David Raphael ran into trouble using his Verizon Internet connection last month, discovering major slowdowns when accessing Amazon’s cloud-server ‘AWS,’ which in addition to serving his employer also feeds Netflix video content to customers.

“One evening I also noticed a slowdown while using our service from my house,” Raphael writes on his blog. “I realized that the one thing in common between me and [my employer] was that we both had FiOS internet service from Verizon. Since we host all of our infrastructure on Amazon’s AWS – I decided to do a little test – I grabbed a URL from AWS S3 and loaded it. 40kB/s.”

Internet slowdowns while accessing different websites is nothing new. Just ask anyone trying to watch YouTube in the early evening.

But what was different this time is that a Verizon representative seemed to openly admit the company is purposefully throttling certain web traffic, as this chat screen capture suggests:

“Frankly, I was surprised he admitted to this,” Raphael writes. “I’ve since tested this almost every day for the last couple of weeks. During the day – the bandwidth is normal to AWS. However, after 4pm or so – things get slow. In my personal opinion, this is Verizon waging war against Netflix. Unfortunately, a lot of infrastructure is hosted on AWS. That means a lot of services are going to be impacted by this.”

That would certainly be the case as many large content distributors increasingly rely on cloud-based delivery services to reach subscribers over the shortest and fastest possible route. But broad-based interference with web traffic would also throw a major wrench in Verizon’s core marketing message for FiOS — its fiber-fast speed when compared against the cable competition. If subscribers notice their Netflix experience degraded to speeds that resemble dial-up, cable companies are going to get a lot of returning customers.

We reached out to Verizon for comment and it turns out the company has not declared war on Netflix after all.

“We treat all traffic equally, and that has not changed,” says Verizon spokesman Jarryd Gonzales. “Many factors can affect the speed a customer’s experiences for a specific site, including, that site’s servers, the way the traffic is routed over the Internet, and other considerations.  We are looking into this specific matter, but the company representative was mistaken. We we’re going to redouble our representative education efforts on this topic.”

Hackers exploited poor coding practices at an Ottawa-based third-party contractor to access and eventually publish more than 20,000 usernames and passwords of Bell Canada’s small business customers on a website.

Canada’s largest phone company is being criticized for allowing the third-party contractor access to sensitive account information, which became vulnerable after IT workers introduced security holes that bypassed Bell’s own security and encryption systems. Even worse, security experts say, Bell apparently stores customer usernames and passwords in a plain text format, accessible to any hacker.

Bell has refused to comment on the security lapse or its ongoing investigation, but the hackers are talking.

“Nullcrew” claimed responsibility for the breach on Twitter, including screenshots that suggest the group used a well-known SQL (structured query language) exploit that allowed the hackers to fish for information contained in Bell’s database.

Hackers often use automated scripts to hunt sites for security exploits and often don’t know whether they will get a handful of useless data or a treasure trove like Bell’s customer records.

Trustwave Holdings, a security company based in Chicago, Ill., said in a 2013 report that poor coding practices have made the SQL injection attack a threat for more than 15 years.

“Outsourcing IT and business systems saves money only if there’s no attack,” the Trustwave report said. “Many third-party vendors leave the door open for attack, as they don’t necessarily keep client security interests top of mind.”

“Nullcrew’s” attack also discarded any pretense of encouraging clients to use passwords that are easy to remember but hard for others to guess, since Bell stored the data in an easily readable format.

Nullcrew said it alerted Bell to its security lapse more than two weeks before publishing their find online. An additional screenshot showed a Bell online customer service representative perplexed about the hacker group’s claims and likely never passed the information on to Bell’s security department.

Bell suspended the affected passwords over the weekend and is notifying customers about the security breach.

AT&T has returned fire in a price war with T-Mobile designed to keep its customers and attract new ones.

AT&T Mobility has cut $40-100 a month off the price of plans targeting some of its most lucrative customers — families with multiple phone sharing a lot of data.

Under its newest offer announced Saturday, a family with four smartphones sharing a 10GB data allowance will see their bill cut from $200 to $160 a month effectively immediately. Any family plan customer with 10GB or higher usage allowances will also see their bill cut by $40-100 a month.

The price cut comes in response to fierce competition from T-Mobile, which has repeatedly bashed AT&T in its advertising campaigns. Now a customer with three smartphones will find AT&T’s new plan price just $5 more than what T-Mobile charges, although T-Mobile’s offer includes unlimited data.

“This is about being competitive,” said David Christopher, chief marketing officer for AT&T Mobility. “We feel we have the best network and the best value in the marketplace,” Christopher said.

AT&T is also offering a $100 bill credit for each new line added or for activating each new tablet, mobile hotspot, or AT&T’s wireless home phone service until March 31.

The contrast in pricing between AT&T, hounded by T-Mobile, and Verizon Wireless, which has largely ignored the price war, is striking. Verizon Wireless charges up to $125 more a month for its family plans with identical data allowances and features.

The new offer requires no contract, and phones must be purchased at full price either up front or in installments. Existing, on-contract customers with subsidized phones will pay more.

AT&T has also stepped up customer retention efforts, handing out hundreds of dollars in service credits to some threatening to leave for T-Mobile.

Customers are receiving an average of $55 a month in service credits over the next year by tweeting complaints to AT&T’s social media team: @ATTCustomerCare and @ATT

Those on family share plans with several lines of service complaining that AT&T is charging too much and are planning to switch to T-Mobile are being offered discounts such as $70 a month in service credits for the first six months and $40 a month for the next six months after speaking to an AT&T representative arranged through Twitter.

Customers get a less charitable response in AT&T stores where some employees have dared customers to switch to T-Mobile claiming they will be unhappy with the slow data service and coverage areas. In short, no service credits or retention offers are available from in-store representatives. Customers must appeal to AT&T’s social media team to get a discount.

[flv]http://www.phillipdampier.com/video/ATT New Mobile Share Value Plan for Families 2-1-14.mp4[/flv]

AT&T explains the new pricing for their Family Share plans. (1:27)

Time Warner Cable today announced major improvements in its service, including a tripling of broadband speeds and equipment upgrades that will first arrive in New York City and Los Angeles.

With the cable company facing a hostile takeover effort by Charter Communications with Comcast’s help, CEO Rob Marcus sought to appease shareholders that worry the cable company’s recent lackluster results originate from outdated technology, poor customer service, and broadband speeds that are well below the cable industry average.

Time Warner Cable will have to increase capital spending to pay for the upgrades, expected to cost $3.8 billion annually for the next three years.

CEO Rob Marcus calls the effort a “transformation of the Time Warner Cable customer experience.” The upgrade program is called TWC Maxx for now inside Time Warner Cable, but will have its own brand when it publicly launches later this year.

Here are some highlights:

Marcus

TV Service

• Network infrastructure upgrades to enhance reliability
• New advanced set-top boxes
• A six-tuner DVR
• A cloud-based interface and navigation
• An expanded on-demand library

Internet

• Dramatic free speed boosts for all customers
• A new Ultimate speed tier of 300/20Mbps

Unfortunately, customers outside of Los Angeles and New York will have to wait up to two years for the upgrades to reach their community.

“With ‘TWC Maxx,’ we’re going to essentially reinvent the TWC experience market–by-market,” said Marcus. “We’ll triple Internet speeds for customers with our most popular tiers of service, add more community WiFi, dramatically improve the TV product and, perhaps most importantly, we’ll set a high bar in our industry for differentiated exceptional customer service. We’re focused on providing the features and benefits that matter most to our customers.”

The most noticeable improvement will be free broadband speed upgrades. Customers with Standard or above Internet service will also receive the latest generation cable modems including Advanced Wireless Gateways for customers with Turbo to Ultimate tier service. Marcus did not say whether the company is ending is monthly equipment fees for cable modems.

Here are the new speed tiers:

• Everyday Low Price – Currently 2/1Mbps – New 3/1Mbps
• Basic – Currently 3/1Mbps – New 10/1Mbps
• Standard – Currently 15/1Mbps – New 50/5Mbps
• Turbo – Currently 20/2Mbps – New 100/10Mbps
• Extreme – Currently 30/5Mbps – New 200/20Mbps
• Ultimate – Currently 50/5Mbps – New 300/20Mbps

New York and Los Angeles Upgrade Schedule

The first four network hubs scheduled for upgrade are those in West Hollywood and Costa Mesa, Calif. and portions of Woodside (Queens) and Staten Island, N.Y. The rest of both cities will be upgraded by the end of this year.

Los Angeles customers will also see analog cable television service discontinued in favor of digital later this year. New York City has already been converted to all-digital television. Customers in both cities will be able to schedule same-day appointments and one-hour service windows.

Who Gets Upgraded Next?

Analysts expect Time Warner Cable will upgrade cities where they face competition from U-verse and FiOS after completing NYC and LA.

Analysts say Time Warner Cable’s upgrade plans are more aggressive than initially anticipated and many expect the company to move quickly, especially in competitive markets, to boost subscriber numbers and cut customer defections to help convince shareholders it is worthwhile to reject Charter’s hostile takeover bid.

The most likely markets to be targeted for upgrades after New York and Los Angeles are those facing stiff competition from Google Fiber and Verizon FiOS. Cities where AT&T U-verse delivers competition are likely to come next, and those cities where Time Warner Cable only faces competition from telephone company DSL service will likely be the last to be upgraded. However, long before that, Time Warner Cable could be sold off to other cable operators that will make these upgrade plans moot.

Marcus today reiterated his rejection of Charter’s latest $132.50 a share offer. Marcus said the cable company is only interested in an offer above $160 a share, and that at least $100 of that must be in cash, with the balance in Charter stock. Charter will have trouble delivering that amount of cash without the assistance of other cable operators.

Craig Moffett with MoffettNathanson Research isn’t sure Marcus’ plans are enough to keep TWC from being sold. He expects Charter to soon increase its offer above $140 with the help of Comcast, which is willing to pay cash for Time Warner Cable systems in New York, New England, and North Carolina after a deal with Charter is complete.

[flv]http://www.phillipdampier.com/video/Bloomberg Rob Marcus Interviewed 1-30-14.flv[/flv]

Robert Marcus, chief executive officer of Time Warner Cable Inc., talks about the cable company’s fourth-quarter earnings and its forthcoming upgrades, and Charter Communications Inc.’s $37.4 billion buyout bid. Time Warner Cable beat fourth-quarter profit estimates and forecast subscriber growth. Marcus speaks with Betty Liu on Bloomberg Television. (8:38)

[flv]http://www.phillipdampier.com/video/Bloomberg Anatomy of a Deal 1-29-14.flv[/flv]

Bloomberg News’ Alex Sherman and Porter Bibb, managing partner at Mediatech, break down the background and potential moves in the cable industry involving Comcast, Charter Communications and Time Warner Cable and the regulatory hurdles in their way on Bloomberg Television’s “Market Makers.” One interesting development will be the future of Cablevision, which will be an obvious takeover target for Comcast should Time Warner Cable be sold and split up. (9:14)