Kuittinen

Forbes Magazine has been pondering Verizon’s radical shift to eliminate buckets of voice minutes and text messages, while increasing prices on wireless data just when mobile broadband is expected to become the new profit center for wireless phone companies. It appears Verizon is well on the way to milking the data cash cow.

Tero Kuittinen notes Verizon Wireless has been on a rate increase binge, primarily by eliminating cheaper plans in favor of those with bigger buckets for voice and text services customers simply don’t need. What used to cost $50 a month two years ago for a respectable minute plan jumped to $70 for a smartphone with data, and now will increase another $20 to $90 a month, and give customers a smaller data allowance.

Verizon Wireless argues customers will get more bang for their buck, and for heavy voice, mobile hotspot and texting users, they may be right. But for the average customer who watches their voice minutes and keeps texting to a reasonable level, prices are going nowhere but up, whether you want unlimited voice and texting or not.

Q. Will Verizon Wireless herd all of its customers to unlimited voice calling at a higher price? A. Yes!

Why is Verizon taking the risk of alienating consumers by forcing them into a major price hike?

Holder

The Justice Department has been quietly conducting a wide reaching investigation into whether cable operators are using Internet Overcharging schemes like usage caps and metered billing to squash online video competition, according to a report in this morning’s Wall Street Journal.

The Antitrust Division has spoken to major online video providers like Netflix and Hulu as well as cable operators, including Time Warner Cable and Comcast.

At issue are data caps — limits on how much a subscriber can use their broadband account.  Justice officials are exploring whether major broadband providers like Comcast and AT&T are using usage limits to protect their video businesses from cord-cutting — canceling a cable subscription to watch shows online.

Providers of online video like Netflix are particularly concerned about operators showing favoritism to their own video platforms. Comcast, for example, exempts partnered content from its usage allowance while continuing to count Netflix viewing against its cap. Comcast’s Xbox “free pass” is attracting particular attention in the Justice probe, in part because it could violate the merger agreement with NBC-Universal which requires the company to not discriminate against third party video content.

Some cable operators claim usage caps protect their networks from heavy users overwhelming their facilities. Comcast claimed its decision not to count Xbox video traffic against the operator’s monthly usage cap was fair because the video content did not travel across the Internet. Now the company has temporarily suspended  usage caps altogether in preparation for testing a new usage limit that also carries overlimit penalty fees.

Federal Communications Chairman Julius Genachowski last month publicly announced his support for usage limits and metered billing, describing both as innovative and enabling customer choice. The Justice Department probe would indicate otherwise, because it suggests customers are finding their options increasingly limited, possibly in violation of federal antitrust laws.

The Justice Department is also investigating the industry’s TV Everywhere project, which provides access to cable network online video exclusively to those with an existing cable television package. Most cable networks specifically prohibit online streaming of their live content, which itself might run afoul of antitrust rules.

The Journal notes Attorney General Eric Holder on Tuesday suggested he would like to be a cord-cutter himself, picking and choosing only the channels he wants to watch. At a recent Senate hearing, Sen. Al Franken (D-Minn.) said cable bills were “out of control” and consumers want alternative options to watch shows online. Holder responded, “I would be one of those consumers.”

AT&T is tracking some of their customers in a data mining experiment few know about.

AT&T is watching you.

America’s second largest cell phone company admitted Sunday it is quietly tracking the habits of customers using their AT&T cell phones to learn what they do with their time, where they work and play, how long they spend in traffic, what pubs they visit, and how long they stay.

The industry calls it “data mining,” and the treasure trove of information companies clandestinely collect about their customers could eventually become a major profit center when packaged and resold to third parties. AT&T researchers are experimenting with “big data,” according to a weekend report in the Star Ledger, sifting through vast amounts of location information customers unknowingly provide the phone company that could fetch a high price on the open market.

The newspaper reports AT&T Labs has been quietly following its customers in Morristown, N.J. in an experiment to prove its “big data” concept.

AT&T researchers mapped the movement of workers in and out of the city each day, following customers from their home to the office and beyond to favored nightspots such as bars and restaurants — all by tracking where customers’ cell phones were at different times of the week.

The result was a highly-detailed “snapshot” of daily life in Morristown. Plotted on a map, AT&T knows that workers commute from as far east as Queens, N.Y., and the city’s nightlife attracts people from northern New Jersey and Brooklyn.

Company researchers tracked customers as they moved from cell tower to cell tower as they traveled, and from that the company was able to predict patterns of behavior from local residents. For example, AT&T knows your commuting shortcuts, and can deduce (and share with urban planners) problem intersections or likely workarounds residents will typically use when traffic snarls.

Such sophisticated tracking alarms privacy advocates despite company claims personally identifiable information is scrubbed before accessed by third parties. AT&T customers are automatically opted-in for data mining when they sign up for AT&T cell service. It is included in the company’s terms of service, AT&T says.

The Morristown project was considered experimental, but AT&T has high hopes it can eventually use its “big data” concept to create a new source of revenue for the company.

AT&T is not alone using tracking capabilities to monitor its customers. Verizon is not far behind, the newspaper reports. Google itself tracks smartphone owners to help spot traffic jams for the company’s “live traffic” maps.

Privacy advocates question how informed customers are about location tracking and data mining, and what companies can ultimately do with the data.

Lee Tien, senior staff attorney with the Electronic Frontier Foundation, a San Francisco-based nonprofit organization specializing in free speech, privacy and consumer rights, told the newspaper consumers have a right to be concerned.

“One of the things you learn in kindergarten is that if you want to play with somebody else’s toys, you ask them,” Tien said. “What is distressing, and I think sad, about the big data appetite is so often it is essentially saying, ‘Hey, we don’t have to ask.’ ”

Broadband Backwater: Don't let AT&T and ALEC keep South Carolina broadband down.

AT&T and the corporate-funded front group American Legislative Exchange Council (ALEC) are making progress banning community broadband in South Carolina with the second reading of H.3508, the AT&T Profit Protection Act.

This bill has been debated in the state legislature since early last year, and despite protestations from local community leaders in broadband-impoverished areas of the state, AT&T’s money and lobbyists can buy a lot of support.  South Carolina cannot afford to have its broadband options limited. It remains among the worst states in the country for broadband adoption, with just a tad over half of all households hooked up to the Internet. The rest either cannot afford the prices incumbent providers charge, or in many cases, nobody is willing to provide the service.

With the passage of H.3508, South Carolina’s broadband future will effectively be left in the hands of Time Warner Cable, which has some presence in larger cities, and the former BellSouth, which is now AT&T. But unless you live in greater Charleston, Columbia, or Greenville, AT&T’s investment in your future has been limited to smatterings of slow speed DSL.

Despite claims that the “private sector” will provide, South Carolina remains a broadband afterthought for telecommunications companies in the state, especially outside of major cities. H.3508 stops communities from electing to drain the broadband backwater they are forced to endure and build better service other companies simply won’t provide.

You can’t discourage investment from providers who won’t invest in South Carolina’s broadband in the first place.

Use this tool to find your state senator and take a few minutes to call their office and let them know you oppose H.3508 and what it represents — broadband stagnation and corporate protectionism. Let them know you want broadband decisions for your community made in your community, not by a lobbyist for AT&T or the cable industry. Ask why any legislator would want to support a measure that would allow an out of state corporation to dictate what South Carolina can do about its own telecommunications future.

Ask them to stand up for you as a constituent and do the right thing.  AT&T, a multi-billion dollar corporation does not need their help. Broadband in South Carolina does!