Kyle McSlarrow, president of the National Cable & Telecommunications Association (NCTA), a cable industry trade group, wants cable companies to be able to continue experimenting with metered broadband service.

McSlarrow

In an interview with Ars Technica, McSlarrow claims broadband pricing experiments aren’t about “gouging” customers or creating even fatter profit margins.  Instead, he claims the cable industry just wants to provide Internet access in a way “that’s best for the consumer.”

According to McSlarrow, there’s no particular rush to pick one business model, and the industry has no “grand plan” hashed out by cigar-smoking executives in clubby back rooms. In his view, though, cable needs to do the experiments to make sure that the Internet survives the coming bandwidth apocalypse.

“As demand goes in a certain direction,” he says, “someone’s going to have to build a network” to deal with “not just instantaneous peak but, more importantly, average peak usage. The whole point is to do it in a way, and to serve your customers in a way, that they have a great experience. If you fail on the network side to do that, particularly with our shared network, that’s a real problem.”

McSlarrow himself enjoys flat rate pricing from his Internet service provider, so he’s not a part of any experiment, nor is he willing to defend Time Warner Cable’s recent attempt to launch metered billing in several cities around the country.  But, he feels that broadband service doesn’t have to come with a single monthly price for everyone, claiming that the “majority” of broadband customers consume so little, they are basically overpaying to support heavier consumers of bandwidth.

McSlarrow, who has ties to the Republican party, having been the national chairman for Dan Quayle’s failed 2000 presidential bid, and has worked for two Senate Majority Leaders — Sens. Bob Dole and Trent Lott, is a firm believer in free markets, with no government regulation.  He also claims the broadband industry is highly competitive, which means market forces will protect consumers from gouging providers.

McSlarrow must have spoken to Ars Technica on Fantasy Island, because that must be where he is living these days.  He certainly doesn’t live in Reno, Beaumont, San Antonio, Rochester, Greensboro, or Austin, where AT&T and Time Warner Cable decided to test their paltry Cap ‘n Tier schemes.  It’s no surprise he wasn’t willing to defend Time Warner Cable, which tried to launch a Money Party at consumers’ expense.  McSlarrow should also know that free market competition without regulation only works when there are competitors — lots of them, offering similar levels of service.  That’s not the broadband industry the majority of America lives with today.

Nate Anderson, who penned the piece for Ars, took a skeptical aim at many of McSlarrow’s claims.  We’re willing to go further and say they don’t represent reality, period.

… Continue Reading

I had no idea.  Why was I not informed?  Did I miss the campaign?  Did I miss the protests?

Time Warner Cable has announced it is dropping HDNet and HDNet Movies from its HD lineups nationwide on May 31st.  Was there a clamor for these channels to be tossed off Time Warner Cable lineups?  Multichannel News printed the excuse:

Asked why the company was dropping HDNet’s services, Time Warner Cable director of corporate public relations Robyn Watson said, “There’s a limited appeal for the programming. In a world with more than 100 HD channels, being in HD is not enough. We are adding other channels in HD to give our customers more choice.”

Folks offended by Dan Rather in HD will be pleased, but those who watch HDNet for their mixed martial arts programming won’t.

Of course, customers really don’t have much choice either way.  The real reason TWC is dropping these networks is that there is a price dispute over what TWC is willing to pay for them.  Mark Cuban, who owns the two networks, apparently wants more than what the bean counters at the cable company are willing to pay, so the channels are gone whether you wanted them or not.

The delightful replacements, which you also didn’t clamor for (and probably never heard of) vary by system.  In Rochester, the Smithsonian Channel and RFD-HD will replace the two channels.  In some other areas, Mav TV will be forthcoming.  How many of you knew any of these channels even existed, much less in HD?

It’s ironic that two networks that were among the first to highlight and showcase high definition programming, and are routinely used in showrooms to show off HD picture quality, are now being banished for the likes of RFD-HD, which shows Hee Haw reruns and the chased-into-obscurity Don Imus.  My only question: who is more frightening to see in crystal clear high definition, Dan Rather or Don Imus?  If Hee Haw circa 1974 didn’t sell you, here are some of the other shows on RFD to consider:

• Machinery of the Past
• Fiesta of the Spanish Horse
• Classic Tractor Hour
• Big Joe Polka Show
• Brazil Ag Report
• Superior Livestock Auction
  
• Training Mules and Donkeys
• Tractor Supply Company Live

Get the popcorn ready.  Get more if you are going to sit through the Livestock Auction.  That runs from 9am-5pm on Friday with no breaks.  That’s a whole lot of bull.

As far as Mav TV goes, it’s billed as “TV created by men for men” and seems to have a core programming requirement that bikini clad models parade across the screen every 15 minutes, and things need to get “blowed up real good.”  I suppose that might look better in HD, but it only reinforces the broader argument that at the same time a cable company wants to convince you to pay for only what you consume online, on the video side where the channels you didn’t care for and didn’t want come and go with little notice, you’re still forced to pay for all of it.

We have continued to make some adjustments to our new theme to accommodate readers and believe we have swatted most of the bugs, particularly those related to images and buttons not functioning properly on certain browsers.  We have also made some changes to help make the site look better for those using lower resolution settings.  Even most netbooks should be seeing some improvement.  We still have work to do on the mobile browsing side, and will be working on that behind the scenes during this week.

I believe the two column format is an improvement for Stop the Cap! and my writing style, so we will be sticking with it going forward.

Readers will notice the right column contains a new “donate” button.  I have been considering how to help defray the expenses of maintaining this site, and what expenses we are likely to have going forward, especially when the Cap ‘n Tier issue rears its ugly head once again.  I intend to begin preparing information for elected officials I can share with them offline, and build our infrastructure and organization to more effectively reach out to affected communities.  That takes some money, which I am spending out of pocket myself at the moment.  If you feel comfortable in helping to defray these kinds of expenses, you can use the donate link which will connect you through Paypal to a donation processing page where you can securely use a credit or debit card.  I will be updating our contact page this week as well with our contact details so one can contribute by mail as well.

The alternative was advertising, and while I don’t have a problem with programs like Google Adsense which don’t pollute the page with all sorts of screen junk, the fact is, I know for certain the contextual advertising programs would throw ads at you for Internet service providers, many on our “naughty list.”  There is no way I am going to promote any provider that is engaged in anti-consumer behavior.  I think it’s important for us to maintain credibility and integrity.  We are an all-consumer group, with no industry or political ties.  Anything that could color or shade that perception is a detriment to our goals.  Therefore, voluntary contributions seems to be the way to go for now.

The “cap” issue has been quiet for the last week or so, and the quantity of new content has dropped a bit here, but that does not mean the issue is at all dead.  I have been working on several projects behind the scenes and laying some additional groundwork to prepare us for the battles to come.  You will see a number of articles coming here which, at first glance, may seem to be slightly off point.  But trust me when I say they are not.  A lot of things written here will connect right back to our issues, and it has been effective to be able to explain to an elected official that we’ve got a track record of following these issues that we can later connect the dots on.

Starting this week, you will see a considerable amount of attention on two issues:

1. The debacle of FairPoint Communications, an independent telephone company that took over telephone/broadband service for a large part of rural New Hampshire, Vermont, and Maine from Verizon.  They botched it, and are now receiving their own bailout.  FairPoint is a private company that promised wonderful things for a captive population in the upper northeast, and they’ve alienated three states.  The anti-municipal network crowd whines about taxpayer money going to what “should be” a private marketplace.  As we bring you the whole sordid story, we’ll show you why the private sector should never be given a monopoly or a free reign in an uncompetitive marketplace, especially in rural America. Many lessons may also apply to other Verizon customers about to become Frontier customers.
2. Following the money.  Jay Ovittore is following who got what for what in North Carolina.  This is a lesson every reader here will find easy to learn.  When an elected official suddenly takes an active interest in proposing or supporting legislation against the best interests of voters, there is always a reason for it.  More often than not, that reason comes in the form of a check with a lot of zeros on it.  On our issues, for too long, names have not been named and elected officials have gotten away with it because they figured the voters back home wouldn’t find out.  Those days are over.  We will name names, list amounts, and remind voters come election time who did the right thing, and who didn’t. There are good Republicans, Democrats, and independents on our issues, and there are bad Republicans, Democrats, and independents.  Political parties make no difference — voting records do.

Municipal networks and broadband remains a powerful response for any municipality facing an abusive telephone or cable provider.  That’s why we support them.  Since the majority of them aren’t interested in the game of Cap ‘n Tier for big profits, they are a solution for capped broadband.

Finally, there are a few other story tips we’ve gotten in e-mail that we are also following.  If you are interested in writing something for Stop the Cap! please use the contact form and volunteer.  We welcome new authors here!

Have a great week.

Following the Money: Telecom's Best Friends in North Carolina Get a Payday

If there is one thing I know about how politics work, it is that when you follow the money you find the reason certain people are pushing so hard to get legislation through.  After doing some intensive research into the Senators involved with S1004, I found a trail of money that leads right back to the Cable/Telecom industry.  S1004 was primarily sponsored by Senator David Hoyle (D-Gaston County) and was co-sponsored by Sen Debbie Clary (R-Cleveland and Rutherford Counties).

Sen. David Hoyle (D-NC)

What made me think to look in the first place was the quotes in the local paper by Hoyle.

You can expect to see 1004 on the Senate floor and sent over to the House soon, said Sen. David Hoyle, its sponsor. Hoyle says he doesn’t much care how it gets studied, as long as it gets there.  “It’s an issue that needs to be looked at,” Hoyle said. “All the parties need to get in the same room and defend their position.”

Add that to a Hoyle quote reported on Facebook by the Greensboro News & Record’s Mark Binker, “I take great pride in being a pro-business member of the Senate.” Now I had to look.

What I found was that Hoyle took a total of $25,750 in telecom industry PAC money in 2008.  Embarq Employees PAC gave $4500, Time Warner PAC gave $4250,  AT&T PAC gave $4000, NC Cable PAC gave $2500, Sprint/Nextel PAC gave $3000, NC Broadcast PAC gave $1500, NC Association of Broadcasters PAC gave $4000 and ElectriCities gave $2000.  That last donor is particularly interesting, because their lobbyist, Drew Saunders, also happened to sponsor a nearly identical bill in  2007.

It is easy to see why Hoyle is pushing this legislation so hard for his telecom buddies: $25,750 is a lot of money for a state politician.  Most people don’t make much more than that in a single year working 40 hours a week.

Co-sponsor Clary has not been very outspoken on this bill, but her total take from telecom industry PACs was considerably lower as well, amounting to $4750.  Embarq Employees PAC gave her $1500, Time Warner PAC gave $1000, AT&T PAC gave $1750, and ElectriCities gave $500.

Other big players in the North Carolina Senate are also cashing their industry checks, and the details are forthcoming.  Next, my attention will turn to the sponsors of HB 1252 in the North Carolina House.  Soon, we’ll all know exactly how much is takes to get big telecom’s legislative agenda passed into law in the North Carolina General Assembly.

All information I have provided above was a matter of public records search at the NC State Board of Elections website.

A lot of big companies have gotten big headaches dealing with the implications of a wired world.  Instead of embracing change and developing new business plans to win profits from online users, many see the net as the enemy or something that must be controlled.  When netizens out-think corporate efforts to protect fat profits and market control, an executive throwing a hissyfit sooner or later goes public.

That’s precisely what happened at one of those elite breakfasts with “important people” this past Thursday, according to Irin Carmon, reporting for WWD Media.  Sony Pictures Entertainment CEO Michael Lynton let loose in a mini-tirade against what the Internet had done to Sony Pictures:

“I’m a guy who doesn’t see anything good having come from the Internet… (The Internet) created this notion that anyone can have whatever they want at any given time. It’s as if the stores on Madison Avenue were open 24 hours a day. They feel entitled. They say, ‘Give it to me now,’ and if you don’t give it to them for free, they’ll steal it.”

At the breakfast, co-hosted by the S.I. Newhouse School of Public Communications at Syracuse University and The New Yorker, Lynton wasn’t alone in whining about the online revolution’s impact.  Co-panelist Nora Ephron wanted to share her pain about how the Internet in impacting the newspaper business:

The Internet has had a greater effect on “our beloved print than it’s had on the movie business.” But, she conceded, “We’re in the last days of copyright, if you want to be grim about it….  Stop it. I dare you.”

When Hollywood or the folks who work for the dead tree format feel threatened, demanding control and order usually comes next, which is really just code language to hand power over to the entities feeling threatened.  Lynton didn’t disappoint, complaining the Obama Administration’s plan to improve broadband without first obsessing about piracy control measures was the equivalent of building highways with no speed signs or licensed drivers.

Of course, Lynton’s world view would have companies like Sony serving as the DMV, mandating the same kinds of onerous, consumer-unfriendly digital rights management schemes, lock-outs on content, or ludicrous high pricing — the very things that fuel piracy in the first place.

The newspaper industry’s problems didn’t start with the Internet.  The merger and acquisition frenzy of the 1980s and 1990s in the newspaper business created enormous debt, resulting in inevitable “cost-cutting” measures, laying off the very journalists that made newspapers worth reading to begin with.  Today, many newspapers print a dozen or less locally written stories per day, often shallow in scope, with the rest being wire service copy, columns, and lots of ads.  Is it any surprise many people drop their subscriptions for a paper that increases in cost and decreases in quality?  When movie studios shovel junk to moviegoers who pay $10 or more per person, bombard them with ‘preview’ commercials, and require “easy credit financing” to afford the popcorn and soft drinks, why be surprised when people rely on Netflix or other rental services to watch for less?

Controlling the Internet isn’t just limited to big media companies or newspapers.  Most of those opposing net neutrality have a vested interest in protecting their brand or service from the online free-for-all.  Some new media companies manage to make enormous profits that other older companies wish they could still earn.  It’s not always an issue of price or piracy.  More often, it’s about developing a product or service that consumers want and charging a fair price for it.  Consumer Reports online represents a success story.  Many are willing to pay a yearly access fee for their online content because of its quality and trustworthiness.  Meanwhile, several online news sites experimenting with subscription models to monetize their content also want to hang onto profits from their littered-with-ads look, driving readers crazy with video ads, sales pitches taking over your screen, and the usual pop-ups and pop-unders.  You still get all of the irritation, but now you also have to pay for the right to be irritated.  No wonder web audiences simply move on.

Instead of learning lessons from customers that reject limits on things they’ve already paid for, denial of access for ‘business reasons,’ or trying to reduce the quality of a product while charging the same or more for it, cartel thinking takes over. Enormous sums are spent trying to impose limits or order on the net to protect themselves, even if it means shutting down the Internet’s own “model,” where a level playing field means success to those with the best ideas, not just to those with the best connections and influence.