The trend towards cable consolidation is no longer just limited to cable operators. Now programmers are looking to strengthen their position in cable carriage negotiations by building “must-have” packages of cable programming that could mean smaller independent channels could eventually get locked out.

Bloomberg News reports the board of Discovery Communications, owner of the Discovery Channel, is discussing a possible bid for Scripps Networks Interactive, which runs channels including HGTV and the Food Network.

Scripps is one of the smaller network owners, but one that has proven popular and profitable. But it is not tied to a media conglomerate or the cable industry directly. Discovery has been a part of the cable television lineup for decades. Cable TV billionaire Dr. John Malone controls 29 percent of Discovery’s voting rights, giving him significant influence at the company.

A combined operation would control these networks:

Discovery:

• TLC
• Animal Planet
• Oprah Winfrey Network
• Destination America
• Investigation Discovery
• Discovery Fit & Health
• Discovery Science
• Military Channel
• Science
• Velocity

Scripps:

• HGTV
• Food Network
• DIY Network
• Cooking Channel
• Great American Country
• Travel Channel

Some analysts suggest such a combination doesn’t make much sense for Discovery, which has been focused on expanding operations internationally.

But other bidders might surface for Scripps, reports Bloomberg, which may be a complementary business for 21st Century Fox, Time Warner or Viacom, said Eric Handler, an analyst at MKM Partners, in a research note.

Rural Norway is getting a broadband upgrade. Out goes last century’s DSL service and in comes gigabit fiber to the home service for villages and towns that American providers would consider unprofitable to serve.

Despite the harsh winter conditions, Altibox has already begun work installing the new fiber network in the fjord and mountain district of Hjelmeland on Norway’s west coast. The aim is to offer a fiber optic connection to each of the 2,800 residents and 1,000 seasonal vacation homeowners who want one by the end of 2016.

Hjelmeland
Photo by: Bjarte Sorensen

Installation has already begun in the fjord and mountain district. The first customers will be online by the first half of 2014. At launch, customers will be offered a package including 1,000/1,000Mbps Internet access, cable TV, and a phone line with calling and feature package for around $165 a month, considered steep for Europe but not unusual in high cost service areas.

With its widely spaced buildings and vacation homes, Hjelmeland is perhaps one of the most challenging districts in Norway to install a fiber-optic network, according to Toril Nag of Altibox.

“This project will set a new standard for what it is possible to achieve when local government, local residents and the service provider all work towards a common goal,” Nag said. “In our assessment, there are currently only a few households that are situated so far from the trunk cable that it would not make economic sense to invest in a fiber connection.”

Not every resident can get broadband service as the district relies heavily on DSL, which underperforms in rural areas. Fiber optics solves the problem distance creates for high-speed copper-based DSL service and is cheaper to maintain in a district known for its difficult terrain and rugged character.

Altibox is using Hjelmeland as a rural broadband laboratory to learn more about how the company can profitably offer fiber optic broadband in higher cost areas. Eventually every Altibox customer across Norway will get gigabit speeds from the provider.

Norway is rushing ahead of North America in broadband deployment and speed. The government has set a target for every resident to have access to a minimum of 100Mbps service by 2017. The European Union has been less demanding, seeking 100Mbps service for at least 50 percent of subscribers by 2020.”We can look forward to an incredibly exciting year,” said Hjelmeland’s mayor, Trine Danielsen. “We believe that the installation of the most advanced data-communications infrastructure in Norway will make us an even more attractive area to live in for people of all ages.

“In the long-term, for example, the fiber-optic network could enable our older residents to live at home for longer, with the help of smart-house technology and new self-help solutions,” she added. “In addition, the new fiber-optic network will boost business development throughout the district, and provide a strong platform on which to build for both existing business enterprises and brand new ones.”

AT&T supervisors ordered operators to aid Nigerian fraudsters making free calls that cost millions in credit card fraud and the life savings of some victims, while AT&T collected more than $16 million in reimbursements paid by telephone ratepayers across the country.

Last week, AT&T admitted no wrongdoing but agreed to pay a $3.5 million settlement to the operator the company fired after complaining about widespread fraudulent use of a service intended to help the hearing and speech impaired.

The story is now the subject of a movie script, reports The New Castle News. It begins in 2003, when AT&T was required by the Americans with Disabilities Act to provide operators willing to relay conversations from hearing or speech impaired individuals typing on a computer or device and the people they called.

AT&T employed at least 150 operators at a western Pennsylvania call center in a former shopping mall just to assist with international relay calls. One of them was Constance Lyttle.

AT&T’s international relay service offered those overseas the opportunity to make a free, untraceable relay phone call to any number in the United States. AT&T billed the FCC-administered fund $1.30 a minute for calls placed through the relay operator.

The service quickly became popular… with Nigerian scammers who used it to make free calls to American businesses. In fact, according to a lawsuit filed in 2010, around 95 percent of all calls placed through AT&T’s international relay service came from con artists peddling various scams and ordering merchandise with stolen credit cards from unsuspecting businesses.

The Nigerians used hard-to-track public Internet terminals to initiate calls through AT&T’s relay center. An AT&T operator would read the words typed by the con artist over the phone to the person called and type back any responses.

Lyttle testified the usual target for the scam was a unknowing small business willing to accept credit card orders from Nigeria or an individual willing to advance their life savings in return for promised larger payout unlocked by their deposit. It was all made possible with the help of AT&T, which earned several dollars for every successfully completed call.

Lyttle said the operators in the call center immediately understood what was going on and complained repeatedly about the abuse of the system. In response, AT&T “made workers sign agreements that they would put through the scam and fraudulent calls, and they actually used those words,” said Lyttle’s attorney, who also happens to be her sister. “The workers at the call center were afraid they would lose their jobs. AT&T paid very well and good-paying jobs are hard to come by in western Pennsylvania.”

Nigerians exploited the AT&T Relay service call center located at this former mall in New Castle, Penn.

The lawsuit against AT&T alleged the phone company had full knowledge of what was going on but didn’t want to lose a lucrative contract that resulted in at least $16 million in reimbursements.

“They were getting $1.30 per minute for these calls,” said Lyttle’s attorney. “Think about the volume of calls that were being made.”

Lyttle’s attorney said Constance would sabotage some calls to stop the fraud, falsely claiming the party at the other end had hung up. Her 2010 lawsuit alleged her effort to protect the public from Nigerian scam artists was the reason she was fired in 2010 after 13 years with AT&T.

Her lawsuit soon attracted the interest of the U.S. Department of Justice. In March 2012, the federal agency joined the case. Lyttle was designated a “whistleblower” and her involvement in the federal lawsuit was initially kept secret. Earlier this year AT&T agreed to reimburse the Federal Communications Commission more than $18 million for abandoning their responsibility to block the overseas scammers not qualified to use the relay service. AT&T also admitted a percentage of callers did use the service for illicit purposes.

Lyttle herself received a settlement proposal of $3.5 million in her whistleblower case. AT&T also offered her old job back but she turned them down, saying she preferred her current part-time job over returning to AT&T.

It’s just as well. The New Castle, Penn. call center at the epicenter of more than $20 million in reimbursements and settlements was ordered closed by an unnamed AT&T executive in November.

“I was told 125 employees would lose their jobs in the next 12 to 15 months,” said New Castle Mayor Anthony Mastrangelo. “I don’t know if the local people will lose their jobs or have the option to be transferred.”

AT&T shareholders concerned the company is risking its reputation and future profits by excessively cooperating with the National Security Agency have been told to mind their own business by company executives.

AT&T roundly rejected a resolution demanding greater transparency offered by New York Comptroller Thomas DiNapoli, who administers the $160.7 billion NYS Common Retirement Fund, which has investments in AT&T.

AT&T recommended the resolution be excluded from the ballot for AT&T’s annual shareholder meeting this spring, noting shareholders have no business getting involved in the “ordinary business operations” of AT&T, which are under the purview of company executives.

In his shareholder resolution, DiNapoli said there was a real issue of customer trust at stake for AT&T. Customers upset with AT&T could switch providers, hurting revenue.

But with Verizon also providing access to customer records, wireless customers may have few alternatives. AT&T also passes along information about non-customers whose calls happen to cross into AT&T’s extensive network.

In November, the New York Times found AT&T is well-compensated for monitoring and disgorging customer records to federal officials, earning at least $10 million annually. AT&T also has important business before the Obama Administration regarding the future of the landline telephone network, its multi-billion dollar wireless service, and its campaign for greater deregulation.

The news does not inspire confidence in Stop the Cap! reader Earl, who shared the story with us.

“With AT&T it’s always about the bottom line, even at the price of privacy.”

Sold Out

An area Britain’s telecom giant BT pronounced “not commercially viable” for a fiber broadband upgrade sold out every available connection after residents successfully campaigned BT to change its mind.

The unassuming “Cabinet 82” in Hunslet (Middleton, north of Manchester, near South Leeds) was left off the telecom company’s fiber upgrade list because the company was convinced residents were satisfied with the DSL speeds they were getting and it wouldn’t be worth the cost to upgrade service.

Nearly 300 residents had complained about slow Internet speeds and requested a fiber upgrade for “Cabinet 82” since 2012, initially to no avail. After relentless complaints from local residents, BT changed its mind.

A newly upgraded cabinet with fiber to the neighborhood service was inaugurated earlier today and within hours, every available connection was sold, proving BT’s assumptions about customer demand for faster speeds wrong.

“This is the best possible Christmas present for so many people in this previously under-served area,” Carl Thomas, a member of the Fiber for Middleton Coalition told ISPreview.co.uk. “From being able to work from home for the first time to enjoying the media-rich Internet to, in the case of a deaf family, being able to communicate with relatives via sign language over Skype this is quite literally life-changing.”

The example of Middleton has called into question the veracity of BT’s customer demand modeling scheme, a critical part of how the company decides which areas are most commercially viable for service upgrades. It turns out even in out-of-the-way suburban neighborhoods, there is tremendous demand for speeds far faster than what providers expected.

[flv]http://www.phillipdampier.com/video/Superfast Cornwall Inside a BT fibre broadband cabinet.mp4[/flv]

A short tour inside one of BT’s Fiber to the Neighborhood cabinets produced by Recombu. (1:50)