Comcast’s David Cohen

Comcast is an American success story, but Americans that do business with the cable giant are getting slighted by overpriced, too-slow broadband service.

In a commentary piece in the Financial Times, Edward Luce indicts the company that bought NBC-Universal for pay-for-play campaign contributions that have kept the company from much  regulatory scrutiny and free to charge whatever it likes for a service now increasingly considered a necessity.

Comcast’s key employee as far as Washington is concerned is its senior vice-president, David Cohen, who also happens to be one of President Barack Obama’s largest fundraisers.

The revolving door between Comcast in Philadelphia and the federal government in Washington is always spinning.

Of Comcast’s 121 lobbyists, 85 are former government employees, according to Open Secrets, which monitors money and politics.

“Comcast employs the royalty of K Street [lobbyists],” says Sheila Krumholz, head of Open Secrets.

In 2011, the year the FCC approved Comcast’s merger with NBCU, the company spent more than $14 million on lobbying – the ninth-highest of any US company (it ranks 49th on the Fortune 100 list).

Luce adds Meredith Atwell-Baker, a former Republican FCC commissioner, took an executive position at Comcast shortly after voting to approve the merger-buyout between the cable operator and NBC.

This month Comcast acquired the 49 percent of NBC-Universal it did not already own in a $16.7 billion transaction that got less attention at the FCC than the lunch menu at the Chinese takeout down the street.

So while Comcast enriches itself, customers are left with Internet service that is nothing to brag about.

While only 7% of the U.S. is wired for fiber broadband, more than half of South Korea and Japan can buy fiber-fast broadband service from a range of broadband suppliers. Back home, Comcast and the local phone company have built a comfortable duopoly:

The company’s meteoric rise in the past decade parallels the relative decline of Internet service in the US. In the late 1990s the US had the fastest speeds and widest penetration of almost anywhere – unsurprisingly given that it invented the platform. Today the US comes 16th, according to the OECD, with an average of 27 megabits per second, compared with up to quadruple that in countries such as Japan and the Netherlands.

The contrast on price is just as unflattering. The average US cost for 1 Mbps is $1.10 compared with $0.42 in the UK, $0.34 in France and $0.21 in South Korea. It is not only places such as Hong Kong that put the US into the shade. Countries such as Estonia, Portugal and Hungary offer a significantly better Internet service. South Koreans joke that when they visit the US they are taking an Internet vacation. Yet bringing the US up to speed appears to be low on Mr Obama’s list of priorities (it did not even get a mention in his State of the Union address last month).

Verizon FiOS has made it easy for broadband customers to upgrade to 50/25Mbps service for $10 more a month.

Getting access to the company’s introductory Quantum tier is as simple as going to FiOS TV Channel 500 and clicking the OK button twice with your remote control. Within one hour, your speeds will be upgraded. For those who don’t subscribe to FiOS TV, you can visit the FiOS Quantum website or use the MyFiOS smartphone app.

A promotion for new customers includes an introductory offer of FiOS TV, Quantum 50/25Mbps, and telephone service for $89.99 a month with a $250 debit card rebate in certain markets.

Last summer, the company launched the Quantum brand to market its highest speed tiers: 50/25Mbps, 75/35Mbps, 150/65Mbps or 300/65Mbps.

Verizon says the company noticed an increasing demand for faster speed service because customers are connecting more devices to the Internet. Streaming multiple online videos at the same time, for example, can burden slower speed Internet services.

Verizon says the faster speeds also keep the company ahead of its cable competition, which has struggled to provide affordable faster tiers of service and remains limited on upstream speeds.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Verizon FiOS Quantum Upgrade 2-15-13.flv[/flv]

Verizon FiOS is now offering broadband customers a $10 upgrade to 50/25Mbps service just by clicking a button on your FiOS TV remote control twice.  (1 minute)

The remnants of JJ’s restaurant in Kansas City, Mo. after a gas explosion on Tuesday.

A contractor working for Time Warner Cable is alleged to have pierced a two-inch gas line in Kansas City, Mo., eventually causing a massive explosion that demolished a popular restaurant, leaving one worker dead and 15 injured.

Early Tuesday morning Heartland Midwest LLC, working on behalf of the cable operator, notified local authorities it intended to use a trenchless horizontal boring machine near JJ’s restaurant to install a fiber optic cable to reach a nearby office building.

Mark McDonald, president of North American Gas Workers Association told the Kansas City Star such installations can be dangerous because of nearby gas pipelines.

“You’re basically drilling blind,” McDonald told the newspaper. “You’re taking a lot of risk.”

Authorities now suspect that boring machine pierced the gas line and started a major leak.

There are conflicting reports about when the contractor notified emergency officials about the rupture. Some press accounts suggest it could have been one hour or more before 911 was notified.

Other reports criticize the local gas utility for not treating the gas leak as a more urgent threat.

Evacuations of nearby buildings, including JJ’s, did not begin until at least an hour after authorities were notified. Approximately one hour after that, JJ’s exploded leaving little more than a pile of rubble.

Megan Cramer, a 46-year-old server at JJ’s, was reportedly killed in the blast. More than a dozen others were injured.

At attorney for the contractor said the company was cooperating with local authorities in the investigation.

[flv width=”640″ height=”380”]http://www.phillipdampier.com/video/KCTV Kansas City TWC Contractor Responsible for KCMO Blast 2-20-13.mp4[/flv]

KCTV-TV in Kansas City reports they could find no evidence Heartland Midwest filed a permit request before starting work on behalf of Time Warner Cable.  (2 minutes)

Comcast may be attempting to get around Federal Communications Commission regulations governing what cable companies can charge for cable equipment by recasting the monthly fee as a “service charge.”

The cable operator’s decision to start charging $1.99 a month for digital transport adapters (DTAs) — small boxes that can convert digital signals into analog for older televisions — has at least one Minnesota city up in arms.

Eagan city officials met with outraged residents Tuesday to discuss the fee hike and hear a number of complaints about how Comcast does business in the community.

“It really ran the gamut, from concerns about losing stations, to concerns about being bait and switched, to having gotten boxes for free and worried that you had to pay for them in the future,” Eagan Mayor Mike Maguire told WCCO-TV.

Comcast customers in Minnesota are receiving letters from the cable operator some call deceptive. The letter warns “digital equipment is needed on all your TVs to receive channels,” despite the fact many televisions manufactured after 2007 are equipped with QAM tuners that will receive the digital signals without extra equipment, at least for now.

Only in fine print at the bottom of the letter does Comcast admit QAM-equipped sets won’t need the equipment, saving $1.99 a month per set.

Letters have also been sent to customers who have used DTA equipment provided by Comcast at no charge… until now.

Comcast earlier announced it intends to collect $1.99 a month from each subscriber using DTA equipment, even if those customers previously had received the equipment for free.

But Comcast’s decision to charge $24 a year in perpetuity for a box with a wholesale cost of less than $50, depending on the model, may run afoul of Federal Communications Commission regulations that forbid cable operators from charging excessive amounts to lease cable equipment:

Cable operators may require their subscribers to use specific equipment, such as converters, to receive the basic service tier. They may include a separate charge on your bill to lease this equipment to you on a monthly basis. This monthly rate must be based on the operator’s actual costs of providing the equipment to you. Operators may also sell equipment to you, with or without a service contract. If an operator provides a choice between selling and leasing the equipment, the monthly leasing rate will be regulated but the sales price will be unregulated. If an operator only sells equipment and does not also lease equipment, then the sales price must be the actual cost of the equipment plus a reasonable profit, and any service contract should be based on the estimated cost to service the equipment. If the customer buys the equipment but does not purchase a service contract, the customer can be charged for repairs and maintenance. Cable operators may not prevent customers from using their own equipment if such equipment is technically compatible with the cable system.

Eagan Mayor Mike Maguire

In a possible attempt to avoid regulatory language regarding cable equipment, Comcast has declared its new $1.99 fee is actually an “additional outlet service charge,” not an equipment fee.

“The deployment of DTA technology allows us to bring more value to our customers through additional HD channels and faster Internet speeds, both of which are used by the majority of our customers,” said Mary Beth Schubert, vice president of corporate affairs. “These types of enhancements require significant investment, and we feel the nominal fee now being implemented for DTA additional outlet service on our digital tiers reflects the additional value of the service.”

“There is no charge for the first three DTA devices,” said Schubert. But she quickly added, “After the digital transition in March and April, those TVs will not have access to these channels unless they are paying the $1.99 DTA additional outlet service fee.”

Michael Bradley, an attorney representing 20 local communities, is investigating to see if Comcast’s language about its new fee violates FCC rules.

The new charge is expected to be lucrative for Comcast, earning the company at least $550 million annually in new revenue.

Comcast intends to boost that even further as it embarks on encrypting its digital lineup, making QAM-equipped televisions useless to receive scrambled cable channels.

“These customers will eventually need to connect a digital device to their QAM tuner equipment at a future date as we implement additional network security features,” warned Schubert. “Customers will be provided complete information well before any additional measures take place.”

The FCC previously negotiated an agreement with cable operators intending to encrypt their cable lineup to keep customers from experiencing bill shock from new, mandatory equipment fees:

But by recasting new fees as unregulated “additional outlet fees,” Comcast and other cable operators may have successfully outwitted the FCC’s good intentions, earning billions in new revenue annually as a result of a simple language change.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WCCO Minneapolis Comcast Fee Causes Outrage in Minn 2-20-13.mp4[/flv]

WCCO reports the city of Eagan held an informational meeting Tuesday about Comcast’s newest fee for digital boxes required on older televisions. Comcast customers nationwide will soon pay the new $1.99 “DTA additional outlet service fee” for each television equipped with the digital set top DTA box “to offset increasing programming and operational costs.”  (2 minutes)

Verizon Wireless has created a new warning page about “high-risk apps” that can chew up your data allowance or kill a fully charged Android smartphone battery in a matter of hours.