A Huntsville AT&T sub-contractor trying to install new telephone cable is safe after a resident started shooting in his direction, forcing Marcus Kyle to make a mad dash down a nearby highway to safety.

Questioned by police, the homeowner claimed he thought he was firing his shotgun at a possum.  WHNT-TV spoke with police officials and witnesses who are not convinced by the man’s story, suggesting the homeowner may have felt the AT&T worker was trespassing on his property.  Several witnesses claim the man took direct aim at the AT&T lineman before beginning to fire.

As shots rang out, the worker hightailed it out of range, thankfully unharmed. Those who want to learn more about gun laws in New York may consider consulting a firearms attorney.

The Lauderdale County Sheriff’s Office offered to charge the homeowner with misdemeanor reckless endangerment, but Kyle refused to press charges.

Kyle and his fellow workers added they were working within a recognized utility easement and did not stray onto anyone’s property, and weren’t sure why the resident started shooting.

Utility company employees usually have the right of reasonable access to their respective easements to perform work on the company’s infrastructure.  Many workers may inform residents of their presence as a courtesy, but it is not required.  It is never responsible to confront such workers with weapons.  If a homeowner has concerns about the legitimacy of the work being done, they should contact local police and let them handle it.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/WHNT Huntsville Man Shot at While Installing Phone Lines 6-16-10.flv[/flv]

WHNT-TV in Huntsville ran this story about a local homeowner who let his shotgun do the talking, firing at a telephone company subcontractor he claims he mistook for a possum.  (2 minutes)

Unitel is one of five Maine telephone companies facing competition from Time Warner Cable's "digital phone" service

The Maine Public Utilities Commission has denied a request by Time Warner Cable to launch “digital phone” competition in rural Maine unless and until the cable operator agrees to completely wire every home that wants service in the affected communities.  The decision may carry national implications because it signals utility commissions have the power to stop unfair competition from companies that don’t agree to provide their service on a universal basis.

Five rural phone companies faced the prospect of trying to compete with Time Warner Cable’s “digital phone” service under requirements they provide universal service to every customer in their service area while the cable operator could cherry-pick where to provide service.

Unitel, Lincolnville Networks, Tidewater Telecom, Oxford Telephone Company and Oxford West Telephone Company told the PUC Time Warner Cable’s competitive threat was not fair because the cable company only provided service in choice neighborhoods, typically those with multiple residences adjacent to one another.  Only wiring significant population areas reduces costs for the cable operator while the rural landline providers are required to extend service to every resident in their communities, regardless of where they live.

A review by the PUC found Time Warner Cable’s request would create an undue economic burden on the rural telephone companies, reducing their value and increasing the risk of their long term survival, which would discourage investment and increase risk to creditors.

Reishus

PUC Chair Sharon Reishus: “Our decision…is taking place in a changing landscape for telephone regulation at the federal level with pending congressional and FCC actions, in the marketplace and in wireless technology. Our decision came down to an analysis of the current financial ability of the rural companies to withstand market competition if the exemption were lifted.”

“Customers in these rural areas must be assured a telephone service provider of last resort and access to lifeline services. Although the commission has a long history of recognizing the value of competition in the telecommunications market, in this instance, where Time Warner is not proposing to expand the availability of its service throughout the entire service territory of the rural companies, selective competition would undercut the ability of the rural companies to fulfill their ‘provider of last resort’ obligations.”

For years large telephone companies like AT&T and Verizon have argued that cable’s entry into the telephone business was unfair because cable companies never were required to serve every potential customer.  But instead of maintaining demands that cable match their universal service obligations, large phone companies have instead tried to free themselves from having to provide service to every possible customer.  AT&T, for example, has heavily lobbied for repeal of universal service requirements that mandate they provide telephone service to residents who live in the most rural service areas.

The Maine PUC has adopted a different standard — demanding that would-be cable competitors get busy wiring their entire communities for cable if they want permission to compete with area phone companies.  If they are not willing to do so, they cannot provide phone service to anyone in those communities.

Time Warner Cable had been seeking permission to provide phone service in rural Maine since 2008.

[flv width=”560″ height=”340″]http://www.phillipdampier.com/video/Oxford Networks.mp4[/flv]

A promotional video from Oxford Networks (d/b/a Oxford/Oxford West Telephone Company) explaining the company’s history and their investment in fiber optics.  (3 minutes)

Despite claims that broadband is not eroding Time Warner Cable’s cable television business, the nation’s second largest cable operator has begun a “TV Everywhere” trial to expand broadband viewing options for “authenticated cable subscribers” and plans IPTV tests by the end of this year.

A “small number” of subscribers are now participating in the TV Everywhere trial in the New York City area, accessing premium channel content online, if they also subscribe to the channel.

James Manchester, regional president of network operations and engineering in the company’s New York City system told Broadcasting & Cable that the tests will verify whether the authentication process functions properly.

Manchester expressed urgency that unless Time Warner Cable moves to manage video content online, the company will continue to lose subscribers.

He told B&C cable’s erosion of video subscribers, at a time when digital voice and broadband subscriptions continue to grow, makes it essential to move to more of an IPTV environment.

“It’s no secret that we’re losing video subscribers as an industry,” he said. “We can’t afford to wait.”

Time Warner Cable sees challenges from several potential competitive threats:

• Online video: Services like Hulu and Netflix, and time-shifting services that allow viewers access to on-demand programming online represent a real threat to the traditional cable-TV model.  Customers can cut the cable cord and watch everything online for free or for around $10 a month.
• IPTV: Niche and ethnic programming delivered over IPTV networks allows third parties to create mini broadband-based cable systems using hardware that mimics a cable box, delivering potentially dozens of channels to subscribers without giving a cut to the cable company.

[flv]http://www.phillipdampier.com/video/Skyangel IPTV.flv[/flv]

SkyAngel used to deliver its lineup of Christian television channels over satellite, but switched to an IPTV platform in 2007.  This video explains how the service works.  (3 minutes)

TV Everywhere allows Time Warner Cable to control who has access to cable programming, restricting it only to those who haven’t cut cable’s cord.

Time Warner Cable’s solution for IPTV competition is to bring those services under TWC’s own menu of offerings.

One example in KyLin TV, a multi-channel Chinese language IPTV service.  Today, customers pay KyLin TV for service they watch over Road Runner’s network.  But Time Warner Cable could potentially get a piece of the action if it moved KyLin TV into its own IPTV package.

Manchester says TWC would like to be able to make such IPTV programming services an extension of the TWC offering.

Despite some earlier assertions made by company officials that DOCSIS 3 upgrades were designed to improve broadband service for Time Warner Cable customers, it turns out DOCSIS 3 is the foundation for the cable company’s future IPTV and “big pipe” platform.  Manchester says DOCSIS 3 will enable the company to service the wired home of the future.  It will deliver content to an edge device (such as an advanced router) with a hard drive and caching capacity that will link to home computers, MP3 players, or any other device on which consumers want to view content.

AT&T has made it a whole lot easier to learn who has bought Apple’s transformative iPad.  An AT&T security lapse permitted a third party to access and obtain the e-mail addresses and individual iPad ID’s of all 114,000 current owners of the device.  That third party, Goatse Security, then promptly handed over the entire list — some 2,000 pages long, to Gawker — who exposed some big name iPad owners last week.

More importantly, several high officials in government and the military were also identified as iPad owners, even as the security lapse could have given access to the exact location of any of them.

In the media and entertainment industries, affected accounts belonged to top executives at the New York Times Company, Dow Jones, Condé Nast, Viacom, Time Warner, News Corporation, HBO and Hearst.

Within the tech industry, accounts were compromised at Google, Amazon, Microsoft and AOL, among others. In finance, accounts belonged to companies from Goldman Sachs to JP Morgan to Citigroup to Morgan Stanley, along with dozens of venture capital and private equity firms.

Some of the movers and shakers exposed (Image: Gawker)

In government, affected accounts included a GMail user who appears to be Rahm Emanuel and staffers in the Senate, House of Representatives, Department of Justice, NASA, Department of Homeland Security, FAA, FCC, and National Institute of Health, among others. Dozens of employees of the federal court system also appeared on the list.

While Gawker considers the implications of a widespread security breach and whether Apple or AT&T is to blame, others are focusing more intently on AT&T’s role in the misadventure.

AT&T e-mailed every iPad owner notification of the security breach only after it became public news:

“On June 7 we learned that unauthorized computer ‘hackers’ maliciously exploited a function designed to make your iPad log-in process faster by pre-populating an AT&T authentication page with the email address you used to register your iPad for 3G service. The self-described hackers wrote software code to randomly generate numbers that mimicked serial numbers of the AT&T SIM card for iPad – called the integrated circuit card identification (ICC-ID) – and repeatedly queried an AT&T web address. When a number generated by the hackers matched an actual ICC-ID, the authentication page log-in screen was returned to the hackers with the email address associated with the ICC-ID already populated on the log-in screen.

The hackers deliberately went to great efforts with a random program to extract possible ICC-IDs and capture customer email addresses. They then put together a list of these emails and distributed it for their own publicity.

As soon as we became aware of this situation, we took swift action to prevent any further unauthorized exposure of customer email addresses. Within hours, AT&T disabled the mechanism that automatically populated the email address. Now, the authentication page log-in screen requires the user to enter both their email address and their password.”

AT&T’s damage control has been one-part victim, two-parts minimize the impact, sprinkled with “attack the messenger” all over the top.

AT&T’s characterization of the security team that exposed the security flaw as malicious hackers brought a swift response from Goatse:

AT&T had plenty of time to inform the public before our disclosure. It was not done. Post-patch, disclosure should be immediate– within the hour. Days afterward is not acceptable.

[…] The potential for this sort of attack and the number of iPad users on the list we saw who were stewards of major public and commercial infrastructure necessitated our public disclosure. People in critical positions have a right to completely understand the scope of vulnerability immediately. Not days or weeks or months after potential intrusion.

In addition AT&T says the person responsible for this went “to great efforts”. I’ll tell you this, the finder of the AT&T email leak spent just over a single hour of labor total (not counting the time the script ran with no human intervention) to scrape the 114,000 emails. If you see this as “great efforts”, so be it.

AT&T’s mistakes just keep on coming, ranging from ongoing billing errors amounting to hundreds of dollars to threatening customers with cease and desist orders just for e-mailing concerns to the company.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Goatse Owens Calls ATT Security Flaw Egregious 6-10-10.flv[/flv]

Bloomberg News ran this interview with a representative from Goatse Security that got a bit over-technical for the average Bloomberg viewer.  (4 minutes)

Bresnan Communications, the nation’s 13th largest cable operator with 308,000 customers in Colorado, Montana, Wyoming, and Utah, has been sold to Cablevision for $1.36 billion dollars — $4,300 a subscriber — well above the asking price of one billion dollars, including the company’s debt obligations.

Providence Equity Partners Inc. of Providence, Rhode Island, majority owner of Bresnan unloaded the cable company to help boost its earnings for clients.  Private equity firms like Providence have been suffering in the current economic climate, turning in their worst returns since 2000.  Many are selling off holdings to pay investors.

Bresnan spokesman Shawn Beqaj said the sale had nothing to do with founder William Bresnan’s death last November at age 75.

Bresnan, 30 percent owned by Comcast, today specializes in providing service in the sparsely populated mountain west states that have been ignored by larger companies.  At least 44 percent of Bresnan’s business is in Montana, where 688 of the company’s 1,300 employees work.  But the company’s founder, William Bresnan didn’t start out providing service in any of the states where the company operates today.

The acquisition by Cablevision, known mostly for its suburban New York City-area cable systems, would bring Bresnan’s current owners a considerable bonus over the asking price, and Cablevision (and the debt-financing banks) will pay in cash.

Other bidders included Suddenlink and a company controlled by former cable czar Dr. John Malone.

Cablevision managed to leverage the deal with less than $400 million of its own equity, financing the remaining $1 billion dollars between Citigroup and Bank of America Merrill Lynch in non-recourse debt.  That means if Cablevision’s buyout of Bresnan falters, the banks can only recoup their losses by seizing and selling the acquired Bresnan systems.  They can’t go after Cablevision’s other cable systems or sports ventures to make up the difference.

Considering Bresnan subscribers in the Northern Rockies face little prospect of robust competition, and Bresnan cable broadband can easily exceed broadband speeds offered by telephone rival Qwest, most analysts expect few problems from the deal.

[flv]http://www.phillipdampier.com/video/CNBC Bresnan Acquired by Cablevision 6-14-10.flv[/flv]

CNBC explains the Bresnan-Cablevision Deal.  (3 minutes)

Bresnan Founder’s Story Is Echoed Across the Entire Cable Industry

The late William Bresnan -- Founder, Bresnan Communications

Bresnan’s journey through the cable industry over several decades tells the story of the often-ruthless deal-making, horse-trading, and customer-financed  mergers and acquisitions starting after cable deregulation in 1984.  Rates spiked to pay ever-increasing sums to buy and sell cable properties.  To own a cable system, it was said in the late 1980s, was a license to print money.

Bresnan’s involvement in the cable industry began with a job in the engineering department of a midwestern cable company and moved into management at a number of companies, most now long-gone after waves of consolidation.  Those with cable television dating back to the 1970s may even recall some of the names:

H&B American Cablevision: Operator of rural cable systems, most with around 12 channels, offering residents clear reception of over-the-air television signals.  They had a loyal customer base, stable earnings, but little potential for growth.

TelePrompTer: The nation’s largest urban and suburban cable operator through much of the 1970s, but a 1972 bribery scandal for a cable franchise agreement in Trenton, N.J., lead to bribery and perjury charges for TelePrompTer’s principal owner, Irving Berlin Kahn.  The famous songwriter’s nephew ordered the company to spend nearly everything to help mount his defense.  The TelePrompTer scandal would ultimately force the company to sell itself to…

Group W Cable: Westinghouse acquired the financially-troubled TelePrompTer in 1981.  Group W itself would exit the business by 1986 with an acquisition feeding frenzy among four other cable operators — American Television and Communications Corp.; Tele-Communications Inc.; Comcast Corp. and Daniels & Associates Inc.  Ironically, only Comcast would survive merger-mania intact.  ATC systems eventually became a part of Time Warner Cable.  TCI systems were acquired by Comcast.  Daniels was itself a buyer and seller of cable systems.

Bresnan Communications was founded in 1984, not in the mountain west, but in the upper peninsula of Michigan where Bresnan acquired and ran several small cable systems thanks to the help of cable czar Dr. John Malone, CEO of Tele-Communications, Inc., (TCI).  Millions of Americans are familiar with TCI’s own journey through consolidation, first becoming AT&T Broadband and then later as a part of Comcast.

Over the next 14 years, Bresnan expanded operations with Malone’s help.  At one point Bresnan jointly operated cable systems with TCI in northern Michigan, Wisconsin, Minnesota, Nebraska, Georgia and Mississippi serving approximately 660,000 customers. The company even bought cable systems in post-Communist Poland and in Chile, the latter eventually sold outright to TCI.

Bresnan Customers Benefit from Founder’s Technical Background

What set Bresnan Communications apart from the rest of the smaller players in the industry was the founder’s in-depth understanding of cable technology.  Bresnan understood where the industry was going, and had an insatiable appetite for new technology that would also leverage additional growth in the business.

Bresnan spent heavily to upgrade his cable systems, deploying the hybrid fiber-coaxial cable architecture (HFC) in 1997 which is still in use at most cable systems today.  HFC would set the stage for Bresnan to compete with satellite television’s multi-hundred channels, and would let him sell telephone and broadband service to his customers.

That was unprecedented for smaller cable operators.  In the 1990s, it was still common to find small cable systems running only a few dozen channels.  If these legacy cable systems didn’t upgrade, DISH and DirecTV could eat them for lunch.  For those that would raise the necessary money, upgrades were performed.  For those that couldn’t, many would exit the business, selling their cable systems to larger, better-equipped enterprises.

Buy Low, Sell High

Beyond anything else, Bresnan was a businessman.  He had a track record of acquiring cable systems at fire sale prices and selling them for a tidy profit.  So during the height of the dot.com boom, he could hardly ignore a 1999 call from Microsoft co-founder Paul Allen.  Flush with cash to spend, Allen saw cable systems as a key component of his dream for a “wired world.”  Cable companies owned dozens of networks brimming with content that he believed could help drive people to broadband.  Owning both the content and the pipeline to deliver it could drive up the value of both, and Allen could control both.  He had already established himself as owner of Charter Communications, itself a medium-sized cable operator.

Allen’s cable acquisition shopping spree inflated values of cable systems to all-time highs, finally reaching nearly $5,000 per subscriber in crazed bidding wars.  Allen offered $3.1 billion dollars for Bresnan’s small cable empire.  Bresnan sold.

Bresnan Communications Recreated

By 2003, the dot.com boom was well over and done with, and those high-spending online tycoons saw the value of their acquisitions and enterprises erode away.  For Allen, his much-treasured vision had become a cash-sucking albatross.  Charter Communications’ stock by then had lost 95 percent of its original value.  Consumer protection regulation had also arrived in 2003, putting a stop to subscriber rate increase-fueled bidding wars.  Cable rates had risen 61 percent from the time the industry was deregulated in 1984 until legislative relief took effect in early 2003.  When the Money Party ended, stock prices for cable operators crashed.

Bresnan saw the deflation in the industry as an opportunity to buy his way back in, and started shopping.  That year AT&T Broadband, formerly TCI, found itself considering an acquisition offer from rival Comcast.  AT&T owned cable systems large and small, several of which were in the Northern Rockies, hardly cable’s fast lane.  While Comcast had big plans for AT&T cable systems in larger areas, it would be willing to part with smaller systems acquired as part of the deal.

By the time Bresnan arrived with an offer in hand, cable system values dropped further, and his bid for the roughly 300,000 subscribers that comprise today’s Bresnan Communications would be accepted at the fire sale price of $2,100 per subscriber.

Since the acquisition, Bresnan upgraded its systems, offering speeds up to 15/1 Mbps in its rural service area and maintains a reputation in the industry for running well-managed cable operations.