Comcast spent $3.1 million dollars of its subscribers’ money in the first three months of 2010 lobbying elected officials to approve its proposed merger with NBC-Universal and putting a stop to Net Neutrality proposals, according to disclosure statements files in the House clerk’s office.

Comcast has spent over $10 million dollars a year trying to keep broadband reform, ownership limits, and oversight regulators at bay.  Most recently, it is dedicating considerable time and resources lobbying elected officials, with campaign contributions in hand, to get federal approval for its proposed 51 percent ownership stake in NBC-Universal, making the nation’s largest cable operator also the owner of a two major television networks, and a studio that produces movies and television shows.

Spangler

While the mainstream media and some of AT&T’s apologists tell consumers AT&T’s 2 GB monthly usage limit will impact only a handful of “abusers,” the cable trade press is telling its readers the industry insider’s secret — consumers will blow right through those caps.

Todd Spangler, who is an Internet Overcharging advocate and columnist for Multichannel News, a cable industry trade magazine, writes the implications of AT&T’s usage cap couldn’t be clearer to him.

The new iPhone 4, introduced yesterday to the predictable media crush, provides 10 hours of battery life for playing video, among other features.

But now that AT&T has eliminated its all-you-can-eat plan for smartphones, you will blow through the maximum 3G usage for the entry-level 200 MB plan if you watched just 4 minutes of streaming video per day. That would include commercials.

Even AT&T’s more generous DataPro 2-GB plan would allow just 35 minutes per day of streaming video (assuming you used your iPhone for nothing else), according to the carrier’s online data calculator.

Like a stopped watch, at least he’s right twice a day.

Spangler celebrates the opportunity AT&T’s overcharging scheme provides the cable industry to “grease the skids” for data caps and overpriced consumption billing on cable modem service.

In Spangler’s “Cable companies pay my salary”-world-view, it wasn’t that Time Warner Cable did the wrong thing when it tried to triple broadband pricing — to $150 a month — for the exact same level of service customers previously enjoyed.  It was all about its execution.

Spangler characterizes Time Warner Cable CEO Glenn Britt as a victim, burned over the company’s failed overcharging experiment in 2009.  When one plays with matches, is it any surprise there are consequences?

Consumers will respond to more overcharging schemes the same way they did a year before — with overwhelming condemnation and opposition.  It’s hard to convince consumers to pay a higher price for limits on usage while telling shareholders you’ve invested less to expand your network, charged more to access it, all while the costs to provide the service have dropped dramatically.  Consumers call that out for what it is: greed.

Make no mistake, consumers hate usage caps and overpriced consumption billing and Time Warner Cable has no justification to introduce either.

[flv]http://www.phillipdampier.com/video/CNBC ATT Cuts Unlimited Data 6-2-10.flv[/flv]

Normally business-friendly CNBC covers the introduction of the 2 GB usage cap on AT&T smartphone data usage.  Then the CNBC anchor got skeptical about AT&T’s claims this was good news for consumers, admitting she hates overcharging schemes that deliver a surprise on the bill at the end of the month.  Lance Ulanoff, editor of PC Magazine expressed some doubts himself.  (8 minutes)

unlimited

Main Entry: un·lim·it·ed
Pronunciation: \-ˈli-mə-təd\
Function: adjective

1 : lacking any controls : unrestricted <unlimited access>
2 : boundless, infinite <unlimited possibilities>
3 : not bounded by exceptions : undefined <the unlimited and unconditional surrender of the enemy — Sir Winston Churchill>

An Alaskan Internet service provider is baffling its broadband customers with a blizzard of BS regarding just how unlimited its “unlimited” service plans really are.

A Stop the Cap! reader in The Last Frontier drops us a note to alert us of yet another provider trying to pull a fast one on its customers.

GCI markets cable-TV, telephone and broadband service in larger communities across many parts of the state.  Its broadband service, dubbed “Xtreme,” offer DSL-like speeds at a significant price premium over what users in the lower 48 pay for Internet access.

Since 2007, our reader writes, GCI offered customers a deal.  In return for letting the company provide all of your telecommunications needs — cable, phone, and Internet, GCI would provide you with unlimited broadband service.  The triple-play package was sold for at least $80 a month, and many customers agreed to the bundled route to avoid GCI’s restrictive, data-capped plans sold to its broadband-only customers.

GCI is now reneging on its end of the deal thanks to a creative redefinition of the word “unlimited.”  For the convenience of those who may be English-challenged, Stop the Cap! has provided the Merriam-Webster definition of the word “unlimited” above, which hasn’t changed much since its first use in the 15th century.

Broadband providers like GCI think they are clever enough to change all that.

Much to the chagrin of GCI’s bundled customers, the company unfairly slapped a “Fair Access Policy” on all of its unlimited customers on April 1st.  Customers started receiving usage warnings this spring, which came as quite a surprise for an “unlimited” service plan.  But the company insists it hasn’t limited its “unlimited” plans at all:

GCI offers some cable modem Internet service plans with “unlimited downloads”, meaning GCI does not bill customers additional fees for usage in a given month.

Actually, that isn’t the meaning of “unlimited” at all, no matter how much the company wishes it was.  Again, see the definition above.

In fact, even using GCI’s own definition, nonsensical as it is, it isn’t reality-based either.

Customers who exceed the arbitrary limits GCI determines as “fair,” could be subjected to higher pricing.  GCI’s website currently lists the overlimit fee starting at an impenetrable $0.005 per megabyte, which sounds pretty low until you realize it’s $5.00 per gigabyte, which is significantly higher than what most other naughty cappers charge.  On slower speed plans, GCI’s overlimit fee is a whopping $0.03 per megabyte — $30 per gigabyte.

What happens when you overuse your GCI unlimited Internet?  GCI will contact you to discuss your account and then ask you to agree to either reduce usage or pay additional fees for usage in a given month.

GCI loves to make its limits look mighty big by representing them in megabytes instead of the more commonly used gigabyte measurement.  They also include the usual comparisons: over 10,000 web pages, 250,000 e-mails, 1,000 pictures, etc.  On the lower speed plans, GCI avoids defining the far-smaller allowances for higher bandwidth services like near-DVD HD video streaming some Alaskan families may want to use during those cold and dark Alaskan winter evenings.

Here are the limits GCI assigns to its “unlimited” service plans:

That’s usage ranging from 40-100 gigabytes.  What this illustrates yet again is that Internet Overcharging schemes are ridiculously arbitrary.  A provider in rural Alaska defines “fair” use of its slowest speed “unlimited” broadband tier (3 Mbps/512 Kbps for $45 a month) at 40 gigabytes.  Meanwhile, Frontier Communications considers it fair to define its DSL service usage allowance at just 5 gigabytes per month.  Comcast says 250 gigabytes a month is fair.  AT&T’s wireless smartphone data plan now carries a 2 gigabyte limit AT&T claims is about right.

As is also commonly the case among Internet Overchargers, any unused allowances do not “roll over” to the next month.

GCI considers anyone exceeding these limits engaged in continuous high-volume data transfers, extensive use of streaming video and peer-to-peer file sharing programs, or using an unsecured wireless signal everyone in the neighborhood has hopped on to use.  But just backing up your family computer through an online backup service over a month could easily put you over these limits.  If a “mutually agreed on” solution cannot be reached to either limit your use or increase your price, GCI will show you the door.

Essentially, GCI hobbles its broadband service plans by imposing limits on services that could challenge some of its other products.  For standalone broadband customers, GCI builds in plenty of protection against customers potentially using its Internet service to bypass its cable and phone offerings, despite some recent speed and usage allowance increases.  How much online viewing will you feel safe doing on some of these Internet service plans:

Monthly service fees

Our reader in Alaska thinks the usage limits are unjustified considering GCI’s capacity, and its prices:

GCI has well over 600 Gigabits of capacity across two undersea fiber optic cables.
Since 2007, the only way to get an unlimited download option for the company’s various speed tiers was through its bundled packages.  With the new limit on “unlimited” downloads, GCI fraudulently misrepresents its service to Alaskans.

GCI is the poster child for the cable industry’s push for metered billing. I think you’re well aware that cable companies view metered billing as an anti-competitive solution to fend off emerging competition from online content providers like Hulu and Netflix Online. Time Warner backed down when confronted with the possibility of regulation for the entire industry. They will however try again if companies like GCI continue to have success over a long term. This is why it’s imperative that groups like Stop the Cap! fight beyond your region and get regulation passed to bar forced bundling and data transfer limits entirely. Content providers (video services) should be separate entities from network providers (ISPs). It’s the only way to keep rates low and businesses competitive. Thank you for keeping up the good fight.

Apple's iPhone 4

As expected, Steve Jobs introduced America to the new Apple iPhone 4 today at Apple’s Worldwide Developer Conference in San Francisco.  Karl Bode at Broadband Reports did a great summary on what’s new, so I won’t reinvent the wheel:

As everyone had expected, Apple just announced the long-awaited iPhone 4. According to his Jobsness, the phone is 24% thinner than the iPhone 3GS and as expected has a more powerful primary 5MP camera with flash — and a new camera on the front that will be used primarily for video chat. The phone’s stainless steel frame (sandwiched by glass) is being partially used as an antenna, something that may prove helpful for connectivity issues.

Other specs: Dual mics, 802.11n WiFi, GPS, compass, accelerometer, Quad band HSDPA (7.2Mbps), gyroscope (perfect for gaming, insists Jobs). The company says they’ve also improved the device’s battery. It can now handle 7 hours of 3G talk, 6 hours of 3G browsing, 10 hours of Wi-Fi browsing, 10 hours of video, or 40 hours of music. The phone also records HD video (720p at 30fps, insists Steve), and the new flash will stay on during video recording.

Amusingly, Apple ran into network connectivity issues while trying to demonstrate the phone’s higher resolution screen (join the club, Jobs). According to Apple, the phone comes in white or black, with the 16GB version costing $199 and the 32GB version costing $299. The phone will be available on June 24, with pre-orders beginning on June 15.

Karl also notes, as others have confirmed with us, AT&T is so eager to get this new phone into your hands (along with a new two-year contract), they are waiving the usual two-year waiting period before customers can upgrade their phones.  If your contract expires anytime this year, you can obtain the phone at the subsidized price.

But should you?

For many, the iPhone 4 will represent an incremental upgrade, especially if you aren’t a power user.  In this economy, is it worth $200-300 for a new phone and a new service commitment?

The upgrade for current customers, who can keep their unlimited data plan, may make sense -if- you receive tolerable service from AT&T and feel the latest phone would directly benefit you.  You should consider, however, that signing a new contract will lock you into another two year marriage with the company that drove more Americans crazy with bad service, dropped calls, slow data, and irritating customer service than any other.  A divorce will cost you up to $325 per phone. Their 3G coverage isn’t all that, either.

It also gives the company that loves to cap more of your money.

Unfortunately, waiting for the iPhone to arrive at Verizon Wireless is increasingly less likely to be a panacea for AT&T’s Internet Overchargitis.  That’s because AT&T and Verizon are the Mary Had a Little Lamb of big telecom:

Everywhere that AT&T went,
AT&T went, AT&T went,
Everywhere that AT&T went
Verizon was sure to go.

It’s a safe bet that by the time Verizon brings forth the coveted iPhone, it will have an Internet Overcharging scheme matching AT&T’s.

If you are seeking to upgrade to a smartphone, it’s increasingly likely you’ll find a better deal with Sprint or T-Mobile, both of which have no plans for AT&T’s pricing schemes.

The best way to get a company like Verizon or AT&T to pay attention is to avoid their products when they charge too much.  A dramatic reduction in demand for AT&T’s iPhone among new customers, for example, would send a clear message to Wall Street that their love of usage caps is hurting shareholder value in a big way.  They follow the money.  If existing customers hang on to their $30 unlimited plans while other customers head elsewhere to avoid AT&T’s Internet rationing, you’ll see an overnight conversion among many industry players suddenly demanding a return to the unlimited buffet.

Or better yet, how about giving every customer a choice of both types of plans — pay less for limited service or pay today’s prices for unlimited.

[flv width=”636″ height=”380″]http://www.phillipdampier.com/video/Apple – iPhone 4 6-2010.mp4[/flv]

Apple proclaims the arrival of iPhone 4, calling it a revolutionary upgrade.  Apple released this video showcasing iPhone 4’s video capabilities that AT&T has now effectively hobbled with a wireless Internet rationing plan that punishes customers who try to use the phone’s new features.  (6 minutes)

AT&T’s hurry to end unlimited wireless data plans for its customers, many of which are using popular Apple iPhone and iPad devices, signals AT&T’s overburdened network can no longer handle customer demand.  With the threat of even higher data usage from today’s release of the next generation iPhone, which will highlight bandwidth-intensive video conferencing and streaming, AT&T put the brakes on before new customers even activate their new phone.

With a penalization program in place, AT&T is sending a message to customers contemplating owning the newest generation of smartphones that its network is in no position to actually provide service to those devices, particularly bandwidth-heavy video streaming.

Customers who dare use these video streaming services face the prospect of paying an overlimit fee up to $15 for just 200 megabytes of data.  That’s a compelling reason to think twice about every high bandwidth application. And that may be exactly the point for a network that suffers from congestion problems in several major American cities.

AT&T has consistently ranked at the bottom of consumer surveys done by credible organizations like Consumer Reports, typically because of network capacity issues.  Yet the carrier also charges, on average, the highest out-the-door price among the four major carriers — an average of $134 a month for a two-phone plan with a data package.  That’s $20 higher than either T-Mobile or Sprint, eight dollars more than Verizon Wireless.

Ranked rock-bottom for voice quality, downright lousy for customer service, and only average for its other services, AT&T has simply not kept up.  Yet AT&T raked in more than 13 billion dollars in profits in wireless last year.  The New York Times reports AT&T has at least 33 million smartphone customers, many committed to AT&T’s required $30 data plan.  That represents more than $900 million dollars per month in revenue — $10.8 billion dollars annually, and that’s for data services alone.

Yet the percentage of the company’s investments committed to expanding its network, measured under AT&T’s 2009 annual financial report, has not kept up with its enormous iPhone customer base, on AT&T’s network since 2007.

Source: AT&T's 2009 Annual Report -- AT&T's capital investments in its network and service don't keep up with the enormous increase in its Apple iPhone customer base introduced to AT&T service. Last year showed a dramatic reduction in investment when compared with 2008. AT&T is not exactly plowing all of its wireless profits back into its wireless business.

According to TownHall Investment Research, between January 2006 and September 2009, AT&T spent about $21.6 billion, or $308 per subscriber, on its wireless network. During that same period, Verizon Wireless spent about $25.4 billion, or nearly $353 per subscriber.  Verizon has outspent AT&T each of the past three years on service upgrades without the revenue benefits a stampede of iPhone-owning customers brings.  That gap has now grown into a nearly $4 billion dollars difference between the two providers in infrastructure upgrades.

“This is the story of a wireless carrier that is determined not to invest enough to meet the demand of users, but has decided to manage its network as a scarce resource,” says Chris Riley, policy counsel for Free Press. “This is what Wall Street loves: Reduce your expenditures and increase your revenues.”

In a barely competitive wireless marketplace, AT&T can afford to force customers to pay dramatically higher data costs in the months and years ahead, especially for iPhone customers who must use AT&T if they want a subsidized phone.  Even if a customer leaves, AT&T will earn up to $325 in cancellation penalties.

That iPhone exclusivity agreement with Apple has been an unlimited goldmine for AT&T. AT&T’s wireless business drives AT&T’s overall profitability, generating 57 percent of its operating income according to Gerard Hallaren, director of research at TownHall.