times over as multiple subscribers can be moving in and out of range of a cell site at any given moment. Moreover, the available bandwidth can fluctuate due to variations in radio frequency signal strength and quality, which can be affected by changing factors such as weather, traffic, speed, and the nearby presence of interfering devices (e.g., wireless microphones).

These problems compound those resulting from limited spectrum. As the Commission has repeatedly recognized in proclaiming an upcoming spectrum crisis, “as wireless is increasingly used as a platform for broadband communications services, the demand for spectrum bandwidth will likely continue to increase significantly, and spectrum availability may become critical to ensuring further innovation.”

A wireless carrier cannot readily increase capacity once it has exhausted its spectrum capacity. Thus, wireless broadband providers are left to acquire additional spectrum (to the extent available) or take measures that use their existing spectrum as efficiently as possible, which they do through a combination of investing in additional cell sites and network management practices that optimize network usage and address congestion so as to provide consumers with the quality of service they expect.

Regulators need to ask why wireless companies are telling the FCC there is a bandwidth crisis of epic proportions that requires the Commission to exempt them from important Net Neutrality principles while telling investment banks, shareholders and content producers the more traffic the merrier, as long as someone pays. Customers also might ask why their unlimited use data plans were discontinued while carriers seek deals to allow unlimited viewing with their preferred content partners.

What is the real motivation? The Wall Street Journal suggests one:

“Creating a second revenue stream for mobile broadband is the holy grail for wireless operators but collecting fees from content companies would probably make the FCC take a close look into the policy implications,” said Paul Gallant, managing director at Guggenheim Securities. An FCC spokesman declined to comment.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/WSJ ESPN Toll Free Data 5-9-13.flv[/flv]

The Wall Street Journal takes a closer look at a plan to manage an end run around Net Neutrality by allowing preferred content partners to offer streaming video services exempt from your usage cap. (4 minutes)

Verizon casts off its rural landline network for some customers.

Verizon landline customers reporting problems with their service in Pennsylvania may be soon targeted for Verizon’s wireless landline replacement — Voice Link — according to two sources sharing an internal memo with Broadband Reports.

The May 7 memo states that a significant number “selected customers” will be migrated off Verizon’s copper landline network to the Voice Link wireless service. One of the sources recognized the move as an end run around regulators:

“It has become painfully obvious to both our employees and customers that Verizon wishes to divest themselves of all regulated services,” says the source. “Abandoning our regulated wire line customers in favor of fixed point LTE may seem like a clever move but it violates “The Negroponte Principle” and will ultimately bump-up against the immutable laws of spectrum conservation physics.”

“It’s a shame that corporations like Verizon can build a FTTCS based wireless empire with regulatory subsidies provided by their wireline customers and then force them onto the unregulated wireless side,” argues the insider. “Questions of ethics and legality abound and perhaps regulatory over-sight is warranted here.”

Verizon may not get too much oversight from Pennsylvania regulators hoodwinked by the telecom company in the past.

Voice Link is a voice-only wireless home phone replacement that lacks certain calling features, Caller ID with Name for one, and requires the homeowner to provide power (and backup batteries in the event of a power failure). Customers are also dependent on quality reception from the nearest Verizon Wireless cell tower and that it remains in service during severe weather events or prolonged power outages.

Some of the customers likely targeted are still waiting for DSL broadband service from Verizon. If those customers are identified as Voice Link prospects, they will be waiting for broadband forever because Voice Link does not support data services and Verizon cannot supply DSL over a scrapped landline network.

Stop the Cap! has also learned today that the Federal Communications Commission has no problem with Verizon’s unilateral action to switch landline customers to wireless.

A FCC representative told our reader Anne, who is currently fighting Verizon over its plans to abandon landline service on the New Jersey Barrier Island, that they consider Voice Link a functionally equivalent landline service. In a response that could have come directly from Verizon customer service, the FCC helpfully describes the new service Anne already understands and does not want:

Q. What if Verizon is NOT replacing copper with fiber, but is going strictly to wireless?  There will be no landlines whatsoever.  Is that acceptable?

A. “Yes that is acceptable and it is called Verizon Voice Link.  It is a wireless device that plugs into the telephone lines in your home, allowing customers the ability to use their home telephone to make and receive calls.” — FCC Representative Number : TSR54

“This second FCC response, like the first one, ignores the issue, is unprofessional and is insulting,” says Anne. “Obviously, I already know what Voice Link is.”

Verizon says customers are responsible for maintaining and replacing backup batteries used with its FiOS service.

Beep.  Beep.  Beep.

Verizon FiOS phone customers will one day hear that ominous sound in their home and begin searching for the source. The audible alarm isn’t coming from the smoke detector or your computer’s uninterruptible power supply. It is coming from a square white box mounted in your garage or basement with a Verizon logo on it.

The Verizon Optical Network Terminal (ONT) Battery Backup Unit (BBU) provides up to eight hours of backup power for your FiOS voice services in the event of a commercial power failure.

Verizon considers its battery your problem, even though you lease the equipment from Verizon as part of your monthly service. After one year of standard warranty coverage, customers are responsible for maintaining the battery and for any damages that might occur if one fails to replace or remove it. Verizon’s website warns not promptly removing the spent battery could result in leaking corrosive battery acid which might damage the BBU itself. You would be held responsible for any repair or replacement costs.

Some Verizon FiOS customers cannot understand why they should pay to maintain equipment Verizon still technically owns.

“They require us to lease the equipment (set-top boxes, wireless router, backup battery device, etc.) so they are responsible,” believes one disgruntled customer. “If they would sell it to us or allow us to provide our own I could see us paying for it.”

Verizon representatives say they fully disclose customers are responsible for maintaining the battery. But customers complain it is buried in the fine print. Many more are unhappy to learn Verizon charges at least $45 for a replacement battery that seems to last only about two years.

Joanne Gaugler is on her third battery in seven years, and that one is now on its way out.

“The battery I have now has been beeping for a long time,” Gaugler wrote.

Not only does the battery beep incessantly, but the company also begins sending e-mail messages warning customers they need to replace it to avoid the possibility of damaging their equipment.

“When I called about this problem ten months into my FiOS service, the representative had me remove and reinstall the battery, claiming it was probably a loose connection and that I did not need a new battery,” says Stop the Cap! reader Jim Connor. “When I called back about the same problem 13 months into my FiOS service — one month out of warranty — the representative insisted I buy a new battery.”

Connor said Verizon charges an exorbitant amount for the replacement.

“Another profit center for Verizon, because they charge $35 for the battery and another $9 to ship it, before taxes,” Connor writes. “I ended up paying $10 less at a local battery replacement store, but Verizon got all bothered I did not buy it from them, warning it could ‘damage my service.'”

Verizon strongly discourages customers from buying replacement batteries from anyone other than themselves and disclaims any responsibility for damages caused by “an improper battery.” Verizon also offers customers free battery replacement if you happen to buy a Verizon Protection Pak plan, which starts at $19.99 a month.

There is nothing special about Verizon’s backup battery, a standard issue 12-Volt 7.2Ah SLA (Sealed Lead Acid) model often found in home alarm systems. Frugal Verizon FiOS customers can find equivalent batteries online for less than half the price Verizon charges, often with no upfront sales tax or shipping.

A Stop the Cap! search for “GS Portalac PX12072” or “GT12080-HG” (from labels on current batteries) on websites like Amazon or eBay quickly uncovered several highly rated alternatives that cost as little as $18 with identical specifications.

Batteries of this type have a shelf life of 3-5 years, and an in-service useful life of 1.5-3 years, after which they should be replaced and recycled.

Another alternative is to simply remove the battery altogether. That will result in no backup landline service in the event of a power failure, but your cell phone may already offer a suitable alternative.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KDKA Pittsburgh Verizon FiOS Battery 5-09-13.mp4[/flv]

KDKA in Pittsburgh reports around 10 Verizon FiOS customers a day are flooding into local Batteries Plus stores looking for new batteries for the company’s equipment.  (4 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Verizon Install Replacement Battery 2012.flv[/flv]

Now that you have a replacement battery in hand, here is a Verizon-produced video explaining how to safely install it.  (4 minutes)