Comcast is introducing its 300GB usage cap in Atlanta on Dec. 1:

The cable company is currently sending e-mail notifications to affected customers. Comcast has tested usage caps in several markets, mostly in the southern United States, to measure customer response.

Notice the e-mail suggests Comcast is “increasing the amount of data” included in the customer’s allowance. In fact, Comcast rescinded usage limits for most customers across the country in May 2012.

Last week, Neil Smit, president and CEO of Comcast Cable Communications told Wall Street analysts customers are not pushing back hard against capped Internet.

“We have a number of trials in place in markets,” Smit said. “We’re testing different types of usage-based pricing offerings. Thus far the consumer response has been neutral to slightly positive. We’ll continue to monitor it.”

If customers do not want their Internet usage capped, they must vocalize complaints with Comcast and consider taking other steps such as organizing protests in front of local Comcast offices, inviting the media to attend.

In 2009, a similar effort to introduce usage caps and consumption billing by Time Warner Cable failed after customer backlash forced the company to shelve the idea.

The taxpayer-funded Central Intelligence Agency is paying AT&T more than $10 million annually for its “voluntary help” with counter-terrorism investigations in return for open access to the company’s vast trove of calling records, including international calls placed by Americans.

No court order or subpoena was required to start the partnership, according to an article in today’s New York Times. The CIA provides AT&T with the telephone numbers of overseas terrorism suspects and in return the phone company provides records of calling activity, possibly identifying associates.

With interconnection agreements between telephone companies standard operating procedure, AT&T has been able to collect calling records from any foreign or domestic calls that pass through its equipment, even if neither party is an AT&T customer.

Despite AT&T’s claims of robust privacy protection, Americans are not promised anonymity or privacy when requests arrive from law enforcement officials. But only recently have phone companies voluntarily provided calling data that in earlier years would have required a court order to divulge.

By law, the CIA is specifically prohibited from collecting intelligence on the domestic activities of U.S. citizens, so the agency imposes its own safeguards on the surveillance program. AT&T provides the agency with calling times, duration of the calls, and the phone numbers of both the originating and called party. It does not divulge the contents of the calls. The CIA is granted full access to AT&T logs involving foreign to foreign calls, but if either party is in the United States, AT&T will mask certain digits of the U.S. telephone number. If more information is required, the CIA will refer the matter to the Federal Bureau of Investigation (FBI), which has jurisdiction the CIA lacks. The FBI can then subpoena AT&T directly for the missing details.

AT&T would not comment on national security matters, but the newspaper reminded readers AT&T has a history of making life very easy for government surveillance programs:

AT&T has a history of working with the government. It helped facilitate the Bush administration’s warrantless surveillance program by allowing the N.S.A. to install secret equipment in its phone and Internet switching facilities, according to an account by a former AT&T technician made public in a lawsuit.

It was also one of three phone companies that embedded employees from 2003 to around 2007 in an F.B.I. facility, where they used company databases to provide quick analysis of call records. The embedding was shut down amid criticism by the Justice Department’s inspector general that officers were obtaining Americans’ call data without issuing subpoenas.

And, for at least the past six years, AT&T has embedded its employees in federally funded drug investigation offices to analyze call records, in response to subpoenas, to track drug dealers who switch phones. A briefing document for that program said AT&T had records of calls handled by its switches — including “a tremendous amount of international numbers that place calls through or roam on the AT&T network” — dating back to 1987, and described efforts to keep its existence “under the radar.”

AT&T has agreed to pay an extra $3.5 million in addition to the $18.25 million already paid to settle Justice Department claims the company knowingly overbilled the government for reimbursement of fraudulent international relay calls usually made by scammers originating from countries like Nigeria.

The government joined a whistle-blower lawsuit in a Pittsburgh court in March 2012 after learning as many as 95 percent of relay service calls were initiated by ineligible individuals using a service intended for the hard of hearing.

AT&T was accused of knowingly allowing and profiting from fraudulent use of its relay service, collecting $1.30 a minute in reimbursement from a ratepayer-funded account administered by the government. The lawsuit claimed virtually all of the relay traffic was initiated by swindlers using untraceable text messaging.

Under the scam, an overseas individual pretending to be deaf would text message an AT&T relay operator to connect a call to a U.S. business or individual. Operators were compelled to relay any messages sent over the texting system, even if they suspected the calls were fraudulent. A large percentage of the calls originated in Nigeria and often involved placing orders with U.S. companies using stolen credit cards or counterfeit checks. Any subsequent investigation would reach a dead-end at one of AT&T’s relay operator centers, where the voice calls originated.

The federal government accused AT&T of profiting from the fraudulent calls and not suitably screening users to verify eligibility. The rules mandate individuals must certify they are deaf or hard of hearing and that they are United States residents. The federal government said AT&T skirted those requirements “out of fears that fraudulent call volume would drop after the registration deadline.”

“Taxpayers must not bear the cost of abuses of the Telecommunications Relay system,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania. “Those who misuse funds intended to benefit the hearing- and speech-impaired must be held accountable.”

Today, the Justice Department announced AT&T agreed to pay another $3.5 million to resolve civil allegations under the federal False Claims Act.

AT&T said through a spokesperson settling the case was the “most productive course” of action.

Frontier Communications’ new simplified pricing with no equipment fees or surprise contracts was well-timed for the phone company as it picked up a growing number of disgruntled Comcast and Time Warner Cable customers fed up with increasing modem rental fees.

Frontier depends a great deal on its residential broadband service to win back revenue the company has lost from years of landline cord-cutting. The company reported slowing revenue losses, now down to less than one percent for the quarter ending Sept. 30. Frontier’s profits reached $35.4 million this quarter, reduced by increased investment in broadband upgrades and pension fund-related expenses.

The independent phone company is still losing residential and business phone customers, but those losses have begun to stabilize. Frontier has 2.82 million residential customers and 275,000 business customers. While Time Warner Cable lost customers during the recent quarter, Frontier picked up 27,000 new ones. For all of 2013, Frontier added 84,500 new broadband customers. Nearly 84 percent of them added broadband as part of a bundle, which leads analysts to suspect most of Frontier’s new broadband customers are located in rural areas that never had access to broadband speeds before.

Frontier’s greatest opportunity is in the rural residential broadband business, and the company’s investment in improved broadband speeds has made a major difference in growing market share especially where it has a cable competitor. Currently, Frontier has 20-25 percent market share in most of its service areas. It wants 40%, but is unlikely to achieve it selling broadband speeds that often top out at around 10Mbps. Winning customers back to a landline provider has also proved difficult without an attractive bundled offer. In all but a few cities, Frontier bundles landline service with DSL broadband and a satellite television package.

Wilderotter

In rural markets, Frontier has had better success, particularly in areas formerly served by Verizon.

With help from the federal government’s Connect America Fund (CAF), Frontier invested over $21 million to expand rural broadband service in 2013. In the third quarter, the company expanded service to another 37,000 possible homes and businesses, with 30,000 more on the way in the fourth quarter. The company applied for $71.5 million in CAF funding for 2014.

Broadband speeds have also gradually increased in an expanding number of communities. As of today, 45 percent of homes can receive 20Mbps or better, 58 percent are capable of 12Mbps. A year-end commitment to offer at least 3Mbps speeds to 85% of customers in the most rural areas also appears within reach. Customers can upgrade to the next speed level in $10 increments.

But not every customer has gotten speed upgrades. In their largest legacy market — Rochester, N.Y., DSL speeds have remained unchanged in many areas. At the headquarters of Stop the Cap!, Frontier pre-qualified us this afternoon for the same 3.1Mbps DSL speed they offered in 2009, despite being blocks away from the city line.

Those increasing speeds have led to more traffic on Frontier’s broadband network, but the company says it has enough capacity to handle it.

“The average usage of all our customers across both fiber and the copper has grown to about 24GB per month at this point, and we see that increasing and people are comfortable with [our] facilities as well as our backhaul to support that growth,” said chief operating officer Dan McCarthy. “We’ve seen that grow virtually every month as we move forward.”

Frontier analyzes what customers do with their broadband connection and found 30 percent of customer usage is online video. That number is growing. Customers upgrading to the fastest speeds are often telecommuters or have a home full of avid broadband users.

“On the residential side [these high-end customers] are usually working at home, they are VPNing, they are gamers, and they are very active on video services and social media as well,” said CEO Maggie Wilderotter.

The average Frontier DSL customer still subscribes to 6Mbps service, which Wilderotter said was adequate for Netflix, web surfing, and e-mail. But the company is preparing to market speed upgrades to these customers to earn extra revenue.

So far, Frontier’s broadband growth has gone relatively unnoticed by their cable competitors.

“We really haven’t seen any sustainable programs that cable has put against us in the market and we do know that several cable operators have said they’re going to do more in those areas,” said Wilderotter. “We are very well prepared for that. We are giving everyday low pricing to the customer that’s simple and predictable and there are no add-on fees or modem rental costs.”

Most Frontier customers are offered $19.99 or $29.99 broadband pricing that can be bundled with other products for discounts. There is no term contract.

“Time Warner Cable has increased their modem fees [to] between $6 and $9 a month,” said Wilderotter. “That’s a huge price increase for a lot of customers. You compare that with Frontier which has no modem cost and customers understand where price value lies.”

Wilderotter noted Comcast has raised rates as well. Frontier intends to remind cable customers they have a choice, and will tailor offers to continue to increase market share.

Armstrong

A Wall Street analyst that maintained a “buy” rating on Comcast stock for most of the past four years is leaving Goldman Sachs after 13 years to become Comcast’s head of investor relations.

Jason Armstrong, often heard on earnings conference calls of major telecommunications companies, will start his new job in January, although his job change has not been publicly announced.

Armstrong served as the investment bank’s lead analyst for the cable, telephone and satellite sector. He arrived at Goldman Sachs in 2000 after leaving Ernst & Young, LLP in Chicago.

Officials from both Goldman Sachs and Comcast declined to comment.