Verizon Wireless is proud of its new “business intelligence” initiative that will collect your browsing habits and online behavior, aggregate it with other customers similar to you, and then package and sell it to anyone willing to pay.

For your convenience, Verizon has automatically opted you in to their Precision initiative, and it is up to you to make the effort to opt out.

“Companies are always seeking opportunities to understand and act on their customers’ preferences, and Verizon is in a unique position to offer information and insight in a format that can help,” said Colson Hillier, vice president, Precision Market Insights, Verizon Wireless.  “At the same time, protecting customer data and safeguarding privacy have always been high priorities at Verizon, and we give our customers choice and control over their privacy preferences.”

The first set of services from Precision will help brands and companies such as outdoor media companies, sport venues, and other marketers, to understand the characteristics of the audiences for their products and services so that they can better reach and serve those customers.  Business and marketing insights use information from Verizon’s mobile network that is gathered and combined with demographic data, then aggregated to provide real insights into consumer behavior.  Data associated with the preparation of business and marketing reports is anonymous and secure and will not allow the identification of an individual.

Precision plans to introduce additional services including one that will help brands tailor the type of advertising customers see on their mobile phones, also known as relevant mobile advertising, and others that will help marketers create opportunities to better address their consumers and their consumers’ needs.

Still, Verizon’s lucrative new program delivers all of the benefits to themselves, while sticking you with an ever-increasing mobile phone bill. If Verizon Wireless wants to collect your browsing data and other “aggregated” information to sell to advertisers, then the company ought to be paying customers to participate. As usual, they keep all of the money for themselves.

Verizon Wireless obfuscates this privacy invasion with technobabble. They call it: Customer Proprietary Network Information (CPNI), ironic for a program that sells “precision” information to Verizon’s clients. In fact, Verizon tracks your location, collects ongoing statistics that can be used to predict where you will be at any given time, and offers that information up to mobile advertisers. They in turn deliver you “relevant advertising,” that eats your limited data allowance. It represents a win-win for the company and advertisers. Sell your data and then collect even more revenue as advertisers pelt you with unwanted ads.

But customers do not have to be the losers. You can deny Verizon their latest Money Party until they share some of the proceeds with you:

1. Login to your account at Verizon Wireless.
2. Scroll to “I want to…” and find “profile.”
3. Choose “Manage privacy settings.”
4. Note the section: “Customer Proprietary Network Information”.
5. Choose “Don’t Share My CPNI” for each relevant cellular number.
6. Make sure to click the “Save Changes” button when finished or your choices will not be saved.

You may want to also block Verizon from cashing in on your data for their Business and Marketing Reports and Relevant Mobile Advertising. Those settings appear just below the CPNI section. Make sure you “Save Changes” for each section.

Not a Verizon Wireless customer? Look out. Your carrier may be packaging and reselling your browsing habits as well.

• Sprint: Collects and markets subscriber data. Login to your Sprint account and select “My Choices” to opt out or call 1-855-596-2397 from each of your mobile devices.
• AT&T: Collects and markets subscriber data. Visit AT&T’s privacy options after logging into your account and opt out as needed.
• T-Mobile: Legalese overload. Would the average customer understand this: “We may obtain your consent in several ways, such as in writing; online, through ‘click-through’ agreements; orally, including through interactive voice response; or when your consent is part of this policy or the terms and conditions pursuant to which we provide you service. Your consent is sometimes implicit.”

The Federal Communications Commission has granted cable operators permission to completely encrypt their television lineups, potentially requiring every subscriber to rent set top boxes or CableCARD technology to continue watching cable-TV.

The FCC voted last week 5-0 to allow total encryption, a reversal of an older rule that prohibited encryption of the basic tier, allowing cable customers to watch local stations and other community programming without the expense of extra equipment.

The cable industry said the decision is a victory against cable theft, claiming that nearly five percent of all cable television hookups are illegally stealing service, at a cost estimated at $5 billion in lost revenue annually.

But some third party companies offering alternatives to costly set top boxes with endless monthly rental fees claim the industry move towards encryption is more about protecting the cable monopoly than controlling signal theft.

Current licensing agreements do not allow third party set top manufacturers to support scrambled channels without an added-cost, cable company-supplied set top box or card. That means a would-be customer would have to invest in a third party set top box and a cable company-supplied set top box to manage scrambled channels. That may leave customers wondering why they need the third party box at all.

This presented a problem for Boxee, which manufactures third party set top boxes, some with DVR capability. If cable systems completely encrypt their lineups, Boxee customers will need to rent a cable box and work through a complicated procedure to get both to work together.

Boxee officials suggest both an interim and long term solution to the dilemma — both requiring the goodwill of the cable industry to work out the details.

For now, Boxee and Comcast have agreed to work together on an HD digital transport adapter (DTA) with built-in Ethernet (E-DTA). A Boxee user would then access basic tier channels directly through an Ethernet connection and change channels remotely using their enhanced set top via a DLNA protocol.

A longer term solution would be to create a licensing path for an integrated DTA solution included inside third party set top boxes. This would eliminate the need for an added cost E-DTA box.

Cable operators planning to encrypt their entire television lineup will soon begin notifying customers of their plans. Under an agreement with the FCC, those with broadcast basic service will get up to two boxes for two years without charge (five years if the customer is on public assistance). Those who already have a cable box or DVR will get one box for two years at no charge. The cable company can impose monthly rental fees on additional boxes and begin charging for every box after two years.

Former FCC chairman Michael Powell, who now presides over the nation’s largest cable lobbying group, called the FCC decision “pro-consumer” despite the added expense and inconvenient many customers will experience.

“By permitting cable operators to join their competitors in encrypting the basic service tier, the commission has adopted a sensible, pro-consumer approach that will reduce overall in- home service calls,” said Powell, president of the National Cable and Telecommunications Association. “Encryption of the basic tier also enhances security of the network which reduces service theft that harms honest customers.”

Comcast is a leading proponent of total encryption, because it would allow them to start and stop service remotely, without having to schedule a service call to disconnect service. Cablevision already encrypts its entire lineup in certain areas under a previously-obtained waiver from the FCC. The company said it saved money reducing labor costs associated with service calls to physically connect and disconnect service.

Softbank’s marketing is baffling to Americans. The company has produced more than 150 different ads featuring a “typical Japanese family” that is anything but. The Otosan (father) is portrayed as a white dog, accompanied by a more familiar Japanese mother, a daughter played by a famous Japanese pop star, and her African-American brother.

Softbank, Japan’s third largest cell phone company, is said to be in advanced talks with both Sprint-Nextel and Clearwire to acquire a $12.8 billion majority ownership interest in both companies, according to a report from Bloomberg News.

Softbank’s primary motivation isn’t a sudden interest in serving American cell phone users. It wants bigger discounts for expensive smartphones and other mobile equipment for its Japanese customers, and volume discount opportunities are wide open if the company can pool Sprint, Clearwire, and Softbank together as a single buyer.

CNBC reports Softbank originally sought a blockbuster deal with Deutsche Telekom’s T-Mobile USA, Sprint, and Clearwire to form one super-sized carrier, but the German owners of T-Mobile got cold feet and pulled out, fearing the Obama Administration’s antitrust concerns could ultimately torpedo the deal. DT recently proposed an offer for MetroPCS instead, a deal much more likely to pass regulator review.

The deal could provide much-needed financial backing for Sprint, currently embarked on its costly Network Vision plan to upgrade to 4G LTE service. Softbank also sees synergy with Clearwire, because both companies share the same frequencies and TDD LTE network technology, meaning smartphones compatible on one network will work on the other.

Sprint is still said to be considering making a counteroffer for MetroPCS, potentially pulling that company away from T-Mobile, while Leap Wireless’ Cricket also remains a potential takeover target.

Wall Street thinks a foreign player entering the U.S. market will have a much easier time winning regulator approval, because Softbank has no other interests in the U.S. market. The Justice Department and the Federal Communications Commission both ultimately rejected a previous attempt to merge AT&T and T-Mobile, fearing a larger AT&T would reduce competition and stifle innovation.

Softbank is a disruptive competitor in the Japanese cell phone market. It aggressively competes with KDDI and market leader NTT Docomo. The company is perhaps best known for its oddball, often mystifying marketing which features a talking dog interacting with well-known Hollywood stars, including Brad Pitt, Quentin Tarantino, and Tommy Lee Jones.

Ads feature a typical Japanese family played by atypical actors — a strict father played by a talking dog, a more familiar Japanese mother, a daughter played by a famous Japanese pop star, and her African-American brother. The ads are almost incomprehensible to North American audiences used to a more direct marketing approach. But Japanese audiences love the ads they consider both funny and more importantly, unexpected.

That latter theme is particularly important to Softbank’s image in the Japanese cell phone market. With 98.6% of the country ethnically Japanese, the unexpected family underlines the company’s efforts to shake up conventional cell phone service. Softbank is known for introducing unique plans that target different groups of cell phone users often neglected by larger carriers. First to take a chance with the iPhone to appeal to youth, Softbank also sells plans targeting older users that emphasize unlimited calling to family members.

If Softbank brings this type of marketing to the United States, it could challenge T-Mobile as America’s most disruptive carrier. Just don’t expect a talking dog to close the sale.

[flv]http://www.phillipdampier.com/video/CNBC Softbank Said to Be in Talks to Buy Sprint Nextel 10-11-12.flv[/flv]

CNBC covers the deal between Sprint, Clearwire, and Softbank that originally also included T-Mobile USA.  (3 minutes)

 [flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Softbank Tommy Lee Jones.flv[/flv]

Softbank’s legendary ads have been running since June, 2007 and are beyond prolific. More than 150 different ads featuring “the Shirato family” have been produced so far, often with blockbuster Hollywood talent playing along. But most prove baffling to English-speaking audiences, such as this one featuring Tommy Lee Jones as a threatening maid with a uni-brow. (1 minute)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/SoftBank Quentin Tarantino.flv[/flv]

Quentin Tarantino hams it up in these two impenetrable ads for Softbank. The rough translation from Japanese does not help much. It starts with the older woman asking Otosan (the dog) if he’s going to a town called Tosa. Otosan says yes. Then, the younger woman asks if Tarantino is also going, and he replies: “I am Tara!” (In the longer version, Tarantino does his Samurai impression “Hai-ya! Samurai spirit! Get him with the Samurai sword! Ho-ha!”)  Otosan responds, “I’m determined to go to Tosa!” The older woman tells Tarantino to calm down. When the phone rings, the younger woman says, “It’s the phone,” and the older woman says, “It’s your wife.” Tarantino gasps. The wife asks for Tara. Tarantino responds, “I am Tara!” His wife yells, “Get home right now!” (1 minute)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/SoftBank Brad Pitt.flv[/flv]

Not every ad features the Shirato family. A barely recognizable Brad Pitt helps out while showing off some creative ways to use his built-in cell phone camera. (1 minute)

Charter Communications’ new CEO Thomas Rutledge loves Connecticut so much, he is moving the company’s executive headquarters to a new facility in Stamford — just minutes from his tony estate in New Canaan —  at taxpayer expense.

Rutledge has been running Charter, based in St. Louis, largely from Connecticut and a temporary executive suite in New York City since he accepted the position days after quitting as Cablevision’s chief operating officer in December, 2011.

But instead of relocating to St. Louis, Rutledge will force about 100 employees to quit or move to Connecticut, with taxpayers picking up the tab. Charter blamed the move, in part, on the downsizing of St. Louis’ airport which company spokesperson Jessica Hardecke said hampered the ability of the company’s employees to visit its cable systems in 25 states.

Under the terms of the corporate welfare deal, Charter will receive a 10-year loan of $6.5 million financed at 2%, with principal payments deferred for three years. If Charter meets modest job milestone requirements, the loan’s balance will be transferred to state taxpayers who will pay it back in part or in full, depending on Charter’s job growth performance. The company has promised to add up to 200 jobs in Stamford, which will earn them an added bonus. The package allows Charter the opportunity to access up to $2 million in grant funding — $1 million for each additional 50 corporate jobs they bring to Connecticut. The company can also receive $1 million in grants if it adds 100 jobs. The grants are capped at $2 million.

News reports indicate Charter is eyeing 70,000 square feet of premium office space in a 15-story high rise in downtown Stamford shared with UBS Financial Services and Harmon International.

Rutledge has a long history of stubbornly sticking close to home. While an executive at Cablevision, he refused to move closer to the company’s headquarters on Long Island, requiring the cable company to provide a helicopter service that flew him back and forth from Connecticut every day.

Rutledge

Rutledge could have self-financed the entire move out of his personal compensation. His four-year pay package at Charter is worth about $90 million, according to recent filings with the Securities and Exchange Commission.

Two other former senior executives who left Cablevision to join Rutledge at Charter may have known Rutledge would never move to Missouri. Neither Charter’s chief operating officer or chief marketing officer have put their New York City-area homes up for sale. Now they don’t have to.

St. Louis officials were shocked by the decision, and were fuming about the company’s surprise announcement Oct. 2, because nobody gave them an opportunity to make a counteroffer to get Charter’s executives to stay.

Steve Johnson, executive vice president for economic development at the Regional Chamber and Growth Association, wasn’t given a chance to change Charter’s mind either. “You never want to lose corporate headquarters and the cachet that goes with them,” Johnson says. “But I’m not sure there was anything we could do to influence this one.”

County Executive Charlie Dooley was more succinct: “I don’t believe [Rutledge] wanted to come to St. Louis.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KMOV St Louis Charter Moving to Conn 10-2-12.mp4[/flv]

KMOV in St. Louis reports local officials were unpleasantly surprised with Charter’s sudden announcement, but were partly mollified with promises Charter would hire an additional 300 modestly paid customer service workers in St. Louis (without any taxpayer incentives) between now and the end of the year. (2 minutes)

 [flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KTVI St Louis Charter Moving Headquarters Out of St Louis Area 10-2-12.flv[/flv]

KTVI in St. Louis notes Charter’s executive exit from Missouri has become a political issue, with Republicans complaining the state has to do even more for businesses to keep this from happening again. (2 minutes)

“We know where you live, where your office is and who you owe money to. We are having your house watched and we are going to use this information to destroy you. You made a big mistake messing with TCI. We are the largest cable company around. We are going to see that you are ruined professionally.” — Paul Alden, TCI’s vice president and national director of franchising to an independent consultant hired to review competing cable operators for Jefferson City, Mo., in a historical example of cable industry abuse

The Federal Communications Commission last week voted unanimously to expire rules that required cable operators to make their programming available on fair and reasonable terms to competitors. Big mistake.

We have been here before. Let us turn back the clock to the days before the FCC and Congress mildly reined in the cable television industry with the types of pro-consumer regulations Chairman Genachowski and others have now let expire. Why were these rules introduced in the first place? Because years of industry abuse heaped on consumers and local communities took their toll, with high prices for poor service, outrageous corporate bullying tactics, and endless litigation to hamper or stop consumer relief.

How long will it take for the industry to resume the same abusive practices that forced the FCC and Congress to finally act once before?

The Central Telecommunications. v. Tele-Communications, Inc. (TCI): The Poster Child for Cable Industry Abuse

Tele-Communications, Inc. (TCI) was the nation’s largest cable operator. Later known as AT&T Cable, the company was eventually sold to Comcast.

Back in the 1980s, before the days of direct broadcast satellite competition like DirecTV and Dish, and years before telco-TV was allowed by law, the cable industry totally dominated the video marketplace. The only challenges came from incredibly rare competing cable TV providers or three million home satellite dish owners or wireless cable subscribers.

The industry’s only check on unhampered monopoly growth came from local authority over cable operations through the cable franchising process. If a cable company got out of control or did not offer the programming or service a community found adequate, it could offer a franchise to another company, effectively kicking bad actors out of town.

In Jefferson City, Mo., the local cable operator during the 1980s was Tele-Communications, Inc. (TCI). It had acquired the franchise in the city by buying out the original provider in the late 1970s. TCI had been buying a lot of smaller cable operators around the country under the direction of then CEO John Malone. By 1981, it had grown to the largest cable operator in the country, and few dared confront the well-heeled operator, which had a legal budget greater than the operating budgets of some communities TCI served. TCI was later acquired by AT&T Cable, which in turn sold its cable systems to Comcast, which continues to operate them to this day.

In 1980, Jefferson City officials decided it would be prudent to make sure they were getting the best cable service possible, so as TCI’s franchise agreement reached expiration, the city issued a “request for proposals” offering other cable companies a chance to bid for the right to serve the community of around 38,000. For TCI, this was tantamount to a declaration of war, and the cable company meant business. Malone equated anything threatening a permanent cable franchise for TCI as something like an act of government theft. In books later written about the events in Jefferson City, even some TCI executives admitted they were “horrified by the sleaziness” of the kind of hardball tactics involved, comparing them to a “B-movie.”

TCI revealed it would stop at nothing to keep competitors away from their territories and drag out years of litigation. Central Telecommunications, Inc., v. TCI Cablevision, Inc., revealed exactly how far TCI was willing to go:

From: Cutthroat: High Stakes & Killer Moves on the Electronic Frontier, By Stephen Keating

Cajole the mayor into canceling competitive bidding. In early 1980, after Jefferson City made it known TCI might get some competition, the company quickly met with the mayor hoping to persuade him to renew TCI’s franchise without a competitive bid process, so as to avoid a “frontal attack” by competitors.

Threaten the independent consultant. In December, 1980 the city hired Elmer Smalling, an industry consultant, to independently evaluate various bids from cable operators willing to serve Jefferson City. TCI immediately began publicly attacking his qualifications in a way the court later found to be defamatory. The court case documents Paul Alden, TCI’s vice president and national director of franchising, making personal threats against Smalling.  A sample:

“We know where you live, where your office is and who you owe money to. We are having your house watched and we are going to use this information to destroy you. You made a big mistake messing with T.C.I. We are the largest cable company around[.] We are going to see that you are ruined professionally.”

It got worse for Smalling. At this same time, Warner-Amex (another large cable company now known as Time Warner Cable) was a client of Smalling’s. Alden contacted Warner-Amex about Smalling. Following the threats, Smalling lost Warner-Amex as a client.

City Attorney Thomas Utterback later wrote a memo to the City Council in which he described TCI as a “relentless corporate bully.”

Threaten would-be competitors. On several occasions, from January of 1981 to the summer of 1981, Alden repeatedly telephoned Robert Brooks, chief operating officer of Teltran, a company which submitted a bid for the city’s franchise, and threatened him that unless Teltran withdrew from the bidding process, TCI would make trouble for Teltran in Columbia, Missouri, where it operated a cable television franchise. Teltran subsequently dropped out of the bidding process on the ground there was a “distasteful environment” in Jefferson City.

Another competitor, Central Telecommunications, became a defendant in a TCI lawsuit challenging the city’s right to request proposals from other cable companies. TCI argued it now had a 1st Amendment right of free speech to serve Jefferson City residents regardless of the wishes of city officials. In a wide ranging series of subpoenas, TCI demanded the bank handling Central’s financing turn over a “very wide range of potentially confidential records,” which according to Central was an effort to destroy its financing agreement with the bank.

Malone

Threaten customers. TCI warned customers that unless it won the cable franchise for Jefferson City, it would immediately shut off its cable system and leave customers without service, potentially for years, until Central built its own system from scratch. TCI officials said “it would not sell ‘one bolt’ of its system to whoever received the new franchise and that it would ‘rather have [its system] rot on the pole’ than sell it to a competitor at any cost.”

TCI’s system manager in Jefferson City told elderly residents of a senior citizens’ home that TCI would cut off service if denied a franchise, and the residents would be without television for two years pending construction of a new system because the concrete walls of their residence would not allow reception of over-the-air stations.

Lie, Lie, and Lie Some More. In one City Council meeting, Alden wildly claimed that TCI was the nation’s largest distributor of satellite dish antennas, with “an exclusive” right to sell in the state of Missouri. TCI promised that if the city renewed its franchise agreement, it would keep satellite dishes out of Jefferson City. If the franchise was not renewed, Alden promised to “flood the city with satellite dishes,” denying the city franchise fees. Alden later admitted both statements were untrue.

Threaten the mayor’s office. Although the mayor has never disclosed exactly what TCI threatened him with, the public record shows in March 1981, Alden called the mayor and threatened to turn the system off unless TCI’s franchise was renewed. TCI also filed an expensive lawsuit against Jefferson City regarding the way it handled its request for proposals.

By the fall of that year, TCI was meeting with city attorney Utterback in secret negotiations to renew its cable franchise, in direct violation of the city’s request for proposals  which required all negotiations to be open, as well as Missouri’s “sunshine laws.” By next spring, the mayor had privately notified council members he would veto any franchise renewal awarded to anyone other than TCI, which he later admitted was a condition imposed by TCI during its secret negotiations.

On January 25, 1982, the City Council provisionally awarded the franchise to… Central Telecommunications. TCI immediately refused to pay the city the prior year’s franchise fees, in excess of $60,000. It also reminded the mayor of his obligations to TCI as part of the secret franchise renewal negotiations held the prior fall. On April 20, 1982, the City Council passed the ordinance awarding a franchise to Central. The vote was six in favor and four against. The mayor vetoed the ordinance. The council then deadlocked five-to-five on awarding a franchise to TCI and the mayor cast the deciding vote in favor of that company. The next day, TCI dismissed its lawsuit against the city and paid the withheld franchise fees.

In the end, several courts upheld tens of millions in damages for Central Telecommunications, TCI’s lawsuit was dismissed at the company’s request, Mr. Alden was summarily dismissed by TCI after Malone referred to him as a “loose cannon,” and Jefferson City was stuck with several additional years of lousy service from TCI.

But TCI’s “bad corporate citizen” practices would come back to haunt the cable juggernaut, eventually failing to win assignments for two $800 million orbital slots for a direct broadcast satellite service the company proposed. After the Jefferson City experience, even the FCC could not, in good conscience, reward TCI with satellite slots it wanted for a “competing satellite service” it would sell through its own cable companies.

The memories of FCC officials are evidently short. Giving cable operators an inch has historically bought them a mile, paid for by consumers. Mandating easy to understand rules requiring cable operators sell programming to competitors on fair and reasonable terms is sound policy whether there is competition or not. Removing those rules or watering them down only promotes the kind of mischief that, when unchecked, leads to these kinds of horror stories. History need not repeat itself.